Latest Scholarship

  • Introduction

    The year is 2023 and the United States is being invaded from all directions by a force both indistinguishable from, and eager to replace, the American population - at least according to Texas Governor Greg Abbott.1

    In July 2023, Governor Abbott deployed a 1,000-foot-long string of buoys, separated by serrated saw blades, in the Rio Grande River to deter immigrants from crossing into Texas.2 The buoy system raised the attention of both immigrant activist groups3 and the Mexican government.4 The Biden Administration not only called for Texas to remove the buoys, but also sued Texas, alleging that Texas's buoy system violates the Rivers and Harbors Act (RHA) - a federal law intended to protect navigable waters in the United States.5 Specifically, the Biden Administration claims the buoy system violates section 10 of the RHA, which prohibits the unauthorized obstruction of any navigable water of the United States.6

    Governor Abbott responded to the lawsuit by saying, "Texas will see you in court, Mr. President."7 According to Governor Abbott, the implementation of the buoy system falls squarely within constitutionally-granted powers to the states because the Biden Administration violated  [*647] Article IV, section 4 of the United States Constitution.8 Section 4 of the Constitution contains two important clauses. First, the Guarantee Clause, which ensures a Republican form of government to the states; and second, the Invasion Clause, which promises protection to the states against Invasion.9 Governor Abbott contends that Mexican cartels are Invading Texas, and by failing to prevent this Invasion, the federal government is failing to uphold its constitutional duty to protect the State of Texas.10

    Governor Abbott specifically claims that the Biden Administration is failing to enforce 8 U.S.C. §1325(a)(1), a federal statute that prohibits immigrants from entering the United States between authorized ports of entry.11 Texas has thirty-one ports of entry, including eleven ports along Mexico's border that serve as key checkpoints.12 The busiest of these ports is in El Paso, where more than twelve million cars and seven million pedestrians entered the United States in 2018 alone.13 Undocumented immigrants crossing via the Rio Grande River do not pass through a designated port of entry, which Governor Abbott claims is a violation of §1325(a)(1).14

    In light of the alleged constitutional violations by the federal government, Governor Abbott has invoked Article I, section 10, clause 3 of the United States Constitution, which grants States the right to keep a militia and "engage in War" during times of invasion.15 Governor  [*648] Abbott also points to the Texas State Constitution, which expressly names the Governor as Commander-in-Chief of the State militia, and grants the Governor the power to "call forth the militia to execute the laws of the State [and] .… to repel invasions."16

    The "Immigration as Invasion"17 argument raises significant questions as to the original purpose of the Invasion Clause, its intended application within the context of immigration, and the precedent that Governor Abbot's policies of defining immigration as an Invasion might set for States hoping to employ their own deterrence and defense strategies.

    Although Invasion Clause claims have historically been deemed non-justiciable, or unfit for review in federal courts, this Comment argues that Invasion Clause claims should be deemed justiciable questions for federal courts to hear. After establishing justiciability, federal courts should find that immigration is not an Invasion within the meaning of the Invasion Clause and should be distinguished from the activity of Mexican cartels under the Invading Force18 elements set out below.19 Otherwise, Governor Abbott's "Immigration as Invasion" argument could be validated and would create a detrimental precedent for immigrant rights and future Invasion Clause cases.

    The remainder of this Comment will address each of these points in turn. Part I will explore the definitions of an invasion, and the Framers' intent behind drafting the Invasion Clause, as well as the justiciability of Invasion Clause claims; the federal government's ability to legislate regarding immigration; and the federal government's power to preempt certain state laws that may conflict with federal immigration legislation. Part II will apply the definition of an Invading Force to the  [*649] immigration context and will specify the identity of the alleged Invasion into Texas. More specifically, Part II will differentiate between the organization, hostility, power, and predetermined malicious objectives of Mexican cartels and immigrants.

    I. Background: The Southern Border, the Invasion Clause, and Federal Immigration Power

    The shared border between the United States and Mexico spans 1,951 miles and is the busiest border in the world20 with more than 800,000 people arriving in the United States from Mexico every day.21 Roughly half of the southern border runs below Texas22 and much of Texas's border falls along the Rio Grande River.23 This river has long been a popular entryway for undocumented immigrants entering the United States, despite its deceivingly strong current and alligator-infested waters.24

     [*650] The Rio Grande River poses a deadly final hurdle for undocumented immigrants crossing into the United States.25 Frequently, small children attempting to cross with their parents are swept away by the river's current.26 One Texas National Guard member drowned while trying to rescue a migrant attempting to swim across the Rio Grande.27 This crisis has led many advocates to voice their concerns the buoy system and the increased risk of drowning that it creates.28

    In March of 2021, Governor Abbott announced "Operation Lone Star," an initiative aimed at increasing border security and deterring crime within the State.29 Under this initiative, Governor Abbott deployed additional Texas National Guard members and increased physical border barriers, including shipping containers and concertina wire.30 Two years after announcing Operation Lone Star, Governor  [*651] Abbott has continued to implement increased security and deterrence methods at the border31 despite pushback from various immigrant support groups, the federal government, and Texas's own residents.32

    Policies concerning the treatment of newly-arrived immigrants have also raised disputes between Governor Abbott and the Biden Administration.33 Title 42, a Trump-era public health policy which allowed for the expedited removal of unauthorized immigrants in the United States, is considered the toughest immigration policy the United States has ever implemented, specifically because it removed the ability for unauthorized immigrants to seek asylum after crossing the border.34 Title 42 was enacted during the height of the COVID-19 pandemic to regulate the flow of people into the United States and "to stop the introduction of communicable diseases."35 Since its implementation in March 2020,  [*652] more than 250,000 immigrants with various nationalities have been expelled to the Tamaulipas region of Mexico alone under Title 42.36 Immigrants waiting on the Mexican side of the border have been subjected to harsh conditions as well - evidence indicates that there have been at least 9,886 cases of kidnappings, torture, rape, and other violent attacks since 2021 on stranded asylum seekers in Mexico.37

    In 2022, the Biden Administration attempted to lift Title 42 and revert to less stringent policies that would allow undocumented immigrants to apply for asylum at the border.38 Many state representatives, including Governor Abbott, opposed this proposition, and sought to keep the stricter regulations in place.39 In protest, Governor Abbott tightened inspection rules and regulations for trucks crossing the border into Texas, and sent buses of immigrants from Texas to Washington D.C.40

    Twenty-one states voiced their opposition to the proposed repeal of Title 42, and a federal court ultimately stayed the Biden  [*653] Administration's proposal.41 When Title 42 was eventually lifted,42 Title 8 took its place, allowing undocumented immigrants to once again apply for asylum by making an appointment at a port of entry.43 The return from our nation's strictest asylum application policies has been met with aggressive resistance from those who favored Title 42, including Governor Abbott's Operation Lone Star efforts along the border.44

    Governor Abbott's buoy operation in the Rio Grande River is the latest addition to Operation Lone Star and seeks to repel alleged Invaders from entering Texas.45 For a better understanding of this argument, this Comment must first define Invasion both independently and within the scope of the Constitution.

    A. The History of the Invasion Clause and Justiciability: Invasion Clause Cases as Historically Non-Justiciable

    Historically, the Supreme Court has abstained from ruling on Invasion Clause claims for questions regarding their justiciability.46 [*654] Article III of the United States Constitution limits the power of the federal judiciary to hear only certain "Cases" and "Controversies."47 The Supreme Court has defined the justiciability doctrine as a mechanism to examine the "[a]ppropriateness of the subject matter for judicial consideration .…"48 Various circumstances may make a case inappropriate for judicial review, such as a lack of standing of the parties bringing the case,49 or the lack of ripeness of the controversy between the parties.50

    Another bar to justiciability, or a court's ability to hear a case, is the Political Question Doctrine, which bars federal courts from deciding questions that are political in nature.51 The Political Question Doctrine acknowledges the expressly-granted rights of the individual branches of federal government, and seeks to maintain "respect due [to] coordinate branches of government" by avoiding "the potentiality of embarrassment[s]" that judicial decisions involving political questions may cause for the federal government as a whole.52

    Baker v. Carr is a seminal case in Political Question Doctrine jurisprudence, as it was one of the rare instances where a Guarantee Clause case was deemed to be justiciable, as the claim involved therein did not require the Court to decide on an inherently political question.53 Notably, the Court emphasized that it is only the involvement of political questions which makes Guarantee Clause claims non-justiciable. Accordantly, the Clause itself is not insulated from judicial review.54

     [*655] Invasion Clause claims, much like many of their Guarantee Clause claim counterparts, have consistently been deemed non-justiciable by the courts.55 In New Jersey v. United States, the Third Circuit was asked to determine whether the entry of unauthorized immigrants into New Jersey violated the Invasion Clause.56 New Jersey sought a declaratory judgment that it had the right to reimbursement from the federal government for costs of imprisonment and education of undocumented immigrants.57 The case was ultimately found to be non-justiciable because it would have required the court to "evaluate the formulation and implementation of immigration policy by the executive branch," including making a policy judgment regarding the allocation of resources and enforcement methods put in place.58 This finding aligns squarely with the separation-of-powers explanation for the non-justiciability of political questions, and the courts' hesitancy to step on the toes of other branches of government.59 Importantly, the Court was reluctant to accept New Jersey's "Immigration as Invasion" argument because New Jersey did not offer support for the Invasion Clause to be applied in the context of immigration, and there were no such manageable standards in place for the Court to apply in hearing the case.60

    In California v. United States, the state of California similarly sought financial relief from the federal government for providing federally-mandated education and healthcare benefits to undocumented immigrants, in addition to the costs of imprisoning undocumented immigrants within the State.61 California argued that  [*656] the federal government failed to protect the State from the "intrusion of illegal aliens across the State's borders."62 The Ninth Circuit refused to accept the "Immigration as Invasion" argument because it would have required the Court to determine that the United States had been Invaded without such determination from another branch of government.63

    Given that both New Jersey and California were deemed to be non-justiciable cases, coupled with the reasoning against the hearing of political questions in Baker, this Comment predicts that Invasion Clause claims that involve political questions will be found to be non-justiciable.64New Jersey and California highlight courts' hesitation to accept the "Immigration as Invasion" argument because there is no clear definition for an Invasion in the immigration context, and no clear lines exist for the courts to determine when an influx of immigrants becomes an Invading Force.65 If another branch of government were to provide a clear set of manageable standards for defining an Invasion within the scope of immigration, cases like New Jersey, California, and Governor Abbott's current suit would have an easier time jumping the justiciability hurdle and gaining access to the federal courts.66

    B. Defining Invasion

    The word invasion can be traced back to the Latin word invadere, meaning to "enter violently, penetrate into as an enemy, assail, assault, or make attack on .…"67 More recently, invasion has been defined as "[t]he action of invading a country or territory as an enemy"68 or as  [*657] "an occasion when an army or country uses force to enter and take control of another country."69

    While these definitions are useful, the meaning of an Invasion within the Invasion Clause is best understood when looking at the intended purpose of the Framers upon drafting the Constitution. In their campaign to urge states to ratify the Constitution, three of the Framers: James Madison, Alexander Hamilton, and John Jay, published eighty-five essays known as the Federalist Papers.70 These essays are considered to be the most authoritative sources for determining the Framers' intent behind Constitutional provisions.71 Essay forty-three, written by James Madison, describes protection against Invasion as protection from "foreign hostility" and "ambitious or vindictive enterprises of its more powerful neighbors."72

    Notably, Madison also states that "[p]rotection against domestic violence is added with equal propriety" within the meaning of the Invasion Clause.73 Domestic violence in this context means "ambitious or vindictive enterprises of [a state's] more powerful neighbors."74 The qualification of violence as "domestic" hints that an Invasion could mean something more than a foreign action; thus, the Constitution grants the states the "right to interpose" for both foreign and domestic Invasions.75

    Modern courts have been asked to interpret the meaning of Invasion in the context of the Invasion Clause. In California v. United States, The Ninth Circuit referred to the Federalist Papers when it found that the Invasion Clause affords protection "in situations where a state is  [*658] exposed to armed hostility from another political entity."76 The modern focus on hostilities from political entities, rather than nations or nation-states, expands the protection afforded under the Invasion Clause.77 Whether a group is an Invading Force under the Invasion Clause is not determined by its sovereign status, but rather by its degree of organization, power, and political objectives.78 An Invading force can therefore be defined as a: (1) hostile, (2) organized, and (3) powerful force, conducting a purposeful intrusion on sovereign land in furtherance of a (4) predetermined malicious objective.79

    C. Federal Immigration Power and its Ambiguous Origin

    The federal government is one of enumerated powers and it may only act when authorized by the Constitution, or when the act is "necessary and proper" to execute such enumerated powers.80 Although the regulation of immigration is not expressly mentioned in the constitutional powers of the federal government, the Supreme Court has held that it is necessary for the execution of various other enumerated powers.81 The power to regulate immigration has been gradually afforded to the federal government, and encompasses "the power to expel or exclude aliens as a fundamental sovereign attribute exercised by the Government's political departments largely immune from judicial control."82

     [*659] Congress's immigration powers are seen as plenary and "inherent" in the status of the United States as a sovereign nation.83 The Supreme Court first officially recognized this plenary power in the 1889 Chinese Exclusion Case.84 In the Chinese Exclusion Case, the Supreme Court adjudicated the constitutionality of the Immigration Act of 1917, which prohibited Chinese laborers who had previously lived in the United States from re-entering the United States after visiting China.85 The Chinese Exclusion Act (CEA) was passed in 1882, five years before the Chinese Exclusion Case, and was the first federal law that restricted immigration based explicitly on nationality and national security concerns from the political branches.86 The CEA was enacted at a time when violence against Chinese nationals was rampant in America, and Chinese workers were seen as a threat to the American workforce.87 In the Chinese Exclusion Case, the Court justified Congress's plenary power over immigration as one related to  [*660] foreign affairs,88 necessary for a sovereign independent country,89 and justified by the structure of the national government.90 However, when viewed in the temporal context of its enactment, it is hard to separate the CEA from its prejudicial underpinnings.

    Under this precedent, the federal government continued using national security concerns as justifications for implementing racially restrictive immigration laws into the 1900s.91 Although many of these laws, including the CEA, were repealed or replaced after World War II, the federal government has continued using this line of precedent to enact "sudden and sweeping" changes to federal immigration laws.92

    A recent example of this practice appears in Trump v. Hawaii ("The Travel Ban Case"), where the Supreme Court showed extreme deference to the executive branch when it upheld an Executive Order from former President Trump that temporarily restricted entry into the United States for foreign nationals from seven predominantly Muslim countries.93 The Trump administration argued that the restriction was justified by national security concerns, linking the governments of six of  [*661] the seven countries to state-sponsored terrorism.94 Justice Sotomayor's dissenting opinion emphasized that President Trump had made several Islamophobic comments during his campaign for election, and argued that the policy "masquerades behind a façade of national-security concerns."95 Nevertheless, the Court deferred to the executive branch and its determination of potential "national security concerns," as it has repeatedly done in the past.96

    Despite legitimate challenges, the doctrine of judicial restraint has historically provided a relative buffer for federal immigration policy.97 For example, where a policy denying entry to non-citizens at the border was implemented, the Court found that "[w]hatever the procedure authorized by Congress is, it is due process as far as an alien denied entry is concerned."98

    Critics of plenary federal power to regulate immigration question the broad deference given to Congress by the courts when deciding whether an issue involves foreign affairs or otherwise implicates federal jurisdiction.99 Some go further to argue that Congress's power to regulate immigration should instead be reserved to the states under the Tenth Amendment.100 These critics urge Congress to reconsider the constitutional origins of its power to regulate immigration, and to establish more consistent guidelines for when it may or may not pass laws  [*662] relating to immigration.101 The ambiguous origin of the federal power to regulate immigration has led many state legislatures to pass their own immigration legislation, which has repeatedly been challenged by the federal government.102

    D. Federal Preemption of State Immigration Laws

    Under the United States federalist system,103 the Constitution, along with laws and treaties made pursuant to the Constitution, are the supreme law of the land.104 When state and federal policy are in conflict, the federal law will reign "supreme," and the state law will be nullified.105 Notably, the language of the Tenth Amendment bestows upon the states the power to legislate over those areas of law which are not expressly granted to the federal government nor otherwise prohibited to the states.106 This enables states to legislate in those areas of law not enumerated to the federal government, nor implied to that end, arguably including the area of immigration law.

     [*663] Federal preemption can be classified into three categories: express,107 conflict,108 and field.109 The power to regulate immigration is not expressly enumerated within the Constitution, so the latter two methods of preemption (conflict and field) often justify federal supremacy over state immigration laws.110

    In Arizona v. United States, the Supreme Court examined whether federal law preempted and rendered invalid four provisions of a 2010 Arizona state law that was enacted to "`discourage and deter the unlawful entry and presence of aliens and economic activity by persons unlawfully in the United States.'"111 The Court found that three sections of the "Support Our Law Enforcement and Safe Neighborhoods Act" (SB 1070) were preempted by federal law and rendered them invalid.112

     [*664] Section three was preempted by federal law for the reason of field preemption.113 More specifically the court found that, if section three were validated, every state could give itself the authority to prosecute federal registration violations.114 Section 5(c) was preempted by federal law for the reason of obstacle preemption, as this section would interfere with Congress's regulations regarding the unauthorized employment of aliens.115 Section six was also preempted by federal law for the reason of obstacle preemption, chiefly because this section conflicted with federal law which prohibited state officers from making warrantless arrests of aliens based on possible removability.116

    The court found that these three sections were preempted because they each interfered with a federal law and created an obstacle to the purposes and objectives of Congress when passing their legislation.117

    The Court, however, found that another section, section 2(b), was not preempted by federal law because "without .… the benefit of a definitive interpretation from the state courts, it would be inappropriate to assume that section 2(b) would be construed in a way that conflicts with federal law."118 This section should be read to avoid concerns of conflict and therefore federal preemption was unauthorized in this circumstance.119

    Arizona serves as a good gauge of how the Supreme Court currently views preemption within an immigration context. When state law conflicts with a federal law or creates an obstacle for Congress in the enforcement of a federal law, then it will likely be preempted.120 However, if no  [*665] contradiction exists, and the law may be read to conform to other constitutional limitations, the state law will likely not be preempted.121

    II. Adopting Manageable Standards for What Constitutes an Invasion

    Case law suggests that Invasion Clause claims are generally non-justiciable because of their relationship to foreign policy and the lack of manageable standards for the Court to apply when determining whether immigrants are Invading.122 The political branches should consider defining an Invasion within the immigration context using the Invading Force elements to create manageable standards for the judiciary to resolve "Immigration as Invasion" claims in the future. Deeming Invasion Clause claims justiciable, and thus allowing them to come before the Court will establish a precedent of consistent policies when defining a group as an Invading Force and, within the immigration context, will ensure that immigrants are not wrongly classified as Invaders and barred entry into the United States.

    Once past the justiciability hurdles, federal courts are likely to show deference to the other two political branches, given their plenary powers over immigration.123 Federal courts will also have the power to preempt state immigration laws that conflict with their federal counterparts.

    Governor Abbott will likely argue that federal plenary power over immigration is too powerful for the reasons explored above.124 Additionally, Governor Abbott may point out that this power allows politicians in Washington D.C. to make the final decision regarding immigration policies that directly impact the lives of citizens living along the border, including Texas residents.

    While this argument highlights the reality that many politicians are far removed from the citizens they represent and issues they wish to resolve, Arizona v. United States exemplified that states are free to legislate within the immigration field so long as their laws do not conflict  [*666] with federal legislation.125 Further, because federal courts tend to defer to immigration-related decisions made by the political branches of government, focused voting efforts to elect representatives who share similar views on immigration enforcement would substantially impact immigration legislation concerning the southern border.126

    As established above, and Invading Force must be a (1) hostile, (2) organized, and (3) powerful force, conducting a purposeful intrusion on sovereign land in furtherance of a (4) predetermined malicious objective.127 Unless Governor Abbott can show that the alleged Invading Force meets these elements, and that Texas's action to deter this Invading Force does not conflict with federal legislation, the Court is likely to defer to the Biden Administration's choice of immigration enforcement.

    A. Applying the "Invading Force" Elements to Texas's Buoy System

    Assuming that the case against Governor Abbot's recent policies is deemed to be justiciable, the court will next apply the Invading Force elements to the alleged Invasion of Texas to decide the merits of the "Immigration as Invasion" argument. The reviewing court will likely require Texas's reaction to the Invading Force to be necessary128 and proportional129 to the threat posed by the Invaders to prevent any overreaching action that may unfairly effect parties who are not part of the Invading entity. The remainder of this Part predicts a court's likely conclusions upon conducting this inquiry.

     [*667] In his response to the Biden Administration's lawsuit challenging Texas's Rio Grande buoy system, Governor Abbott claimed that Texas is protecting itself from "invasion by the Mexican drug cartels."130 Governor Abbott notes, "deadly drugs like fentanyl, cartel violence, and the horrors of human trafficking" are consequences of this alleged Invasion.131

    However, the Invading Force impacted by the Rio Grande buoy system is not exclusively made up of Mexican cartel members smuggling drugs and people into the United States.132 In fact, most of the population crossing the border consists of immigrants seeking entry into America.133 The United States offers substantially greater economic freedom, job opportunities, and independence than many other countries, which serves as one incentive for immigrants willing to risk their lives to enter.134 This distinction is important when determining whether the buoy system is deterring the alleged Invasion into Texas, or whether it is an excessive border security measure promulgated under the guise of national security concerns. Governor Abbott will likely argue that the buoy system was enacted to combat activity from Mexican cartels, while the Biden Administration will emphasize the impact the buoys have on individual immigrants unassociated with cartel activity.

    B. Organization of the Invading Force

    The first element to consider when analyzing the alleged Invading Force is its organization.135 Generally, Mexican cartels are hierarchical and influential entities,136 while migrants crossing the border at any  [*668] given time represent a broad range of people consisting of different ages and backgrounds.137

    Governor Abbot will likely attempt to classify the organization of the Invading Force under the identity of Mexican cartels and not immigrants, but this argument is weakened by the fractured and adversarial relationship between various cartels throughout Mexico.138 Additionally, operations from separate South American cartels appear similarly to the work of Mexican cartels within the United States, even though they are not part of the same organizational entity.139 Finally, cartel operations in the United States are often carried out by independent contractors who are far removed from the cartel itself, indicating a weaker organizational structure for cartel operations outside of Mexico.140

     [*669] A second element to consider is how to effectively target an Invading Force. Notably, cartel systems141 are drug trafficking operations that aim to distribute drugs, money, and people across borders using typical and atypical means of transportation, like airways, railways, highways, and even tunnels or commercial vessels. The Rio Grande buoy system is not aimed at large roadways or other channels of commerce frequently used by the cartels to traffic drugs,142 but rather seeks to prevent individuals from crossing the Rio Grande who are less likely to be smuggling significant quantities of drugs or people given the dangerous conditions of the river.143 The Biden Administration will likely emphasize this point to question the effectiveness of the buoys in preventing cartel activity in America, and will note that there are other, more efficient means for Texas to combat cartel activity than a blanket stoppage of immigrants crossing the Rio Grande River.

    C. Hostility of the Alleged Invading Force

    Since 2006, when the Mexican government declared war on cartels, there have been more than 360,000 homicides in Mexico.144 This number continues to rise as cartels gain more power and notoriety in Mexico  [*670] and abroad.145 Additionally, the cartels' hostility is not limited to physical violence, but also extends into the world of synthetic drugs and drug abuse.146 Extremely profitable and severely addictive drugs like fentanyl147 have incentivized cartels to increase production and distribution of the drug,148 which, in turn, has led to heightened overdose rates in the United States in recent years.149

    The Biden Administration will likely posit that while immigrants in America are often stereotyped as hostile,150 this hostility is often dramatized by politicians hoping to appeal to voters. On the contrary, recent studies have found that immigrants, particularly undocumented immigrants, have substantially lower crime rates across a range of  [*671] violent felony offenses.151 The significant effect of the buoy system on the statistically non-hostile immigrant population, and its relatively inconsequential effect on any hostile cartel activity in the United States,152 lend support to the Biden Administration's argument that the buoy system is a disproportionate reaction to the alleged "Invaders" crossing the Rio Grande River.

    D. Power of the Alleged Invading Force

    The power of cartels within Mexico is apparent both in their financial impact153 and their political influence.154 Economically, Mexican cartels bring in billions of dollars from their drug trafficking schemes, and employ enough Mexicans to be the fifth largest employer in Mexico.155 Notably, high-ranking Mexican officials like Genero Garcia Luna, former Mexican Secretary of Public Security, have been convicted of taking millions of dollars in bribes from the Sinaloa Cartel to turn a blind eye to or even assist with cartel operations.156 Additionally, when the son  [*672] of the former head of the Sinaloa Cartel, Joaquín "El Chapo" Guzmán, was arrested in 2019, cartel gunmen began fighting with the Mexican army in the streets until Mexican authorities were forced to release him, proving to be a powerful adversary to the national army of Mexico.157

    Immigrants are a growing population in the United States and almost every country in the world is represented by the United States' immigrant population.158 Immigrants make up roughly seventeen percent of the American labor force and contribute roughly $1.3 trillion of spending power into the United States economy each year159 - evidencing the powerful economic effect brought by the influx of these communities. It is likely that both immigrants and Mexican cartels exhibit characteristics of a powerful entity, and courts will likely consider them as such within the Invading Force elements.

    E. Predetermined Malicious Objective of the Alleged Invading Force

    While Mexican cartels chiefly pursue financial motivations from their operations in the United States,160 many believe their influence over the American government is growing. Between 2008 and 2010, roughly 1,600 officials at all levels of American government were convicted following a corruption investigation linking them to cartel operations.161 Much of the effort to fight corruption has been aimed at the southwestern border, perhaps because officials working along the  [*673] border are in positions to assist cartels in their drug-smuggling endeavors.162 This exhibition of influence over United States government officials illustrates the predetermined malicious objectives of the Mexican cartels: to corrupt American officials into allowing cartel operations within the United States. More specifically, by targeting customs inspectors or other border officials, Mexican cartels can more easily ensure that their drug shipments will reach the United States, and ultimately enrich the cartels.163

    Immigrants, on the other hand, frequently come to the United States in search of the "American Dream": coming to and working in America to build wealth.164 Many of these individuals are escaping violence, financial collapse, or simply would rather take their chances working in America to provide for their families.165 Characterized in this manner, there does not appear to be a predetermined malicious objective behind the plight of immigrants entering the United States illegally. Again, the Biden Administration will argue that the buoy system does more to deter these individuals coming to America for non-malicious objectives  [*674] than it does to deter cartel objectives within the United States, especially considering the ongoing corruptibility of border officials.

    Conclusion

    When applying the Invading Force elements to the population entering Texas via the Rio Grande River, much of the analysis will involve uncovering the identity of those being affected by the buoy system. Generally, Mexican cartels are easier to classify as an Invading Force due to their hostility and unified power. Immigrants, on the other hand, are a much more disorganized and non-hostile group of individuals, each with their unique reasons for coming to the United States, making them difficult to classify as an Invading Force. Governor Abbott will likely argue that the Rio Grande Buoy system prevents the cartels from entering into the United States, while the Biden Administration will likely argue that it almost exclusively impacts immigrants, who cannot be classified as Invaders. It is therefore likely that the Court will reject Governor Abbott's "Immigration as Invasion" justification for implementing his saw-blade buoy system because it appears to impact immigrants (non-Invaders) more than it deters Mexican cartel operations (Invaders).

    This decision would be wise when considering the dangers of classifying immigrants as Invaders. For example, the United States Constitution grants the people the Privilege of the Writ of Habeas Corpus - generally, the right to challenge detention - 166and only suspends this right "in Cases of Rebellion or Invasion" which threaten the public safety.167 The Supreme Court has found that detainees at Guantanamo Bay awaiting a determination as to their status as "enemy combatants have the right to Habeas Corpus review."168 Immigrants' Habeas Corpus rights, however, may be jeopardized if the Court finds them to  [*675] be Invading Texas. Immigrant rights in America, including the right to Habeas Corpus, may be diminished if immigrants entering the United States illegally are given the status of Invaders. The potential for minimization of immigrant rights in this manner should deter the Court from making this classification.

    Additionally, lenient interpretation of the alleged Invasion in this case could lead to further expansions of the definition of Invasion. Digital invasions of privacy by hackers or invasions by diseases might now risk being classified as an Invasion following the precedent of the "Immigration as Invasion" argument and could lead to severely intrusive state action responses. Understanding that the Invasion Clause also grants protection from "domestic violence,"169 a state might also attempt to bring an Invasion Clause claim against another state, which would be largely counterproductive to the constitutional aspiration of a union comprised of several united states.170

    This Comment firmly argues that the Supreme Court should reject Governor Abbott's "Immigration as Invasion" argument to justify deploying buoys and saw-blades in the Rio Grande River because the blockade disproportionately impacts fleeing migrants, while comparatively stymying only a small percentage of Mexican cartel activity. As this Comment has argued, immigrants seeking passage to the United States across the Rio Grande do not meet the necessary elements to be considered an Invading Force that would justify using violent deterrent measures against them.171 Mexican cartels, on the other hand, should be considered an Invading Force because of their economic and political  [*676] influence in the United States.172 However, cartel activity on the Rio Grande River is not significant enough when compared to non-cartel, migrant activity to justify imposing a violent blockade measure like the saw-bladed buoys in the Rio Grande River. This action represents an unjustified interpretation of the Invasion Clause and would create a problematic precedent for its future application within the immigration context and beyond.

  • I. INTRODUCTION

    When Christie's, an international auction house known for selling ultra-luxury goods, sold a Non-Fungible Token (NFT) for $ 1.6 million, NFTs gained credence in the investing world not previously seen in the cryptocurrency realm. 1In 2021, fueled largely by cryptocurrency optimism, 2sales of NFTs skyrocketed to over $ 22 billion, 3representing an increase of 21,900% in just one year. However, as global financial markets entered bear territory in 2022, 4NFTs have seen a similarly steep decline in value. 5Yet, the NFT market outlook remains hopeful given the extensive measures companies such as Budweiser, Gucci, Coca-Cola, and Autodesk are taking to expand their businesses into the metaverse, despite critics' contentions that NFTs are "a passing fad" not likely to last. 6However, as big-name brands look to expand into Web3 7, an increased  [*287]  call for regulation of digital assets 8anticipates their longevity by experts.

    The law has lagged behind the rapid increase in new technology, leaving a lack of case law governing intellectual property infringement in online platforms. At the forefront of legal issues surrounding Web3 media is the mogul fashion house, Hermes. The iconic French brand, operating since 1837, is known for its famous Birkin bag. 9The Birkin bag, which cannot be bought at a Hermes store, is as rare as it is expensive. 10Yet in 2021, a marketing strategist and entrepreneur sought to capitalize on the fame of the bag, creating a series of 100 NFT "meta-bags" based on Hermes's famed Birkin. 11These digital bags made their online debut on OpenSea, an NFT marketplace, and sold for five to twenty-five Ethereum apiece (between $ 13,000 and $ 56,000, based on the exchange rate as of January 2022). 12The only problem with the digital handbag, known as "MetaBirkins," 13are their origins: the bags were made by marketing strategist and entrepreneur, Mason Rothschild, not Hermes. Rothschild did not seek permission to use the Birkin trademark or trade dressed shape for his project. 14The luxury brand has since prevailed in its suit against the artist for creating "knock-off handbags ... in the  [*288]  metaverse," 15on the basis that MetaBirkins infringed upon multiple registered trademarks owned by Hermes. 16

    While trademark law is well-established both in Congressional acts such as the Lanham Act 17and case law throughout each federal circuit, trademark law has yet to be applied to NFTs. In this case of first impression, the Southern District Court of New York must evaluate how to apply trademark laws to NFTs. 18The Southern District Court of New York contends that this is not a case of first impression for the Second Circuit since the Lanham Act covers intangible goods. 19Yet, the Lanham Act has not yet been applied to metaphysical assets. The district court pointed out that NFTs, which are a virtual commodity, may be used as either wearable digital goods, or through the sale of the digital images of the goods. 20Thus, while Rothschild's MetaBirkins are not "worn" in the metaverse, the sale of the digital image can still infringe on the rights of the trademark holder. This comment - a mere footnote in the court's order - may influence future cases concerning how companies address third parties who create digital wearable items (worn by avatars in the metaverse) that infringe on registered trademarks. 21

    This Note discusses the issues surrounding the lack of codified law concerning NFTs, using Hermes Int'l v. Rothschild as a foundation for its discussion. More specifically, this Note addresses the determination of when NFTs should be treated as expressive works, and when an NFT may be considered commercial work. While many NFTs warrant treatment as an expressive work, others created by companies to expand their consumer footprint to the metaverse should be treated as commercial goods, falling under a different standard. To someone unfamiliar with the intricacies of NFTs and their many uses, this may seem an arbitrary  [*289]  line to draw. Yet, as will be further discussed in this Note, the nature of NFTs can differ dramatically in purpose, even though they may possess some aspect of creativity. As such, the United States Court of Appeals for the Second Circuit should draw a line between NFTs of a commercial nature (e.g., tokens used to unlock levels in video games), and truly artistic NFTs which are created for the purpose of contributing to the new digital art space.

    The framework to create this distinction is already in place. The Rogers Test, a balancing test created by the Second Circuit 22, addresses the distinction between an expressive work which warrants the protection of the First Amendment, and a commercial work, which does not. 23However, the Second Circuit should use this case to draw the line between NFTs that are artistic works, and those that are not. As the Rogers Test is currently used, the factors weigh heavily in favor of a work with even the most minimal degree of creativity warranting First Amendment protections from trademark infringement claims. 24To avoid further extension of the First Amendment defense's broad application, which ultimately undermines trademark rights, in the case of Hermes v. Rothschild, it is important for the court to give a narrow ruling. The Rogers Test appears to be sufficient for use in the case of Hermes, provided the court narrows its application to NFTs deemed works of art. 25

    Part II provides a brief overview and background of NFTs, their function, and how they relate to the "blockchain." This section also explores the rise in litigation surrounding these digital assets. Part III then explains the history of the MetaBirkins lawsuit, and the arguments presented by both sides. Part IV explains Rothschild's defense and the technicalities of raising the First Amendment right of fair use as a defense to trademark infringement. Section V discusses how the Rogers Test may best be applied and whether it is satisfactory in addressing the  [*290]  unique nature of trademark infringement concerning NFTs. Finally, Section VI of this Note concludes with a brief overview and prediction of how future NFT cases in the intellectual property realm may evolve as NFTs become more accessible to the general public.

    II. BACKGROUND: NON-FUNGIBLE TOKENS, THE BLOCKCHAIN, AND THE ROGERS TEST

    A. NFTs and Their Digital Connection to Blockchain

    An NFT is a unique digital asset which is now a staple of the digital world. 26NFTs are connected to the blockchain, 27a "shared, immutable ledger" which enables the tracking and recording of assets and transactions. 28Virtually anything may be tracked or traded on the blockchain safely because it is decentralized 29and cannot be altered once the transaction is recorded on the ledger. 30Each of these transactions is recorded as a "block" of computer data, and each block is then connected to the ones that are created before and after it; thus creating a "chain." 31In simpler terms, each "block" of data is akin to one LEGO brick. Each block that comes after it is then connected, building upon one another until it creates something larger, the blockchain. However, unlike LEGO bricks, which can be removed and reconnected over and over, once a "block" of data is added, it becomes a permanent addition to the blockchain that cannot be altered or removed. 32

     [*291]  Trading digital currencies is the most common type of transaction attached to the blockchain, of which there are two types: fungible and non-fungible. 33Of these assets, NFTs are becoming increasingly popular. The "non-fungible" part of the name indicates that each NFT is unique and cannot be replicated or recreated. 34An NFT is a "unit[] of data stored on a blockchain" which may be used to transfer ownership of physical or digital assets. 35The digital image itself is not connected to the blockchain, but rather, the NFT's digital code is attached to a "smart contract" and thus connected to a specific location on the blockchain. 36A "smart contract" is a computer program that is set to run if certain predetermined coded conditions are met. 37In other words, if/then statements are written into the code that connects the NFT to the blockchain that may result in actions such as releasing funds, sending notifications, or registering physical assets. 38

    Furthermore, NFTs are usually connected specifically to the Ethereum blockchain. 39Because of the unique standard of Ethereum, which aims "to distinguish each token with distinguishable signs," 40this differs from other cryptocurrencies like Dogecoin and Bitcoin because each individual coin is identical. 41To compare to something tangible, an NFT would be similar to buying a mined diamond. Each diamond has its own unique inclusions, variances in color, cut, and size, and holds different values based on changing market values in the diamond industry. On the contrary, other types of fungible cryptocurrencies are similar to buying a  [*292]  lab-grown diamond: the artificial creation results in diamonds that are nearly the same, with only slight variations. Just as there are slight variations from one type of cryptocurrency to another, such as Bitcoin and Dogecoin. 42

    Since NFTs are usually attached to a specified location on the Ethereum blockchain, they cannot be replicated, reproduced, or digitally altered. 43In other words, the smart contract denotes a specific, unique location which can be used to authenticate the digital file to which it is attached. 44Smart contracts were an addition to the Ethereum blockchain beginning with the Ethereum Improvement Proposal, EIP-721. 45The smart contract is updated each time the token is sold, and automatically stores the sales history, creating a log of historical asset values. 46Because of the function of the smart contracts, NFTs can operate as investments that can store and increase in value, 47similar to owning Exchange Traded Funds (ETFs) in the stock market. 48

    While NFTs are primarily known for their mark in the digital art world, NFTs are also used in online gaming, and in ways akin to trading rare baseball cards or collectible stamps. CryptoPunks, one of the first NFTs on Ethereum, has minted over 10,000 "collectible punks," which  [*293]  are part of the ERC-721 NFTs. 49CryptoKitties, another type of collectible NFT, available as early as 2017, 50was dismissed as the "digital beanie babies epitomizing the cryptocurrency mania." 51Yet, despite the generally negative press associated with the rise in cryptocurrencies and digital tokens, their impression on the digital marketplace has proved enduring. In a twenty-four-hour trading period, the crypto market volume averages $ 41 billion 52, and the NFT market volume averages nearly $ 6.5 billion on OpenSea 53The market cap for the entire cryptocurrency market stands at over $ 1 trillion. 54Mike Winkelmann, an artist known professionally as "Beeple," set the record for the most expensive NFT ever sold with his artwork, The First 5000 Days, selling for a ground-breaking $ 69,300,000 at Christie's . 55

    B. The Rise of NFTs and the Increasing Legal Problems Surrounding Them

    Selling GIFs 56of Nyan Cat (a flying cat with a Pop-Tart as a body) appeared to be more a trend than a lasting form of global currency. 57However, NFTs have maintained both relevance, market value, and volume. 58  [*294]  The sustained interest has attracted many artists and businesses alike who have minted NFTs. These NFTs are sold at luxury auction houses like Christie's and Sotheby's, or on digital marketplaces such as OpenSea, Rarible, and Foundation. 59Celebrities - including Melania Trump 60, Quentin Tarantino 61, Grimes 62, and Paris Hilton 63- are minting their own NFTs in the hopes of entering an emerging marketplace and making a profit.

    Nevertheless, in the rush to enter the new and evolving field of digital token art, a slew of lawsuits shrouds the digital investment landscape in uncertainty. Quentin Tarantino, who minted and sold a series of NFTs with content from his movie Pulp Fiction, was sued by the film's producer, Miramax. 64The studio asserted that Tarantino's NFT infringed on its copyright of the film. 65Similarly, Yuga Labs, Inc. - the company behind the popular Bored Apes Yacht Club (BAYC) tokens - sued Ryder Ripps and others for "trolling Yuga Labs and scamming consumers into purchasing RR/BAYC NFTs by misusing Yuga Labs' trademarks." 66Like many other NFT cases, the BAYC lawsuit is still pending litigation. 67Legal issues in these lawsuits include: common law trademark infringement and false designation of origin (as in Bored Apes); cybersquatting, unjust enrichment, violations of the California Business and Professions  [*295]  Code; and unfair competition ( Hermes International v. Rothschild). 68As NFTs become mainstream, the legal market has yet to catch up.

    As cases of first impression begin to reach courts around the country, judges and legislators will need to decide how to handle the issues of blockchain intellectual property. One case, Hermes International v. Rothschild, will likely reach higher courts and set a precedent for future NFT litigation. 69

    C. Introduction to the Rogers Test: A Possible Solution

    As these complex cases reach the courts, judges will apply or modify previously established case law to fit the facts of each case. For example, in the case of trademark infringement in the Web3 space, the Rogers Test will likely emerge as the test used to determine whether the Lanham Act applies to NFTs.

    The Rogers Test originates from Rogers v. Grimaldi, a 1989 copyright case from the Second Circuit. 70In it, Ginger Rogers sued Alberto Grimaldi of MGM Studios for producing the 1986 film by Federico Fellini, Ginger and Fred. The film depicted two Italian cabaret performers named Pippo and Amelia who imitate the performance style of Ginger Rogers and Fred Astaire. 71Rogers claimed that the film violated her trademark rights of publicity under the Lanham Act. 72This seminal case was the first application of a First Amendment defense in a trademark infringement case. 73The court held that First Amendment protections for free speech safeguarded the studio from Rogers's infringement claims. 74

    The court used a two-factor test to conclude that the First Amendment defense protected the film. 75According to the decision, artwork does not fall under the Lanham Act and infringe trademark if the court finds that: (1) the name or mark is "minimally artistically relevant," to  [*296]  the product, or (2) the use does not "explicitly mislead" the content and relation of the work of art to the trademark. 76For this test to apply, however, a court must first decide whether the infringing work at hand is an expressive work or a work that falls under commercial speech. 77

    Using the Rogers framework to decide the Hermes case will extend traditional trademark laws to unique Web3 items, though it may create issues in its practical application. If the scope of the test is not limited to NFTs minted for the sole purpose of non-commercial art - unlike NFTs, which may have creative elements but are for commercial purposes - courts will encounter issues applying traditional first amendment tests in deciding future cases. The Hermes decision is an opportunity to limit the application of the Rogers Test because the facts involve a balance of trademark holders' rights and artistic freedom of expression.

    III. STATEMENT OF THE CASE: HERMES INTERNATIONAL V. ROTHSCHILD

    In January 2022, Hermes International filed a claim against Mason Rothschild in the Southern District Court of New York. Hermes brought several causes of action including trademark infringement, federal trademark dilution, false descriptions and representations, cybersquatting, injury to business reputation, misappropriation, and unfair competition. 78The lawsuit stems from two collections of NFTs minted by Mason Rothschild. The first NFT Rothschild minted was called "Baby Birkin" and featured an animation of a human fetus inside the shape of the iconic Hermes Birkin bag. 79Shortly after releasing the Baby Birkin, Rothschild minted a second series of NFTs that featured furry digital bags, again in the shape of a Birkin bag. 80Hermes claims that the  [*297]  "knock-off" NFT handbags are the product of Rothschild's agenda as a "digital speculator ... seeking to get rich quick." 81

    A. The Plaintiff and Their Legacy in the Fashion World

    To understand the breadth of the claims lodged by the fashion house against the digital creator, it is helpful to understand the origins of the brand. Hermes is a family-run, independent luxury brand founded in 1837. 82The French fashion brand has long graced the world's most fashionable streets in New York, Milan, London, Paris, and more, totaling 300 stores in forty-five countries. 83While the fashion house is known for its equestrian style and colorful scarves, the Birkin bag is its most famous and iconic product. 84

    In 1983, British actress Jane Birkin sat next to the Executive Chairman of Hermes, Jean-Louis Dumas, on a flight from Paris to London. 85Birkin complained that she could not find a bag suitable for the needs of a young mother. 86Recognizing her needs, Dumas immediately sketched the first version of the bag, later incorporating a roomy interior and a secure outer-lock. 87Dumas even included a space inside to fit her baby's bottles. 88The original idea for the bag had modest and practical beginnings. Over time, however, Hermes began using "rare heritage leather." 89The ultra-high grade leather is "entirely vegetable-tanned natural cowhide," and has become the apex standard of luxury. Birkin bags cost anywhere from $ 40,000 to an astonishing $ 500,000. 90

     [*298]  The brand has been extensively featured in pop culture; adorned by characters in shows and movies such as Sex and the City, Gilmore Girls, and The Proposal. 91Celebrities are known for carrying the bag as well. Victoria Beckham is rumored to have a collection of over 100 Birkin bags, while Kim Kardashian was seen in 2013 sporting a $ 40,000 Birkin finger-painted by her then-infant daughter. 92

    While it may seem that the taste of the ultra-elite would be unimportant in a legal proceeding, in the case of Hermes International v. Rothschild, the bags' recognition and reputation is central to the controversy. Since the fashion house owns numerous trademarks and has countless trade dress registrations with the United States Patent and Trademark Office (USPTO), 93the federal protections offered by its registered marks create a seemingly dispositive case of trademark infringement. Yet, as is discussed in the next section, the digital nature of the NFT coupled with other unique factors creates the perfect storm for an exceedingly complex case that will define the rights of future NFT minters.

    B. Where the Case Stands Today

    Hermes filed the initial complaint in January 2022. 94In response, Rothschild and his attorneys filed two unsuccessful motions to dismiss the case. 95The first motion was filed on February 9, 2022, 96to dismiss the case for failure to state a claim on which relief could be granted 97and was swiftly denied by the court. 98

     [*299]  The opinion and order for interlocutory review discussed the applicability of the Lanham Act and whether the "MetaBirkins" were a source indicator of artistic expression. 99Although Hermes contended that the Rogers Test 100did not apply to the case at hand, the court disagreed: it stated that the Rogers Test applied to this case (at least in part) for the trademark infringement analysis of the use of "MetaBirkins." 101Additionally, the court examined the defenses to trademark infringement argued by Rothschild. Rothschild claimed the affirmative defense of the First Amendment right of fair use. Rothschild argued that ""MetaBirkins' is the title of the artwork" and not a source identifier of his products. 102He claimed that because MetaBirkins is not a source identifier, his artistic expression is covered under the First Amendment protection as illustrated in Rogers v. Grimaldi. 103

    Furthermore, Rogers requires a degree of artistic relevance attached to the artwork rather than commercial speech to warrant First Amendment protections. If "the speech at issue [ ] is not primarily intended to serve a commercial purpose, the prohibitions of the Lanham Act do not apply... ." 104The court went on to state that this balance would generally not support an application of the Lanham Act unless it is a case where the title has no artistic relevance to the work of art or has some artistic relevance. This, however, only applies if the title does not explicitly mislead consumers regarding the source of origination. The court acknowledged that while the digital image attached to the NFT "may reflect some artistic creativity," if the "commercial aspects of a work are  [*300]  intertwined with artistic content, the trademark-suing speech must be treated as noncommercial." 105

    While a smattering of NFT lawsuits have reached courts across the United States, the Hermes opinion is the first that categorized an NFT as "noncommercial" speech. It may be advantageous for minters of NFTs to find refuge under the free speech protections of the First Amendment, but this is not likely to solve the issue of infringement claims running rampant within the digital space. As the Southern District of New York keenly pointed out:

    Because NFTs are simply code pointing to where a digital image is located and authenticating the image, using NFTs to authenticate an image and allow for traceable subsequent resale and transfer does not make the image a commodity without First Amendment protection any more than selling numbered copies of physical paintings would make the paintings commodities for purpose of Rogers. 106

    Rothschild's motions to dismiss and interlocutory review were all subsequently denied by the trial court. The denial of Rothschild's second motion propelled the case to trial in early February of 2023, and the nine-person jury delivered a verdict for Hermes International. 107Rothschild and his attorneys stated at the conclusion of the trial that they planned to appeal the verdict, 108which would provide an opportunity for the Second Circuit to further clarify standards for NFT trademark disputes. Since the jury trial, Rothschild has continued litigating the issue by filing a motion for judgement as a matter of law or a new trial. 109Hermes has countered  [*301]  with a motion for a permanent injunction, asking the district court to permanently block Rothschild's sale and promotion of Metabirkins. 110

    IV. FUZZY STANDARDS: TRADEMARK INFRINGEMENT OR FAIR USE?

    The opinions and other litigation documents filed by both parties provide insight into what the future of NFT lawsuits may look like. The current amended complaint includes numerous causes of action, which, if successful, could lay the foundation for future plaintiffs in validating similar digital copyright disputes. Conversely, treating NFTs as expressive works under the Rogers Test may enable future creators to comment on consumerism and other topics through artistic depictions of trademarked items. Although the outcome of this case remains undecided as it makes its way through the appeals process, much can be gleaned from the case as it currently stands.

    A. The Complaint: Hermes International's Trademark Infringement Allegations

    In Hermes International's January 2022 amended complaint against Rothschild, the fashion giant alleged numerous torts including trademark infringement, cybersquatting, and trademark dilution under the New York General Business Law. 111Hermes alleged that after sending Rothschild a cease-and-desist letter, Rothschild "flatly refused to stop selling METABIRKINS NFTs." Hermes argued this caused consumer confusion based on proof of actual confusion in the media. Media outlets including Elle Magazine, The New York Post, and L'Officiel erroneously reported that Rothschild and Hermes collaborated on the NFT project. 112In addition, Hermes alleged that Rothschild's use of "Birkin" in "MetaBirkin" and "metabirkins.com" amounted to trademark infringement and cybersquatting. Per Hermes, the NFT and website titles misled consumers into believing that the NFTs were authorized by Hermes, diluting their name and harming their business reputation. 113Hermes further alleged that MetaBirkins explicitly misled consumers as part of a marketing strategy  [*302]  to gain notoriety and is ultimately a generic name for "Birkins in the metaverse." 114

    Taken at face value, this may seem to be a standard trademark infringement case. However, Hermes's complaint is unique. Hermes alleged Rothschild sought to "create the same kind of illusion that [the Birkin] has in real life as a digital commodity," and impute the real-world value of the bag to its reapplication in the metaverse. 115Ultimately, with Rothschild making an online, mock-version of the physical Birkin, this case hinges on whether a trademark may be infringed in the digital landscape.

    Hermes's complaint is also unique in that it alleges that Rothschild is not an artist, but rather a marketing strategist who has never successfully sold or created NFTs or artwork. 116Such a distinction is essential for one prong of the Rogers Test, which requires the artistic significance of the alleged infringing artwork for the court to find fair use. 117It appears that Hermes will use this fact to undermine the relevance of the MetaBirkins to the art world.

    B. The Answer: Rothschild's First Amendment Fair Use Defense

    In response to the complaint filed by Hermes, Rothschild filed multiple motions to dismiss, a motion for interlocutory appeal, and a motion for summary judgement. As may have been predicted by the denial of Rothschild's multiple motions, the trial court did not find Rothschild's defense convincing. Although the case has not yet made its way through the appeals process, the court will likely recognize the originality of the issue at hand and may not want to make a hasty decision given the deference this case will have due to its first-impression status. 118

    Rothschild's defense hinged on the fair use doctrine, citing Rogers, and asserted that his artwork did not infringe on the Birkin trademark. 119The court looks to see that (1) the name or mark is "minimally artistically  [*303]  relevant," to the product or (2) the use does not "explicitly mislead" the content and relation of the work of art to the trademark. 120In applying the Rogers Test, Rothschild argued that "Birkin" is "minimally artistically relevant" to the MetaBirkins because his digital project focuses on the fashion industry's cruelty to animals. Rothschild claimed that Birkin bags, made of animal hide, symbolize this cruelty. 121Rothschild further argued that implicit confusion (i.e., media outlets' assumptions about a purported collaboration) is insufficient to satisfy the second prong under Rogers. In other words, Rothschild argued that Rogers's second prong requires that only explicitly misleading use of the trademark will satisfy the second prong of Rogers, not implicit confusion, as Rothschild contends exists in this case. 122

    Interestingly, Rothschild also cited to a quote from the Ninth Circuit regarding the balance between artistic expression in the art world and consumer confusion:

    If we see a painting titled "Campbell's Chicken Noodle Soup,' we're unlikely to believe that Campbell's has branched out into the art business. Nor, upon hearing Janis Joplin croon, "Oh Lord, won't you buy me a Mercedes - Benz?,' would we suspect that she and the carmaker had entered into a joint venture. A title tells us something about the underlying work but seldom speaks to its origins. 123

    While this is true of traditional artwork and well-settled in the courts, NFTs do not neatly fit into the mold of traditional art for several reasons. First, NFTs are not simply art for the sake of art, nor are NFTs merely art that contributes to the art community. Rather, NFTs, with their attachment to the blockchain, hold inherent value akin to real estate in a high-end market. Second, the NFT market is not solely a market to buy and sell artwork by artists. Big-name household brands like Adidas, Budweiser, McDonalds, and Coca Cola are also adopting and utilizing NFTs. 124McDonald's, for example, minted an NFT depicting one of its  [*304]  most famous menu offerings, the McRib. 125Other brands branched out into the world of NFTs to offer their products in the digital universe at prices both affordable and extravagant. The diverse offerings by companies at multiple price points demonstrates how trademark owners' rights extend into the digital landscape and beyond the realm of art for art's sake. Thus, previous cases in trademark and copyright law become problematic when applied to NFTs.

    For example, in Mattel v. MCA Records, the Danish rock band Aqua recorded a song called "Barbie Girl," poking fun at the children's doll by the same name. 126Mattel - the manufacturer of the doll - subsequently sued for copyright and trademark infringement. 127The ruling in Mattel no longer holds the same relevance it did when the case was decided in early 2002, prior to the birth of cryptocurrencies and the rise of NFTs. Today, similar to the false endorsement assumed by multiple publications, an NFT with blatant use of a trademark may cause consumer confusion. Such confusion is understandable given the NFT market is rapidly expanding and legitimate companies are now regularly using their intellectual property to mint trademarked items. 128With the inherent value attached to NFTs because of their connection to the blockchain, consumer confusion can either intentionally or unintentionally mislead consumers into believing the purchased NFT has the value of a brand behind it, when it in fact may not, a la MetaBirkins. For this reason, Hermes offers the courts a chance to narrowly apply the Rogers standard to better fit the unique concepts and issues in NFT litigation.

    V. THE ROGERS TEST, HERMES, AND NFTS: TRADITIONAL TRADEMARK LAWS AS APPLIED TO NFTS

    Notwithstanding legal solutions that may encompass both securities and contract law, in Hermes, the Second Circuit may take two very different approaches when applying the Rogers test to trademark infringement that specifically deals with NFTs. Given the case's novel intersection of NFTs and trademark infringement, 129the Second Circuit must  [*305]  decide how fair use may apply in a digital realm, as well as whether the Rogers test may be adapted for use specific to NFTs. Other district courts will look to the Metabirkins decision in the near future as NFT lawsuits work their way through litigation, making the strategic interpretation of Rogers in the context of NFTs critical in creating concrete guidance.

    A. The Rogers Test and its Application to Hermes International

    Hermes presents an opportunity for the court to apply the Rogers test in a way that extends First Amendment protections to NFTs that are works of art and contribute to the artwork, while simultaneously narrowing Rogers in such a way that gives trademark owners more protection against brazen copying.

    In his concurring opinion on the Rogers ruling, the Honorable Thomas P. Griesa explained that he agreed with the outcome but substantially disagreed with the majority's application of the law. 130Judge Griesa noted that the test created by Rogers created ""broad immunity' which would prevent a remedy in instances of "flagrant deception.'" 131

    It is quite possible that Judge Griesa was concerned that future applications of the Rogers test would be problematic, especially when considering the issues in Hermes International v. Rothschild. As hypothesized in Rogers, the title - here, MetaBirkins - may be found to be so closely related to the artwork - the Birkin bag - that it explicitly confuses consumers. Yet, it provides no remedies for Hermes because the Rogers test has historically applied to traditional artwork. This lack of any meaningful remedy may prove to be a hurdle for Hermes and other brands which seek to expand into the metaverse because of the potential for unfair competition.

    As codified in Rogers v. Grimaldi, infringers using a trademark for artistic purposes can claim use of a mark in an artistic or expressive work by way of the First Amendment. 132The courts strive to promote freedom of expression by permitting otherwise infringing artistic works that meet a certain threshold. However, the courts must simultaneously balance legitimate concerns about consumer confusion. The courts are cognizant  [*306]  that any such adjudication that changes the Rogers scope may have significant implications on either First Amendment protected speech, or consumer confusion in the market, affecting unknowing consumers' wallets. 133

    As applied to copyright and trademark infringement, First Amendment defenses are proper in two instances: parody, and use of a mark in an artistic or expressive work. 134For purposes of this Note, only the latter is discussed, as it is the only one at issue in the Hermes case. 135

    Before the Lanham Act is even applied to the case at hand, a court must first establish that the work is one of artistic expression. 136If answered in the affirmative, a court then considers whether the trademark in question (1) "has no artistic relevance whatsoever," to the underlying work, and (2) "explicitly misleads as to the source or content of the work." 137Even where courts are satisfied that the use of the trademark is artistically relevant, a work is not entitled to protection if it is "explicitly misleading as to [its] source or content." 138

    Applying that analysis to Hermes, the Second Circuit will first need to determine if MetaBirkins are expressive works. To determine if a work is expressive, the item at issue must "communicate ideas or express [...] points of view." 139If MetaBirkins were a series of physical paintings, it is possible that this prong would be satisfied. Yet MetaBirkins  [*307]  are, at their core, cryptocurrency. The Second Circuit will need to address whether cryptocurrency can also be artwork. There are clear cut cases when cryptocurrency, such as Dogecoin and Botcoin, is not art. Still, the unique nature of NFTs places this case in an unexplored middle ground between art and currency. The value of an NFT is derived from its connection with the blockchain (in this case, Ethereum), but NFTs are commonly displayed on online NFT sales websites, much the same as art is displayed in a gallery. 140The district court addressed this squarely when it concluded that the Rogers test does apply, meaning MetaBirkin NFTs are expressive works. 141

    Whether the MetaBirkin is an expressive work is likely to be hotly contested. Another notable and potentially bellwether case, Jack Daniels Products, Inc. v. VIP Products, LLC, granted certiorari by the United States Supreme Court, which heard oral arguments on March, 22, 2023, argued whether a dog toy is an expressive work. 142 Jack Daniels may well factor in the court's analysis in Hermes. Case law has established a low threshold for what constitutes an expressive work. The appellate courts have previously found greeting cards, video games, movies, and literary works to be expressive works. 143The Ninth Circuit concluded, for example, that the work need not be as well known as Citizen Kane or Anna Karenina to satisfy the first prong of Rogers. 144Rather, the art merely needs some creative expression of an idea to be an expressive  [*308]  work. 145Thus, while not at issue at the trial level, this may be of greater importance on appeal as no opinions on the Hermes case to-date have discussed why or which type of NFT is an expressive work. The district court concluded only that the MetaBirkins are expressive works. 146Further delineation between an expressive NFT and a non-expressive NFT will provide greater clarity for future litigation.

    If the Second Circuit recognizes the MetaBirkin NFTs as expressive works, the court must still determine whether the Birkin trademark has artistic relevance to MetaBirkin. 147The Ninth Circuit in Rogers has described the threshold for artistic relevance as "purposely low," or "above zero." 148While the threshold is low, it is clear that this standard does not allow direct copying. This policy is rooted in the statutory protection of a trademark and the balancing of freedom of expression with intellectual property rights. The balance lies in the nuanced interpretation of whether something is a direct copy or has enough of a creative spin which creates artistic relevance. Part of this analysis depends on whether the message surrounding the expressive work would be understood by the audience. 149

    In the case at hand, Rothschild will face an uphill battle to prove to the Second Circuit that his message concerning animal cruelty was understood, that the Birkin bag was essential to his expressive work, and that the name "Birkin" was not arbitrarily used. While the shape of the Birkin bag is an essential part of the artwork, Rothschild must argue how this is an expression. Accordingly, Rothschild must show that the Birkin bag is essential to his expressive purpose, which he failed to do convincingly at trial. The MetaBirkin title may be afforded protection if the Second Circuit finds persuasive Rothschild's argument that the NFT "provides commentary  [*309]  on the relationship between consumerism and the value of art and is therefore protected by the First Amendment." 150

    As it currently stands, Rothscild's message was not understood by the district court as a work of art unrelated to the trademark used. In a May 2022 interview, Rothschild stated that he listed the MetaBirkins as "an ironic nod to the iconic Birkin bag by Hermes," and a "tribute" to Hermes's well-known bag as "an experiment to see if [he] could create that same kind of illusion that [the Birkin bag] has in real life as digital commodity." 151In a sense, Rothschild acknowledged the inherent value surrounding the Birkin bag's unmistakable characteristics. 152Yet in later interviews, Rothschild stated that his MetaBirkins were actually a commentary on the Birkin bag and its use of leather products, specifically on the use of animal products. 153Rothschild has also separately claimed that Birkin bags are a commentary on society's view of luxury, which he argues prompt people to think about what society gives value to. 154

    Ultimately, the district court did not find that the trademark was relevant to the expressive work, resulting in MetaBirkins failing the Rogers test. As stated in the Rogers opinion, if a court determines "that the use of a trademark was "artistically relevant' to the underlying work [the court] must still decide whether the defendant's work was "explicitly misleading'" and thus is not afforded First Amendment protection. 155More specifically, Rogers states that if there is some artistic relevance of the title to the underlying work, "the work is not explicitly misleading as to the content of the work, it is not false advertising under the Lanham Act[.]" 156Therefore, the appellate court will need to determine whether  [*310]  the trial court erred in finding that an ordinary consumer would recognize the Birkin bag in the work.

    Rothschild's NFTs may rise to the level of being explicitly misleading. There is currently a disclaimer on the MetaBirkin website that reads: "We are not affiliated, associated, authorized, endorsed by, or in any way officially connected with HERMÈS, or any of its subsidiaries or its affiliates. The official HERMÈS website can be found at https://www.Hermes.com/." 157Yet, Rothschild's slogan for his NFTs is "Not your mother's Birkin," which could be perceived by consumers in two different ways. On one hand, it could be perceived as being something wholly separate from the physical Hermes Birkin bag. On the other hand, using the trademarked Birkin name alongside the trade dressed shape could invoke a new version of the Birkin by Hermes rather than the creation by a separate entity.

    Additionally, there is reason to doubt the clarity of Rothschild's artistic message given the evidence of actual confusion by multiple magazines who believed the NFTs to be a part of a collaboration with the fashion label. 158Hermes argued that the Birkin NFTs were specifically chosen to play off the widely known trademark and fame of its handbag, which increased the NFTs' value. 159

    B. The Future of Trademark Issues and NFTs

    While the Rogers Test remains relatively easy for courts to apply, it will only be useful in cases where the main purpose of the NFT is to be a work of art. For commercial NFTs, or any one of the other many underlying uses, 160 Rogers does not apply.

    Overall, the district court concluded that the MetaBirkin NFTs are expressive works, although the Second Circuit's opinion is yet to be determnined.  [*311]  There are many NFTs, however, that may not be so clearly defined by the court as an expressive work. If a dog toy's classification as an expressive work is at issue, it is likely that an NFT such as this one that may have multiple uses could be found not to meet the threshold required for an expressive work (e.g., a token for an online game, or, as the district court in Rothschild pointed out, an item like the MetaBirkins that is wearable by an avatar in the metaverse). 161These cases remain in a grey area that further complicates infringement concerning NFTs.

    Separately, in cases where likelihood of consumer confusion exists, courts within the Second Circuit's jurisdiction may apply a different test, applying the Polaroid factors, taken from Polaroid v. Polarad Elecs. Corp. 162The Polaroid factors, which are used to determine likelihood of confusion in trademarks, would create another issue of first impression for the court. While the application of the Polaroid factors is beyond the scope of this Note, it is worth noting that applying the Polaroid factors to this case, in addition to the Rogers test, would be a substantial first step in codifying the application of traditional trademark law to NFTs. 163While this is not the focus of the opinion in response to the motion to dismiss or motion for interlocutory review, it may provide another opportunity for the Second Circuit Court of Appeals to apply traditional intellectual property laws to NFTs. 164

     [*312]  The many possible uses of NFTs (the most common use being artwork) have created a new space for potential issues in infringement and the probable expansion of the fair use doctrine. Because Hermes International v. Rothschild was the first to see a trial - and since the Rogers Test has been adopted by every circuit that has addressed a Rogers issue - extending the Rogers test to a new, intangible medium will surely create new precedent. This precedent will either expand or restrict the application of fair use in the newly developing metaverse.

    VI. CONCLUSION

    The landscape of the digital universe is rapidly expanding, faster than the legislature can adapt. While the public continues to speculate as to whether NFTs and cryptocurrencies are here to stay, lawmakers have been slow to adapt any formal acknowledgement of the new global currency and its accompanying emerging technologies. This may subsequently change while Hermes makes its way through the Second Circuit. 165Consequently, litigation has ensued for a range of intellectual property, securities, and contract issues. Further, since Miramax and other early NFT cases settled before these digital-age issues could be adjudicated, the courts missed opportunities to modify existing case law.

    Yet, with increasing numbers of NFTs minted daily, there are new opportunities for both legislators and courts to analyze the core issues surrounding these new technologies, and whether they are protected by the First Amendment and intellectual property laws. While no clear solution has presented itself, in Hermes International v. Rothschild, the digital world leans closer to extending traditional intellectual property protections to digital assets. This, however, does not account for the unique nature of an NFT, which is too often treated like a piece of art, and too little like the complex, digitally coded currency that it is.

    While the NFT market remains unstable, the increasing commercialization of the NFTs by global brands demonstrates a potential for longevity akin to new-aged art or real estate assets. Or, at least a digital version  [*313]  of a physical asset. Although some traditional investors believe NFTs and other cryptocurrency exchanges to be too unstable to be reliable investments, the unique, adaptable nature of NFTs provides a new global investment market that is expanding at a rate similarly experienced at the dawn of the internet in the 1990s. As with NFTs, the primary purpose of which is to be digital art, values will always fluctuate depending on the popularity of the artist. In this way, NFTs are analogous to physical paintings which can increase dramatically in value after the death of the artist. 166

    Like the beginning of the internet, the introduction of something so innovative and abstract is bound to have its critics. Robert Metcalfe, the inventor of ethernet, stated in 1995 that he believed the internet "will soon go spectacularly supernova and in 1996 catastrophically collapse." 167Similarly, in a 1995 article by Newsweek entitled "The Internet? Bah!," Clifford Stoll, a renowned astronomer, author, and professor stated that "visionaries see a future of telecommuting workers, interactive libraries and multimedia classrooms," but that this was clearly "baloney." 168Both naysayers' prognostications ended up being spectacularly wrong.

    The NFT marketplace and other cryptocurrency exchanges are marked by similar doomsday forecasts from commentators who see digital assets as nothing more than over-valued, dangerously unregulated, and historically volatile investments. 169Drawing the obvious similarities between the infancy of NFTs and the early days of the internet, as NFTs  [*314]  and other fungible tokens increase in mainstream popularity, the courts will need tools to make informed decisions in handling the unique aspects of NFTs that interplay with intellectual property law. As commercial NFTs evolve for use in video games and online platforms, or as confirmation of ownership of physical items and more, big businesses will find ways to market their trademarked products in this new domain. As the metaverse expands, and the use of cryptocurrency becomes more commonplace and regulated, an increase in conflicts concerning the intellectual property rights associated with NFTs, including claims of cybersquatting, unfair competition, false advertising, and false representation of products and services is also foreseeable. With the inevitable expansion of NFTs, Hermes International v. Rothschild stands to be the first of many cases to set a precedent for how these unique issues will be litigated in federal court. As the Hermes case ultimately makes its way through the Second Circuit and potentially beyond, tailoring the Rogers Test to apply to non-commercial NFTs will offer a partial solution to the myriad of new and notable issues surrounding this novel form of international currency.




    California Western Law Review
    Copyright (c) 2023 California Western School of Law 

    Footnotes

  • "The land shall not be sold in perpetuity, for the land is mine. For you are strangers and sojourners with me." 1

    On April 29, 2022, four hunters from Missouri sat in a Carbon County, Wyoming courtroom anxiously waiting for a jury to deliver their fate in the form of a verdict. The four men were charged with violating Wyoming's criminal trespass law, despite technically never having stepped foot on private land. 2The prosecution's theory of the case -grounded in a long-standing tradition of American common law property rights -was that the hunters had violated the airspace above a privately-owned ranch where two corners of the ranch's parcels came together with two opposing corners of public land. 3After hearing the evidence, the judge decided to include verbiage about traversing the airspace of privately-owned property in the jury instructions. 4This decision greatly impacted the prosecution's case, mainly because there had not been a shred of evidence that the hunters had ever physically touched the privately-owned property. 5

    To help visualize the problem, imagine squares on a checkerboard, where alternating squares of black and red join at four corners to meet at a center point. The red squares represent public land, and the black squares are privately-owned land. In the case of the four hunters, the black squares are parcels of land that are part of the privately-owned Elk Mountain Ranch. Elk Mountain Ranch is a property that includes 22,000 acres of deeded land interspersed with approximately 11,000 acres of public land, overseen by the Bureau of Land Management and the State of Wyoming. 6Interestingly, on the real estate listing for Elk Mountain  [*351]  Ranch, the property is described as having deeded property "blocked up together" with leased land. 7

    In the case described above, the Missouri hunters creatively tried to avoid physically trespassing on the privately-owned land. They built a stepladder, positioning it in such a way that two of its legs were grounded on the parcel of publicly-owned land they wanted to access, while the other two legs were planted on the publicly-owned land they were already standing on. 8To traverse the stepladder, the hunters had to pass through the airspace of the adjacent two squares of Elk Mountain Ranch's privately-owned land -never physically stepping onto the property. 9This act of crossing at the corner where public and privately-owned parcels meet is commonly referred to as "cornercrossing." 10To Fred Eschelmen, owner of Elk Mountain Ranch, these hunters trespassed, despite the legal ambiguity of cornercrossing, and this was a crime. 11

     [*352]  The jury who heard the case, however, disagreed with the landowner and the prosecution's theory of the case. 12After deliberating, the jury returned a verdict of not guilty on all charges. 13

    But the story of these Missouri hunters is still far from over. Today, the hunters face a federal civil case where their fate could have wide-reaching consequences for the American public's access to over 8.3 million acres of similarly inaccessible public land across eleven different states. 14

    This Comment briefly introduces the reader to the history and concepts of both checkerboarding and cornercrossing in Part I. Also within Part I, Section C discusses Wyoming's methodology for dealing with the lack of accessibility and the implications of a pending federal civil case involving the four Missouri hunters. Part II discusses the legal issues and the jurisprudence implicated by cornercrossing. Part III calls for any and all changes to the existing law. This Comment concludes by positing a pragmatic solution of making immediate changes to criminal trespass statutes in Wyoming and elsewhere to explicitly bring cornercrossing out of the realm of illegality. It also argues, in a more aspirational manner, for a fundamental reordering of the rights that traditionally accompany property ownership to include a right to roam.

     [*353] 

    I. CORNERCROSSING - AN INTRODUCTION AND BRIEF HISTORY


    A checkerboard pattern of land ownership makes accessing millions of acres of public land in Wyoming and other western states practically impossible. 15

    Vast swaths of several western states are home to a complex checkerboard pattern of property ownership. 16The checkerboard itself has an equally complex origin story and carries with it an enduring legacy of poor planning that has led to today's problems with inaccessibility. This quilted pattern of property ownership has created an estimated eight million acres of inaccessible public land. 17This means public lands as large as four Yellowstone National Parks are currently inaccessible to the public. 18To understand how so much public land became inaccessible in the  [*354]  first place, it is necessary to look at the history of American land purchases.

    A. A Brief History of Cornercrossing

    In the mid-1800s, as the United States sought to connect its new west coast states of California, Oregon, and Washington with existing states east of the Mississippi via the great transcontinental railroad, the idea that westward expansion could best be accomplished by land grants came into being. 19However, the United States quickly discovered that selling distant, desolate plots of individual land to homesteaders and farmers would be practically impossible. 20Instead, Congress came up with what was believed to be a mutually beneficial plan: the federal government would simply give railroad companies alternating parcels of land along the planned railway, while the government would retain ownership of the remaining parcels. 21Then, railroad companies would sell off their parcels to privately finance construction of the railways. 22As podcaster and avid hunter Randy Newburg put it, "the thinking was that the railroads would make a lot of money from the land they owned in the checkerboard, as towns developed ... correspondingly, these public land sections would increase in value, too." 23

    Ostensibly, the federal government hoped that by giving the railroad company alternating parcels of land along the railway, settlements and towns would spring up alongside them, and property values would increase accordingly. 24Indeed, the government would recoup its money  [*355]  by freely granting sections to the railroad companies, and would subsequently sell the sections it retained to incoming homesteaders as nearby towns expanded. 25

    But, as in many cases, the best-laid plans often fail, and this plan failed spectacularly. By the mid-to-late 1970s, the federal government shifted its policy toward federal ownership and problems in managing the public lands mounted. 26Those parcels reverted back to government ownership, creating the patchwork of privately and publicly-owned parcels seen today. 27Very little, if any, attention was paid by the government or remaining landowners regarding how to access the remaining publicly-owned parcels. 28As privately-owned parcels were subsequently sold and resold over the years, the United States retained control over alternating parcels. 29However, little forethought was given to providing access to the millions of acres of interspersed publicly-owned parcels. 30The Supreme Court further muddied the issue in the Leo Sheep Co. v. United States decision. 31In Leo Sheep, the Court found that the federal government had not retained any access, by way of easement or otherwise, to the landlocked parcels. 32

    Within the past few decades, the federal government has since made securing easements and rights-of-way through privately-owned lands a priority, but many of these publicly-owned parcels remain landlocked behind thousands of acres of privately-owned land. 33

    As a result, the United States is left with a strange checkerboard pattern of land ownership and the fallout of a lack of foresight in maintaining access to landlocked parcels. There are currently over 15.8 million acres  [*356]  of federal land that are landlocked. 34According to the most comprehensive mapping report to detail this issue, there are two types of landlocked public land - land that is isolated and land that is corner-locked. 35Corner-locked land is land that can be accessed at the corners because it shares a corner with other publicly-owned land. 36

    B. The Cornercrossing Quandary

    As previously described, the maneuver that the four Missouri hunters attempted by crossing from one corner of public land to another that is bordered by privately-owned parcels is known as "cornercrossing." 37It has been given the name "cornercrossing" because one can only access a parcel of public land by crossing from the diagonally adjacent parcel of public land where the two corners meet. 38Cornercrossing is not explicitly illegal in Wyoming as the law is currently written, 39"and the law [surrounding cornercrossing] has been a legal gray [area] in Western states ever since their settlement." 40In fact, not a single law exists in any state that specifically criminalizes stepping from one corner of public land onto another corner of public land. 41This legal ambiguity has led to confusion and uncertainty with respect to the application of the law, "with some counties prosecuting corner crossers as trespassers and others choosing to turn a blind eye in most cases." 42

    Hunters and outdoorspeople have been capitalizing on this legal gray area for years -in the same way the Missouri hunters did -to access land  [*357]  that has been designated as public land but is corner-locked and surrounded on all sides by private land. 43Typically, these public lands are owned or operated by the United States Forest Service ("USFS") or the Bureau of Land Management ("BLM"). 44The issue of public land being landlocked behind private land is most egregious in the state of Wyoming. Currently, there are approximately 2.5 million acres of land designated as "public land" in Wyoming that are corner-locked. 45

    Until recently, cornercrossing was simply a murky legal issue that was rarely prosecuted because few hunters had either the time or inclination to scour county recorders' offices to determine where easements on landlocked public land existed. 46If hunters and outdoorsmen wanted legal access to landlocked public land, but were uncertain of where the exact boundaries lay, they would simply knock on an owner's door and ask permission to cross. 47Within the last decade, however, the concept of cornercrossing has become both more conspicuous and more prevalent as global positioning and mapping companies are more adept at identifying (down to the foot in most cases) where private land ends and public land begins. 48

    In 2019, after mapping company onX's team of access advocates painstakingly scoured decades' worth of land transactions, onX published a report that detailed precisely how egregious the inaccessibility issue is. 49onX identified millions of acres of public land that are currently landlocked behind private land, and, therefore, unreachable without the express permission of the neighboring landowners. 50Maps of the western United States, such as the one included in this Comment, detail the pervasiveness and complexity of this issue. There are millions of acres of  [*358]  public land that American citizens should have access to that are "diced up" between government agencies and private owners. 51

    The difficulties in accessing landlocked public land abound for numerous reasons. Historically, outdoor enthusiasts were relegated to only those lands whose access points were recorded in public records or on printed maps. 52Accessibility has recently become a priority for legislatures, especially after private companies like onX and constituents alike saw a need to modernize access records. 53Not only is public access a priority, but wildlife management benefits from better mapping. 54Accordingly, this has led to government agencies taking the initiative to dust off and digitize their records. 55

    Furthermore, BLM has recently digitized access easements, and USFS has likewise begun digitizing easements and rights-of-way. 56The White House recently signed H.R. 3113 into law (ironically on April 29, 2022, the very same day the Missouri hunters were acquitted in their criminal trespass case). 57H.R. 3113 "digitizes and makes publicly available geographic information system mapping data relating to public access to federal land and waters for outdoor recreation." 58

    Outdoor enthusiasts and hunters began using handheld GPS technology more frequently with the advent of smartphones and as mapping companies developed applications that would give precise boundary lines and ownership records. 59As GPS technology has become increasingly accurate with technological advances, applications like onX give  [*359]  users the ability to know precisely where they are when traveling outdoors. 60This not only helps prevent users from getting lost, but also allows users to identify who owns the private lands around them, and whether there are any recorded easements on the privately-owned property that would allow them an avenue of access to landlocked islands of public land. 61Seeing a need for a service like theirs, onX and other mapping companies now have entire crews of people who are tasked with combing through assessors' offices and updating ownership status of privately-owned land and any corresponding easements. 62These up-to-date records make their mapping products vitally important, not only to their subscribers and purchasers, but to the American public at large. 63

    C. How States Currently Deal with Corner-Locked Public Land

    Different states have dealt with their landlocked public land in different ways and with varying degrees of success. "Recreational easements, as well as public access programs like Montana's Block Management Program and Idaho's Access Yes, ... for hunting, fishing, or other recreational purposes" have successfully opened up much of the landlocked areas in those two states. 64By prioritizing the creation of ingress and egress into these landlocked areas, "groups like the Trust for Public Land and the Montana Department of Fish, Wildlife & Parks worked with willing landowners and elected officials to secure public access." 65

    There are also efforts at the state and federal levels to incentivize private landowners to give the public access to these landlocked parcels. 66For instance, "every major timber company in Montana has a conservation easement allowing the public to enter at least part of their domain," which has "helped secure access to public lands around fast-growing resort towns  [*360]  like Whitefish and Columbia Falls." 67In 1964, Congress passed the Land and Water Conservation Fund ("LWCF"), an initiative dedicated to purchasing and preserving Americans' access to wild and natural spaces. 68In August 2020, Congress authorized funding permanently, allotting the LWCF a $ 900 million annual budget 69at virtually no cost to taxpayers. 70Some states' legislatures who have begun to prioritize conservation are now using LWCF funds to purchase land or easements in an effort to ensure the public has shared access to wilderness. 71

    Wyoming, on the other hand, seems to be plodding steadily along in the opposite direction. The Wyoming Wildlife Taskforce has been exploring a variety of ways to improve access to public land, 72including implementing a program called "Access Yes." Access Yes, established in 1998, has had limited success, and suffers from a dubious definition of what constitutes improvements in accessibility. 73The task force has also been discussing tying landowner tags to access.

    The reasons for Wyoming's reticence to provide better access are myriad. The Cowboy State is home to long-time "legacy" ranches that are hundreds or thousands of acres in size. Many of these ranches have been in families for generations, 74and a large percentage of these ranches are home to this checkerboard pattern of public and private ownership. Until recently, many landowners allowed the public to cross their private parcels to access landlocked public acreage with the understanding that  [*361]  the public would respect their private land. 75Over the last few decades, however, many of these working ranches have been sold to wealthy, out-of-state business people who have no interest in maintaining a dying way of life. The consolidation of the meat industry into only four conglomerates who dominate and control eighty-five percent of the market is further hindering the tradition of legacy ranches. 76These conglomerates are edging out or buying up smaller, individually-owned cattle ranches resulting in the saga of the small-town cattle rancher going the way of the dinosaur.

    Instead, these properties are marketed and sold to amenity buyers looking for a great piece of property with wildlife, beautiful vistas, lots of space, and few neighbors. 77These amenity buyers, most of whom are independently wealthy, do not purchase these ranches intending to maintain the ranching way of life, and they certainly do not depend on cattle ranching or farming for income. A perusal of current real estate listings for large legacy ranches in western states demonstrates that the marketing of these properties is often geared towards buying thousands of acres but "controlling access" to many more acres of contiguous public land. 78Once they become owners of these legacy ranches, landowners are often less willing than their predecessors to allow access through their private land (perhaps because of a land ethos that does not include granting access to strangers). 79It also may be due to the way the properties have been marketed, or it may be that these out-of-state owners bring a different mentality with them when it comes to the right to exclude. More than likely, both factors are at play in different ways. Formerly-working ranch owners had no trouble granting access to neighbors and hunters. But out-of-state purchasers have bought properties that are marketed in such a way to control access not only to their land, but to the public land that lies behind their property boundaries. And "if you're a buyer who doesn't know any better ... this sounds like a really good deal." 80

     [*362] 

    II. LEGAL ISSUES IMPLICATED BY CORNER-LOCKED LAND

    A. Traditional Property Interests - Right to Exclude

    The cornercrossing issue puts the intersection of American property jurisprudence and public necessity squarely in the crosshairs at the most basic tenets of property law. 81At the heart of common law property rights in the United States is the ubiquitous "bundle of sticks," which represents the many valuable rights held by American property owners. 82Presently sitting atop this bundle is the right to exclude, a right the Supreme Court has called "the most essential." 83Property theorists remain divided over whether the definition of private property should focus on the right to exclude. 84In the instant case, the right to exclude stick has been wielded as a cudgel, preventing the public from accessing lands designated by the government as belonging to everyone.

    However, it was not always that way. Before industrialization took hold in the latter half of the nineteenth and early twentieth centuries, it was uncommon for private land to be enclosed. 85Indeed, until the early to mid-1900s, fenced land was more so the exception than the rule. 86Unrestricted subsistence hunting was also commonplace on lands that remained open and unenclosed. 87As homesteaders and ranchers were incentivized to settle west of the Mississippi River, enclosure and the right to exclude became more common. Because the American landowner class was becoming larger and less exclusive, the need for the common use of vast swaths of land was becoming less prevalent, and by extension, the right to exclude from one's own lands was gradually becoming baked into the American concept of property ownership. 88

     [*363]  This method of asserting control and dominion over a vast, uncharted wilderness is largely reflected in American fables and popular culture. The concept of manifest destiny and the idea that the west was something to be won and owned are entrenched in American history. 89This is noticeable in cultural touchstones American children learn about in grade school, such as Paul Bunyan, Davey Crockett, Johnny Appleseed, as well as modern television series like Yellowstone.

    The idea of enclosure, 90and, thus, the right to exclude, slowly made its way through the various states in fits and starts. 91The right to exclude gives a property owner power and control over who can and cannot come onto their land and how the property is used and enjoyed. 92With the right to exclude from the land, so too came the right to exclude from the airspace above the land. "A landowner's property interest in land extends to the airspace directly over the property, to the extent that the airspace can be used to benefit the underlying land. A property owner, therefore, owns only so much of the air space as such owner can practicably use." 93Under common law, landowners "enjoyed property rights de infernus ad coelum, or "from heaven (to hell).'" 94The concept of ad coelum ownership of the airspace above one's land dates back to Justinian law, but has only been limited relatively recently. 95With the invention of the airplane, the concept of "navigable airspace" belonging to the public made its way into American property jurisprudence. 96With the advent of drone technology, the Federal Aviation Administration is attempting to assert even more control over the airspace above private property. 97

     [*364]  Each state regulates airspace above private land up to five hundred feet. 98Further, in United States v. Causby, the Supreme Court effectively limited the definition of "airspace" as that area "within the "immediate reaches' of the surface" of the land. 99Under 49 United States Code section 40103(1), the United States government has exclusive control of the airspace of the United States, and subsection two recognizes public use only of navigable airspace. 100However, the law is not without precedent in carving out exceptions for trespass of the airspace above property. "A temporary invasion of the air space by aircraft is a privilege. So long as it "does not interfere unreasonably with the possessor's enjoyment ... it is privileged.'" 101This aggravating factor (of whether there was injury to the property or interference with the owner's possession) seems to play a role in many decisions as to whether or not a trespass has actually occurred. 102

    In the case of the four Missouri hunters, the owner of Elk Mountain Ranch is using his ownership rights - specifically the right to exclude from the airspace above his property - to penalize the hunters for encroaching on his property boundaries, despite the fact that no harm was done to his property. The case against the Missouri hunters could be viewed as a case of illegitimate leverage, where "an owner's decision to use or to enforce her property rights is based solely on the harm to others, and so the leverage, that will result." 103This is the legal context through which the Missouri hunters must navigate and make their case. Unfortunately, the law as it currently stands is precedentially void of support for their position. "[A] landowner has virtually absolute property  [*365]  rights in the space above [or near] his or her land," 104and the most important of these property rights is the right to exclude. Without permission, these hunters are illegally trespassing - albeit momentarily. Unless there is a sea-change in how Americans view their property and their property rights, or a fundamental shift in how trespass laws are currently drafted, this type of invasion of airspace will continue to be a crime, a liability, or both.

    The potential plight of private property owners, if they cede access to the public at large, is not a wholly unsympathetic one. There are claims that "allowing corner crossing would devalue ... property," and "more access could mean more people," and therefore, "more potential problems like trespassers, litterers, or poachers." 105These potentialities are arguably mundane as compared to the current injustice of millions of acres of public land that remain inaccessible to the public. Specifically, in the case of the Missouri hunters, the cries of outrage from an absentee landowner who filed a civil case for damages when the criminal case resulted in an acquittal on all charges appear to be nothing more than a temper tantrum. The landowner claims that "by merely crossing his land at the corner, the hunters had decreased the value of his property." 106The invasion of his "airspace," however de minimus, is alleged to have caused a "loss of exclusive access to [his] land," and "millions of dollars in damages." 107

    B. Criminal Trespass

    1. The Law as it Currently Stands

    When the Missouri hunters stepped over one parcel of public land to another, thereby crossing through two corners of adjacent private land owned by Elk Mountain Ranch, 108the Carbon County prosecuting attorney charged them with a violation of Wyoming's criminal trespass statute. 109This statute provides that a "person is guilty of criminal trespass  [*366]  if he enters or remains on or in the land or premises of another person, knowing he is not authorized to do so, or after being notified to depart or to not trespass." 110"Notice" is further delineated within the statute as being given by "personal communication to the person by the owner or occupant, or his agent, or by a peace officer," or through the "posting of signs reasonably likely to come to the attention of intruders." 111Charging these hunters with violations of the criminal trespass statute was entirely discretionary, 112which itself is a problem, as it has the potential to lead to inequity in enforcing the law.

    Criminal trespass statutes like Wyoming's exist to protect the sanctity of a property owner's right to exclude. Historically, trespass was not a criminal offense, but was "in many respects the basis of the whole law of torts." 113Some theorize that the criminalization of trespassing was brought about because of systemic racism. 114After the American Civil War, southern states began criminalizing trespass as a way to control former slaves' movements. 115And certainly, criminal trespass statutes that were adopted in the years after the American Civil War were honed and used to criminalize forms of peaceful protest (such as sit-ins) during the Civil Rights era. 116

    In modern situations, such laws have been or could be used to criminalize and further stigmatize marginalized groups. For instance, despite  [*367]  a resurgence in European right to roam laws, 117recently contemplated changes in criminal trespass laws in the United Kingdom could "have serious consequences for Gypsy, Roma, and Traveller communities." 118It is not difficult to see how "criminalising instances of non-violent and non-destructive trespass" can be "used as measures of social control, forcibly relocating" so-called "undesirable" populations to other jurisdictions. 119

    In the case of the Missouri hunters, these criminal trespass laws are being used by a wealthy landowner to intimidate, strong-arm, and exclude the public from accessing public land. On April 25, 2022, just four days before the four hunters were acquitted of the original criminal trespass charges filed by the Carbon County prosecutor, the prosecutor filed a new case against the hunters for similar conduct that had taken place a year prior. 120The prosecutor moved to dismiss the new charges after a jury acquitted the four hunters, stating "the essential facts in [the] matter were considered by the Jury." 121The owner of Elk Mountain Ranch is essentially sending a strong message to anyone who dares to invade the airspace above his land: "Keep out, or I'll see you in court."

    2. Implications of Currently Contemplated Changes to Wyoming Trespass Laws

    Rather than eliminate the gray area of the current cornercrossing trespass law that favors giving the public better access to publicly-owned lands, Wyoming's legislature is now considering adding verbiage to the current trespass laws that would explicitly ban cornercrossing. Earlier this year, the proposed changes would have added the verbiage "passing through" someone's property to hunt, or antler-collecting, to the hunter  [*368]  trespass statute. 122In effect, this would criminalize the encroachment and intrusion into the airspace above private property. Among the contemplated changes to the trespass law, Wyoming Game and Fish Department officers are being given the power to cite those persons they deem to be trespassing as they "pass through" private property. 123House Bill 103's author and Wyoming State Representative Barry Crago has insisted publicly that his bill had nothing to do with cornercrossing and that he is "not into the whole corner-crossing controversy." 124Because the original draft of Crago's bill was overly vague as to what constituted "passing through" a property, the bill went nowhere. 125

    The most recent proposed change to the law, taken up in November 2022, stipulates ""traveling through' private property in relevant cases means actual ground contact." 126The proposed verbiage includes a definition that ""travel through' requires physically touching or driving on the surface of the private property." 127Again, this clarification only pertains to the hunter trespass statute, and not the criminal trespass statute. Only sheriff's deputies can cite hunters and outdoorspeople for violations of the criminal trespass law. 128The bill would still give game wardens the ability "to cite people illegally passing through private property to get to public land with the intent of hunting, fishing, trapping or shed collecting," or passing through private property "if they were returning from those activities." 129

     [*369]  Unfortunately, these contemplated changes do nothing to alter the criminal trespass statute. Whether cornercrossing can continue to be criminally prosecuted, or whether a trespasser can be civilly liable for damages, remains murky.

    III. POTENTIAL RESOLUTIONS

    Cornercrossing continues to be a thorny issue precisely because of the legacy of American property law and the sanctity of the right to exclude. Indeed, when the private landowner of Elk Mountain Ranch was unable to see the four Missouri hunters criminally prosecuted successfully, he sued in civil court. The civil suit, originally filed in a Wyoming state court, was removed in March 2022 and is currently pending in federal district court. 130Once resolved, the federal decision will likely have far-reaching implications for public access in states where corner-locked land is prevalent. 131If the landowner prevails, the ramifications of this decision are an egregious lack of public access to designated wild spaces. The lack of public access is intentionally being frustrated by the incredibly wealthy at the expense of everyone else, at a precise moment in history when our wild spaces are diminishing, and the chasm of wealth disparity is ever-widening.

    A. Model Solution(s)

    Above all, what Americans value and hold dear when it comes to property rights requires a fundamental shift in ideology away from exclusion. However, "the answer to the corner-crossing dilemma is more about finding compromise solutions than changing the law in one fell swoop." 132

    1. Statutory and Legislative Efforts to Improve Access

    There are some legislative conservation and access efforts already underway in the United States. The Federal Land Transaction Facilitation Act ("FLTFA"), for example, serves as a potential blueprint and an  [*370]  "avenue for enhancing public access on a piece-by-piece basis." 133The FLTFA uses revenue from the sale of BLM-managed public lands to purchase land or easements that are identified as having "high conservation or recreation value," 134and such purchases are "meant to help [BLM] consolidate public land parcels." 135BLM is also prioritizing and purchasing specific parcels "on a piecemeal basis by targeting parcels [identified to be] "low-hanging fruit.'" 136

    The Theodore Roosevelt Conservation Partnership ("TRCP") "focuses on voluntary programs and financial incentives that make more land accessible." 137The TRCP's initiatives include pushing legislation that requires land management agencies to digitize records. 138Unfortunately, these programs are disappointingly underfunded compared to the number of acres of land that would need to be purchased in order to provide access to the millions of acres of public land that remain landlocked. While initiatives and programs, like the FLTFA and the TRCP, are a step in the right direction, they also depend on the willingness of private landowners to sell off parcels of land or to grant easements that would allow public access. Unwilling landowners are not likely to be swayed or bought when they already have the ability to control access to these public parcels because of the checkerboard pattern of ownership.

    2. Aggravated Trespass

    Accordingly, adding a requisite element of aggravation to criminal trespass laws would potentially have an immediate effect on how prosecutors bring actions against defendants charged with trespass. In Georgia, for example, there are multiple statutes regarding criminal trespass. Georgia's misdemeanor criminal trespass statute states "charges can be brought against a defendant who intentionally causes less than $ 500 in damages, or knowingly and maliciously interferes with the possession or use of property." 139First degree criminal damage to property, a felony,  [*371]  involves violence or threat to the wellbeing of another, and a defendant is guilty in the first degree if they "knowingly and without authority interfere with any property in a manner that endangers human life." 140Second degree trespass is trespass that causes property damage of more than $ 500. 141Alternatively, in California, a prosecutor must prove that an alleged trespasser harbors the specific intent to interfere with an owner's unenclosed property. 142

    A graduated system of trespass laws, which includes an element of intent, especially in instances like cornercrossing, would make it more difficult to charge Americans with criminal trespass when they are only passing through the airspace of private property to get from one parcel of public land to another. Likewise, adding an element of aggravation would hold actual trespassers accountable for any property damage they cause, which should placate property owners.

    3. Rediscovering Our Right to Roam

    Americans did not always view property ownership as we do today. For many years, Americans' ideology of private property included a concept known as the right to roam, inherited from British common law.

    In the United Kingdom, beginning in the latter part of the fifteenth century and continuing on through the nineteenth century, wealthy aristocrats and royals enclosed land that had previously been used for common purposes. 143After a series of coordinated mass trespassing excursions during the nineteenth and twentieth centuries, the United Kingdom finally regained the right to roam private properties. 144Slowly but surely, Britain regained the right to roam: "Walkers became trespassers. Then trespassers became walkers." 145

    Americans similarly used to freely walk across common wild spaces and through private property. Indeed, throughout the 1860s, so long as property was unimproved, it was fair game for Americans to hunt, fish,  [*372]  or wander through. 146"People thought of the land that was unimproved ... and unenclosed ... with a flexibility and nonchalance" that seems foreign in a day and age where "No Trespassing" signs are ubiquitous. 147

    Property legal theorists have argued about reinstating or adopting a right to roam, as well as what role the right to exclude should continue to play in the conceptualization of property. 148More progressive property law policies call for measures that "[maximize] the social value of property and the administration of property law," and insist that "an owner's value of privacy and seclusion cannot easily be compared to another individual's use value, which may be crucial for that non-owner's flourishing as a human." 149Michael Heller's thesis of the Tragedy of the Anticommons also decries the fact that "too much ownership has the opposite effect [of creating wealth] - it leads to resource underuse in an anticommons." 150Certainly, that appears to be the case here. Private owners are capitalizing on their ability to exclude other Americans from public land by seeking to enforce trespass laws, resulting in less access to the public and less enjoyment of shared resources as it pertains to cornercrossing.

    While property ownership should include the right to exclude, in instances like the case of the Missouri hunters, courts should be wary of the cost an absolute right to exclude would have on the public's ability to access land. 151A balance must be struck between a private property owner's interest and the interests of the American public. 152

    Reimagining the American concept of property law should include some aspect of a right to roam, but this right carries potential problems. For example, the right to roam presents tort liability for a property owner. If members of the public have a right to roam, then how would that  [*373]  affect the duties of property owners to those who roam on their property? Turning again to countries that have implemented and embraced a right to roam, "landowners are exempt from tort liability for harm to hikers caused by natural features of the property or resulting from an improper use of gates, fences or walls." 153Limiting or exempting property owners from liability when roamers are injured on their property would go a long way in convincing owners that they have little to fear in allowing others onto their property.

    Another concern is the value of property after a right to roam has been established. There is some indication that a right to roam diminishes private property values, 154however, a modest reduction in private property values is infinitely preferable to allowing vast tracts of public land to simply go unused, or used only by the very wealthy and the very few.

    One alternative to a free-for-all right to roam is footpaths. Footpaths are "public easements over private lands that are confined to a defined right of way." 155Where the right to roam gives a wanderer broader access to explore private or unimproved property, a footpath is only used for travel through a specific portion of private property. 156This seems to be the perfect compromise for instances like cornercrossing where the public would only need to step over adjoining private property boundaries to access public land.

     [*374] 

    4. Nuisance and the Unlawful Inclosures Act of 1884

    Nuisance is another avenue that could be utilized against property owners who insist on preventing the public from accessing the public lands that lie beyond their private property. Generally, nuisance can be defined as obstructing the free use of property such that it interferes with the enjoyment of that property. Public nuisance is an act that obstructs the public in the exercise of rights common to all, or interfering with a right shared by the public, regardless of the property interest in the vicinity. Similarly, the Unlawful Inclosures Act of 1884 157("UIA") sought "to preserve public access to federal property." 158

    There are several cases that would support using the UIA as a weapon against property owners who physically fence or enclose public land. 159Because of the way the checkerboard pattern of property ownership persists, any owner whose private land is peppered with public acreage cannot enclose their own property. 160In the case involving the four hunters, there was some indication that the owner of Elk Mountain Ranch attempted to fence his own parcels in the corner where public land met his private land. 161He may have violated the UIA by doing so, and in their answer, the four hunters alleged that he was the one in violation of federal law. 162Depending on the outcome of the federal civil case, the UIA could be turned into a weapon the public could wield against property owners who keep them from accessing public land.

     [*375] 

    B. More Ephemeral Solutions

    1. Paper Streets

    One possible avenue for creating access to public land is paper streets, also referred to as "paper roads." Paper roads is a legal term of art for "those streets or alleyways that have been laid out on officially adopted plans or maps, but have never been improved or opened" by the local authorities. 163As more land ownership records are digitized and become available to the public, recorded servitudes and easements are unearthed. A promising possibility is the idea that paper roads or paper streets may exist on some privately-owned land.

    2. Light-and-Air Easements

    There is minimal caselaw that would support this Comment's thesis as it pertains to granting more access rather than less to the public to the perceived detriment of the private landowner. However, there is some precedent to support a "taking" that would not warrant compensation to the landowner. In one case out of Nevada, the district court determined that a right to compensation did not exist when a property owner's "implied negative easement of light, air and view" was impacted by an overpass placed on a nearby street, and none of the owner's property was taken. 164While "securing 16,102 [traditional] easements from 11,000 private landowners could provide certain access to the 8.3 million acres," 165the cost, time and feasibility difficulties of obtaining that many easements from so many property owners dwarfs the potential payoff. "At least 19% of the corners at issue are shared by oil, gas, energy, timber, or mining companies - not ranchers or farmers," 166which reduces the amount of potential expense and legwork, but leaves much of the public land still inaccessible.

     [*376] 

    IV. CONCLUSION

    The legal predicament of how to provide access to landlocked parcels of public land while still respecting the rights of property owners is a unique one. Cornercrossing through the airspace of privately-owned land will remain a legal gray area, unless and until it is explicitly condoned or criminalized. Because the American conceptualization of property ownership includes, first and foremost, the absolute right to exclude, a right to roam has little chance of reasserting supremacy in the short run. Such a fundamental change in the ways Americans perceive ownership remains an aspirational solution, however, as European right to roam laws are now commonplace. A more immediate and concrete solution to the cornercrossing issue is to adopt into states' criminal trespass statutes a requisite element of aggravation. This aggravating factor will both adequately deter wrongdoers and bad actors, and support those hikers, hunters, and outdoorspeople who simply want to enjoy the freedom to explore America's designated wild spaces. Some combination of both a change in the way Americans think of property ownership and the pragmatic addition of an aggravating element of trespass would also go a long way in addressing the bad faith or ill will of both property owners and hunters. For hundreds of years, unimproved and unenclosed land was thought of as belonging to everyone. These landlocked public parcels should not remain under the dominion and control of a few to dictate access. They belong to all of us, and it's time we get them back.




    California Western Law Review
    Copyright (c) 2023 California Western School of Law 

    Footnotes

  • INTRODUCTION

    In January 2018, the Superior Court of Los Angeles County entered a $ 7.75 million settlement against Uber Technologies, Incorporated, for its alleged Labor Code violations affecting 1.5 million drivers. 1Of that $ 7.75 million, the State of California received over $ 3.6 million and the drivers' attorneys recovered $ 2.3 million; the remainder was split among the drivers. 2Ultimately, each driver took home only $ 1.08. 3The uneven distribution of this award may seem unethical or arbitrary. Unfortunately for the drivers, it was not. Indeed, the individual allotment - 0.000013935% of the total award to each driver - is precisely the distribution that California's Private Attorney General Act allows. 4

    The California Private Attorney General Act ("PAGA") deputizes private attorneys to remedy public harms - namely California Labor Code violations. 5PAGA, which is meant to alleviate the burden on the State's precious legal resources, has survived heavy scrutiny from critics throughout its relatively brief lifetime. 6The most technical of  [*255]  these critiques has reemerged following the United States Supreme Court's decision in Viking River Cruises, Incorporated v. Moriana. 7In Viking River, the Court held that the Federal Arbitration Act partially preempts a portion of the California law prohibiting the bifurcation of PAGA proceedings when heard in an arbitral forum. 8In overturning an eight-year precedent, the Viking River holding has explicitly challenged the intersection between arbitration and joinder in the context of California employment law under PAGA. 9Moreover, Viking River renders PAGA obsolete where employment disputes in California are subject to arbitration.

    This Note critiques PAGA through the lens of Viking River. 10Part I provides a legislative overview of PAGA, including the reasons for its enactment. It also explains and critiques the statute's joinder mechanisms that allow such perverse monetary incentives for plaintiffs' attorneys. Part II explores the historical background and policy underlying arbitration and the Federal Arbitration Act, and how arbitration intersected with PAGA. Part III discusses the two seminal cases on the issue at hand that illustrate the incompatibility of PAGA's joinder mechanism with the principles of private, individualized arbitration. Part IV discusses and critiques two existing solutions to a problem highlighted by the decision in Viking River -the State's need to protect and vindicate the rights of its labor force with underfunded prosecutorial agencies, and without mass PAGA arbitration. Finally, this Note proposes a new solution, premised on a tax expenditure, to prevent and remedy California Labor Code violations while protecting both employees and employers.

     [*256] 

    I. CALIFORNIA'S PRIVATE ATTORNEY GENERAL ACT: AN OVERVIEW

    The Labor Code sets forth guidelines for employers' conduct and is intended to protect employees' labor rights. 11Before 2004, the Labor and Workforce Development Agency ("LWDA") was California's main entity charged with prosecuting employers who violated provisions of the Labor Code. 12The Labor Commissioner could bring punitive actions against employers and seek monetary penalties as a result of their Labor Code violations. 13Monies obtained through LWDA actions were deposited into the State's General Fund to be used for public benefits, including health infrastructure and educational programming for employers. 14This model, though well-intentioned, eventually proved inadequate for California's booming workforce.

    When California's workforce grew by forty-eight percent from 1980 to 2000, 15there became a need for more protections for those workers. In comparison, the budget for Labor Code enforcement agencies, like the LWDA, grew by only twenty-seven percent - almost half as much as the workforce whose rights it was meant to supervise. 16California's exponentially-growing workforce, coupled with increased Labor Code violations, left the underfunded LWDA unable to effectively prosecute those violations. 17Moreover, many Labor Code provisions were punishable only as criminal misdemeanors without sanctions, deterring District Attorneys from prosecuting  [*257]  those violations. Consequently, there was an overall absence of monetary fines - civil or criminal - for employers who violated California Labor Code provisions. 18This lack of accountability also contributed to an underregulated "underground economy" 19that had, by then, already caused California to lose between three and six billion dollars annually in unrealized tax revenue. 20

    A. California Legislature Enacts the Private Attorney General Act

    An underfunded LWDA that could not keep up with California's rapidly growing workforce was a problem. In Arias v. Superior Court, the California Supreme Court summarized the legislature's response:

    The Legislature declared that adequate financing of labor law enforcement was necessary to achieve maximum compliance with state labor laws, that staffing levels for labor law enforcement agencies had declined and were unlikely to keep pace with the future growth of the labor market, and that it was therefore in the public interest to allow aggrieved employees, acting as private attorneys general, to recover civil penalties for Labor Code violations, with the understanding that labor law enforcement agencies were to retain primacy over private enforcement efforts. 21

    Thus, in 2003, the California Legislature passed PAGA. 22Legislative proponents of PAGA pointed to the sheer growth of the California workforce compared to the relatively slow growth of the budget provided to labor enforcement agencies. 23Proponents also highlighted the comparably low number of Labor Code violations being prosecuted  [*258]  by the LWDA. 24These proponents promoted PAGA as a mechanism that would cure this deficiency 25by deputizing individual employees as Private Attorney Generals, giving them authority to sue their employers for Labor Code violations and to collect civil penalties. 26As such, the employees would not sue in their individual capacity, but "step[] into the shoes of the labor commissioner" and sue on behalf of the State. 27Stated differently, PAGA would allow the LWDA to extend its prosecutorial powers by allowing suits to be executed by employees. 28

    Successful PAGA suits provide a default penalty of $ 100 per employee per pay period for the first alleged violation and $ 200 for any subsequent violations per employee per pay period. 29Of the money recovered, the employee who brought the suit receives twenty-five percent while the State receives seventy-five percent. The attorneys who helped the plaintiff bring the suit receive statutory attorney's fees and costs. 30The widespread manipulation of these provisions by the California Plaintiff's Bar has faced particular scrutiny by defense attorneys, employers, and businesses. 31

     [*259] 

    B. The Common Criticism of PAGA's Exploitative Recovery Allotment

    Since its enactment, critics of PAGA consistently point to the flaws in its justification. 32Perhaps the greatest criticism concerns the disproportionate share of the recovery between the state, the attorneys, and the employees bringing the PAGA action. As noted above, the employee only receives twenty-five percent of any recovery - subject to statutory and attorney's fees. 33This opens the door for immense exploitation by plaintiffs' attorneys, much like the $ 1.08 award for each Uber employee compared with the $ 2.3 million in attorneys' fees. 34

    PAGA's statutory mechanism of joinder may also facilitate exploitative attorneys fees. Joinder allows the principle "individual" plaintiff to bring, along with their own claim, a series of "representative" claims, which could include the claims of tens, hundreds, thousands,  [*260]  or even millions of other employees. 35Plaintiffs' attorneys working on contingency bases are incentivized to take cases likely to yield a higher monetary recovery. Accordingly, some plaintiffs' attorneys have taken to "exploiting glaring loopholes" of PAGA's joinder mechanism to maximize their fees. 36The extravagant fees awards are made possible when attorneys join large numbers of "representative" claims to the main plaintiff's "individual" PAGA claim.

    This joinder process is relatively simple because there is no requirement that PAGA plaintiffs actually suffer every violation they allege 37Accordingly, there seems to be no practical end to the number of PAGA claims that can be filed or joined. PAGA lawsuits have increased more than 1,000% since its enactment in 2003. 38Beginning in 2014, and every year since, the LWDA has received notice of approximately 4,000 PAGA cases per year. 39

     [*261] 

    II. ARBITRATION, THE F.A.A., AND PAGA

    PAGA suits can join an immense number of claims together, facilitated by its simplified joinder procedure, which has few obvious obstacles. However, one procedural instrument significantly hinders PAGA's sweeping power: arbitration. California precedent originally cast doubt on arbitration's effectiveness at stymying representative PAGA claims. 40This view was disrupted by the United States Supreme Court's decision in Viking River Cruises, Incorporated v. Moriana. There, the Court highlighted arbitration's powerful effect on rendering many PAGA cases practically unprofitable for plaintiffs' attorneys, a waste of court resources, and fruitless for those employees with "representative" claims. 41

    A. A Brief History of Arbitration and the Federal Arbitration Act

    Arbitration is now well-defined. 42In the context of modern employment contract dispute resolutions, arbitration is an out-of-court procedure wherein an employee and employer present their cases before a mutually selected and neutral arbitrator, who serves as a judge or referee. 43After each party presents their cases, the arbitrator  [*262]  chooses the prevailing party. The parties are bound by that decision, just as they would be by an opinion issued by a court. 44

    Arbitration was not always the standard mode of resolution for contract disputes. Inspired by the hostility of English courts towards arbitrating claims, 45early United States courts employed special rules titled "the ouster and revocability doctrines." 46These rules precluded parties from obtaining specific performance of contracts to arbitrate claims 47and, thus, established a certain "judicial hostility" towards arbitration. 48As a result, most disputes were adjudicated in a courtroom, notwithstanding alternative means of resolution available or better-suited to their claim. 49

    In response to this hostile attitude towards arbitration, Congress enacted the Federal Arbitration Act ("F.A.A.") in 1947. 50The F.A.A. withdrew states' power to require a judicial forum for the resolution of claims 51and made arbitration provisions "valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 52Proponents of the F.A.A. recognized  [*263]  that arbitration was cheaper and more efficient than formal contract dispute adjudications, and generally precluded appeals. 53Early arbitration involved less discovery, motion practice, and other time-consuming aspects associated with litigation. 54Accordingly, the F.A.A. was meant to avoid such "needless contentions ... incidental to the atmosphere of trials in courts." 55

    B. Arbitration in the Context of Employment

    At its inception, the F.A.A. explicitly excluded regulation of employment contracts for "seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce." 56However, the Ninth Circuit Court of Appeals later held that section two of the F.A.A. exempted all employment contracts from the F.A.A.'s reach. 57

    In 1991, the Court upheld the enforceability of employment contract clauses mandating arbitration and of binding arbitration agreements arising therefrom. 58Soon after, in 2001, the Court explicitly rejected the Ninth Circuit's interpretation of the F.A.A. in Circuit City Stores v. Adams. In Circuit City Stores, the Court held that the F.A.A. did indeed cover employment contracts, 59and that such coverage was consistent 60with the F.A.A.'s original legislative intent. More recently, in 2018, the Court held that employment agreements requiring individual, not collective, arbitration would be enforceable and would  [*264]  not violate employees' rights to engage in protected, concerted activity 61under the National Labor Relations Act. 62

    Seeking to avoid the long and costly process of litigation and bolstered by judicial support of mandatory arbitration clauses in employment settings, employers have increasingly included arbitration clauses in their employment contracts. 63At first glance, mandatory arbitration provisions appear to impose a sweeping hurdle on employees who want to litigate their claims in court. However, a key principle of arbitration is consent. 64This primarily means two things: (1) employees' claims are subject to arbitration only if the employee has expressly consented to arbitration 65; and (2) the parties will arbitrate only those issues that they have specifically agreed to submit to arbitration. 66Futhermore, section two of the F.A.A. permits the invalidation of arbitration agreements under traditional contract remedies, including unconscionability or fraud. 67State courts therefore retain the power to invalidate arbitration agreements on general contract grounds. 68Moreover, the language in section two of the F.A.A. enforces arbitration as a matter of law. 69Accordingly, the F.A.A. "preempts any state rule discriminating on its face against arbitration - for  [*265]  example, a law "prohibiting outright the arbitration of a particular type of claim.'" 70

    C. PAGA's Statutory Joinder Mechanism

    As previously discussed, the State is the real party in interest in a PAGA suit. 71Accordingly, a PAGA suit is a type of qui-tam action, 72where plaintiffs represent the Labor Commission as "agents or proxies" of the State of California. 73PAGA's true power as a qui tam action, however, does not come from the plaintiff's individual claim or claims against their employer. Rather, it comes from joining representative claims of Labor Code violations committed by the plaintiff's employer against other alleged aggrieved employees. 74

     [*266]  Most suits brought on behalf of a class of people require some sort of procedural certification. 75For example, class action lawsuits in California generally require that a class be ascertainable and well-defined. 76This determination turns on a variety of factors, including whether the representatives share a common question of law or fact, and whether the representatives will adequately represent the members of the class as a whole. 77Similarly, among the factors considered in federal class action suits, there is a required showing of commonality and adequacy. 78

    PAGA actions, on the other hand, strategically evade this class certification requirement, despite their ability to adjudicate the claims of millions of employees at a time. 79This ability to circumvent the class-certification process comes from PAGA's "built-in mechanism of claim joinder," 80which allows the main plaintiff to use their individual claim as the basis by which to join the claims of other alleged aggrieved employees, without a showing of adequacy or commonality. 81Accordingly, this statutory joinder mechanism establishes standing for a great number of employees without having to certify a "class."

     [*267]  The legitimacy of the joinder mechanism rests on the fact that PAGA actions are not class action suits. The Supreme Court has established that a PAGA action cannot be a class action because the representative claims are not "distinct claims belonging to distinct individuals," but rather "predicates for expanded liability under a single cause of action." 82PAGA suits present one claim against the employer, brought on behalf of the State. PAGA suits are not comprised of multiple claims brought on behalf of each employee. Thus, there is no need to prove a commonality of law or fact with another claim or claims because the standing conferred on the individual claim inherently creates standing for all who are joined. The effect of joinder on standing under PAGA is frustrated when introduced into the arbitral forum - a problem not fully clarified until Viking River. 83

    III. EXPLORING THE CASE: BEFORE AND AFTER VIKING RIVER

    The standing created by PAGA's joinder provision raised concerns about the potential for federal preemption of certain PAGA provisions. Generally, preemption is a legal principle drawn from the concepts of federalism - the balance between the state and federal legislatures. 84The principle of preemption declares that when the two authorities are in conflict, the higher authority - here, federal law - will displace the lower authority - state law. 85The F.A.A. is a federal law whereas PAGA is a state law. Originally, the California Supreme Court's ruling in Iskanian suggested that the F.A.A. preempted PAGA. 86However, Viking River has highlighted the possibility of federal preemption in employment contract disputes. 87This is of paramount  [*268]  consequence because so many California employers require arbitration. 88

    A. Iskanian, Eight Years of Precedent

    Before Viking River, the seminal PAGA case was Iskanian v. CLS Transportations Los Angeles, LLC. There, the California Supreme Court held that the "F.A.A. [did] not preempt a state law that prohibited waiver of PAGA representative actions in an employment contract." 89The plaintiff, a driver for CLS, had signed a "Proprietary Information and Arbitration Policy/Agreement" upon commencing his employment. The agreement required employees to resolve all employment-related claims against CLS in a neutral arbitration forum. 90The agreement also contained a representative and class action waiver, essentially requiring the plaintiff to relinquish his right to bring any and all representative or class actions against CLS. 91

    Following a series of alleged Labor Code violations by CLS, the plaintiff filed a class action complaint for failure to provide meal and rest breaks, and final wages in a timely manner. 92CLS asserted that, pursuant to their agreement, all the plaintiff's claims were subject to binding arbitration, which it then moved to compel. 93The court agreed, and granted CLS' motion. 94However, the California Supreme Court later held in Gentry v. Superior Court that class action waivers in employment arbitration agreements may be invalid in certain circumstances. 95Accordingly, CLS voluntarily withdrew its motion to compel arbitration and the parties proceeded to litigate the case. 96The plaintiff then amended his complaint to include individual and representative  [*269]  PAGA claims on behalf of the State, and sought civil penalties. 97

    During the pendency of the Iskanian litigation, the Court decided AT&T Mobility LLC v. Concepcion. 98 Concepcion invalidated a previous California decision restricting consumer class action waivers in arbitration agreements. 99In response, CLS renewed its motion to compel arbitration and dismiss Iskanian's class claims, arguing that Concepcion invalidated Gentry. 100The plaintiff argued that Gentry was not invalidated, and that CLS had waived its right to pursue arbitration when it withdrew its original motion to compel arbitration. 101The trial court ruled for CLS, ordered the case into individual arbitration, and dismissed the class claims with prejudice. 102On appeal, the court affirmed, holding that the F.A.A. precludes states from withdrawing claims from an arbitral forum and PAGA claims must be argued individually, not in a representative action, consistent with the terms in an arbitration agreement. 103It also upheld the view that CLS had not waived its right to compel arbitration when it originally withdrew its motion. 104

    The California Supreme Court granted review of the case to explore whether the F.A.A. preempted California's rule regarding PAGA and arbitration. 105The court first determined that, pursuant to public policy, 106an employee's right to bring a representative PAGA claim is unwaiveable. 107Nevertheless, while a waiver of representative  [*270]  PAGA claims is unenforceable, state law "may not be enforced if it is preempted by the F.A.A." 108The court established that the California rule against PAGA waivers did not frustrate the objectives of the F.A.A. 109The F.A.A. aimed to ensure efficient resolution of private disputes, while PAGA actions were between an employer and the California's LWDA. 110Accordingly, the California law was not preempted by the F.A.A. 111However, when the United States Supreme Court reviewed this finding in a similar case, it concluded that California's decision was based on a flawed analysis.

    B. Viking River Establishes a New State of Law

    Viking River Cruises ("Viking River"), a company offering international ocean and river cruises, employed Angie Moriana as a sales representative. 112Moriana's employment contract contained a mandatory arbitration agreement that included two important provisions. 113First, a class action waiver, through which Moriana's forfeited any right to bring an employment dispute as a "class, collective, or representative" action. 114Second, a severability clause explained if the first waiver was found to be invalid, any "class, collective, or representative" PAGA dispute would be litigated in court and the remaining valid portions would be arbitrated. 115

    Alleging violations of two Labor Code sections, 116Moriana filed a PAGA action against the cruise line in state court. Moriana asserted both an individual claim and representative claims, including a "wide  [*271]  array" of violations allegedly suffered by other employees. 117In response, Viking River moved to compel arbitration of Moriana's individual PAGA claim and to dismiss her representative claims. 118The trial court denied Viking River's motion after applying a public policy justification from Iskanian; the intermediate court later affirmed on the same grounds. 119Both courts held that categorical waivers of PAGA standing are inconsistent with California's employment policy. 120Accordingly, PAGA claims must not be severed to create individual, arbitrable claims and representative, non-arbitrable claims. 121More simply, the Court in Iskanian concluded that the individual plaintiff's PAGA claim, subject to arbitration per his employment agreement, could not be severed from the representative PAGA claims of other employees, whose arbitration was not agreed to in the representative employee's agreement.

    The United States Supreme Court granted review to clarify whether the California law prohibiting the division of PAGA actions into constituent claims, pursuant to the severability clause in Moriana's waiver, was preempted by the F.A.A. 122In its analysis, the Court readdressed Iskanian. Ultimately, the Court required the lower courts to treat the representative-action waiver in Moriana's employment contract as invalid "insofar as it was construed as a wholesale waiver of PAGA standing." 123However, because of the severability clause in Moriana's contract, Viking River was entitled to enforce its arbitration agreement regarding Moriana's individual PAGA claim and to dismiss the representative claims for lack of standing. To the extent that PAGA had prohibited Viking River from arbitrating Moriana's  [*272]  individual claim and dismissing her representative claims, PAGA was preempted by the F.A.A. 124

    In explaining its contrary holding to Iskanian, the Court first discussed how consent underpins arbitration. 125The F.A.A. exhibits a policy-based inclination towards arbitration in support of judicial economy. Therefore, when parties agree to arbitrate a claim, those parties waive their right to litigate the dispute in a judicial forum and, instead, create a contractual right to resolve the dispute in an arbitral forum. 126The right to arbitrate a claim, bolstered by the policies of the F.A.A. and basic contractual provisions, must not be contravened by a generally applicable state law, such as PAGA. 127

    The Court also noted that there is, in fact, a conflict between the procedural structure of PAGA and the F.A.A. in the context of arbitration. 128This conflict comes from PAGA's statutory mechanism of claim joinder - the very mechanism that gives PAGA its bite. 129Moreover, the secondary rule in Iskanian practically invalidated agreements to separately litigate or arbitrate "individual PAGA claims for Labor Code violations that an employee suffered." 130This was so because undertaking "victim-specific" claims in separate arbitration proceedings does not serve PAGA's deterrent purpose. 131More specifically, the rule prohibited the contractual division of PAGA actions into constituent claims. Thus, the rule "unduly circumscribed the freedom of parties" to determine the issues and rules by which they would arbitrate in a way that violates arbitration's fundamental principle  [*273]  of consent. 132The Court explained that state law "cannot condition the enforceability" of agreements to arbitrate on a procedural mechanism that would allow parties to "expand the scope of the arbitration" by submitting claims that the parties had not consented to arbitration. 133That is contrary to typical procedural rules of joinder, and the F.A.A. departs from this approach, favoring individualized arbitration procedures of the parties' own "design," even if bifurcated proceedings inevitably results from that procedure. 134

    Iskanian prohibited the division of individual and representative PAGA claims. The effect was an expanded PAGA joinder mechanism. The result undermined parties' abilities to choose what claims and in what forum they will arbitrate. 135

    After addressing the preemption issue, the Court considered the severability clause issue. The Court held that the severability clause entitled Viking River to enforce the arbitration agreement of Moriana's individual PAGA claim. 136The Court highlighted that PAGA's joinder provision rests solely on the basis of a plaintiff's individual claim, absent an agreement to arbitrate representative PAGA claims. Therefore, once an employee's individual PAGA claim has been submitted to arbitration, any representative claims would lack standing to  [*274]  be adjudicated, either in court or in arbitration. 137PAGA simply lacks any other procedural mechanism that would confer standing on representative claims, leaving them unable to be enforced or litigated.

    IV. EXPLORING POTENTIAL SOLUTIONS TO CALIFORNIA'S PAGA PROBLEM

    Viking River dictates that employees with unsettled PAGA claims may only seek monetary penalties for their individual claims of Labor Code violations. Employee plaintiffs may no longer collect for representative claims of violations experienced by any other employee - let alone hundreds, thousands, or even millions of employees. Currently, employee plaintiffs seeking to adjudicate alleged Labor Code violations as representative PAGA claims have no avenues for resolution, especially if they sign arbitration agreements similar to the one signed by Moriana in Viking River. 138Certainly, employers could consent to the arbitration of all representative PAGA claims. However, it is difficult to believe they would do so. After all, the purpose of the severability waiver in Moriana's employment agreement was to preclude the adjudication of representative PAGA claims.

    Moreover, given Iskanian's reversal, it is unlikely that these same employers would not immediately move to amend their arbitration agreements to include severability provisions that would split individual and representative PAGA claims. Indeed, many employers likely have already made such amendments. 139The only real option for employees,  [*275]  of course, is to simply adjudicate their individual PAGA claims in arbitration. It follows that individual PAGA claims are less profitable to plaintiffs' attorneys than representative claims. 140In essence, Viking River identified a procedural - and, arguably, a fatal - flaw in the PAGA statute. In Viking River's wake, California must now reassess how to resolve its problem of insufficient prosecution of Labor Code violations.

    A. A Roadmap from Justice Sotomayor

    One potential solution came from the text of Viking River itself. In her concurrence, Justice Sotomayor's clarified that California is not "powerless" to address its concern that the State is unable to adequately enforce the Labor Code without the assistance of deputized private attorneys general. 141First, the Court may have misunderstood California's state law: California's courts should clarify its case law regarding the bifurcation of PAGA claims. 142Ultimately, these state courts could "have the last word." 143

    A second, and more practical, solution would require action by the legislature, not the judiciary. Justice Sotomayor explained that if the Court did not misunderstand California law, then "the California Legislature is free to modify the scope of statutory standing under  [*276]  PAGA within state and federal constitutional limits." 144Essentially, Justice Sotomayor provided a roadmap for addressing representative PAGA claims. The California Legislature could amend the text of PAGA to create statutory standing for representative PAGA claims, provided it did not run afoul of the state or federal constitutions, and avoided F.A.A. preemption. Thus, severed representative claims could be heard and adjudicated; plaintiff employees' representative standing would not rely on the standing of a main, individual claimant. 145

    This legislative solution should be financially attractive to California because the State would continue to collect seventy-five percent of any monetary award. Additionally, this solution would not depend on a future decision by California justices upon hearing an "appropriate case," 146which may or may not resolve this issue for the California LWDA. Furthermore, permitting individual plaintiffs to again join representative claims would clearly be attractive to the California Plaintiff's Bar. 147

    Legislative reform could force employers - under pain of financial penalty - to pay closer attention to their behavior. However, the resulting benefit to the employees would remain overshadowed by the exploitative nature of the PAGA joinder mechanism. If the purpose of PAGA is to protect California's employees, this is not realized in practice. In fact, the LWDA itself has recognized this issue. In their joint Budget Request Summary for fiscal year 2019-2020, the LWDA and Department of Industrial Relations stated:

    Seventy-five percent of the 1,546 settlement agreements reviewed by the PAGA Unit in fiscal years 2016/17 and 2017/18 received a grade of fail or marginal pass, reflecting the failure of many private plaintiff's attorneys to fully protect the interests of the aggrieved employees and the state. 148

     [*277]  That the LWDA - the very agency that PAGA was enacted to benefit - expressly recognizes the checkmate of the plaintiff's bar to the statute's entire purpose indicates the severity of PAGA's exploitation. Moreover, it is indicative of PAGA's ineffectiveness. Notwithstanding legislative reforms permitting joinder of representative claims, PAGA continuing to operate in this manner does not solve the LWDA's problem.

    B. The Fair Pay and Employer Accountability Act Ballot Measure

    The California Fair Pay and Employer Accountability Act ("F.P.E.A.A.") is another potential solution to the issues posed by PAGA. 149The law, if passed, would repeal PAGA in its entirety and eliminate the authority of the Labor Commissioner to authorize private attorneys to assist with enforcing the Labor Code. 150The law would also require the California Legislature to provide funding for enforcement by the Labor Commissioner and allow employers to correct identified violations without penalties. 151The F.P.E.A.A. would also create and maintain a "Consultation and Policy Publication Unit" to provide information, advice, and assistance to California employees  [*278]  and employers. 152Finally, the law would award all penalties to the alleged aggrieved employees and authorize increased penalties for employers who willfully violate the Labor Code. 153Essentially, the F.P.E.A.A. would reposition the Labor Commissioner as the ultimate enforcer of California Labor Code violations in a manner that is more financially agreeable to employers.

    Unfortunately, this solution lacks creativity. While it rids California of the exploitation by plaintiffs' attorneys via PAGA claims, it sends California back to 2004 by putting prosecutions of Labor Code violations back into the hands of an underfunded Labor Commissioner. California's workforce has expanded exponentially since 2004; meanwhile, the LWDA budget has not increased commensurate to that growth. 154At its current budget, the LWDA cannot effectively prosecute violations in a way that protects California employees. 155The measures proposed in the F.P.E.A.A. address this issue, 156albeit incompletely. Assuming that California, who has depended on the prosecution of Labor Code violations by private parties since the passage of PAGA, would be suddenly equipped to handle the enforcement of the violations by "all the necessary funding," is imprudent. 157This proposal within the F.P.E.A.A. directs the legislature in a conclusory way to amend the very issue that made PAGA necessary in the first place - fund the LWDA. Without clearer parameters, and in the face of the ever-expanding Califiornia workforce, this solution does not afford sufficient protection to employees. This proposal simply  [*279]  does not equip California with the necessary structure and guidelines needed to handle the rights of its workforce.

    C. A Preventative and Remedial Measure is the Best Solution for California

    The solution proposed by Justice Sotomayor - clarifying the law, legislatively or judicially - seems to better address the problem highlighted in Viking River than the F.P.E.A.A. However, both solutions share a common flaw: they take effect after the violations have already occurred. As a result, employers lack financial incentive to proactively adhere to the Labor Code. If the underlying issue is employers violating the Labor Code, then why not aim to prevent those violations from the start?

    If California truly wants to protect its employees while preventing excessive litigation, it should repeal PAGA and enact a tax expenditure to reward employers who commit minimal Labor Code violations per capita. Separately, the State could still allocate funds to the LWDA to prosecute serious violations of the Labor Code. Alternatively, the State could cap the recoverable attorney fees for privately vindicated PAGA suits at a figure comparable with the lodestar calculation. 158Put simply, tax expenditures work. 159Also known as tax  [*280]  incentives, 160these policies create exceptions to the state's basic tax structure and incentivize businesses and employers to alter their behavior to benefit from a reduction in their taxable incomes. 161Tax expenditures, while lacking an official definition, generally refer to either a special inclusion, exemption, or deduction in taxes, which function as an alternative to other policy apparatuses, including regulatory and spending programs. 162

    Fortunately, California has been a leader in this area. Following the federal government by only a few years, California was one of the first states to focus on tax incentives in its budget and legislative processes. 163Moreover, California consistently analyzes and reports on the effectiveness of its tax expenditures and conducts statutorily required annual reports. 164Thus, the State already has a system to assess  [*281]  the efficiency and success of a potential tax expenditure program, thereby ensuring that the program functions as intended. This would allow for the maximization of resources.

    Because of its proactive, incentivizing character, a tax expenditure is an effective way to tackle California's problem. California legislators should pass an expenditure, either in the form of an exemption or a deduction, that is tethered to a number of Labor Code violations. This would allow employers who heed that line to pay less taxes. This expenditure should be structured to reach all employers, regardless of incorporation or size, in the same way that PAGA reaches all California employers. Based on the number of workers employed by a particular employer, the legislature should set a quota of Labor Code violations permissible under the expenditure. If an employer commits more than its allotted quota of Labor Code violations, it will not be allowed to reap the benefits of the tax incentive. This will encourage employers to pay close attention to the less-noticeable Labor Code violations often prosecuted under PAGA, including failure to provide and maintain detailed wage statements, which requires no proof of injury. 165Keeping a closer eye on similar, often unintentional violations, will reduce the number of Labor Code violations committed by employers.

    The broad nature of the Labor Code makes it nearly impossible to prevent all Labor Code violations. The tax expenditure would be designed to thwart a majority of Labor Code violations at their source. For all others, the LWDA would maintain its prosecutorial authority. The prospect of an underfunded LWDA is allayed in this case because the tax expenditure should proactively reduce the number of violations the LWDA would need to prosecute. This reduction in Labor Code violations conserves the LWDA's resources and allows it to act efficiently in its capacity as the State's main prosecutor of these offenses. Of course, the LWDA would continue to collect civil penalties for the violations it does prosecute.

    Alternatively, if the LWDA remains underfunded in spite of the tax incentive, California should amend the PAGA statute to include a cap on attorney's fees. This cap should be based on the hours worked  [*282]  and the reasonable, actual results achieved by the plaintiffs' attorneys, similar to the lodestar fee methodology. 166As this Note previously discussed, a common sentiment among employers, businesses, and defense attorneys is that the Plaintiff's Bar exploits PAGA's recovery provisions to maximize their personal financial recovery. 167Through real-life examples, the attorneys' recovery seems wildly unfair, both to the employees whose rights have been violated and to the State, who actually brought the case. 168Furthermore, considering that PAGA was enacted because the State lacks adequate resources to vindicate the rights of employees, PAGA's exploitation by the plaintiff's bar seems all the more distasteful.

    This cap would limit the perverse financial incentives for plaintiffs' attorneys to bring PAGA suits on behalf of thousands or millions of employees simply for the payout. Instead, plaintiffs' attorneys would be compensated reasonably and fairly.

    A preventative tax-measure coupled with a cap on attorney's fees is what makes this two-pronged approach most effective. The tax incentive solution adopts a more comprehensive approach than the solutions posited by Justice Sotomayor and in the F.P.E.A.A. because it curbs a number of violations at their source.

    CONCLUSION

    The current framework under PAGA has proven to be untenable, both in its failure to prevent the Labor Code violations and in terms of adequately and fairly compensating those employees who have suffered from violations. Moreover, the exploitation of PAGA's attorney's fees provision by the California Plaintiff's Bar undermines the legislative intent of PAGA. 169

    The United States Supreme Court's recent decision in Viking River highlights the futility of PAGA as a tool for the enforcement of labor rights of employees who have signed arbitration agreements. A recent empirical study found that over fifty-five percent of workplaces in  [*283]  California require mandatory arbitration. 170Because a substantial portion of the California workforce is now unable to bring representative claims under PAGA's joinder mechanism, California needs a new way to ensure the protection of its employees. Two solutions to this problem have been put forth, as laid out above, one by Justice Sotomayor and one by proponents of the F.P.E.A.A. Both solutions address California's problem from a remedial, not a preventative, perspective. Moreover, attempts by the courts to reconcile PAGA with the tenets of the F.A.A. have created chaos, and the underfunded LWDA lacks the resources to effectively enforce the Labor Code. A better approach is to abandon PAGA, maintain the structure and policies of arbitration, and incentivize California employers to commit fewer Labor Code violations through the adoption of a tax incentive. By adopting this approach, California can liberate its employers from the suffocating effects of PAGA's exploitation while paving a path to justice for its workforce.




    California Western Law Review
    Copyright (c) 2023 California Western School of Law 

    Footnotes

  • INTRODUCTION

    On November 12, 2021, the release of Battlefield 2042 was met with immediate backlash from fans and reviewers alike. 1Upon launch, the game sold for $ 70 2on current-generation consoles in the United States and was purchased by 4.23 million consumers in the first week alone. 3However, its peak concurrent player count dropped 70% in the weeks after its launch as players seemingly abandoned the game and complaints of software defects flooded the internet. 4One popular personal computer video game launcher, Steam, was inundated with thousands of negative reviews and warnings from players "not to buy Battlefield 2042." 5For those who already purchased the game, the real issue was how to get a refund on the product, and whether the license attached to it allowed them the opportunity.

    The rise of digital goods and software licenses that have replaced physical sales has led to confusion and the loss of ownership rights. 6Attached to these licenses - and present in virtually all digital video game sales - are arbitration clauses. These clauses place a restriction on consumer protection. 7Purchasers can no longer rely on return policies found in brick-and-mortar stores, which previously allowed consumers to decide where they would like to purchase based on more favorable refund  [*317]  systems. For years, this has presented redressability issues for purchasers of digital products. However, new legal tactics and organizational software has allowed for cost-effective mass arbitration. The expense of this mass arbitration tactic cannot be understated. For example, recent filings against DoorDash resulted in the company attempting - and failing - to argue its way out of paying arbitration fees. 8The popular food delivery company paid a staggering $ 9,000,000 bill before arbitration even began. 9The court noted that companies like DoorDash "have tried for thirty years to keep plaintiffs out of court, and so finally someone says, "OK, we'll take you to arbitration,' and suddenly it's not in your interest anymore. Now you're wiggling around, trying to find some way to squirm out of your agreement." 10The "poetic justice" noted by the court may soon make its way to the sale and use of software. 11

    Instead of relying on arbitration clauses to act as a suit of armor protecting against consumer lawsuits, positive steps may be taken for the video game industry (the "Industry") to safeguard itself from potential liability while building a stronger relationship with its customers. Online Dispute Resolution ("ODR") has been used by eBay since the late 1990s when it began employing a mediator who used email to resolve disputes between the website's users. 12eBay's ODR system has evolved, using new and advanced technology which allows it to handle sixty million disputes every year. 13eBay conducted a study using routinely-collected data to show that users who participated in the ODR system were more likely to increase their activity on the platform afterward, so long as the  [*318]  process took less than six weeks to resolve. 14Such user interaction, which promotes the continued use of the company's platform, is in stark contrast with arbitration, which tends to preclude an ongoing relationship. 15

    This Comment will examine the case law concerning software licenses, class action lawsuits, and arbitration clauses that have left millions of consumers unable to obtain refunds on purchased products or use the court system for monetary compensation. It will then discuss using a mass mediation system through automated ODR to address this expansive problem. Part I will characterize the current issues in interactive entertainment software and troubled releases, highlighting the difficulty in refunding or gaining compensation through the courts for purchasing "broken" software. Part II will discuss software classification as a good to be regulated by the Uniform Commercial Code ("UCC") and how it favors the producer over the consumer. Part III will discuss the ubiquity of restrictive arbitration clauses and how they disallow redress through the stifling of class action lawsuits. Part IV will propose a form of mass mediation to be adopted by the Industry to cut the costs of arbitration and litigation, while protecting industry growth and consumer purchases. Finally, Part V will discuss methods of ODR that the Industry can use to mediate on a large scale.

    I. CHARACTERIZING THE PROBLEM

    The past several decades have seen an unprecedented growth in the production and consumption of video games across the globe due to technological innovations and mainstream popularity. In the Industry's formative years, major console producers created cartridges that held the game's software and sold them through third-party retailers. 16The reliance on major retailers, such as Wal-Mart, led publishers to spend weeks preparing to pitch their hardware and software and created strong relationships  [*319]  between retailers and leading developers. 17Even a well-prepared sales pitch touting new innovative hardware, such as Sega's Genesis, could fail if the retailer was already reliant on another supplier. 18

    In the late 1980s, storied video game developer, Nintendo, accounted for 10% of Wal-Mart's total revenue. 19Nintendo's relationship with Wal-Mart was so strong, Wal-Mart refused to carry games and gaming consoles created by other rival companies out of fear of damaging their relationship with the monolithic video game kingpin. 20However, this reliance on traditional retail storefronts has seemingly ended. Implementing new information technologies allowed major console manufacturers to create digital storefronts and sell directly to the consumer through Xbox Live and PlayStation Network beginning in 2002. 21These new networks allowed prominent developers to operate their own storefronts and create specialized policies for software licenses and refunds. 22Unlike physical goods, these "network storefronts" mean consumers cannot freely sell or trade their purchases without creating a new copy of the software, which is generally held to be copyright infringement. 23The shift from tangible goods to digital licensing in the exploitation of copyright has created a system in which restrictive software licenses, including arbitration clauses, leave consumers without a traditional means to refund their purchase. 24

    Major video game development companies are facing increasing backlash when expensive, marquee titles are released only to contain major malfunctions, leaving consumers upset with no means to refund the product. After its launch, fixes to Battlefield 2042's most essential operating functions were delayed - including standard fare such as a scoreboard  [*320]  and in-game voice chat - until months after the game's launch. 25The discontent by fans manifested when a disgruntled member of the community started a Change.org petition in January 2022. 26By February 7, 2023, the petition had 233,768 signatures from those demanding a refund or simply showing support for others due to what the community felt was false advertising and a series of broken promises. 27Ultimately, the petition's creator abandoned hope for launching a lawsuit against the game's publisher, Electronic Arts, due to anticipated barriers to litigation. 28A close look at the End User License Agreement ("EULA") sheds light on why litigation would likely prove difficult.

    Specifically, Section 15(A) of the EULA contains an arbitration clause confining, "all disputes, claims or controversies arising out of or relating to this Agreement ... [to] be determined exclusively by binding arbitration." 29Unfortunately, the cost and time of arbitration greatly outweighs the benefit for upset users concerning a $ 70 purchase. 30Further complications occur in Section 15(C), wherein the EULA states fees and costs attributed to arbitration will be in accordance with the American Arbitration Association's Consumer Rules. 31Following these rules, a nonrefundable fee of $ 200 is required at the time of filing, 32making small claims impractical. Finally, the EULA contains a limitation allowing individual claims only "and not as a ... class member," making the  [*321]  pursuit of a class action unattainable unless the contract itself is declared void. 33

    Battlefield 2042 is not the only recent launch from a major studio to contain game-breaking malfunctions. In 2018, storied video game developer Bethesda Game Studios released Fallout 76, an online action role-playing experience set in an already popular in-game universe. 34At launch, Fallout 76 was plagued by technical issues and exploits, breaking the in-game economy by allowing players to duplicate valuable items and access developer-only areas filled with every earnable item in the game. 35 Fallout 76 suffered further from framerate drops, broken character models affecting essential in-game functions, disappearing questlines, and a digital world devoid of content for engagement. 36Much like Battlefield 2042, Fallout 76's lack of content and numerous software glitches at launch caused immediate vitriol from its fanbase. 37Similar to the heightened sales seen at the launch of Battlefield 2042, Fallout 76 sold 1.06 million units in the first week. 38

    After refunds proved difficult, players turned to the court system and had to contend with the license attached to the game's software. In a statement by the plaintiffs' lawyers, Migliaccio & Rathod LLP, the firm argued that the refusal of refunds after purchase left the players "to deal with an unplayable experience until patches bring it back to a playable  [*322]  state." 39Customer support told users who were attempting to receive a refund that they were ineligible after downloading the product. 40

    While the first sale doctrine typically grants purchasers ownership rights to transfer and sell physical products, this doctrine does not provide the same consumer protections for software purchases. This essentially allows buyers to recoup losses when unsatisfied with a purchase; however, digital goods cannot be resold in the same manner, 41altering the relationship consumers have with their purchases. Digital copyright owners justify this loss of previously-established resale rights through the complicated licenses employed in digital sales, which deny actual ownership to purchasers. 42Bethesda's EULA attached to Fallout 76 is primarily silent regarding refunds. 43The 9,475-word document notes that statutory obligations may allow users compensation in certain countries, excluding the United States. 44Much like the aforementioned Battlefield 2042, the arbitration clause in Bethesda's EULA includes a class-action waiver, stymieing attempts at redress. 45Attorneys attempted to file claims in multiple forms to keep the class action in court, 46however, the EULA's arbitration clause still proved ironclad. 47

    Still seeking compensation for consumers unhappy with the state of Fallout 76, law firm Migliaccio & Rathod launched what it has dubbed "arbageddon." 48"Arbageddon," as practiced by Migliaccio & Rathod, is an aggressive approach consisting of filing hundreds of individual demand letters against Bethesda on behalf of game purchasers in an attempt  [*323]  to force a settlement. 49While the results of this mass arbitration method are currently undetermined, it demonstrates a desire among consumers and litigators alike to establish a means of monetary compensation for the purchase of software in a primarily broken and unusable state.

    II. THE FIRST STEPS TOWARD DENYING RECOURSE; SOFTWARE IS, APPARENTLY, A GOOD

    It is now generally held that software is considered a good in the eyes of the court, rather than a service, which has limited the protections available to consumers. In application to the Industry, such a distinction is difficult to justify. Classifying software as a good has effectively forced consumers to provide complete assent to unfavorable terms in order to use and enjoy a product. Courts cannot predict future changes in technology when ruling on the case before them, and a series of cases have created a classification for software as a good that strongly protects the interests of producers at the expense of their customers.

    Software's designation as a good was initially justified by its attachment to a physical purchase, which could then be returned by the customer to the retailer from which it was purchased. In the 1991 case Advent Systems Ltd. v. Unisys Corp., the Third Circuit ruled that software was a good to be regulated by the UCC. 50Key to this decision was the acknowledgment that although "computer programs may be copyrightable as intellectual property ... the fact that once in the form of a floppy disc or other medium, the program is tangible, moveable and available in the marketplace." 51It is well established that "goods" under the UCC are interpreted broadly, with Section 2-105 defining the term as meaning "all things ... which are movable at the time of ... sale." 52 Advent Systems offers the premise that intangible intellectual property, such as a software code for a video game, becomes a tangible good when it is attached to a medium, such as a compact disc. 53Therefore, the disc holding Advent's software was the good that qualified for regulation under the UCC, and not necessarily the software itself. 54

     [*324]  Further, when Sony launched the PlayStation 5, it marked the first time one of its primary consoles was released with the option to purchase a unit without a disc drive. 55The choice to release a console with no disc drive was likely in direct response to the growing trend in digital sales. 56In the past two years, Sony's software sales have grown from 71% in digital form, to 79%, 57meaning most purchasers never obtain a physical copy of any game they purchase. For proprietary storefronts in the Industry, this also means increased profitability through controlling prices and limiting software resale. 58

    Soon, courts began to recognize that software was not a traditional good for which the UCC was written to govern, yet struggled to move away from its classification as a good. In ACI Worldwide Corp. v. Keybank National Association, the court applied the "predominant purpose test" to make the distinction. 59The court illustrated the problems associated with such a classification concerning software, stating, "software is not clearly a good or a service in the abstract." 60Courts can, therefore, "determine "whether the ... contract is a rendition of services ... or is a  [*325]  rendition of goods.'" 61Such a determination can be challenging in the software space involving the sales and licensing of video games. Games-as-a-Service business models promise to provide content to players over the game's lifespan rather than at the time of purchase. 62This model clearly blends the purchase of a good, the software itself, and service, which is the promised update of digital content within the software. Adding choice of law and choice of venue clauses, allowable under the UCC, however, can create a way around the predominant purpose test and further injure the consumer's ability to seek monetary compensation. 63Choice of law has been given such deference in contract disputes that ""in principle,' the parties may choose to "have portions of their contract governed by the law of Tibet, the law of pre-revolutionary Russia, or ... the law of California.'" 64

    The location of the EULA itself has also been a detrimental factor in deciding the legality of form contracts for software licenses, with courts finding assent even if a contract cannot be accessed until after purchase. Such license terms generally include wording stating the user assents to the software license through its use, and the intent is that upon opening and using the software, the terms have been assented to. 65In Specht v. Netscape Communications Corp., for example, the court noted that the mere act of downloading software does not indicate "an unambiguous indication of assent. The primary purpose of downloading is to obtain a product, not to assent to an agreement." 66The acceptance of shrinkwrap as a means of assent has led to copyright owners' expansion of their own  [*326]  rights at the user's expense. 67Among the most important of this expansion was that producers were allowed to propel their rights beyond those established by intellectual property law and limit their liability to consumers. 68

    This deference to contract terms, combined with contracts that virtually no consumer reads and are permitted to be hidden until after purchase, places consumers at a severe disadvantage. 69Actual assent to contract terms are somewhat questionable as most consumers believe that software licenses are much more favorable than they are. 70This "term optimism" is likely based on the experiences consumers have purchasing physical goods and associating the rights granted to them in those purchases with digital downloads. 71However, major software publishers in the Industry have taken advantage of such rulings to create licenses which completely shield themselves from liability.

    III.

    "Too Darn Bad": Courts Continue to Deny Recourse to Aggrieved Consumers

    The introduction of mass form contracts for software licenses has led to an almost ubiquitous inclusion of arbitration clauses. 72Further, the Federal Arbitration Act ("FAA") supersedes all attempts to use state consumer protection laws. The combination of court rulings favoring contract formation and the FAA having denied recourse in the form of class action suits, has allowed for large corporations to reap great benefits while taking advantage of consumers. 73

     [*327]  The Supreme Court has offered its opinion on a number of consumer cases affecting the Industry and the limited ability for consumers to seek monetary relief for faulty products. In the 2011 case AT&T Mobility LLC v. Concepcion, the Supreme Court upheld an arbitration agreement that would force consumers who were unhappy with the purchase of their cell phones to pursue their claims through arbitration. 74In its decision, the Court stated the individual $ 30.22 in sales tax that the claimants would be responsible for if their cases were prosecuted made it such that the cases could not proceed as a class action. 75Much like the EULA in Battlefield 2042, 76consumers were offered no additional protections through the court systems.

    The majority opinion in AT&T Mobility, authored by Justice Scalia, concluded that the federal laws favoring arbitration over adjudication preempted the state law that would allow for a class action in such a case. 77The Court began by recognizing the basic principle that, "Section 2 of the Federal Arbitration Act (FAA) makes agreements to arbitrate "valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.'" 78In response to AT&T's compulsion of arbitration, the plaintiffs contended that the arbitration agreement itself was unconscionable under state law because it disallowed class-wide procedures. 79The Ninth Circuit agreed with the assessment, however, the Supreme Court held their precedent allowed for a "liberal federal policy favoring arbitration," and that "arbitration is a matter of contract." 80The plaintiffs' attorney later offered his perspective on the outcome of the case, stating the corporate use of arbitration clauses "[were] never about making it easier for customers to resolve disputes - [they were] about killing claims." 81

     [*328]  Although many Supreme Court decisions favoring arbitration have been narrow, 82the FAA continuously prevents class action consumer claims. Justice Kagan stated in the American Express v. Italian Colors Restaurant dissent that, "the monopolist gets to use its monopoly power to insist on a contract effectively depriving its victims of all legal recourse. And here is the nutshell version of today's opinion, admirably flaunted rather than camouflaged: Too darn bad." 83Arbitration clauses derive their legality from the FAA, which supersedes any state consumer protection act used by plaintiffs to find monetary relief. 84The Class Action Fairness Act of 2005 ("CAFA") allows federal courts original jurisdiction over class action cases with controversies in excess of five million dollars. 85In Adell v. Cellco Partnership, which involved consumer cell phone contracts including an individual arbitration clause, the plaintiff argued that CAFA supersedes the FAA in class action arbitration cases. 86However, the district court noted that when interpreting two statutes, the best course of action is to give effect to both. 87The court cited precedent supporting the notion that the FAA supersedes other federal laws and stated, "[even] a statute's express provision for collective legal actions does not necessarily mean that it precludes "individual attempts at conciliation' through arbitration." 88Therefore, the court found CAFA and the FAA could coexist as the contract signed by the plaintiff allowed for arbitration and disallowed class action suits. 89With seventy-eight Fortune 100 companies utilizing class action waivers in arbitration contracts, the widespread nature of this problem - continuously denying  [*329]  recourse to plaintiffs even in the presence of statutes like CAFA - is readily apparent. 90

    IV. A PROPOSAL OF A SELF-REGULATING SYSTEM OF MASS MEDIATION

    Since FAA's adoption, arbitration has been a court-supported means of avoiding litigation, but its usefulness is beginning to wane. Rising costs, combined with new, plaintiff friendly filing methods, has shifted the balance of power between producers and consumers. The Industry must adapt by shifting its focus to create new means of solving disputes using ODR to ensure future growth through proactive self-regulation.

    A. The Growing Dangers of Arbitration and Mediation as a Solution

    Consumer protection advocates have already begun turning their eyes towards software sales, focusing on the use of new technology to quickly and easily weaponize arbitration claims on a large scale. Bethesda's current "arbageddon" is just one form of mass arbitration being employed in an attempt to overwhelm a corporate entity. 91

    Mass arbitration filings are the result of a system perceived by the public and many attorneys, to have been manipulated in favor of corporate interest. 92Generally, the sheer expense of arbitration has been one of the main obstacles preventing consumers from using the system to resolve their product claims. 93However, the use of automated software programs has dramatically reduced these costs and softened the obstacles. 94For instance, FairShake was established to disrupt the arbitration system by allowing aggrieved parties to engage in the arbitration process through an automated procedure with greater ease and lower personal cost. 95In its first outing, FairShake launched 1,000 arbitration actions  [*330]  against AT&T and Comcast. 96Stunning the companies and overloading arbitration resources, several of these claims took more than two years to move through the system. 97AT&T's big win in AT&T Mobility was now being weaponized against the company as an unprepared governing body was forced to confront unhappy consumers. 98

    TurboTax, made by Intuit, is a software program easily accessed through the developer's website and used by consumers to file their taxes. 99TurboTax had two relevant products: one called "Free Edition" and the other known as "Free File." 100Use of Free Edition resulted in some users accruing charges based on the forms they filed by directing them to paid services. 101Free File allowed users to file taxes free of charge, but the company effectively hid its use from online search engines, driving engagement to the paid version. 102In 2019, a class action suit was initiated against Intuit, whereby the plaintiffs were able to successfully compel arbitration. 103The law firm of Keller Lenkner chose to represent the plaintiffs through mass arbitration, of which the administrative fees will be paid by Intuit. 104Such fees could reach $ 3,000 per case, with awards for arbitration participants potentially reaching six figures. 105As demonstrated  [*331]  by this example, organizational software is proving to be a powerful tool in pursuing consumer rights. 106

    Even considering the Supreme Court decisions favoring the upholding of arbitration clauses, companies have been exposed to a new and severe vulnerability: weaponized arbitration. 107Arbitration clauses can no longer act as a shield against liability for bad business practices or faulty products. 108New tactics used by enterprising law firms have finally established a weakness in arbitration clauses that the FAA does not protect. 109Recently, Amazon buckled after facing a total of 75,000 potential arbitration hearings; but games like Battlefield 2042 had over 200,000 vocally upset consumers, a number significantly higher than that which caused Amazon to yield. 110The ease of filing mass arbitration claims, pioneered by companies like FairShake, could potentially lead to a breaking point for the ubiquity of these arbitration practices, swinging the benefit pendulum from the producer to the consumer. Considering potential claims for video game disputes are already common, and likely inevitable in the future because millions of players experience the same software bugs, the Industry must reconsider individual arbitration as a tool in dispute resolution.

    B. The History of the Industry's Successes with Self-Regulation

    To avoid further controversy, arbitration, and litigation costs, the Industry should look to its past successes in circumventing government regulation to create a "safe harbor" for itself by taking a proactive approach in establishing a self-regulating system. By enabling the Industry's lobbying arm to implement self-regulation, the Industry can create a new dispute resolution path that avoids arbitration software. In 1993, the United States Senate began its hearings on violence in video games. As  [*332]  a result, the major video game console producers at the time, Sega and Nintendo, were questioned regarding the content of the games they marketed and sold. 111The hearings included the testimony of advocacy groups as well as footage from video games, such as Mortal Kombat, Night Trap, and Lethal Enforcer, to demonstrate particular instances of extreme violence within the games. 112The message was clear - the United States government was interested in regulating the content and sale of video games. 113Soon after the hearings, the House of Representatives introduced the Video Games Rating Act of 1994. 114The bill established a subcommittee appointed by the President to approve a rating system for video games. 115While this bill would consider the "voluntary" participation of companies to partake in the rating system, the prior hearings entertained the idea that it was irresponsible for companies to release violent or sexual content in any form. 116Senator Joe Lieberman's letter to his colleagues highlighted the governmental concern about current and future video game content, stating that "advances in technology ... depict murder, mutilation, and disfigurement in an extremely graphic manner." 117

    In response, leading developers, console manufacturers, and retailers all agreed to the operation and establishment of an independent rating system: the Electronic Software Ratings Board ("ESRB"). 118The comprehensive nature of the ESRB impressed regulators to such a great extent that Senator Lieberman later called it "the most comprehensive [rating system] in the media industry." 119The ESRB became active just in time for the 1994 holiday season, and still operates today as an independent arm of the Industry's lobbying and advocacy body, the Entertainment  [*333]  Software Association ("ESA"). 120As a result, the Industry was successfully able to shift the burden of monitoring violence in video games from the shoulders of the developers to the purchasers of the games - children's parents. 121Since the self-regulatory scheme's inception, the Industry's success has grown exponentially. The worldwide value of the video game industry in 2022 is currently estimated at $ 235.7 billion, with analysts predicting growth of up to $ 321.1 billion by 2026, far outpacing other entertainment sectors. 122In fact, the current profitability of the Industry, even in the face of controversial releases, may make the adoption of a new system seem wholly unnecessary. However, there is opportunity and an economic incentive in the early adoption of a system for dispute resolution outside of arbitration or the courts.

    C. Profits for the Producers Through a System of Mass Mediation

    Adopting mass mediation will not only protect the Industry from weaponized arbitration software, but may also create greater profits through the increased engagement and goodwill of consumers. The benefits of mediation, as opposed to arbitration, for businesses using software licenses to distribute their product is readily apparent. Traditionally, business lawyers favored arbitration for "cost savings, shorter resolution times, a more satisfactory process, [the use of] expert decision makers, privacy and confidentiality, and relative finality." 123However, with the rise of arbitration clauses in agreements, this viewpoint has received considerable pushback. Even studies showing that corporate attorneys  [*334]  favor arbitration, generally focus on the negative elements of its use. 124The progression of arbitration replacing many forms of civil litigation has increased costs, as the evolution of such a process has made arbitration more "formal, costly, time-consuming, and subject to hardball advocacy." 125In addition, the efficiency of the arbitration process has depreciated; arbitrators are more likely to allow the admittance of evidence and, unlike federal judges, they do not "dramatically shorten presentation time." 126Using a third party to mediate instead of arbitrating the consumer's claims will still protect the company's sensitive and proprietary information, as facts released to the third party will not necessarily be shared with the consumers in dispute. 127In essence, the adoption of mass mediation will allow greater control for the developers and publishers of entertainment software because they can control the process without complying with FAA regulations. 128

    Moreover, adopting mediation on a large scale may also create growth in the form of greater consumer engagement in one of the most popular business models in the Industry. Formalized arbitration often, by the nature of its strict regulation, "diverts resources away from mutually beneficial efforts and commits them to mutual combat." 129For video game producers, increased interaction leads to increased profits. 130Major publishers, like Sony, Microsoft, and Nintendo, rely on engagement in their proprietary storefronts. 131The Industry often gauges its  [*335]  engagement through "attach rates," which are calculated by "dividing the number of units an individual game has sold by the number of consoles sold," and are used to assess the health of a video game console. 132For example, Sony's PlayStation 4 had an average of just under ten games sold per console and was considered highly successful. 133The drive to keep consumers involved has led the Industry at large to adopt the Games-as-a-Service ("GaaS") model, which offers players the opportunity to purchase or freely download a game once, with the promise of continually updating the game throughout its lifespan. 134This model has allowed games such as Epic's smash hit, Fortnite, to generate $ 1.2 billion in its first year. 135However, the model is highly reliant on continued support from developers and interaction from players. 136Companies focus on releasing in-game purchases to keep players involved and work with third-party companies designed to create and promote digital economies. 137This in turn highlights the Industry's necessity to keep players interested. 138The switch in revenue model amongst many games will benefit from ODR's creation of goodwill. A comprehensive study of eBay's ODR system shows that participation in a successful mediation process can lead to more significant user interaction. 139Instead of leaving fans of Fallout 76, as mentioned above, upset with their purchase and unable to refund or gain redress, using ODR can heighten fans' engagement  [*336]  with the product, keeping them in the company's system and spending their money with the corporation. 140

    Stepping away from compelled arbitration and embracing a system of mass mediation may also prevent negative press coverage and word of mouth among consumers. Following their launches, games like Battlefield 2042 and Fallout 76 received an array of criticism on the internet, which likely affected their future purchases and overall profitability. 141Studies have shown that many consumers of electronic entertainment gather information from games before purchasing, with 61% using professional reviews as a determinant. 142An overwhelming amount of purchasers rely on word of mouth to determine whether they will purchase a video game, with 91% of a recent survey's respondents confirming they use online forums to help inform their buying decisions. 143As such, widespread online coverage of Fallout 76's contentious launch likely informed consumers' decisions. 144If purchasers had been able to solve their disputes quickly through online mediation, by way of a system like this Comment proposes, much of the negative discourse surrounding the game might have been avoided and producers would have been able to increase their profits. 145By allowing for standardized ODR options for upset gamers, companies not only protect themselves from unwanted mass arbitration, but can also protect the interests of their users and keep their player base within the digital ecosystem. 146

    Perhaps the strongest argument for self-regulation through the adoption of an ODR system is the potential for the Industry to create a "safe harbor" and avoid regulation and litigation from the Federal Trade  [*337]  Commission ("FTC"). 147The FTC is currently targeting Microsoft's acquisition of Activision-Blizzard on anti-competition grounds. 148The $ 69 billion deal represents the largest acquisition in video game history and has drawn the ire of regulatory agencies across the globe. 149Similar to the Senate hearings of 1993, regulators are again targeting the video game industry as its size and influence grows. 150

    Again, the Industry can look to its past successes in dealing with regulatory bodies and adopt a system of mediation to escape consumer protection agencies. Under direction from Congress, the FTC created the Children's Online Privacy Protection Rule ("COPPA"), which requires parents to be notified of the personal information collected from their children. 151COPPA directly impacted the Industry because it protects the data of children under the age of thirteen, and 24% of those who interact with electronic entertainment are eighteen and younger. 152COPPA allows providers to submit self-regulatory guidelines for approval to the FTC. 153Once approved, the provider can enjoy "safe harbor" and avoid investigation from the government's regulatory arm. 154Commissioners  [*338]  working for the FTC voted 5-0 to approve the guidelines submitted by the ESRB. 155The FTC has already worked with major Alternative Dispute Resolution providers and has shown great respect for the ESRB in the past, considering them to have the best rating system in the entertainment sector. 156A comprehensive ODR program promoting mediation for software licensing can potentially apply for a similar safe harbor and avoid further regulatory oversight.

    The creation of this safe harbor can have another benefit for the Industry: protection from Attorney Generals ("AGs"). AGs have parens patriae authority to act on behalf of citizens of the state when enough of them have been negatively affected by corporate misfeasence. 157Although there is some dispute about whether AGs are bound to agency principles - forcing them to abide by the individual arbitration clauses used in software licenses 158- it is generally accepted that parens patriae suits are not subject to contractual constraints. 159In fact, such AG lead legal actions allow circumvention of arbitration clauses that preclude class action suits. 160 Parens patriae authority is not derived from the relationship between AGs and the citizens of their states; instead, it arises when the injured party has no control of the litigation. 161The Supreme Court has already held that government agencies are not barred from seeking damages when arbitration clauses prevent class members from litigation. 162In EEOC v. Waffle House, Inc., for example, employees were barred from participating in a class action suit based on their contract terms. In other words, it prevented them from "pursuing victim-  [*339]  specific judicial relief, such as backpay, reinstatement, and damages." 163The Court ruled the United States Equal Employment Opportunity Commission ("EEOC"), acting on behalf of the class, could intervene without having to arbitrate individually. 164As such, there is precedent for government actors to step in for software consumers and sidestep restrictive arbitration clauses. 165

    High-profile litigation has recently embroiled the Industry, and government actors have already targeted large interactive entertainment companies. 166On July 20, 2021, California's Department of Fair Employment and Housing filed suit against Activision-Blizzard for workplace discrimination against female employees. 167The bias was so pervasive that the EEOC stepped in to litigate on behalf of approximately 10,000 affected employees. 168If AGs can sidestep arbitration clauses on behalf of consumers, entertainment companies face a severe liability for faulty software. Compliance and approval from the FTC through the creation of a mass mediation system can act as a protective shield from such claims.

    D. Power for the People

    For customers, any reimbursement for a regretted purchase will improve the current arbitration problem. 169Currently, there is little opportunity  [*340]  for practical legal action, and direct refunds are also an ineffective means of redress. 170Unlike many physical consumer purchases, software refunds through proprietary storefronts can become an arbitrary process wherein the company does not agree with the consumer's assessment of the product. 171For example, the PlayStation Store offers refunds up to two weeks after a purchase, but denies refunds for downloaded and purchased products "unless the content is faulty." 172The language controlling this refund process, specifically the word "faulty," is up for interpretation and was only added to the storefront in 2019. 173For example, a particularly contentious game launch, Cyberpunk 2077, was considered broken by many consumers and public outrage resulted in the developer offering a full refund. 174The developer's Twitter account directed buyers to the storefront through which they downloaded the game. 175However, PlayStation did not consider the game faulty, nor did they develop or produce it, leading them to deny refunds. 176Instead,  [*341]  customer service representatives at PlayStation suggested that consumers wait for the developer to fix the game's many issues and denied customer support claims. 177The confusion caused by the developer's statement eventually forced Sony's hand, made PlayStation pull the game from its digital storefront, and issue refunds to avoid further backlash. 178It took one of the most controversial and broken launches in video game history to make an exception to Sony's stringent refund policy. Even in extreme situations, refunds are challenging to obtain, necessitating a new and better means of redress.

    The current system of arbitration also takes control from both the producers and consumers and is overly burdensome. 179The relevant statutes and licensed arbitration providers' self-imposed rules and procedures govern disputes, which in turn creates a long, drawn-out system for consumers to navigate. 180Mediation offers consumers more control through its use of information management. 181Parties reach a voluntary agreement through effective communication without the formal, court-like requirements the FAA calls for. 182Additionally, mediators must ensure the parties recognize the mediator's duties, understand the mediation process, and accept the terms of the settlement. 183This alone favors the consumer over arbitration, as it stifles the ability of corporations with vast resources to game the system by choosing what attorneys and judges  [*342]  are used to arbitrate. 184Accordingly, a system with set parameters can limit some of the favoritism that repeat players receive when having their disputes heard. 185In addition, using a third party unregulated by strict procedure can bring a sense of fairness to the process. 186

    Mediation can also expedite the claims process, allowing consumers to see results quickly instead of contending with the long waiting periods typically experienced by consumers in mass arbitration actions. 187ODR provides for the use of asynchronous communication, confidentiality, and immediacy. 188The asynchronous nature of mediation means consumers can seek redress based on their schedules. 189Automated asynchronous mediation also negates concerns such as travel costs and accommodations. 190Moreover, the average internet user can navigate an automated resolution facilitator using nothing more than the skills required for standard internet services. 191

    In the scenarios discussed in Part I, concerning Battlefield 2042 and Fallout 76, the cost of arbitration outweighs the benefits completely, making it unlikely the consumer will obtain any form of redress. 192For example, the court in Sutherland v. Ernst & Young LLP, noted that the cost of arbitrating a single claim from one of the class participants would  [*343]  be more expensive than any individual payout they could receive. 193As a result, the employees, still involved by the time the case was consolidated and proceeded to the Supreme Court, believed arbitration was too costly and ineffective, precluding redress. 194ODR offers a free solution, with institutions such as eBay offering a complimentary service for buyers and sellers to resolve conflicts. 195

    V. METHODS OF ODR AND THE POTENTIAL OF BULK MEDIATION

    In order for mediation to be done on a scale that effectively resolves the number of complaints seen in Battlefield 2042, Fallout 76, and Cyberpunk 2077, the current methods of ODR must be adapted to video game purchases. The Industry has a powerful lobbying arm in the ESA, with enough resources to outspend the National Rifle Association. 196The implementation of ODR as a means of solving disputes using the ESA offers the potential to fairly control the process, similar to using the ESRB as an independent regulatory arm. 197For this to be successful, there must be a sense of trust between the consumer and this new form of self-regulation. 198Confidence in the mediation process facilitates participation and dispute settlement when dealing with consumers upset about their purchase. 199In instances like the launch of Fallout 76, much of the frustration was aimed directly at developers, meaning it is unlikely that consumers would trust the developers enough to engage in such a process in good faith. 200For mediation of software claims to be successful,  [*344]  "likeability, integrity, [and] neutrality" are essential. 201Establishing a "credible neutral third-party" to mediate the process between developers, publishers, and consumers can accomplish this goal. 202When choosing what form of ODR to use, trust and voluntary engagement will likely be critical to ensure success.

    The high number of potential participants in software licensing mediation must also be considered. eBay has shown that the Industry can implement ODR systems to handle a volume in excess of civil filings in the United States. 203The system designed for eBay required distinguishing dispute types to organize suitable resolutions. 204These distinctions would vary widely, but are simplified into two categories: nonreceipt of the item ordered and the item arriving not as described. 205However, eBay's ODR functions as a facilitator between two parties, and for the Industry to be successful in mediating software disputes, it would need to handle a class of consumers. 206For software disputes in the video game industry, similar categories can be created, allowing large amounts of claims to be handled by a much smaller staff. 207Unfortunately, this does not solve the problem of implementation.

    To effectively implement online mediation, the Industry can embrace practices used by its greatest threats, including the automation of arbitration filings pioneered by FairShake, and the class action lawsuits the Industry has contracted away from. Where FairShake has developed a process to automate research and complete legal documents, the Industry can automate the process of filing a request for mediation. 208Based on this model, consumers can show their product purchase, describe their issues with the software, and subsequently select what types of redress  [*345]  would satisfy their claim. 209One method of ODR allows for a fully-automated negotiation process wherein both parties submit a set number of offers which are then revealed if they are within a certain percentage or dollar amount of each other. 210However, this method would be hard to implement when used in a mass mediation process, 211so the aggregation of claims should be done in conjunction with more traditional methods of mediation in order to be manageable.

    While companies adopted arbitration to avoid class action lawsuits and monetary loss, certain aspects of class actions should be utilized. One such aspect is setting a commonality requirement similar to Federal Rules of Civil Procedure Rule 23(b)(3) and requiring a strict commonality of claims. 212This would require that the mediation participant has suffered the same injury, "central to the validity" of the claim, that can be resolved in a single action. 213Rule 23(b)(3) also requires class members demonstrate that a "class action is superior to other available methods for fairly and efficiently adjudicating the controversy." 214Adapting this strategy, the Industry can require claimants be denied refunds prior to participating in automated mediation. Standardized forms may be used to gather the plaintiff's information regarding a claim, using a character limit and what type of redress the plaintiff believes they are owed. 215Once forms are filled out by consumers, they can be automatically organized into more straightforward categories for ease of use by the system. Then, once they are sorted, the forms may be tested to see if they meet the standard borrowed from Rule 23(b)(3). 216The software employed by the mediating body can "automatically impose and enforce rules" to "guarantee equal treatment and comprehensive compliance." 217  [*346]  Essentially, this software can be used as a filter to remove dishonest actors, only allowing those with legitimate claims to proceed to the mediation process. Borrowing rules from class action procedures can ensure mass mediation claims are handled fairly for consumers while preventing producers from being mistreated.

    It should be acknowledged that mediation may not always be the correct way to solve disputes. Companies can allow for redress while protecting their interests by including informal negotiation or mediation periods before compelled arbitration. Software service providers such as Hulu have already employed clauses requiring individual meet-and-confer dispute resolution procedures outside the legal system. 218Video game providers can use this template and replace the requirement for informal negotiation with a requirement to participate in informal mediation. 219Since mediation is not binding unless the parties agree on the settlement terms, they can compel arbitration if the mediation process does not bear fruit. 220When consumers submit claims through the dedicated website, automated decision trees will allow mediators to "identify interests, develop strategies and generate resolution options." 221The standardized collection of information helps identify uncontested issues amongst the parties and show what issues remain disputed. 222This process will allow mass amounts of consumers to engage in the process and, due to the difficulty of finding redress by other means, accept the form of compensation offered.

    CONCLUSION

    The Industry has been celebrated for its melding of art and technology. The Industry's growth from small startup companies to major corporations has led the entertainment sector in innovation and profits and has created, not just a shift in the medium of entertainment, but in popular culture. This innovation has created new legal questions ranging from the meaning of the First Amendment to consumer protection concerns. It has been at the forefront of a new online marketplace through proprietary  [*347]  digital storefronts. Such growth has been built on the e-commerce boom of the past fifteen years and is predicted to continue at a stellar rate in the future. However, this expansion has come at a cost to consumers and their ability to assert their rights to fair reimbursement for faulty products. For electronic entertainment to reach its full potential and continue to break barriers in the future, it must allow for monetary compensation to its consumers as "only after users of online marketplaces can obtain redress will the real potential of e-commerce be achieved." 223




    California Western Law Review
    Copyright (c) 2023 California Western School of Law 

    Footnotes

  • INTRODUCTION

    For years, casino workers and anti-smoking coalitions have fought a losing battle to put an end to smoking in casinos. 1Fortuitously, the COVID-19 pandemic may be the unexpected catalyst to finally turn the tide of the war. As part of the reopening process following the height of the pandemic, more than 200 casinos across the country reopened with smoke-free policies. 2Initially, many of these policies were temporary measures implemented as a condition for reopening during the pandemic. 3However, there has been a significant showing of support for permanent smoke-free policies in casinos. 4

    To many, it may come as a surprise that indoor smoking persists in this country. It is rare to find a city or state that has not enacted some prohibition against smoking indoors. 5Yet, there is still one place where Americans can bet they will be allowed to smoke indoors: casinos. 6The  [*365] gaming industry is often exempt from state-enacted "clean indoor air" acts, which prohibit indoor smoking in nearly all other public places. 7States pass these acts for the sole purpose of protecting the public from the irrebuttable harmful effects of secondhand smoke. However, casinos allow indoor smoking, blatantly disregarding the health and safety of casino patrons and employees in favor of profits. 8

    Thus, casino workers remain among the few unprotected from secondhand smoke in the workplace. Casino workers subjected to secondhand smoke are at higher risk for illness and premature death. 9Compounding the issue, casino workers injured by secondhand smoke exposure have no adequate cause of action or remedy for recovery. In multiple jurisdictions, casino workers cannot claim workers' compensation benefits because secondhand smoke exposure is not considered an occupational disease. 10Additionally, tort recovery for secondhand  [*366] smoke exposure is also largely unavailable; 11thus, casino owners are effectively shielded from liability for casino workers' injuries caused by secondhand smoke.

    For decades, scholars have examined the lack of available remedies to employees injured by secondhand smoke exposure. 12During the twenty-first century, the call for reform motivated an increase in legislation prohibiting smoking indoors and in workplaces. 13Such legislation provided remedies for injured employees, including recovery under an employer's common law duty to provide a safe working environment. 14This progress rendered much of the previous scholarships' arguments moot because suggestions to legislate and provide relief were successful. However, as discussed throughout this Comment, the gaming industry has remained exempt from protective indoor smoking legislation and left injured casino workers with little relief. This Comment reviews the findings of previous scholars who noted a general lack of relief available to employees injured by secondhand smoke exposure and specifically discusses injury to employees in the gaming industry who have yet to benefit from anti-smoking legislation.

     [*367] Over the last two years, businesses have taken economically harmful measures to prevent transmission of COVID-19 (such as shuttering businesses and imposing restrictions on travel). Seemingly signaling society's current prioritization of public health over profit. 15For many, the pandemic was a wake-up call to focus on and improve their health. 16Thus, conditions are ripe for casino workers to demand an end to indoor smoking in casinos. Legislatures and courts are likely more amenable to protecting casino workers by either repealing casino exemptions in states' clean indoor air acts or recognizing exposure to secondhand smoke as an occupational disease recoverable under workers' compensation laws or tort causes of action. Casino owners would be wise to implement change now as their shield from liability for injuries caused by secondhand smoke may soon come to an end.

    This Comment suggests that it is in the best interest of casino owners to (1) implement bans on indoor smoking on their own volition and (2) support legislation eliminating the smoking ban exemption for casinos in all states to create an even "smoke-free playing field" in the gaming industry. Banning indoor smoking would not only help protect casino owners from future potential liability and casino employees from the dangers of secondhand smoke exposure, but casinos will also improve their public relations image and attract more customers as the public has shown strong support for smoke-free indoor environments. Additionally, data suggests that smoking bans may also increase revenue, 17undermining casino owners' primary arguments for allowing indoor smoking.

    Part I of this Comment provides a brief description of the health effects of secondhand smoke, the anti-smoking legislation enacted to date, including the exemptions provided to casinos, and the harm  [*368] employees are subjected to because of the exemptions. Part II analyzes the lack of available tort and administrative remedies available to casino employees injured by secondhand smoke and how changes spurred by the COVID-19 pandemic may likely impact available remedies, creating liability for casino owners who expose workers to secondhand smoke. Part III provides a rationale for casino owners implementing indoor smoking bans. Part III also explains why casino owners should support legislation eliminating the casino smoking ban exemptions in all states to create an even "smoke-free playing field" in the gaming industry. Finally, this Comment analyzes why indoor smoking is a greater liability than an asset for casinos.

    I. BACKGROUND

    Long gone are the days when smoking tobacco exuded glamour and sophistication. Drooping cigarettes out of the mouths of classic stars such as James Dean and Humphrey Bogart have been replaced with anti-smoking campaigns' haunting images of people living with serious long-term health effects from smoking and secondhand smoke exposure. 18Despite the effectiveness of anti-smoking campaigns and wide-spread education of smoking's adverse health effects, tobacco use remains the leading cause of preventable death in the United States, with approximately 480,000 deaths each year. 19For every one smoker who dies, at least thirty more smokers suffer from a serious smoking-related illness. 20

     [*369] 

    A. The Health Effects of Secondhand Smoke

    Voluntary smokers are not the only victims of tobacco use. Since 1964, more than 2.5 million nonsmokers have died from exposure to secondhand smoke. 21There are hundreds of toxic and carcinogenic chemicals in secondhand smoke, including formaldehyde, acetaldehyde, butadiene, benzene, and hydrogen cyanide. 22Exposure to secondhand smoke can cause lung cancer, heart disease, and acute respiratory symptoms. 23The United States Surgeon General's Report on The Health Consequences of Involuntary Exposure to Tobacco Smoke concluded that "there is no risk-free level of exposure to secondhand smoke." 24

    B. Anti-Smoking Legislation

    According to the United States Surgeon General, offering separate spaces for smokers and nonsmokers, cleaning the air, and ventilating buildings are insufficient protections against secondhand smoke exposure. 25Smoke-free indoor air environments are the only way to fully protect nonsmokers from the dangers of secondhand smoke. 26

    Although the negative health effects of smoking were confirmed in the 1960s, 27general acceptance of the health hazards of secondhand smoke did not gain traction within the medical community until the  [*370] 1970s and 1980s. 28Still, it was not until the United States Environmental Protection Agency ("EPA") released its landmark 1993 report detailing the risks of secondhand smoke exposure that significant efforts to reduce exposure began. 29

    By 2013-2014, the EPA reported that secondhand smoke exposure among nonsmokers in the United States had dropped from 80% in the 1990s to 25%. 30This progress can be attributed to numerous smoke-free efforts on federal and state levels. 31Specifically, in 1997, an Executive Order prohibited smoking in federal buildings, 32and as of October 2021, twenty-eight states have enacted laws requiring all non-hospitality workplaces, restaurants, and bars to be 100% smoke-free. 33Despite this progress, casinos are frequently exempted from smoke-free indoor air laws, leaving thousands of casino workers at risk of premature death and disease from secondhand smoke exposure. 34

    Gambling in the United States is a big business that reaches well beyond the glitz and glamour of the Las Vegas Strip. In 2019, the country's gaming industry reported record-high revenue at $ 43.6 billion and is poised to surpass that record in 2021. 35As of December 2021,  [*371] thirty-three states allow legalized gambling in the form of casinos, racinos (racetrack casinos), and bingo halls. 36However, only twelve of those states have enacted laws requiring the gaming facilities be 100% smoke-free. 37The country's two most prolific gambling states, Nevada and New Jersey, exempt casinos from their smoke-free indoor air laws. 38Several other states have implemented similar laws. 39These exemptions, allowing for indoor smoking in casinos, put casino workers at a higher risk for secondhand smoke-related illness than other workers. 40

    In 2009, the National Institute for Occupational Safety and Health ("NIOSH") studied the risks of secondhand smoke for casino workers in Nevada. 41NIOSH found that casino workers were exposed to hazardous levels of toxic secondhand smoke at work, including carcinogens that increased in concentration as they progressed through their work shifts. 42In a similar study conducted by NIOSH in 1996, Atlantic City casino workers were found to have higher levels of exposure to secondhand smoke toxins when compared to a representative sample of the population who reported exposure to secondhand smoke in non-casino environments. 43In other words, casinos contain higher levels of toxic smoke than other smoking  [*372] environments. 44Alarmingly, another study examining the air quality in casinos found that exposure to secondhand smoke for Pennsylvania casino workers caused five times as many premature deaths as Pennsylvania mining disasters. 45

    Secondhand smoke and toxic levels of smoke-related pollutants seep into all areas of the casino, including restaurants and retail locations, thereby preventing casino workers any opportunity to isolate themselves from the dangers of smoke during a work shift. 46In a study evaluating how smoke-related pollutants travel between designated non-smoking and smoking areas of casinos, it was found nonsmoking restaurants directly adjacent to smoking gaming areas registered an average of 60% of the amount of secondhand smoke toxins as the areas where smoking was allowed. 47Simply put, ventilation and separation systems do not work. The only way to protect casino workers from secondhand smoke is to ban smoking in all casino areas.

     [*373] 

    II. ANALYSIS OF THE CURRENT AND FUTURE REMEDIES LANDSCAPE FOR CASINO EMPLOYEES INJURED BY SECONDHAND SMOKE EXPOSURE

    Casino workers are left with no effective remedy to recover from injuries caused by secondhand smoke in the workplace. Casino workers regularly attempt to assert workers' compensation claims; however, these claims often fail because secondhand smoke is not an occupational disease. 48Tort claims also suffer a similar fate. 49

    This section first provides an analysis of the current pitfalls of administrative and tort remedies available to casino workers injured by secondhand smoke exposure and then explores how the COVID-19 pandemic is likely a catalyst to improve the success of such actions in the future.

    A. Current Insufficient Administrative Remedies

    The basic operating principle of workers' compensation acts is that employees who contract an occupational disease or suffer a personal injury by accident arising out of or during employment are  [*374] automatically entitled to certain benefits. 50Negligence and fault are not considered in workers' compensation claims. 51Employees who suffer illness caused by secondhand smoke exposure in the workplace have attempted to recover for injuries under the "occupational disease" prong of workers' compensation acts without much success. 52

    In Mack v. County of Rockland, the Court of Appeals of New York affirmed the workers' compensation board's denial of a workers' compensation claim brought by a plaintiff who claimed that exposure to cigarette smoke in her office exacerbated her eye disorder. 53The court reasoned that illness caused by exposure to secondhand smoke did not constitute an occupational disease, and therefore, plaintiff was not entitled to relief through a workers' compensation claim. 54

    Similarly, in Palmer v. Del Webb's High Sierra, the Supreme Court of Nevada reversed the grant of a casino employee's workers' compensation benefits finding that secondhand smoke exposure did not qualify as an occupational disease under the state's workers' compensation law. 55The plaintiff, James Palmer, worked as a pit boss in a casino, where smoking patrons continually surrounded him. 56He developed lung disease and was told by several doctors not to return to work if he would remain exposed to tobacco smoke. 57The primary issue before the court was whether injury caused by secondhand smoke exposure was a compensable occupational disease. 58

    The court found that tobacco smoke was not a hazard incidental to the nature of employment in a casino. 59The court reasoned that there was not a sufficient relationship between Mr. Palmer's employment and his illness to qualify as an occupational disease because secondhand smoke "is a hazard to which workers ... [are] "equally exposed outside  [*375] of the employment.'" 60Accordingly, the court held that injury caused by exposure to secondhand smoke in the workplace is not an occupational disease and is, therefore, not a compensable workers' compensation claim. 61

    In 2016, a Nevada casino dealer's widow attempted to challenge the Palmer decision in light of the passing of the Nevada Indoor Clean Air Act in 2006. 62Similar to Palmer, the plaintiff, Elliott Heng, filed a claim for workers' compensation contending his lung cancer was caused by secondhand smoke exposure at his casino workplace. 63His claim was denied and affirmed by the administrative appeals divisions. 64He then filed a petition for judicial review as to whether the Nevada Indoor Clean Air Act altered the impact of the Palmer decision. 65Sadly, Mr. Heng died from advanced lung cancer shortly after, but his widow continued the claim on his behalf. 66

    The court found nothing in the Nevada Indoor Clean Air Act to construe as amending the workers' compensation laws to provide benefits to workers for secondhand smoke. 67The court stated that

    the Palmer decision has been in place for over 20 years, the legislature has made the policy decision that secondhand smoke exposure is not an occupational disease ... . It is not the function of the Court to alter policy established by the legislature or second guess its decision making. 68

    Accordingly, until courts acknowledge injuries caused by secondhand smoke exposure as an occupational disease, employees will not be able to assert workers' compensation claims for their injuries successfully.

     [*376] 

    B. Current Insufficient Tort Remedies

    For years, casino workers have sought tort relief for their injuries suffered by exposure to secondhand smoke without success. No matter how creative the suit or causes of action pled, courts have refused relief to injured plaintiffs. This section provides a sampling of cases that illustrate the frustrations of injured casino workers who file lawsuits for tort causes of action.

    In 2001, a group of Nevada casino dealers filed a class-action suit for strict liability, negligence, fraud, and misrepresentation against numerous tobacco companies alleging injuries by exposure to secondhand smoke in the workplace. 69Additionally, the plaintiffs sought medical monitoring to detect diseases contracted after years of exposure to secondhand smoke on the job. 70

    The federal district court petitioned the Supreme Court of Nevada for an opinion regarding whether medical monitoring is a viable cause of action or viable remedy under Nevada law. 71While concluding that a medical monitoring remedy may be available, the Supreme Court of Nevada held that Nevada common law does not recognize a medical monitoring cause of action. 72Consequently, the plaintiffs' cause of action for medical monitoring failed. 73A few months later, the district court denied class certification finding the proposed class failed to satisfy the predominance requirement, as individual issues of causation, comparative fault, assumption of the risk, statute of limitations, and damages predominated over common questions. 74Shortly thereafter, the parties stipulated to a dismissal. 75Therefore, an opinion as to whether the plaintiffs' individual claims would have been successful remain unanswered. However, the court's dictum discussion of the difficulties in pinpointing plaintiffs' injuries to secondhand smoke caused within the casino environment seem to suggest the claims would  [*377] have failed due to an inability to establish a causal link between the plaintiffs' injuries and their casino workplace. 76

    In 2009, an ambitiously broad class action suit was filed against Wynn Las Vegas ("Wynn") by all former, current, and future nonsmoking employees of Wynn who were, are, or in the future will be exposed to unsafe levels of secondhand smoke. 77The plaintiffs alleged that Wynn breached its common law duty to provide a reasonably safe workplace to its employees by failing to take sufficient measures to protect its employees from secondhand smoke. 78Skirting the pertinent issue, the court dismissed the suit for lack of subject matter jurisdiction based on the "home-state controversy" exception. 79Under that exception, a district court would not have subject matter jurisdiction over a class action in which (1) two-thirds or more of the members of all proposed plaintiff classes in the aggregate are citizens of the state in which the action is originally filed; and (2) the primary defendants are citizens of the state in which the action was originally filed. 80Because the vast majority of plaintiffs were citizens of Nevada and the only defendant, Wynn, was also a Nevada corporation with its principal place of business in Nevada, the court found the home-state controversy exception applied. 81

    As the action was dismissed on procedural grounds, the court did not reach an opinion on whether Wynn breached its duty to provide a reasonably safe workplace to its employees by failing to take reasonable measures to protect its employees from secondhand smoke. However, the likelihood of success is questionable as the Nevada Clean Indoor Air Act specifically allows for smoking in casinos. 82Indeed, Wynn argued that it could not be found liable to its employees because casinos are specifically exempted from the Act. 83

     [*378] In 2011, Denise Bevrotte brought a class action suit on behalf of her deceased son and all former, current, and future nonsmoking employees of Harrah's New Orleans Hotel and Casino ("Harrah's"). 84Her son, a nonsmoker, was a poker dealer for fifteen years at Harrah's where he was continually exposed to secondhand smoke at work. 85As a result of this exposure, he suffered numerous health effects such as contraction of leukemia, shortness of breath, dizziness, wheezing or tightness in the chest, and headaches. 86The court struck the class allegations because the claims raised fact-intensive issues of causation and damages that could not be adjudicated in a class action format. 87

    However, Ms. Bevrotte was allowed to proceed with an individual claim against Harrah's for the wrongful death of her son. 88Ms. Bevrotte argued that her son contracted leukemia because of his exposure to secondhand smoke in his working conditions at Harrah's. 89By doing so, she alleged an occupational disease as defined by the Louisiana Workers' Compensation Act ("LWCA"). 90The court explained that damages resulting from an occupational disease are compensable only under the LWCA. 91The rights and remedies under the LWCA are exclusive of all other rights, 92meaning that Ms. Bevrotte could not recover in tort. 93As such, the court dismissed her claim as barred by the LWCA. 94It did not decide as to whether leukemia caused  [*379] by exposure to secondhand smoke should be considered an occupational disease under the LWCA.

    It should be noted that non-casino employees injured by secondhand smoke exposure in the workplace have successfully recovered under the common law theory of an employer's duty to provide a safe working environment. 95However, because legislatures specifically allowed for smoking to continue indoors in casinos, it is unlikely future courts will find that casino employers are failing to provide a safe working environment by doing what the law allows them to do - permit indoor smoking.

    Similarly, negligence suits are also hampered 96because legislation allows for indoor smoking in casinos. These laws effectively eliminate any duty casino employers might have to provide a smoke-free environment. Additionally, causation is difficult for plaintiffs to prove in negligence suits involving secondhand smoke exposure because detailed, time-intensive, factual inquiries into the dates, times, durations of exposure to secondhand smoke at the workplace, exposure outside of the workplace, and at previous places of employment must be proven. 97Simply put, the current likelihood of casino workers recovering for their injuries through the tort system is essentially nonexistent.

    C. How the COVID-19 Pandemic May Usher in Change for Legal Relief

    The COVID-19 pandemic has triggered society's awareness of public health and what is transmitted through airways. 98As discussed throughout this Comment, it is well-known that exposure to secondhand  [*380] smoke can be deadly. Casino workers have been calling for protection from such exposure for years, but their cries have fallen on deaf ears. Casino workers would be wise to capitalize on society's sensitivity and heightened awareness of toxins transmitted through the airways as triggered by the COVID-19 pandemic. Because attitudes surrounding public health have arguably shifted - with many regarding physical health a greater priority than economic health 99- there is no better time for casino workers to lobby for change and call for an end to indoor smoking in casinos.

    Casino workers may recover for their injuries from secondhand smoke with likely success in two ways: (1) recognizing secondhand smoke exposure as a recoverable toxic tort and (2) classifying secondhand smoke exposure as an occupational disease, thereby allowing recovery under workers' compensation laws.

    First, recognizing secondhand smoke exposure as a recoverable toxic tort is not beyond the realm of possibility. Exposure to secondhand smoke is strikingly similar to a well-known and long-standing toxic tort: asbestos exposure. 100Exposure to secondhand smoke parallels exposure to asbestos because both involve airborne transmission of dangerous materials that damage workers' lungs after inhalation. Asbestos and secondhand smoke are both classified by the EPA as Group A carcinogens, and as with secondhand smoke, no level of asbestos exposure is safe. 101Exposure to either causes similar injuries, like difficulty breathing and slow-progressing diseases like lung cancer. 102However, the two deviate from the protection afforded to victims of exposure. The Occupational Safety and Health Administration ("OSHA") has regulations in place to protect workers  [*381] from the dangers of exposure to asbestos. 103This protection has allowed injured workers to receive compensation through the tort system. 104OSHA has no such regulations that apply to smoking, 105thereby thwarting workers' attempts at tort recovery for injuries caused by secondhand smoke exposure.

    As the COVID-19 pandemic increases concern over air quality and disease transmission, 106courts are primed to seriously consider second-hand smoke exposure as a toxic tort. Allowing for such a tort would provide casino workers with a path to recover for their injuries caused by secondhand smoke, similar to the path afforded to victims of asbestos exposure. The asbestos model has provided relief to millions of individuals injured by exposure and has resulted in billions of dollars in litigation costs and settlements. 107Because tobacco smoke and exposure to secondhand smoke is wholly preventable and can easily be banned, it is not beyond reason to think that the public, court, and legislation's appetite for creating a penalty for those employers who allow workers to be exposed to a known deadly risk to finally come to fruition and follow the asbestos model.

    Currently, casino owners do not have repercussions for allowing indoor smoking, and employees have no legal remedy for recovery. However, if a new tort gains traction - as it is reasonable to suspect it could considering the current climate on public health concerns - casinos are likely to be subject to catastrophic liability, similar to employers who expose their employees to asbestos.

    Second, given the current climate, classifying secondhand smoke exposure as an occupational disease is also likely to garner attention. Many states have introduced and enacted legislation to recognize the  [*382] contraction of COVID-19 as a compensable workers' compensation occupational disease. 108If the contraction of COVID-19 - a contagious disease contracted through close contact with an infected individual, similar to influenza, 109that has no relation to any workplace hazard - is being recognized as an occupational disease, the exposure to secondhand smoke must also be recognized. Secondhand smoke, similar to COVID-19, is a deadly yet completely preventable workplace condition. 110

    As such, calls to legislatures to recognize exposure to secondhand smoke as an occupational disease are likely to succeed now more than ever before. Suppose exposure to secondhand smoke is recognized as an occupational disease in states' workers' compensation acts. In that case casino workers will be allowed to recover for their injuries through the workers' compensation process. This route of recovery may appeal to casino owners as well because damages are generally limited and resolved at amounts lower than what could be recovered in a traditional tort suit. 111However, because of the sheer magnitude of potentially injured casino workers, liability would still likely be of great significance.

    III. SOLUTIONS FOR CASINO OWNERS AS POTENTIAL RISK OF LIABILITY LOOMS

    It is well within the realm of possibility that the courts and legislatures will be more amenable to recognizing injury by secondhand smoke as a recoverable tort or an occupational disease recoverable under states' workers' compensation laws. If a path to recovery is opened for injured casino workers, there are potentially large pools of workers that could bring claims for their injuries, which could be a catastrophic cost to casino owners.

     [*383] Casino owners need to be aware of this potential risk and act now to protect themselves from potentially endless claims by injured employees. Casino owners cannot shield themselves from claims by previously injured employees, but implementing a ban would prevent any future injury from occurring to yet-to-be-hired employees, newly hired employees, and existing employees who have fatefully avoided the consequences of exposure to secondhand smoke.

    Casino owners would be wise to be proactive and implement policies on their volition banning indoor smoking, and support legislation eliminating the casino exemptions in states' clean indoor air acts to create an even "smoke-free playing field" in the gaming industry.

    A. Casino Owners Should Implement Policies Banning Indoor Smoking in Casinos

    The reasons for casinos to implement policies banning indoor smoking are numerous. In addition to preventing liability, indoor smoking bans would also protect the health of employees and patrons, promote public relations and company image, and even increase revenue by attracting new patrons, like nonsmokers and high-risk or health-conscious individuals. A discussion of each of these benefits follows.

    1. Casino Smoking Bans Will Protect the Health of Employees and Patrons

    Casino workers should no longer have to put their lives on the line to earn a paycheck. As explained throughout this Comment, there is simply no question that secondhand smoke leads to deadly consequences for those exposed to it. Implementing smoking bans is the only way to protect against the dangers of secondhand smoke. Ventilation systems and designated indoor nonsmoking areas are wholly ineffective. 112

    The health of casino workers is one of the most significant benefits noted in smoke-free casino initiatives enacted in response to the COVID-19 pandemic. For example, Brian King of the CDC's Office  [*384] on Smoking and Health considered the smoking bans spurred by the COVID-19 pandemic to be a definite ""public health win'" that protects casino workers and patrons. 113King elaborated that not only do smoke-free policies help to reduce secondhand smoke exposure, which is well-known to increase risk of stroke, lung cancer, and heart attack in adults, but such policies also encourage people to stop smoking altogether. 114

    Pittsburgh Tribune-Review gaming writer, Mark Gruetze, similarly emphasized the importance of the health of the public and casino workers when discussing his support for the recently reignited smoke-free movement by stating:

    One side effect of the pandemic was forcing each Pennsylvania casino to test how customers reacted to a smoking ban. Casinos' bottom lines prove people like it - or, at the very least, it didn't matter. People go to casinos to gamble, not to smoke ... Players and workers on the gaming floor must have the same protection as everyone else in Pennsylvania. 115

    In Shreveport, Louisiana, casino workers and patrons are experiencing the positive effects of an indoor smoking ban just 100 days after the ordinance took effect. 116A study examining the ban's effect on air quality found "employees and patrons in Shreveport's casinos are no longer exposed to harmful levels of indoor air pollution resulting from indoor smoking." 117

    Similarly, the Navajo Nation, which operates four casinos in Arizona and New Mexico employing over 1,100 casino workers, 118took a monumental step toward protecting casino workers by enacting  [*385] "The Air is Life Act." 119This Act requires casinos and other public spaces to be completely smoke-free. 120Navajo Nation President Jonathan Nez remarked that the Act was a positive step toward protecting the health of the Navajo people. 121He acknowledged the health concerns of secondhand smoke exposure and reinforced his support for the Act by stating, ""Public health professionals have concluded that the only way to protect nonsmokers and vulnerable populations from secondhand smoke is to require smoke-free workplaces and public spaces. It is a fundamental right to protect our Navajo people's right to breathe clean air.'" 122

    Casinos remain one of the few public places where employees and patrons are exposed to secondhand smoke at high levels. 123As demonstrated, implementing a ban on indoor smoking in casinos would undoubtedly positively affect the health of casino employees and patrons.

    2. Casino Smoking Bans Will Improve Company Image and Public Relations

    The public wants casino owners to put their money where their mouths are. The COVID-19 pandemic has caused many casino owners to publicly state their dedication to providing a healthy and safe workplace for employees and patrons. 124However, as Randy Hayden, a consultant for Americans for Nonsmokers' Rights pointed out, these public statements do not hold water ""if [casino owners] allow  [*386] customers to pull down their masks and blow toxic, COVID-laced smoke at a gaming table.'" 125

    Similarly, Assemblywoman Valerie Vainieri Huttle, the original sponsor of a bill pending before the New Jersey state legislature to eliminate the casino exemption to the state's Smoke-Free Air Act, recounted an email she received from a frustrated casino employee saying, ""I don't understand how we casino employees can be protected from a virus that might kill, but not be protected from second-hand smoke, which will kill us.'" 126Simply put, it is difficult for the public to believe that casino owners sincerely care about the health and safety of their employees and patrons while they continue to allow smoking indoors. Banning smoking indoors would back up casino owners' words and improve the gaming industry's image.

    3. Casino Smoking Bans Will Attract More Patrons

    The gaming industry, like many industries, is continually looking for different ways to attract new customers. 127After all, loyal customers age, and newer generations must come in to replace them if businesses want to survive. Attracting younger generations to casinos has been a challenge for the gaming industry. 128As Geoff Freeman, CEO of the American Gaming Association, stated of the process in 2015, ""It's going to be a lot about throwing things up on the wall and seeing what sticks.'" 129One idea has been to overhaul the traditional slot machine model by developing machines that involve an element of skill and are designed to more closely resemble a video game. 130Although these efforts may successfully attract the younger generation to casinos, there may be a more straightforward barrier keeping the younger generation away from casinos: smoking.

     [*387] In 2018, cigarette smoking among young adults hit an all-time low of just under 10%. 131This means 90% of young adults are nonsmokers. Randy Hayden asserted that these young adults are ""more health-conscious than the older generation that currently frequents a casino,'" 132thus it is likely they do not want to patronize a casino filled with smoke.

    However, it is not only the younger generation that prefers smoke-free environments. In a 2017 survey of more than 4,000 adults conducted by the Public Health Reports journal, nearly 75% reported to favor nonsmoking casinos. 133Some casinos have listened to this kind of data and have started to experiment by implementing policies to eliminate or reduce smoking in hopes of attracting new customers. Most notably, on September 30, 2020, megaresort hotel and casino Park MGM reopened during the pandemic as an entirely nonsmoking property, making it the first 100% smoke-free casino on the Las Vegas Strip. 134According to Park MGM Chief Operating Officer, Anton Nikodemus, the reopening provided an "opportunity to be responsive to recurring demand for a fully non-smoking casino resort on The Strip." 135Just a year after reopening, Park MGM President, Ann Hoff, commented that the transition to a smoke-free environment has been ""a very positive differentiator'" and the move has been ""very[,] very well received.'" 136

    Two other Las Vegas Strip properties have made efforts to attract nonsmokers, although not as drastically as Park MGM's move to go 100% smoke-free. Specifically, in September 2020, the Cosmopolitan hotel and casino banned smoking in the resort's public walkways and  [*388] corridors. 137In a statement, the Cosmopolitan explained the ban was implemented as part of a ""continued effort to further protect the health and wellbeing of our guests and employees.'" 138Smoking, however, is still allowed on the gaming floor. 139Similarly, in Summer 2021, the Las Vegas Strip's newest casino resort, Resorts World Las Vegas, opened as a primarily smoke-free resort, with smoking only allowed in the casino. 140

    These efforts signify the public's changing attitude toward smoking. As Malcolm Ahlo, Tobacco Control Coordinator for the Southern Nevada Health District stated, ""If I had been asked 20 years ago what the appetite for casinos going smoke-free was, I would have said zero to none ... . When Park MGM goes smoke-free, it will be a long time coming.'" 141

    The COVID-19 pandemic has provided yet another incentive for casinos to go smoke-free. For those individuals reluctant to venture into public places for fear of poor health standards, casinos that allow smoking are likely not one of the places they would feel safe patronizing. 142Allowing guests to remove their masks and blow not only toxic secondhand smoke into the shared air but droplets of life-threatening contagious disease, is likely not worth the risk. 143A smoking ban will help attract these reluctant patrons back to casinos.

     [*389] 

    4. Casino Smoking Bans May Increase Revenue

    Casino owners likely have reservations about banning indoor smoking for fear that doing so would negatively impact business. The COVID-19 pandemic has provided an unexpected way to test this hypothesis, 144such as in New Jersey, where casinos reopened with a smoke-free policy following the height of the pandemic. 145During that time, the smoking ban did not harm revenue. 146Indeed, Atlantic City casinos posted an all-time revenue record in the month of June 2021, the last full month that they operated smoke-free. 147Although it is unclear whether these numbers are skewed due to pent-up demand for entertainment following the pandemic, they are at least indicative of the fact that patrons did not avoid casinos because they were prohibited from smoking. 148

    Like Atlantic City casinos, Nevada casinos have experienced high gaming revenue since fully reopening after the height of the pandemic. 149The Park MGM is the only Las Vegas Strip property to have gone completely smoke-free and is the best-case study to determine whether revenue dropped, increased, or stayed the same after the ban on smoking was implemented. Unfortunately, MGM Resorts International, the owner and operator of Park MGM, does not report casino revenue trends by property so the exact economic impact from the ban is unknown. 150However, MGM Resorts International overall has shown a steady increase in revenue every quarter since the reopening following the COVID-19 pandemic. 151

     [*390] The COVID-19 pandemic is not the first instance testing the financial impact of banning smoking in casinos. In 2002, Delaware became one of the rare states that did not provide a casino exemption when enacting its clean indoor air act. 152Instead, Delaware's act was a comprehensive smoke-free workplace law that banned indoor smoking in workplaces and public places such as restaurants, bars, live music venues, and casinos. 153In 2006, Governor Ruth Ann Minner addressed the success of the indoor smoking ban stating, ""Some predicted that the Clean Indoor Air Act would hurt the bottom line of businesses, even forcing some to close. Conversely, ... Delaware's three slot machine casinos have all experienced their highest revenue periods in the last two years.'" 154

    Finally, banning indoor smoking may also attract more institutional investors. 155Specifically, many investors are considering the environ-mental, social, and corporate governance ("ESG") criteria in making investment decisions. 156Publicly traded casino companies that allow indoor smoking would not fit the ESG-conscious ideals that many investors are seeking. 157

    These examples suggest a smoking ban will not result in disastrous loss of revenue, but rather may have a positive impact. Additionally, as discussed previously in this Comment, it is possible that new generations and health-conscious customers will begin to patronize casinos and contribute to gaming revenue should casinos decide to become smoke-free.

    There is a good possibility that a ban would positively impact casino revenue on indoor smoking. However, in the event the predictions are wrong and casino revenues take a dip, the loss is likely to pale in comparison to the potential litigation casinos face if they  [*391] continue to allow smoking. The damages casino employees may recover from casino employers should secondhand smoke exposure be recognized as a toxic tort or occupational disease are astronomical.

    B. Casino Owners Should Support Legislation Eliminating the Statutory Exemptions for Casinos in Smoking Bans to Create an Even "Smoke-free Playing Field" in the Gaming Industry

    Spurred by the success of smoke-free operations in the wake of the COVID-19 pandemic, citizens are calling on states' elected leaders and casinos to make gaming venues permanently smoke-free. 158One state leading the charge is New Jersey, which has introduced a bill calling for the elimination of the casino exemption to the state's Smoke-Free Air Act. 159The sponsor of the bill, Assemblywoman Valerie Vainieri Huttle, believes the bill finally has a good shot at passing because casinos have already had to adjust to smoking bans due to the COVID-19 pandemic. 160The Governor of New Jersey, Phil Murphy, has already indicated his support for the legislation stating that he will sign it into law, should it pass through the state legislature and hit his desk for final approval. 161Similarly, as discussed earlier in this Comment, the Navajo Nation and City of Shreveport, Louisiana, have also enacted legislation eliminating smoking in casinos. 162

     [*392] Supporting similar legislation to ban indoor smoking in all states is in the best interest of the gaming industry. Understandably, casino owners may be reluctant to gamble with their profits and implement smoking bans on their own accord. Smoking in casinos is so engrained in society that making a shift to nonsmoking seems like a monumental undertaking. However, for the myriad of reasons cited throughout this Comment, a ban on indoor smoking is the right decision to best protect the health and well-being of the public and the casino employees. Many casino owners already recognize this fact as is evidenced by the moves limiting smoking indoors by the Cosmopolitan and Resorts World Las Vegas resorts and by eliminating smoking entirely as the Park MGM has done. 163

    Perhaps casino owners are reluctant to become smoke-free because they do not want to compete against other properties that opt to continue permitting indoor smoking. While the casino owners may know going smoke-free is the right thing to do, taking a risk that profits walk across the street to a casino that allows smoking may be too great of a concern. As such, casino owners should push for state legislatures to pass laws requiring all casinos to ban indoor smoking. Doing so would even the playing field and alleviate any apprehension about being the only smoke-free property in town. This would allow casino owners to take advantage of all the benefits that accompany smoke-free policies without undertaking an uncertain risk of decreased profits. Gamblers who like to smoke will continue to gamble. They will simply adjust their habits as they had to do when smoking was federally banned in most restaurants, bars, and on airplanes. 164

    CONCLUSION

    There is simply no benefit in continuing to allow smoking in casinos. The health effects of secondhand smoke are staggering, causing disease and premature death in thousands of nonsmokers. Additionally, revenue reports have shown that smoking bans are not  [*393] negatively impacting profits, as feared by casino owners in their longstanding opposition to instituting smoking bans. 165

    Due to the COVID-19 pandemic, public concern over matters of health is at an all-time high. By implementing indoor smoking bans in their own casinos, casino owners will not only curb any future potentially staggering litigation and workers' compensation liability, but they will also curry favor with the public and casino employees alike. It is possible that non-smoking patrons, young adults, and high-risk individuals who have avoided casinos for fear of exposure to secondhand smoke will patronize casinos if smoking is banned. As such, casino revenue may even increase with the implementation of a ban. At the very least, it will provide protection from future liability and damages to be paid to injured casino workers. Simply put, smoking is a greater liability than it is an asset for casinos and change must be made.

    The COVID-19 pandemic has shown that society's tolerance for continuing to allow preventable health risks to fester is running out. As Cynthia Hallett, President and CEO of the American Nonsmokers' Rights Foundation, wisely remarked, "Casinos are the last frontier for extinguishing smoking indoors ... . Look at airplanes and restaurants, which we now take for granted as places that should obviously be smoke free. In the near future, we'll look back at casinos the same way and wonder what took so long." 166Casino owners take heed, indoor smoking is about to be extinguished.




    California Western Law Review
    Copyright (c) 2022 California Western School of Law 

    Footnotes

  • INTRODUCTION

    The climate is changing. One of California's most precious assets - its beautiful public lands - is endangered. 1Public entities must act to protect these lands from climate change, but any action may eliminate the government's immunity for injuries resulting from a natural condition of the land. 2Thus, government efforts to mitigate the effects of climate change present risks in part due to ambiguities in California's natural condition immunity doctrine, which California courts have historically struggled to interpret. 3This Comment proposes solutions.

    Under section 835 of the California Government Code, private individuals may sue public entities for injuries caused by a dangerous condition of public property. 4Public property includes land, buildings, thoroughfares, and other facilities managed by public entities. 5If, however, the injury arising under section 835 is caused "by a natural condition of any unimproved public property," the public entity will be immune from liability under section 831.2, commonly known as the "natural condition immunity." 6The rationale behind the natural condition immunity is to encourage public entities to open land to public recreation by sparing them the burden and expense of defending injury suits. 7In an era where California's forty-two million acres of public property 8  [*397] will be unprecedentedly difficult to manage with climate change, 9public entities must be able to focus time and energy on protecting public lands.

    California lawmakers intended for section 831.2 to supersede section 835 and immunize public entities for injuries on unimproved lands. However, an evolving and inconsistent interpretation of the natural condition immunity has created tension between competing policies. 10Doctrinal uncertainty as to what constitutes a "natural" condition of "unimproved" public property leaves a lack of clarity for public entities and prospective plaintiffs regarding when and where the immunity applies. 11Climate change may exacerbate the problems associated with this uncertainty. 12Increased erosion, severe weather events, floods, and other harms tied to climate change will create new and unforeseen dangerous conditions on public property, giving rise to novel risks of tort liability for public entities. 13

    Public entities must act, but action could result in a loss of immunity under section 831.2. 14Thus, a balance must be struck that  [*398] enables public entities to effectively manage public property and address climate change without being unreasonably exposed to liability. Moreover, private individuals should have a fair opportunity to sue public entities for injuries that result from negligent risk management.

    Part I of this Comment details the risks of global climate change to California's public lands and how these risks precipitate new dangerous conditions on public property that may cause injuries. Part II explores the relevant statutes that authorize private citizens to sue public entities for torts and the tension of these statutes with governmental immunities. Part III evaluates the current state of the natural condition immunity. Finally, Part IV offers a prescriptive framework through which California's public entities can keep public properties open while ensuring injured parties receive rightfully entitled compensation.

    I. CLIMATE CHANGE AND CALIFORNIA'S PUBLIC LANDS

    The scientific consensus is clear: human activities are warming the atmosphere and driving global climate change. 15Since the Industrial Revolution, humans have increasingly relied on fossil fuels, such as coal, petroleum, and natural gas, to accelerate technological progress and population growth. 16However, combustion of fossil fuels produces greenhouse gases that concentrate in the atmosphere. 17These concentrated gases cause a "greenhouse effect," where radiation from the sun is trapped in the lower atmosphere resulting in the heating of Earth's surface. 18This heating is known as "global warming," 19which drives a series of environmental changes that disproportionately impact California's lands over other global regions. 20As this Comment will  [*399] explore, California's urban and rural public properties may see an expansion of dangerous conditions that may dramatically increase the number of bodily injuries.

    A. Current Trends in Climate Change

    Since the nineteenth century, greenhouse gases have increasingly accumulated in Earth's atmosphere. 21The preeminent greenhouse gas, carbon dioxide, is accumulating at a rate of 2.5 parts-per-million ("PPM") each year as a result of anthropogenic carbon emissions. 22This rate of atmospheric carbon dioxide concentration is one hundred times greater than in the pre-industrial era. 23Currently, carbon dioxide levels are at 420 PPM in Earth's atmosphere, nearly twice above the 280 PPM mark of the eighteenth century. 24

    Greenhouse gas accumulation is driving global environmental changes. 25Today, Earth's surface is, on average, two degrees Fahrenheit warmer than in the pre-industrial era. 26Since 1880, Earth has warmed, on average, 0.13 degrees Fahrenheit per decade. 27However, since 1981, global warming has occurred at nearly double the centurial rate at 0.32 degrees Fahrenheit per decade. 28

     [*400] These warming temperatures are causing global sea levels to rise. 29Global sea levels are now eight to nine inches higher than in the pre-industrial era, with one-third of this rise occurring in the last twenty-five years. 30According to the U.S. Interagency Sea Level Rise Taskforce, global sea levels are highly likely to rise at least twelve inches (0.3 meters) above 2000 levels by 2100 on a low-emissions pathway and as high as 8.2 feet (2.5 meters) above 2000 levels on a high-emission pathway. 31

    Rising sea levels are in part due to melting ice caps. 32Currently, 1.2 trillion tons of ice melt each year, and the rate of ice loss is expected to increase. 33Antarctica, for example, is losing twenty-four cubic miles of land ice each year. 34Sea level rise also occurs due to thermal expansion, the increase in ocean water volume due to warming sea temperatures. 35The ocean's surface temperature has warmed two degrees Fahrenheit since the pre-industrial era, contributing largely to the rise of global sea height. 36

    This sea surface warming also precipitates the intensification of storms. 37Hurricanes, for example, require an ocean surface temperature of seventy-nine degrees Fahrenheit to develop and are now intensifying due to the increased availability of warmer sea surface water. 38As a  [*401] result, hurricanes are reaching classifications of Category Three or higher more often in recent years. 39

    On land, global climate change intensifies droughts 40and imperils ecosystems. 41Higher temperatures cause the evaporation of water in plants and soils, causing ground-level drying and drought. 42Large wildfires in the western United States have doubled in frequency since 1984 43and are expected to occur more often globally. 44Climate change also drives the rise of invasive species and diseases, which, 45coupled with hot temperatures and extreme weather events, leads to biodiversity loss around the planet. 46It is estimated that one million animal and plant species are at risk of extinction due to climate change. 47

     [*402] The dangers of climate change are severe for environments across the Earth. 48No region is immune from the harms of rising global temperatures and sea levels. 49California, both in its coastal and inland regions, is particularly vulnerable to the perils of global climate change. 50

    B. Impact of Climate Stressors on California's Public Lands

    Despite a two-degree Fahrenheit increase in global temperature since the pre-industrial era, global warming is not evenly distributed across the earth. 51California's temperatures have risen three degrees Fahrenheit in the past hundred years. 52The last seven years have been the hottest in the state's record-keeping. 53California is projected to see fifteen more heatwave days per year by 2050. 54

     [*403] These temperature patterns have serious ramifications for California's open spaces. 55Higher temperatures enhance evaporation, which reduces surface water and dries soil and vegetation, causing drought. 56The entire state is currently in a drought, with over eighty percent of the state experiencing severe drought conditions. 57California's reservoirs are at fifty percent capacity, and state water sources are dwindling. 58Sierra Nevada snowpack, which provides a significant sum of California's freshwater, could see a recession in size by up to seventy-nine percent of present values by the year 2100. 59

    Further, hot temperatures, lack of rain, and low humidity are causing die-offs in California's ecosystems. 60California's languishing vegetation has contributed to a doubling of large wildfires from 1984 to 2015, a number that is expected to increase. 61California's vegetation  [*404] has also experienced increases in infectious disease 62and invasive species that contribute to biodiversity loss. 63

    The sea level on California's coast has risen eight inches in the last century 64and is expected to rise another twenty to fifty-five inches by 2100. 65A fifty-five-inch rise would expose half a million Californians to flooding and result in over 100 billion dollars in infrastructure and property damage. 66Additionally, rising sea levels risks saltwater contamination to California's public lands, including the San Joaquin Delta, which provides fresh water to 20 million California residents. 67

    Rising sea levels will also accelerate coastal bluff and beach erosion. 68Current studies estimate that the coastal bluff erosion rate will double the historic rate by the year 2100. 69Bluff erosion will happen contemporaneously with coastal sand depletion. 70Current projections estimate that thirty-one percent to sixty-seven percent of Southern California beaches may become completely eroded by 2100. 71Additionally, global wave power has increased at a rate of 0.4 percent  [*405] per year. 72Stronger waves and higher local sea levels will intensify nearshore currents, further contributing to coastal erosion. 73

    In addition to gradual environmental changes, climate change will trigger natural disasters that pose risks to inland and coastal regions of California. 74Floods from stronger storms, rock failures, large wildfires, and other disasters will cause severe damage to California's public lands. 75Both sudden and gradual environmental risks will exacerbate dangerous conditions on public property. 76

    C. Exacerbation of Dangerous Conditions Due to Climate-Driven Degradation

    The aforementioned effects of climate change will escalate the danger associated with natural conditions of California's public lands. As a result, car accidents, recreational accidents, and disaster events will occur more frequently. 77Public entities will increasingly en-counter climate-related issues, such as water on roadways, erosion of coastal bluffs, falling trees, and other safety hazards, in the day-to-day management of public property. 78Additionally, state population growth  [*406] and development will pressure public property management and aggravate existing dangers on public property. 79

    In response to the accelerating risks of climate change, public entities must employ new adaptation measures and ramp up management efforts of public properties. 80For example, on public beaches, bluff erosion will require new infrastructure projects like cliff fortification and managed retreat. 81However, in conducting a risk man-agement analysis of such a project, public entities must consider whe-ther adaptation measures eliminate the natural condition immunity as a shield from liability. Precedent fails to clear the air on what legal pro-tections a public entity will receive when adapting to climate change.

    II. CALIFORNIA'S PUBLIC PROPERTIES AND INJURY LIABILITY

    Over sixty million people visit California's public properties each year. 82Thousands of visitors are injured or killed while on public property. 83Many of these injuries result from risks assumed by the  [*407] visitor, 84but some injuries are caused by dangerous conditions on public land giving rise to tort liability for the managing public entities. 85Liability often rises from dangerous conditions on roadways, parking lots, public walkways, traffic instrumentalities, or defects in public lands and parks. 86

    Typically, public entities' duty of care to visitors is defined by statute. 87State laws advance a broad social policy of government responsibility for safety on public property. 88By holding public entities accountable, California's government liability laws protect individuals from foreseeable harm on public property and compensate them for injuries resulting from a breach of the duty of care. 89

    A. Public Property and Torts, an Overview

    In California, the Tort Claims Act 90governs tort claims against public entities and employees. 91Prior to the passage of the Tort Claims Act, California tort claims were governed by sovereign immunity laws. 92However, these laws were riddled with complicated loopholes and exceptions that effectively swallowed the rules. 93In Muskopf v.  [*408]  Corning Hospital District, 94the Supreme Court of California discarded the sovereign immunity doctrines that controlled government tort claims in the state. 95In response, the legislature passed a series of statutes outlining governmental tort liability. 96Today, the Tort Claims Act governs issues of liability where a public entity's act or omission gives rise to an injury. 97

    The Tort Claims Act provides that public entities and employees may be liable for injuries that arise under three limited circumstances: (1) the injury is caused by an act or omission of a public employee operating in the course and scope of their employment; 98(2) the injury is caused by a dangerous condition of public property; 99or (3) the injury is caused by an act or omission of a public employee that would be actionable against a private individual. 100These theories of liability are subject to several restraints in the form of governmental immunities. 101

    B. Premises Liability Under Government Code Section 835

    A claim for an injury that occurs on public property arises under section 835 of the California Government Code in the Tort Claims Act. 102Section 835 provides that a public entity may be held liable for injuries to a person while on public property where the plaintiff can establish that the public property was in a dangerous condition at the time of the injury, the injury was proximately caused by the dangerous condition, and the injury was reasonably foreseeable from the  [*409] dangerous condition. 103In addition, the plaintiff must establish either of the following:

    (a) [a] negligent or wrongful act or omission of an employee of the public entity within the scope of his employment created the dangerous condition; or (b) the public entity had ... notice of the dangerous condition ... a sufficient time prior to the injury to have taken measures to protect against the dangerous condition. 104

    If the foregoing elements are met, the plaintiff may be entitled to relief under section 835.

    C. Tension Between Public Premises Liability and Governmental Immunities

    Despite resembling a standard premises liability claim, section 835 is narrower in scope. 105Section 835 is subject to several immunities enumerated in the Tort Claims Act. 106

    As an initial obstacle, a plaintiff must prove that the dangerous condition giving rise to injury is not a trivial defect of the property. 107Under section 830(a), a "dangerous condition" of public property requires a "substantial (as distinguished from a minor, trivial or insignificant) risk of injury." 108The trivial defect immunity shields public entities from liability where a judge determines, as a matter of law, that the condition giving rise to injury is "minor, trivial or insignificant nature in light of the surrounding circumstances that no  [*410] reasonable person would conclude that the condition created a substantial risk of injury." 109

    The design immunity, set forth in section 830.6, immunizes public entities from liability for injuries that are caused by the plan or design of public property. 110The purpose of the design immunity is to prevent the factfinder from second-guessing the risk analyses already considered by government officers who approved the plan or design. 111Public entities may evade injury liability even where an approved plan or design malfunctions or deteriorates. 112For example, the immunity may apply where an injury arises on public roads impaired by weather conditions 113or due to a traffic signal malfunction. 114

    Additionally, the Tort Claims Act categorically excludes certain types of public property from injury liability: a managing public entity is immune from liability where injury occurs on unpaved roads or trails; 115at water improvement or distribution facilities; 116at dog parks; 117due to failure to provide fire protection services; 118or due to inadequate correctional facilities. 119

    III. NATURAL CONDITION IMMUNITY AND CALIFORNIA COURTS

    The natural condition immunity, set forth in section 831.2 of the Government Code, is a more powerful shield against public entity liability:

     [*411] 

    Neither a public entity nor a public employee is liable for an injury caused by a natural condition of any unimproved public property, including but not limited to any natural condition of any lake, stream, bay, river or beach. 120

    The natural condition immunity is absolute and applies "regardless of whether the public entity had knowledge of the dangerous condition or failed to give warning." 121

    The legislative purpose of section 831.2 immunity is to ensure that public entities will not prohibit public access to recreational areas due to the burden and expense of defending against personal injury suits. 122Injuries will occur on public properties and parks, but to safeguard against all risks would exceed the state's budget for resource management; thus, the natural condition immunity serves as a solution. 123

    Judicial interpretation of section 831.2 suggests that the natural condition immunity protection is theoretically broad, but unresolved splits between courts in the application of the immunity have led to erratic outcomes. 124These splits turn on three primary questions of statutory interpretation that remain unsettled: (1) what constitutes a "natural" condition; (2) how is causation established in a hybrid environment of natural and unnatural conditions on public property; and (3) what constitutes "unimproved" public property. 125As a result, litigants are left to grapple with a doctrine full of uncertainties. 126

     [*412] 

    A. What is "Natural"?

    The Tort Claims Act does not define "natural." 127Therefore, California's courts must define the term, 128a challenge considering the constantly changing natural environment of California as the state develops and urbanizes. 129As a result, two interpretations of "natural condition" have emerged in California case law: (1) the "hybrid condition" theory; 130and (2) the "combination of human and natural forces is still considered a natural condition" theory. 131To date, the California Supreme Court has not resolved the split in case law. 132

    In the years following the enactment of the natural condition immunity, several California courts interpreted the term "natural condition" consistent with the definition provided by the Restatement of Torts. 133The Restatement Second of Torts defines the term natural as follows:

    "Natural condition of the land" is used to indicate that the condition of land has not been changed by any act of a human being ... . It is also used to include the natural growth of trees, weeds, and other vegetation upon land not artificially made receptive to them. 134

    The first case to interpret "natural condition" in line with the Restatement definition was Buchanan v. City of Newport Beach. 135There, dredged sand in Newport Beach raised the beach level by  [*413] twenty-seven feet, creating a steep sand berm along the waterline. 136The plaintiff, Buchanan, collided with the sand berm after a plunging wave thrust him into the sand, breaking his neck. 137Buchanan brought suit, contending that city's dredging altered the wave action from a "spilling" type of wave to a "plunging" wave, creating an unnatural condition on the beach that eliminated the government's immunity under section 831.2. 138After losing on a motion for nonsuit, Buchanan appealed. 139The appellate court reversed, ruling that the steeper beach and altered wave action where Buchanan's injury occurred may have constituted an unnatural condition of public property, a determination to be left to a jury. 140

    Seven years later, in Gonzales v. City of San Diego, 141a California appellate court expanded the holding in Buchanan. 142There, the plaintiffs sued for the wrongful death of their mother, who drowned in a rip current at a San Diego beach where the city provided lifeguard and police protection. 143The court found that the rip current, combined with the alleged negligent conduct of the lifeguard department, constituted a "hybrid condition" of public property rather than a natural condition. 144

    The "hybrid condition" theory asserts that human alterations to a natural condition of public property can eliminate the immunity provided by section 831.2. 145Whether or not a hybrid condition exists, according to the Gonzales court, is a triable issue of fact. 146However, this theory has received cautious or negative treatment in subsequent cases. California courts have held that Gonzales "only stands for the proposition section 831.2 will not cloak a public entity with immunity when its own conduct is partially responsible for inducing a person to be victimized by a dangerous condition of the nature of a hidden  [*414] trap." 147Despite this treatment , Gonzales has not been abrogated by California's Supreme Court and remains good law.

    Buchanan and Gonzales mark one line of construction of the term "natural." 148Most courts have followed the reasoning of Fuller v. State of California, 149which broadly interpreted the term "natural" to include artificial, human-related changes to the natural condition of public property. 150In Fuller, the court held that the mere fact that human activity contributed to the formation of a condition did not necessarily preclude it from being a "natural" condition under Section 831.2. 151Although acknowledging that "each case must be decided on its own facts," the Fuller court stated:

    The combined acts of men and of nature have caused substantial change to [California] coastline's condition. It cannot be said wherever such has occurred and an area of the coast is no longer in the pristine state which it was prior to the population of California, that the Legislature intended such an area to be excluded from the application of section 831.2. 152

    Since Fuller, California courts have generally held - despite Buchanan and Gonzales - that section 831.2 provides immunity where a natural condition has been altered in some manner by human activity. 153For example, immunity under section 831.2 exists even where the public entity's nearby improvements, together with natural forces, add to the buildup of sand on a public beach. 154In Tessier v. City of Newport Beach 155and Morin v. County of Los Angeles, 156California courts reasoned that, because sandbars occur in nature even in the absence of human activity, any contributing human activity does  [*415] not alter the natural character of the condition. 157In other words, where human activity alters the coastal tide zone in a way that would occur regardless of human intervention, the natural condition immunity applies. 158

    This reasoning has also been extended to cases off the beach. In Goddard v. Dept. of Fish & Wildlife, 159manmade lakes and reservoirs were deemed "natural" for purposes of section 831.2. 160In Alana M. v. State of California, 161trees situated between campsites in a public campground were deemed natural. 162In Winterburn v. City of Pomona, 163caves in a city-owned greenbelt were considered natural. 164These cases reflect the prevailing interpretation of the term "natural" - that human alterations to natural property, without more, keep the land in a natural condition under Section 831.2. 165

    B. What is "Unimproved"?

    Despite a split in precedent, California courts generally interpret the term "natural" consistently. 166However, California case law is less clear on the construction of the term "unimproved." 167

    In Rendak v. State of California, 168a California court considered, for the first time, what constituted "unimproved" land. In Rendak, a  [*416] man was killed by the collapse of a bluff while visiting Brighton Beach Park in Santa Cruz County. 169The case was dismissed at the trial court for failure to overcome the state's natural condition immunity defense. 170On appeal, the Rendak family argued that the bluff was not "natural" or "unimproved" because the park contained improvements, such as administrative offices, staff residences, and a parking area away from the collapsed bluff. 171Laying the foundation for recent natural condition immunity cases, the appellate court held that an improvement of a California park does not remove the immunity from the unimproved areas. 172Thereafter, the focus of natural condition immunity litigation was whether (1) human improvements to the public property existed at (2) the location of the injury. 173

    Subsequent cases refined the Rendak holding, requiring "some form of physical change in the condition of the property at the location of the injury, [to justify] the conclusion that the public entity is responsible for reasonable risk management in that area." 174This development, first introduced in Eben v. State of California, 175added a third component to the unimproved analysis from Rendak: in addition to the need for (1) human improvement at (2) the location of the injury, there must also be (3) an assumption of risk management by the managing public entity. 176Risk management requires some intention by the managing public entity to mitigate the risk of injury to visitors of public property. 177This element ensures that public entities are only liable for foreseeable harms that the public entity should have protected  [*417] against. 178Risk management solutions include barriers and other infrastructure, regulation of visitor activities, and enforcement strategies that protect the public from dangerous conditions of the property. 179

    Eben best illustrates the risk management element of the "unimproved" property analysis . There, the plaintiff, Eben, was rendered quadriplegic after hitting his head on an underwater rock embankment while water-skiing at high speeds at Millerton Lake. 180Eben lost at the trial court after failing to plead around the natural condition immunity. 181On appeal, Eben argued that the placement of hazard buoys along the lake's shore constituted an improvement that precluded section 831.2 immunity. 182The appellate court reasoned that "some form of physical change in the condition of the property at the location of the injury, which justifies the conclusion that the public entity is responsible for reasonable risk management in that area," is necessary to eliminate the immunity of section 831.2. 183The court held that the hazard buoys were too remote from the injury site to be considered "at the location of the injury" and were not intended to create the illusion that it was safe to boat at high speeds. 184The risk management contemplated by the hazard buoys was sufficiently unrelated to Eben's accident; thus, the court found the immunity was correctly applied. 185

    The Eben "risk management" analysis remained good law for thirty years. 186Courts agreed that the existence of an improvement required  [*418] a physical change at the location of injury. 187Subsequent cases added a new requirement that the physical change at the location of the injury is causally connected to the injury. For example, in Mercer v. State of California, 188the lack of fences and signs at the location of the plaintiff's off-roading injury were held not causally connected to the injury and the natural condition immunity applied. 189In Rombalski v. City of Laguna Beach, 190a lifeguard station and a stairway at the location of the plaintiff's diving-related injury was held not causally connected injury itself. 191

    In 2013, several cases - all ironically involving fallen trees - pivoted away from the Eben analysis and convoluted the statutory interpretation of the term "unimproved" under section 831.2. 192These "fallen-tree cases" broadened the scope of the natural condition immunity by focusing on the cause of the injury rather than the location of the injury , muddying the existing "unimproved" property analysis. 193

    Meddock v. County of Yolo 194was the first fallen-tree case to decline to extend Eben. In Meddock, the plaintiff was struck by a fallen tree while standing in a paved parking lot managed by the county. 195The plaintiff argued that, because he was injured on an improved parking lot, Eben barred the natural condition immunity. 196The court rejected this argument, stating that "although the injury occurred on improved property, that is, the paved parking lot, it was caused by the trees." 197This holding emphasized the importance of an injury being  [*419] caused by a natural condition of unimproved property regardless of where the injury actually occurred . 198 Meddock implicitly rejected Eben, suggesting that its spatial analysis served a discrete purpose unique to Eben. 199

    In Alana M. v. State of California, 200a three-year-old girl was injured by a falling tree in a campsite at Portola Redwoods State Park. 201The tree had "identifiable defects including rot, a cavity, and a hatchet wound and it "was overextended with poor taper.'" 202The plaintiff argued that the tree was improved due to its defects and the state's assumed risk management over the tree, evidenced by the state's Tree Hazard Program. 203The court dismissed the plaintiff's arguments and expressly rejected the Eben risk management analysis. 204In its place, the court developed a new "causal nexus" analysis, under which a plaintiff must show that (1) the natural condition that caused the injury was in some way "improved," and (2) the improvements "created, contributed to, or exacerbated the degree of, the danger associated with a natural condition." 205Under this framework, the court determined that the plaintiff failed to introduce evidence that artificial improvements at the campsite created, contributed to, or exacerbated the degree of danger posed by the tree. 206

    Alana M. is a maturation of the Meddock holding. 207While both cases emphasize that a natural condition of unimproved land must cause the injury, Alana M. goes a step further by requiring that some human activity increase the danger associated with the natural condition. 208

     [*420] Later, in County of San Mateo v. Superior Court, 209a twelve-year-old boy was injured when a diseased tree fell on his tent in a designated campsite at San Mateo County Memorial Park. 210An arborist testified that construction adjacent to the campsite changed the nature of the soil and root environment surrounding the tree, which likely exacerbated the risk of the tree falling. 211Unlike in Alana M. and Meddock, the court found that triable issues of fact existed as to whether the tree was "unimproved." 212The court determined that Alana M's causal nexus test was satisfied because the plaintiff produced evidence that the nearby construction contributed to the danger of the tree and made it more likely to fall. 213

    The San Mateo court distinguished Alana M. in several important respects. First, the court declared that it did not "need to decide whether and to what extent the location of the condition, or the location of injury, controls when dealing with a transitory hazard." 214This was a departure from Alana M., which emphasized the location of the dangerous condition is controlling over the location of the injury. 215Second, San Mateo refused to require that a plaintiff produce evidence showing some human improvement exacerbated the danger of a natural condition to establish a triable issue of fact. 216

    In City of Chico v. Superior Court, 217the court further clouded the immunity analysis. There, the plaintiff, injured by a falling tree branch while jogging through Lower Birdwell Park, argued that the tree's branches had been pruned, which contributed to the tree's condition. 218The city forest manager confirmed that pruning may have affected the tree by pushing growth onto the remaining branches, making those branches larger and heavier. 219To that end, the plaintiff's expert  [*421] suggested that the larger and heavier branches held "excessive weight creating significant leverage at the point of attachment between the branch and the main trunk," which could have caused the branch to fail. 220Relying on San Mateo, the plaintiff argued that the city interfered with the natural growth of the tree by pruning it, thereby pushing more vigorous growth into the remaining branches, and by not pruning the tree for years thereafter. 221The plaintiff contended that the prior pruning led the remaining branches to become overwhelmed by their own weight, creating a dangerous condition. 222

    The Chico court ultimately held that the immunity applied as a matter of law. 223The court found the plaintiff's "poor pruning" argument insufficient, because "no one opined that the prior pruning caused the subsequent break, not even plaintiff's own expert arborist." 224Although the plaintiff contended that the city's neglectful forest management led the tree to become "overleveraged," 225the court found the plaintiff failed to produce enough evidence to satisfy the Alana M. causal nexus test. 226Moreover, the court reasoned that the plaintiff's argument was speculation insufficient to raise an issue of fact. 227The court ultimately held that the plaintiff failed to show "that the construction or existence of human-made improvements near the tree or located over the tree's root system caused the branch to fail." 228

    Chico purports to adopt the Alana M. causal nexus analysis but, as applied, runs afoul of the Alana M. rationale. Alana M. requires that a plaintiff establish that "human conduct created, contributed to, or exacerbated the degree of, the danger associated with a natural condition." 229 Chico clearly requires more. Under Chico, a plaintiff  [*422] must essentially assert that but for the human improvements, the injury at issue would not have occurred. 230

    Ultimately, California's Supreme Court has not settled several important questions regarding the "unimproved" element of the natural condition immunity. First, must human improvements exist at the location of the injury or at the location of the natural condition? 231Second, is evidence of a causal link between improvements and the dangerous condition necessary or sufficient to uphold liability? 232And if necessary, how much evidence must be introduced to overcome a motion for summary judgment? 233Finally, must the plaintiff prove that a human improvement creates the danger of a natural condition or merely exacerbates the danger? 234These questions remain unanswered, leaving difficulty for prospective litigants - including public entities who must prepare for climate change - to know exactly where and to what extent natural property can be altered by human activities before precluding the natural condition immunity.

    C. Implications of the Inconsistent Application of the Natural Condition Immunity

    The foregoing questions reflect critical issues in an action against a public entity under section 835 for a dangerous condition of public property. This doctrinal uncertainty impacts litigants. Plaintiffs must know what burdens of pleading and production they carry, and public entities must know how much care to exercise. Because relevant case law offers an ambiguous framework, public entities are left to guess the proper course of action against dangerous conditions. Must trees in a campground be evaluated regularly? Do coastal bluffs need constant examination? Does every sand dune or lake shoreline area need a warning sign? Threading the needle between reasonably managing public property with a limited budget and facing liability for inadequate maintenance is a delicate and uncertain challenge.

     [*423] The present status of the immunity doctrine also upsets judicial economy and efficiency. Almost any given factual scenario implicating the natural condition immunity presents an issue fit for appeal. Statutory interpretation of the terms "natural" and "unimproved" is so variable that unless the accident occurs in a remote area, any human modification to a natural condition essentially warrants appellate review. 235Excess appealability wastes judicial resources and time.

    In sum, resolving the inconsistencies in natural condition immunity case law will serve both plaintiffs, public entities, and the judiciary. Plaintiffs can streamline the litigation process, either by avoiding litigation altogether or adequately pleading around the immunity. Public entities will have a clear schema to follow when managing public property. Consequently, courts will be freed from hazy precedent when evaluating public premise liability claims.

    D. Climate Change as a Test to Statutory Interpretation

    As climate change exacerbates dangerous conditions of public property, injuries that implicate section 835 and the natural condition immunity will become more prevalent. 236The resulting cases will inevitably turn on novel facts that will challenge the integrity of the natural condition immunity doctrine. While courts remain uncertain as to which standard a plaintiff must plead to overcome the immunity, pleading strategies will shift as plaintiffs innovate unique strategies to exploit doctrinal ambiguities.

     [*424] Moreover, climate change will pose progressively costly risks of property damage to California's public lands. 237Accounting for these evolving stressors will strain public entities, which need clear direction in the face of existential threats and immunity challenges that require significant resources.

    The solution to climate change adaptation and mitigation is complex and far outside the scope of this Comment. However, disentangling the uncertainty around injury liability for public entities is much clearer.

    E. An Illustration of How Doctrinal Ambiguity Could Create Problems for Litigants

    To understand how doctrinal ambiguity impacts both public entities and private parties, consider the following hypothetical:

    A coastal city in California wants to place riprap at the base of a beach cliff to mitigate bluff erosion that has accelerated due to climate change. Placing the riprap on the beach is an expensive construction project, requiring large machinery and a staff of construction workers. For weeks, the city uses cranes to hoist materials down to the beach and tractors to press the materials to the bluff's base. The process puts a lot of stress on the coastal bluffs due to the vibration and weight of the machinery.

    Shortly after the project is completed, a man walking down the beach near the newly placed riprap is injured from the collapse of a portion of the bluff. He sues in state court and claims the natural condition immunity does not apply because - per Alana M. - the risk of the bluff collapse was exacerbated due to the human activities associated with the construction project. The city will argue that Chico precludes liability, because the plaintiff's argument is speculative and does not establish that the construction was a sufficient factual cause of the bluff collapse. If the court adopts Chico (the most recent case), the plaintiff would likely be out of luck. However, if the court adopts Alana M. or San Mateo, the plaintiff may have a triable issue of fact.

    The outcome of this hypothetical case would impact the way cities manage risk in fortifying coastal bluffs against climate change. If the  [*425] verdict favors the defendant, then cities may commit more resources to coastal adaptation. If the verdict favors the plaintiff, then cities would likely reevaluate their coastal risk management strategies.

    The outcome would also impact the way plaintiffs strategize in public premise liability suits. If the verdict favors the plaintiff, the injured parties' concerns about defeating section 831.2 immunity would be eased. If the verdict favors the defendant, plaintiffs would likely consider drastic changes to pleading strategies. Ultimately, how a court would rule on these facts is uncertain. As a result, public entities and prospective plaintiffs lack clear guidance on litigating such a case.

    IV. ADAPTING THE NATURAL CONDITION IMMUNITY

    California court must construe the natural condition immunity doctrine consistently and unequivocally to inform potential litigants of their rights and obligations under the Tort Claims Act. Additionally, statutory construction of the immunity should balance the interests of public entities and private individuals. This balancing should allow plaintiffs to bring suit in incidents of clear public entity neglect. However, this balancing should not require an unreasonable standard of care from public entities that manage significant amounts of public property during an era of climate change.

    A. Resolving the Court's Interpretation Issues

    To end doctrinal ambiguities, the Supreme Court of California should resolve the conflicting interpretations of the natural condition immunity. By creating a unified interpretation of the law, the Court can clear the fog surrounding the immunity and strike a balance between the competing interests of public and private entities. This is also an apt opportunity for the Court to embrace a forward-looking framework to address climate-exacerbated injury litigation.

    1. Clarifying "Natural"

    Regarding the term "natural," the Supreme Court of California should first abrogate the Gonzales "hybrid condition" theory. Gonzales leads plaintiffs astray from stronger arguments to defeat immunity, wasting judicial resources in the process. Courts have struggled to fit Gonzales into the broader immunity scheme, while the state legislature  [*426] intended to invalidate the case. Under section 831.21 of the California Government Code, passed by the state legislature ten years after Gonzales, public beaches are considered "natural" even if altered by human activities. 238By abrogating Gonzales, the Court would simply extend section 831.21 to other public lands. This decision would affirm the broad consensus amongst appellate courts that land or water is "natural" even if influenced by human activities.

    Abrogating Gonzales is also in line with climate change concerns. By dispelling any notion that human influence on public property will automatically create a "hybrid condition," public entities will be able to redirect their focus on mitigating and adapting to climate change. Instead of hesitating to fortify land against climate risks out of fear that the fortification will create a "hybrid condition," public entities can simply pursue adaptation without worries of litigation.

    2. Clarifying "Unimproved"

    Regarding the term "unimproved," resolution of current appellate ambiguities should favor protecting public entities. Public entities are already challenged with tackling climate-related risks that will intensify over time. An interpretation favoring public entities will promote accessibility to public lands and prioritize climate change adaptation over injury litigation. Such a resolution would also benefit injured parties, as clear precedent would guide plaintiffs.

    To this end, first, the Supreme Court of California should emphasize that the location of the natural condition controls over the location of the injury. It is paramount to the immunity analysis to consider whether human improvements modified the natural condition itself. As courts have noted, dangerous conditions present migratory dangers. 239It is easier to evaluate and manage a dangerous condition at its source than to anticipate where it will injure a visitor. The location of the injury itself may inform the foreseeability analysis, but courts should focus on a causal analysis rather than an attenuated spatial analysis.

    Second, the Court should adopt the Alana M. causal nexus test over the more restrictive Chico analysis. If a public entity improves the land  [*427] around a natural condition without exacerbating or contributing to the danger of the condition, then the entity should not be liable absent some further responsibility of risk management. Public entities should be liable only for foreseeable injuries that are within the scope of risk management that the entities assumed. 240Where a natural condition of public property causes an injury unrelated to the public entity's conduct, it is a mere tragic accident that does not warrant a remedy at law.

    Additionally, the Alana M. causal nexus analysis is fair to plaintiffs. Under Chico, plaintiffs must produce convincing evidence showing a strong causal tie between the dangerous condition and the human improvement. Under Alana M., plaintiffs must still produce some evidence of a causal link between the danger and the improvement, but only enough to reasonably assume that the improvement could have contributed to or exacerbated the danger. 241The Chico test resembles a but-for causation analysis, whereas the Alana M. causal nexus test is comparable to a substantial factor causation analysis. 242When a natural resource like a tree or bluff collapses, the number of potential contributing factors is so great that it is unfair to require plaintiffs to meet a but-for causation threshold. The causal nexus test filters frivolous suits, where the injury is essentially a tragic accident, from legitimate suits, where human improvements made it more likely that the injury would occur.

    By interpreting the term "unimproved" favorably to public entities, courts will shield public entities from unfair climate change injury litigation. The causal nexus test allows public entities to take the necessary measures to combat climate change, so long as they do not exacerbate a dangerous condition of public property. Going forward, public entities will be able to implement infrastructure projects that protect against climate change without an exhaustive focus on injury risk management.

     [*428] By abrogating Gonzales and implementing the Alana M. causal nexus test, the natural condition immunity will better serve California litigants. Prospective plaintiffs will have a clearer idea of when to bring suit and how to meet their burdens of pleading and production. Public entities will also be able to determine how to effectively manage public property in the face of a changing climate.

    CONCLUSION

    Resolving doctrinal ambiguity in the natural condition immunity will better serve the California court system, plaintiffs, and public entities alike. Climate change's accelerating impacts will increase injury risks on California public lands, and therefore, litigation against public entities. However, current inconsistencies in case law leave plaintiffs and public entities uncertain of their substantive legal rights and obligations under the immunity.

    The Supreme Court of California can resolve these doctrinal ambiguities and provide a proper legal framework for prospective litigants by settling two issues. First, the Court can clarify the term "natural" by abrogating Gonzales, which has confused the analysis of the "natural condition" element. Second, the Court can bring substantial clarity to the term "unimproved" by adopting the causal nexus analysis established by Alana M. and by requiring a lower evidentiary threshold than Chico. By resolving these ambiguities, public entities will be able to focus on climate change and other issues of public property, and private individuals will still receive compensation in incidents of clear governmental neglect.




    California Western Law Review
    Copyright (c) 2022 California Western School of Law 

    Footnotes

  • INTRODUCTION

    Money rules all. Nowhere is this truer than in the world of cash bail. The American cash bail system conditions pretrial release on a defendant's ability to pay a monetary amount in the form of a cash bond. 1This is extremely problematic because approximately 40% of people in the United States are not able to afford even a $ 400 personal  [*304] emergency cost. 2What happens when someone within this 40% is arrested? How can someone afford to pay thousands of dollars to secure release? Unfortunately, many simply cannot. Therefore, many criminal defendants sit in jail prior to trial, unable to afford even a commercial bond. 3In fact, in March of 2020, three out of five people in American jails were awaiting trial, not yet convicted of a crime. 4In other words, the majority of people in jails across the country are still presumed innocent.

    The stories of Daria Morrison and Sarah Jackson perfectly illustrate the socio-economic inequity within the cash bail system. Daria and Sarah found themselves in similar situations when they were arrested and charged with robbery. 5Their similarities do not end there: both women were twenty-years-old and had no prior criminal record. 6Not surprisingly, both women received equal bail amounts of $ 150,000. 7With such similar circumstances, this is only fair, right? Unfortunately, this is not the case. After this initial determination, their paths diverge dramatically. Daria's father could pay a bail bondsman's fee of 6% of the bail amount, while Sarah and her family lacked the financial means to do so. 8Sarah remained in jail, unable to afford bail and faced with the unfortunate decision many defendants face: either plead guilty and get out of jail or stay and wait potentially years for a trial. 9Sarah, after three months in county jail, decided to plead guilty to a time-served  [*305] sentence and five years of probation. 10Meanwhile, Daria was able to get the charges dismissed in exchange for community service. 11

    Tragically, the disparity in outcomes for Daria Morrison and Sarah Jackson is not unique. The cash bail system is effective in forcing plea bargains on those who cannot afford bail. 12Cash bail is a linchpin in the American criminal legal system made to "keep people in jail, coerce guilty pleas, and make court machinery move more rapidly." 13Part of the reason pretrial incarceration has this effect is because the inability to post bail greatly affects the outcome of a criminal case. 14Defendants are much more likely to plead guilty when they cannot afford bail. Often, the plea deal allows for release, so the defendant is incentivized to plead guilty as soon as possible rather than wait to be acquitted. 15Unfortunately, this very rational desire to return to normal life can have catastrophic consequences later in life and only perpetuates disparities within the criminal legal system. 16After three months in jail, Sarah made the difficult choice to be released to probation rather than await trial while incarcerated. 17While Daria, who benefited from her freedom, was able to fight the charges and keep her record clear of a conviction. 18

    These disparate outcomes caused by economic disparities are what the California Supreme Court attempted to address in its 2021 decision  [*306] In re Humphrey. 19Petitioner Kenneth Humphrey filed a writ of habeas corpus arguing that by setting his bail without considering his financial resources, the superior court denied his due process rights under the Fourteenth Amendment. 20Humphrey did not claim that the cash bail system is inherently unconstitutional, but rather argued that setting bail beyond a defendant's economic means is "the functional equivalent of a pretrial detention order." 21And this, he asserted, is unconstitutional.

    In its decision, the Supreme Court of California agreed with Kenneth Humphrey, holding "the practice of conditioning freedom solely on whether an arrestee can afford bail is unconstitutional." 22However, the Humphrey II decision lacks concrete guidance on how to adequately protect indigent Californians from excessive bail fees. By failing to answer these important questions, defendants like Sarah and Daria may continue to face similar disparate treatment. This Note will examine the Humphrey II decision and expose its inadequacies in protecting the rights of indigent people accused of crimes. Part I will introduce a general overview of bail and what inspired our modern bail system. Part II will provide background on the Humphrey decisions. Humphrey first appealed his bail decision to the court of appeals (commonly referred to as Humphrey I). Then, the Supreme Court of California reviewed that decision (commonly referred to as Humphrey II). Part III will extensively analyze the shortfalls of Humphrey II, exposing the language as too vague to protect defendants with limited financial resources and examining a procedural problem inherent within the timing of bail determinations that disadvantages criminal defendants and their attorneys. Finally, the Note will compare Humphrey II to the Federal Bail Reform Act of 1984, which fails to adequately protect the rights of poor defendants in the federal system. By analyzing cases that apply the Act, the  [*307] analyses expose how Humphrey II's factors may perpetuate the status quo of the cash bail system. Part IV will attempt to provide guidance on this extremely complex issue. This Note does not purport to solve the complex issues of the cash bail system, but offer suggestions to create more equity in bail determinations. 23

    I. THE HISTORY OF BAIL IN AMERICA

    Bail describes "the conditions required to release someone from incarceration" before trial. 24In the American criminal legal system, however, bail "is synonymous with money." 25When someone is charged with a crime, conditions of release are determined at an arraignment hearing. 26At this hearing, the prosecutor can request the judge impose specific conditions to be followed upon release and/or an amount of money to be posted before a defendant's release. 27If the judge requires cash bail, the defendant can deposit money, or an asset, in order to secure his or her pretrial release. 28

    At our country's inception, the right to pretrial release "was one of the best-protected ... rights." 29This right dates back to medieval England, where it was common for criminal defendants to be released upon the payment of a bond to ensure defendants did not evade punishment and provide compensation for victims. 30English common law deeply influenced the American colonies' adoption of a right to conditional  [*308] pretrial release. 31"Some of the most fundamental constitutional documents in Anglo-American history: the Magna Carta, issued in 1215; the Statute of Westminster I in 1275; the Petition of Right in 1628; the Habeas Corpus Act of 1679; and the English Bill of Rights in 1689" solidified this right. 32

    The Constitution does not establish a right to pretrial release; however, it establishes a right against "excessive bail" under the Eight Amendment. 33The protection against excessive bail has been critiqued as "some of the most ambiguous language in the Bill of Rights," making it extremely difficult to defend. 34The California Constitution contains similarly vague language prohibiting excessive bail. 35Vague language makes it difficult for courts to apply standards because the "vague right[] of "due process,' leaves courts and Congress to tinker with what is "due.'" 36However, this is precisely what the California Supreme Court attempted to do in Humphrey II.

    II. Humphrey's PROCEDURAL POSTURE

    A. Humphrey I

    In Humphrey I, sixty-three-year-old Humphrey followed seventy-nine-year-old Elmer J. into his apartment and asked him for money. 37Humphrey told Elmer to get on his bed and "threatened to put a pillow case over [Elmer's] head." 38"When Elmer stated he had no money," Humphrey threw Elmer's phone on the ground. 39In the end, Humphrey left with only seven dollars and a bottle of cologne. 40Prosecutors  [*309] charged Humphrey with first-degree residential burglary, inflicting injury on an elder, and theft from an elder. At arraignment, Humphrey asked to be released on his own recognizance, citing:

    his advanced age, his community ties as a lifelong resident of San Francisco and his unemployment and financial condition, as well as the minimal property loss he was charged with having caused, the age of the alleged priors (the most recent of which was 1992), the absence of a criminal record of any sort for more than 14 years, and his never previously having failed to appear at a court ordered proceeding. 41

    The State asked the court to follow the Public Safety Assessment, which did not recommend release and suggested bail be set according to the bail schedule at $ 600,000. 42Despite Humphrey's many mitigating factors, the trial court followed the State's recommendation and set bail at $ 600,000, and required a protective stay-away order for the victim against Humphrey, which was extremely difficult for Humphrey because he lived in the same housing complex as the victim. 43

    Upon this decision, Humphrey filed a motion to have a formal bail hearing, claiming bail was unreasonable because the judge set bail "beyond [his] means," which violated the Eighth Amendment. 44Humphrey further argued that the Fourteenth Amendment required the court to tailor the conditions for pretrial release to him individually, and "his guilt may not be presumed" when setting bail. 45Humphrey, a black man, also cited several studies "showing racial disparities in bail determinations," including an exhibit about the San Francisco criminal justice system that showed ""Black adults in San Francisco are 11 times as likely as White adults to be booked into County Jail' prior to trial." 46Further, Humphrey provided positive information about himself to  [*310] demonstrate that he was a good candidate for release - including his substantial efforts in recovery from a drug addiction, the completion of his high school diploma and two years of college, and his service as a mentor in his community. 47Humphrey even secured acceptance into a residential substance abuse treatment program, with an intake date the day after his bail hearing. 48He argued the program was better than jail because the program would address his substance abuse issues, which were "the root of his past criminal conduct." 49

    The prosecutor insisted that Humphrey was not a good candidate for release. First, because Humphrey had a prior that required prison time, under the California Penal Code, "the court had to find unusual circumstances in order to deviate from" the bail schedule. 50Second, Humphrey's criminal activity facilitated his drug use, which made his "addiction and inability to address it ... "a continued public safety risk.'" 51Finally, Humphrey was a flight risk because he was facing considerable prison time for the charged crimes. 52All these factors considered, the State did not want Humphrey to be released to the treatment program. 53

    The trial court found Humphrey's motivation to get treatment was an unusual circumstance warranting deviation from the bail schedule. 54However, "because of the public safety and flight risk concerns," bail was only reduced to $ 350,000. 55Humphrey asserted that he could not afford even the reduced bail amount, which meant he would stay in county jail. 56Following his denial for release, Humphrey filed a writ of habeas corpus. 57In his writ, he claimed "he was denied due process  [*311] of law and deprived of his personal liberty on the basis of poverty." 58The appellate court agreed, finding the trial court erred in:

    (1) Failing to consider Humphrey's ability to pay;

    (2) Failing to consider alternatives to money bail;

    (3) Failing to set bail based on an individualized criterion. 59

    The court knew the perplexities this decision would create. It opined that "legislation is desperately needed" to take the pressure off of the court to uphold the constitutionality of the bail process. 60However, instead of waiting for the legislature to pick up the slack, the court asserted "the highest judicial responsibility is and must remain the enforcement of constitutional rights." 61Therefore, it reversed Humphrey's bail determination.

    B. Humphrey II

    The controversy, of course, did not end there. After the Court of Appeal granted Humphrey habeas corpus relief, neither named party petitioned the California Supreme Court for review. 62Upon the request of several parties, and supported by the amicus briefs of many (including the District Attorney of San Diego County and San Bernardino County, as well as the Gold State Bail Agents Association and the Criminal Justice Legal Foundation), the California Supreme Court granted review on its own to "address the constitutionality of money bail as currently used in California." 63The California Supreme Court held:

    The common practice of conditioning freedom solely on whether an arrestee can afford bail is unconstitutional. Other conditions of release - such as electronic monitoring, regular check-ins with a pretrial case manager, community housing or shelter, and drug and alcohol treatment - can in many cases protect public and victim safety as well as assure the arrestee's  [*312] appearance at trial. What we hold is that where a financial condition is nonetheless necessary, the court must consider the arrestee's ability to pay the stated amount of bail - and may not effectively detain the arrestee "solely because" the arrestee "lacked the resources" to post bail. 64

    Pretrial detention should not depend on the arrestee's financial condition and should only occur when less restrictive conditions are incapable of protecting the government's interest in protecting the public and "the integrity of the criminal proceedings." 65The Supreme Court's decision attempts to protect a defendant's "fundamental constitutional right to liberty," explaining that, "in our society, liberty is the norm." 66Therefore, unless there is a strong reason to detain a defendant before trial, the court must set bail at a price the arrestee can afford, or release him or her using less restrictive means. 67A court must find, by clear and convincing evidence, that "no nonfinancial condition of release can reasonably protect" the government's interests. 68

    So, while pretrial detention is an important part of our criminal legal system, holding an individual in jail solely because he cannot afford his bail when less restrictive alternatives are adequate is not. 69Seemingly, the Supreme Court sided with pretrial release and upheld the Constitutional right against excessive bail. Upon a deeper look, though, Humphrey II's decision fails to protect criminal defendants from economically-charged pretrial detention.

    III. WHERE Humphrey II FAILS TO PROTECT CRIMINAL DEFENDANTS

    At face value, the Humphrey II decision reads beautifully for freedom fighters, and many of these fighters have come out to praise the decision. The founder of the Civil Rights Corporation went as far as to say the decision will "eradicate wealth-based human caging from our  [*313] society." 70A law firm in California posted a blog asserting that the decision will "fundamentally change how bail is set." 71And an activist called Humphrey "the most historically significant individual in the history of California bail reform." 72

    Undoubtedly, the decision represents massive progress by telling California courts that their past policies in setting bail were unconstitutional: a seemingly strong stance. However, the decision leaves much undetermined and open-ended. For example: what does it mean to consider someone's finances? How is the trial court supposed to do this? Can the court consider the whole family's financial situation? How much weight should the court give flight risk? How much weight should the court give a history of failing to appear in court? The list goes on and on. Leaving such important questions unanswered will prove to be problematic for various reasons. This Section attempts to expose a few reasons but is not exhaustive.

    A. Humphrey Provides for Immense Judicial Discretion

    Vague decisions provide for more judicial discretion. The previous paragraph illuminates many unanswered questions, but this Section will focus primarily on the vague language regarding the ability to pay and the risk to public safety. A similar analysis can be applied to the other unanswered questions to expose even more problems with the Humphrey II decision. Under Humphrey II, courts must consider nonmonetary conditions for pretrial release. 73For Humphrey, the nonmonetary condition he asked the court to consider was for release to a drug treatment program. 74If such nonmonetary means would not protect the public,  [*314] or ensure the defendant's return to court, a judge can begin a cash bail analysis.

    In order to ensure bail is not "the functional equivalent" of a pretrial detention order (or a finding that pretrial release is not suitable), the court has to know what a defendant can pay. 75The court explained the following:

    If the [superior] court concludes that money bail is reasonably necessary, then the court must consider the individual arrestee's ability to pay, along with the seriousness of the charged offense and the arrestee's criminal record, and - unless there is a valid basis for detention - set bail at a level the arrestee can reasonably afford. And if a court concludes that public or victim safety, or the arrestee's appearance in court, cannot be reasonably assured if the arrestee is released, it may detain the arrestee only if it first finds, by clear and convincing evidence, that no nonfinancial condition of release can reasonably protect those interests. 76

    While Humphrey II is championed for explicitly saying "liberty is the norm," its further evaluation of Humphrey's situation waters down this powerful assertion. 77Instead of standing by the notions of liberty, the Court essentially said liberty is only attainable if a defendant is not charged with a serious offense and does not have a criminal record. Beyond this, the vague instruction allows for more judicial discretion, which gives judges immense power to decide what this means and how to apply the standard. 78When it comes to judicial discretion, "the common debate in legal literature focuses on the extent to which judges deviate from formal legal rules and are allowed or required to balance  [*315] between elements such as social goals or legal principles." 79The concern with Humphrey II is that by allowing judges to balance the societal goal of maintaining public safety against the right to pretrial release, the scales will tilt in a way that does not protect poor defendants.

    Traditionally, courts used a Uniform Bail Schedule to determine the bail amount required for each crime. 80These Uniform Bail Schedules suggest bail amounts for each crime, and do not permit deviations, except in specific circumstances. For example, the Los Angeles County Bail Schedule recommends a bail amount of $ 20,000 for a battery charge. 81

    SECTIONCRIMEBAIL (IN DOLLARS)243(a)Battery20,000459Burglary5,000488Petty Theft1,000646.9Stalking50,000


    82

    This is precisely the practice that favors defendants with the financial means to easily secure release. As with Sarah Jackson and Daria Morrison, the practice could significantly alter a defendant's outcome. 83While Humphrey II does not explicitly denounce these bail schedules, its dicta inherently provide they are unconstitutional.

    This is part of the reason why an opponent of the Humphrey I decision was the Gold State Bail Agents Association. Bail bonds offer a way out of jail when a defendant cannot afford their entire bail  [*316] amount. 84The use of commercial bail bondsmen is also the most common way defendants meet bail in America. 85Bail bondsmen typically charge a fee of ten percent of the entire bail amount. 86If the defendant returns to court, the bondsman gets his money back, but the defendant will never get back his ten percent fee. 87If he did, the bail bondsman would not make any money. In Humphrey's case, to pay the bail bondsman's fee, he would have had to find $ 60,000 (10% of the entire bond) - $ 60,000 he would never get back.

    Additionally, evaluating one's threat to public safety is extremely fact-specific, and the judge is required to make difficult determinations. Unfortunately, when it comes to judicial discretion, "in "hard' cases, where no clear-cut rule exists, non-legal factors [will] guide the judges in their decision." 88The most important non-legal factor that may impact Humphrey II analyses is bias: in particular, racial bias and professional bias. Very notably, most judges are former prosecutors. 89In the federal system, for every former public defender on the bench, there are more than four former prosecutors. 90Unlike prosecutors:

    Public defenders and civil rights attorneys, by the nature of their professions, are required to consider the impact of the law on everyday people. Their jobs require them to understand the circumstances of marginalized groups and ensure that large institutions do not strip them of their most basic rights. They spend their careers representing these everyday people, hearing what led them to possibly engage in criminal behavior and hearing stories of being falsely accused. They also understand mitigating factors that have led to harm to the individual, their  [*317] families, and their communities, often because of the government's failure to meet their basic needs. They spend their careers attempting to convince the government that these individuals are also a part of their community and deserve to be treated with the same respect and dignity. 91

    Recent studies show many judges use their discretion in a way that disproportionately favors white defendants. 92Consequently, poor defendants of color will likely suffer more from the discretion provided by Humphrey II. Studies also show law enforcement officers over-police communities of color. 93Black Californians are about two times as likely to be searched and booked into jails as white Californians. 94This increases the likelihood that Californians of color will be convicted of crimes. Because Humphrey II allows judges to continue considering prior criminal convictions, it may exacerbate the bias and racism within the system. 95Such inherent racial disparities, which Humphrey II did not acknowledge, will not go away.

     [*318] In regard to public safety, the Court goes on to explain that you can never eliminate all possibility of harm. 96Even still, superior courts should focus on "risks to public or victim safety or to the integrity of the judicial process that are reasonably likely to occur." 97The standard "reasonably likely," leaves vast room for interpretation. It also leaves room for judges to continue adhering to arbitrary uniform bail schedules, arguing it is for the sake of public safety. At the same time, defendants who have money can "pay for release regardless of how dangerous they are." 98The emphasis on public safety is also problematic because local judges are elected. 99As elective officials, judges may feel pressure to adhere to the whim of the public and use their discretion to give more weight to public safety in the spirit of being tough on crime. Judges need to stay in the good graces of their constituents and if they appear soft on crime, they may be voted out of office.

    Additionally, whenever courts are given factors to consider, uniformity disappears. 100This significantly weakens Humphrey II's power. Of course, there are many proponents for broader judicial discretion. Many sentencings laws that removed judicial discretion, like mandatory minimums and "Three Strikes Laws," created catastrophic damage within the criminal legal system. 101Such laws make it impossible for judges to consider a defendant's life circumstance and unique  [*319] characteristics at the sentencing phase by taking sentencing decisions out of judges' hands. 102Looking at the legacy of reducing discretion within sentencing is certainly a cause for concern. However, it is also true that sometimes discretion leads to "disparate treatment of those arrested, charged and prosecuted." 103This is because judges, like everyone else, have implicit biases. 104It is important to protect defendants against individual biases to ensure a more just system.

    Thus, Humphrey II fails to adequately protect the accused in California courts and perpetuates the same system it criticized. Due to the vague language that amounts to inadequate protection, large bail amounts will continue to disproportionately impact defendants without financial means. By giving judges the power to set bail under the guise of public safety, Humphrey II maintains the status quo of the bail system. When judges have such broad discretion, criminal defendants cannot know what will happen to them with any certainty. Their futures could change dramatically depending on which judge is assigned their cases. California legislatures must draft more concrete legislation on financial protection in the criminal justice system. Without it, judges may use their judicial discretion to protect the public from potential dangers rather than uphold the right to pretrial release. This is only the first hurdle defendants must overcome.

    B. There Are Procedural Issues with Bail Determinations that Humphrey Does Not Account for

    Humphrey II operates under the standard of clear and convincing evidence. 105This is an extremely high standard that requires the court find it is highly probable that public safety will be threatened if a defendant is released. 106This standard is the same standard that courts  [*320] use to terminate parental rights, commit someone involuntarily, and deport someone. 107These examples illustrate how strong the prosecutor's arguments must be. However, the timing of bail arguments weakens the standard and disadvantages defendants, essentially rendering the standard ineffective.

    The initial bail determination occurs at the arraignment hearing, which generally occurs either the day of arrest or the day after. 108This is the first appearance for a defendant and is often the first time the defendant learns what charges the prosecutor has filed. 109Prosecutors have the complaint and the police report, which offer a biased description of events leading to arrest, leaving defense attorneys with incriminating information and minimal time to prepare. 110"Because the hearing is so quick, judges rarely get a full picture of the accused's individual circumstances, and too often rely on their own stereotypes and biases." 111Therefore, even when judges weigh the Humphrey II factors in the way the California Supreme Court intended, the bail system may continue to disfavors people in poverty and people of color simply because of timing.

    Defendants might meet their attorney minutes before arraignment, especially if the defendant is appointed a public defender (people who hire a private attorney have likely spoken to their attorney before, which  [*321] may be different for defendants appointed counsel). As evidenced by the California Penal Code:

    In a noncapital case, if the defendant appears for arraignment without counsel, he or she shall be informed by the court that it is his or her right to have counsel before being arraigned, and shall be asked if he or she desires the assistance of counsel. If he or she desires and is unable to employ counsel the court shall assign counsel to defend him or her. 112

    An attorney must quickly meet his or her client and develop a competent argument, while the prosecutor has a time advantage. Thus, the timing aspect makes it more difficult for the defense to prevail in bail arguments.

    Similarly, there is little time for the defense attorney to investigate allegations and mitigating circumstances prior to arraignment. If an attorney is appointed at the time of the hearing, the defense attorney may have very little to present. The important mitigating factors Humphrey cited in his defense included: his advanced age, his community ties, his completion of substance-abuse treatment, his educational background, and the large gap between his past and current criminal conduct. 113While some of these circumstances may be quickly recited in a brief meeting with one's attorney, some require an intimate conversation between the attorney and client. The quick nature of pre-arraignment meetings can limit these conversations.

    If a client does not yet trust the attorney he just met, or suffers from other impairments - lack of sleep, mental health issues, or substance abuse issues - the defendant may not provide his attorney with the imperative information. It is possible that the police department's description of the crime and the defendant's list of prior offenses is all the court has to evaluate when determining bail. Deferring to this biased description of the crime weighs the scales in favor of the State. So, if the "major premise [is] ... assuring the arrestee's appearance at trial and pro-  [*322] tecting the safety of the victim as well as the public," then bail determinations tilt heavily in favor of detention at arraignment. 114 Humphrey II does not address these evident procedural biases.

    This procedural issue, though, is premised on the idea that release before trial is the presumption. The hope is to quickly release a defendant back into his community, as long as the defendant poses no risk to public safety. This should happen early on. The devastating effects of pretrial detention are widely-known, and discussed in this Note's Introduction. It is important, for both plea negotiation and constitutional protection, to release those who are suitable for release as quickly as possible. It might not make sense to postpone such hearings, forcing defendants to remain incarcerated longer than necessary. The immense burden on defense attorneys, and disadvantage to their clients, will remain unless procedural protections are put in place. Therefore, potential protections are discussed further in Part IV. 115

    C. The Federal Bail Reform Act Demonstrates Potential Application of Humphrey

    To see how Humphrey II may be applied in California state courts, we can look at federal courts' application of the Bail Reform Act of 1984 ("1984 Act"). The 1984 Act contains similar vague language to Humphrey II, which provides that a person charged with a crime should be released or detained, subject to conditions. 116The 1984 Act created large changes, setting it apart from its predecessor in 1966. 117Under the Bail Reform Act of 1966 ("1966 Act"), judges had to use the least restrictive conditions of release, considering only what was required to assure a defendant would return to his future court appearances. 118This  [*323] provided that federal defendants were entitled to pretrial release, or release with conditions, that only aimed to assure a defendant's appearance at trial.

    The 1984 Act, though, widened what judges could consider in determining conditions of release. 119The 1984 Act provides that judges can also consider aspects like "the nature and the circumstances of the charges, the weight of the evidence, the history and characteristics of the putative offender, and the danger to the community," 120plus financial conditions. 121This added hurdle weakened the right to pretrial release. The legislative history regarding the 1984 Act shows that instead of truly holding that liberty is the norm, Congress's language limited the liberty of federal defendants. 122The California Supreme Court adopted similar limiting language in the Humphrey II decision. 123The Court could have set the precedent the 1966 Act did, but instead chose to follow in the footsteps of an act that disadvantages criminal defendants.

    By looking at how other jurisdictions have applied the 1984 Act, we can preview how California superior courts may use Humphrey II to continue perpetuating the standing bail system that negatively impacts poor defendants. United States v. Lemos provides an example of a federal court applying the Federal Bail Reform Act. There, the federal court explained:

    Section 3142(c) provides that a judicial officer may not impose a financial condition of release that results in the pretrial detention of the defendant. The purpose of this provision is to preclude the sub rosa use of money bond to detain dangerous defendants. However, its application does not necessarily require the release of a person who says he is unable to meet a financial condition of release which the judge has determined  [*324]  is the only form of conditional release that will assure the person's future appearance. Thus, for example, if a judicial officer determines that a $ 50,000 bond is the only means, short of detention, of assuring the appearance of a defendant who poses a serious risk of flight, and the defendant asserts that, despite the judicial officer's finding to the contrary, he cannot meet the bond ... then it would appear that there is no available condition of release that will assure the defendant's appearance. 124

    The Lemos court acknowledged that "the internal contradiction [within the 1984 Act] is obvious" - a contradiction that manifests in Humphrey II as well. 125The contradiction the court is referring to is that it is hard for courts to understand how to consider a defendant's financial means while still being allowed to set bail beyond a defendant's means. This obviously sounds contradictory. However, in Lemos, the court indicated that the 1984 Act does not say a defendant is entitled to have bail set at an amount he can pay. Rather, the court said, "bail must be proportionate to the defendant's liability." 126Therefore, a $ 25,000 bond was deemed appropriate for the defendant charged with conspiracy to distribute cocaine, even though he could not afford such a bond. 127

    Even if a defendant cannot afford bail, he may be denied affordable bail if the superior court finds his liability warrants a larger bail amount. This analysis from Lemos can act as a predictor of what may happen when the courts apply Humphrey II. As Lemos showed, courts can use Humphrey II to continue to set bail beyond a defendant's means. This also implicates the procedural issue analyzed in Section (b) above. 128

    Another concerning aspect of the Lemos decision is the court's explicit mention of the defendant's sister's property. 129This suggests that when applying Humphrey II, courts may consider a family's financial  [*325] means. If a family member has means to pay the bond, he or she may feel pressure to pay such a bond. This is a huge burden on the family members of criminal defendants.

    Another cause for concern is the defendant's crime - conspiracy to sell cocaine has no inherent victim. 130Instead, the decision is based almost entirely on the defendant's potential prison sentence. 131This is extremely alarming, because in the 1990s, California adopted new "tough on crime laws," including sentencing enhancements that can double a defendant's prison term. 132

    California's Penal Code is now weighed down by more than 150 separate sentence enhancements, ranging from add-ons for possible gang association, having a prior conviction or being on probation. Such enhancements are now routinely applied in nearly every criminal case in the state. In fact, 80% of people in state prison are serving a term lengthened by a sentence enhancement, and more than 25% of those incarcerated are serving sentences extended by at least three enhancements. 133

    Therefore, criminal defendants charged with many enhancements may receive larger bail amounts strictly because of their charges' potential prison sentence. This is extremely concerning.

    IV. WHERE TO GO FROM HERE

    As demonstrated throughout this Note, the Humphrey II decision is rife with issues. However, the California Supreme Court knew what it was doing when it wrote this decision. It recognized the distinct  [*326] "boundary between the general rule and limited exception, [which] requires a careful balancing of the government's interest in preventing crime against the individual's fundamental right to pretrial liberty." 134However, it declined to go further in describing this balance by saying, "this is not a case that requires us to lay out comprehensive descriptions of every procedure by which bail determinations must be made." 135This quote demonstrates the Court intentionally left many important holes in its decision. By failing to solve fundamental problems in the bail debate, the Court left poor defendants with inadequate protection. Therefore, Humphrey II will not create any meaningful change in the bail reform movement.

    As alluded to in Part III, Subpart A, diversifying the bench is important to maintain fairness within the criminal legal system. 136Judges have an immense amount of power in making bail decisions, which means judges must understand the socio-economic conditions of criminal defendants. Defense attorneys spend their careers learning about these conditions, making them particularly qualified to weigh the Humphrey II factors. On the other hand, prosecutors spend their careers arguing against the Humphrey II factors. Prosecutors often live in a world of solely worrying about victims and public safety, sometimes at the expense of criminal defendants who are not yet legally guilty. As such, having an even mix on the bench could disrupt the system and provide better outcomes for criminal defendants under Humphrey II.

    However, there should be more than just diversity of careers among the bench. Judges need to come from different backgrounds - including ethnic, racial and economic diversity. "While the ethnicity of judges has nothing to do with the quality of their legal reasoning, diversity is important because of the need for broader perspectives that can be brought to bear on the real-world issues facing judges in complex cases." 137 Humphrey II relies on a judge's ability to evaluate complex  [*327] factors of socio-economic status and criminal history. As Supreme Court Justice Sonia Sotomayor said, "[a] different perspective can permit you to more fully understand the arguments that are before you." 138>not only are nonwhite Americans represented at disproportionately high rates in the criminal justice system, but the judges who are hearing those same cases are disproportionally white. Only 5 percent of state trial court judges are Latino, and only 7 percent are black, according to the American Constitution Society report. 139

    By diversifying the bench on several levels, defendants will have a better chance of being subject to a fair evaluation of the Humphrey II factors.

    Finally, ending cash bail is a popular solution within the current bail reform movement. The way the cash bail system currently functions works to criminalize poverty, releasing only those with adequate financial means. 140By eliminating cash bail, this criminalization of poverty will no longer occur. However, the elimination of cash bail may negatively affect the very community the system currently hurts because many issues within the criminal justice system perpetuate bias against poor and disadvantaged communities.

    The very reasons Humphrey II can be manipulated in criminal courts to keep defendants incarcerated will not disappear under a non-cash bail system. Judges will weigh the same factors to find bail is not appropriate for the very communities that suffer over-policing and increased prosecution. Therefore, eliminating the use of cash bail is not the answer to the issue of pretrial detention. Instead, jurisdictions need to rethink their pretrial systems completely. We must think carefully  [*328] and intentionally about the bail movement. Without confronting the inherent bias within the criminal legal system, we cannot expect the elimination of cash bail to truly solve anything.

    This is a tall order, which will take an immense amount of work and thought. Therefore, this Note will only offer suggestions until the pretrial system is dismantled and rebuilt. One alternative step would be to release all defendants charged with misdemeanors. Misdemeanors make up a majority of the American criminal legal system; misdemeanor charges account for nearly eighty percent of all arrests and state court dockets. 141In California, misdemeanor offenses include petty theft, vandalism, and prostitution, and the potential sentences are probation, fines, court-ordered programming, or incarceration in county jail for less than one year. 142However, misdemeanor charges often end in the defendant pleading to lesser charges in exchange for paying a fine or having the case dismissed. 143Ironically, though, "prosecutors often argue high bail because a defendant is "too dangerous to be let out' before trial, then offer the same "dangerous' person a time-served, go home sentence in exchange for a guilty plea." 144This backward argument could be circumvented by calling for the pretrial release of all defendants arrested for a misdemeanor offense.

    Similarly, defendants charged with crimes that do not require prison or jail commitment should be released at arraignment. 145Minor misdemeanor offenses where the typical punishment is a fine should  [*329] warrant automatic release. 146It is likely that defense attorneys in California can use Humphrey II to argue that such minor crimes carry no threat to public safety, however, there should be a mechanism that flags the automatic release for these defendants to ensure no one is wrongfully incarcerated in county jail.

    Another improvement could be lengthening bail hearings. As mentioned previously, under Humphrey II, the State has to prove by clear and convincing evidence that the defendant's release would risk public safety or that the defendant will not return to court if released. 147This high standard should warrant careful consideration by the judge and extended time for the defense to argue against pretrial incarceration. Appearances at arraignment typically last only a few minutes. 148However, more time should be attributed to these hearings because the result of these hearings can take away the liberty of a criminal defendant and impact the entire case's trajectory.

    Once again, these are suggestions to mitigate bias within the criminal legal system. However, we cannot effectuate real change without reflecting more on the biases that perpetuate the system. Because of the inherent biases, the Humphrey II decision reads like a wasted opportunity to create a meaningful impact for poor accused people in California. However, the California Supreme Court was up against a deeply problematic system that must be completely dismantled in order to protect indigent defendants. And as Humphrey I recognized, the court system is doing its best to make change while it waits for the legislature to provide new and concrete guidance. 149

     [*330] 

    CONCLUSION

    The problem with vague decisions like Humphrey II is that they offer tiny steps towards reform but do not offer true change. Pretrial detention can negatively impact criminal defendants in many ways. One huge disadvantage to pretrial incarceration is the inability for defendants to help with their own defense. 150In jail, there are added barriers to communicating with attorneys, defendants cannot help locate evidence, and defendants cannot participate in programs (like drug treatment) that courts like to see when considering plea deals. 151Therefore, allowing the release of more defendants can "shrink[] the footprint of the criminal justice system and save taxpayer dollars." 152

    Under Humphrey II, though, defendants will continue to hope for the best but expect the worst. They will have to be extremely lucky in finding themselves in front of a judge who understands the spirit of Humphrey II and chooses to apply it, rather than clinging to public safety and continuing to incarcerate poor defendants. Unfortunately, many will find themselves in front of judges who interpret the decision as telling them to simply look into a person's finances. After doing so, the judge may decide what he wanted to do in the first place--which may be to lock up poor defendants with long criminal histories in the interest of safety. Under Humphrey II, the judge can do this even if the charges are minor because it is up to his or her judicial discretion.

    Then, facing immense pressure to get out of county jail, a poor defendant may be offered a plea deal. If the plea deal amounts to time served or probation, the defendant will likely plead so he can get back to his life (regardless of guilt, innocence, or strength of his case) - just like Sarah Jackson. 153Now, the defendant has another conviction on his "sheet." And if he is unlucky enough to be arrested again, he will be right back to where he began. Regardless of the current charge, the long criminal history allows the judge to set a higher bail amount, or deny pretrial release, which will keep him incarcerated in county jail  [*331] awaiting his trial. Humphrey II does not help this hypothetical defendant, or Sarah Jackson. Instead, Humphrey II allows the system to continue to manipulate poor accused people in ways that it cannot do to people with financial means. And that is the heart of the problem that the California Supreme Court declined to solve in Humphrey II.




    California Western Law Review
    Copyright (c) 2022 California Western School of Law 

    Footnotes

  • INTRODUCTION

    The windows shook and the walls rattled when Louisville police officers used a battering ram to forcibly enter the home of Breonna Taylor in the midnight hour of March 13, 2020.

    1Afraid for their lives and unsure of the identity of the people "aggressively knocking" their way inside, Taylor's boyfriend, Kenneth Walker, opened fire. 2The police officers involved that night have repeatedly asserted they knocked loudly for ninety seconds, eventually giving notice of their identity (police) and purpose (warrant) before returning fire, killing Taylor. 3However, the 9-1-1 call Walker made that night suggests, at a minimum, he and Taylor had no idea who had barged in with guns blazing. 4Conflicting accounts remain unresolved as to whether the officers truly announced their presence and purpose or not. 5A state grand jury ultimately returned an indictment against one of the responding officers for wanton endangerment, 6though a jury acquitted that officer. 7

     [*151]  Unfortunately, this is an anticipated scenario and danger posed by a no-knock warrant. 8The events leading to Taylor's death were authorized by a no-knock warrant predicated on questionable information about an ex-boyfriend, Jamarcus Glover, who once received mail at Taylor's address. 9Police investigated Glover for drug possession and other drug related crimes before applying for the warrant. 10The affidavit supporting the warrant alleged Glover had once left Taylor's home with a package. 11It further alleged United States Postal Service records corroborated that Glover received mail at Taylor's address. 12Unfortunately for Taylor, that threadbare connection supported the inference that Taylor's home was a possible "safe house" for the drugs Glover was purportedly dealing at the time. 13In twelve minutes' time, a state judge signed off on five nearly identical no-knock warrants describing the same anticipated dangers at each of five locations believed to be associated with Glover. 14In half as many minutes, the police forcibly entered and returned Walker's fire, killing Breonna Taylor. 15

    At the time of Taylor's death, no-knock provisions were permissible under Kentucky state law. 16However, the circumstances of Taylor's  [*152]  death have rightly intensified the discussion surrounding no-knock warrants. 17In direct response to the events of March 13, 2020, the City of Louisville passed "Breonna's Law," effectively outlawing no-knock warrants. 18Breonna's Law also requires officers to turn on his or her body camera five minutes prior to executing a warrant. 19Many other states and localities now have laws prohibiting no-knock warrants. 20However, federal no-knock warrants - once the congressionally approved darling of the Nixon administration 21- have remained in a legal gray zone since 1974. 22Since then, the constitutional question of whether federal judges may issue a warrant with a no-knock provision has gone unanswered. 23The "War on Drugs" manufactured support for the former federal no-knock warrant. 24It is  [*153]  fitting then that drugs - or rather, drug cases - may be the final death knell for such warrants, at least at the federal level. 25

    The constitutional query presented by a federal authority overriding the sovereignty of a state executing its police powers is far beyond the scope of this Comment. Rather, this Comment addresses recent federal legislation - House Resolution numbers 677 and 1280 - and why neither are sufficient to clarify the federal magistrate or district judge's authority to issue no-knock warrants. Part I of this Comment will begin by explaining the origin of the knock-and-announce rule. Part II will discuss the corresponding rise of a workaround known as the "exigency exception." Part III will expand on the legal nuances of case law and other legal opinions addressing no-knock warrants versus no-knock entries. Part IV will highlight the prevalence of no-knock warrants used in drug-related cases, and how conflicting state and federal laws governing marijuana may exacerbate the uncertainty surrounding federal authorization of no-knock warrants. Finally, this Comment will conclude by proposing that Congress should, at minimum, require federal agents to confirm "actual receipt of reliable information negating the existence of exigent circumstances" 26 before executing an otherwise lawful no-knock warrant.

    I. A PRIMER ON THE ORIGIN AND EVOLUTION OF THE KNOCK-AND-ANNOUNCE RULE

    The home was - and largely remains - recognized as the most sacred manifestation of a person's right to privacy. 27The common law's "particular and tender ... regard to the immunity of a man's house, that it stiles [sic] it his castle, and will never suffer it to be violated with impunity," 28runs centuries deep. However, the home-as-a-  [*154]  castle concept has almost always included deference to the sovereign's ability to carry out justice, albeit with a strong caveat. In one of the earliest cases concerning the King's ability to "break the party's house," 29the presiding Lord Justices grappled with the tension between public and private interests with respect to the home. 30In Semayne's Case, the Plaintiff, Peter Semayne, brought a civil writ of attachment against his then-deceased debtor, George Berisford, to recover the debts owed to Semayne. The Sheriff of London attempted to serve the writ to Richard Gresham, a joint tenant with Berisford, but Gresham denied the Sheriff entry. The Sheriff then threatened to break and enter without offering additional context. In his opinion, then-Solicitor General of the Law Officers of the Crown, Sir Edward Coke, acknowledged Gresham's property rights were violated; in doing so, Coke resurrected the premise of an English statute dating to 1275. 31Specifically, the Statute of Westminster recognized the grievous intrusion into the home of an individual not party to the writ being executed: "for the law ... abhors the ... breaking [into] of any house" of an uninvolved party who, if given notice, "is to be presumed that he would obey it." 32Therefore, held the court, agents of the King executing a writ against a subject "ought to signify the cause of his coming and to make request to open the doors." 33Ultimately, the court gave judgment for Gresham for doing "that which he might well do by the law, ... to shut the door of his own house." 34Put in contemporary  [*155]  legal lexicon, the Sheriff's actions against Gresham were unreasonable. 35

    In giving the notice requirement the force of law, 36Coke formally introduced 37what is now known as the "knock-and-announce" rule. Some 150 years after Semayne's Case, the Case of Richard Curtis offered additional context for the rule, requiring "no precise form of words [to signal] the officer cometh not as a mere trespasser, but claiming to act under a proper authority." 38A parallel thread throughout the case law and advisory opinions of the day remained that an officer did have authority to enter once denied; the officer simply had to announce who he was and why he was on the premises. 39Provided the officer gave sufficient notice of "who" and "why," the officer's entry was no longer unreasonable, and therefore tolerated under English law.

    A. Incorporation of Knock-and-Announce into American Law

    This knock-and-announce concept from English common law was quickly codified in the constitutions and legislative acts of the newly independent American states and commonwealths. 40In a testament to the societal importance of this rule, the Framers of the United States Constitution, and specifically of the Fourth Amendment, implicitly elevated  [*156]  the rule to constitutional standing. 41While not an explicit endorsement of a knock-and-announce requirement, the Fourth Amendment is predicated on the same idea of a government's actions being reasonable:

    The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized. 42

    The concept of "reasonableness," however, continues to evolve with Fourth Amendment jurisprudence. To that end, later courts' "efforts to give content to [the] term ["reasonable"] may be guided by the meaning ascribed to it by the Framers of the Amendment [such that] a search of a dwelling may depend in part on whether law enforcement officers announced their presence and authority prior to entering." 43

    Though it was so deeply rooted in American law, this notice requirement only became an explicit part of the Fourth Amendment reasonableness analysis in 1995 with the Supreme Court opinion of Wilson v. Arkansas. The facts of Wilson are straightforward: Sharlene Wilson sold drugs on several occasions to a police informant. Officers used the information from their informant to support their warrant applications to search and arrest Wilson and her housemate, Bryson Jacobs. With lawful warrants in hand, the officers entered through Wilson's unlocked screen door while simultaneously announcing their presence and purpose. In the Wilson opinion, the Court sidestepped the issue of whether the circumstances present at the time officers entered Wilson's home justified their unannounced entry. 44However, it ultimately included notice as a countervailing factor for consideration under a Fourth Amendment analysis. 45Put differently, those executing  [*157]  warrants were now on notice to give notice, at least in most situations.

    II. EXCEPTIONS TO KNOCK-AND-ANNOUNCE AND THE RISE OF THE NO-KNOCK WARRANT

    Over time, the Court expanded the meaning of "reasonable" under the Fourth Amendment to include various exceptions that would permit dispensing with the notice requirement. 46Those exceptions include entry under the force of a lawful warrant, consent, and exigent circumstances. Simply put, "[a] search without a warrant is unreasonable per se unless it falls within an established exception." 47This section examines the exigency exception in closer detail.

    To be certain, Fourth Amendment jurisprudence generally requires a close review of the individual factual scenario to determine the reasonableness of the contested search or seizure. Deference is given to police and similar professionals because of their need to make real-time assessments of situational danger or other possible negative outcomes following their actions. 48Therefore, the presence of "exigent circumstances" has proven to be a handy workaround to the knock-and-announce rule. 49By its plain meaning, "exigent" connotes urgency, something requiring immediate attention. 50The implication is that officers executing a warrant become reactive to the circumstances  [*158]  around them. Put differently, the reasonableness of the officers' actions is scrutinized differently when the officers perceive, for example, an element of danger. However, "in order to justify a "no-knock" entry, the police must have a reasonable suspicion that knocking and announcing their presence ... would be dangerous or futile, or that it would inhibit the effective investigation of the crime by, for example, allowing the destruction of evidence." 51

    Drug-related crimes tend to involve situations where exigent circumstances are - or are likely to be - present at the time a warrant is executed. 52However, this classification does not justify a blanket exception to the knock-and-announce rule. 53The Court made this much clear in its unanimous opinion for Richards v. Wisconsin. 54There, a group of undercover and plainclothes officers knocked on the motel door of a purported drug dealer under the guise of completing a maintenance check. 55Among the plainclothes officers was one in uniform. 56Peering through the door chain of his barely cracked door, the defendant (Richards) saw the uniformed officer and promptly slammed the door shut. 57The trial court acknowledged the officers' predicament, specifically that Richards may dispose of the drugs or attempt to escape, thus justifying why the officers burst through Richards's door by force. 58The Court held that the opportunity to dispose of the drugs quickly was sufficient for the purposes of justifying the officers' no-knock entry. 59Indeed, once officers went inside, Richards was trying to escape through the bathroom window. 60While "this showing [of exigent circumstances] is not high, ... the police  [*159]  should be required to make it whenever the reasonableness of a no-knock entry is challenged." 61And yet, the Court did not let this low threshold equate to carte blanche permission for officers to dispense with the notice requirement in all drug cases by invoking the issue of disposal or escape. Rather, in dicta, the Court underscored the importance of a careful factual review unencumbered by the "social norms of a given historical moment." 62In so doing, the Court attempted to "strike[] the appropriate balance between the legitimate law enforcement concerns at issue in the execution of search warrants and the individual privacy interests affected by no-knock entries." 63

    Only one year after Richards v. Wisconsin, the Supreme Court again addressed the scope of exigent circumstances, though in the context of a "no-knock warrant." A "no-knock warrant" effectively shifts the timeline from reacting to an urgent set of facts to anticipating whether such facts will be present when the warrant is executed. The justification for a no-knock warrant, like that of its kin, the no-knock entry, requires the same showing of reasonable suspicion. 64In United States v. Ramirez, a federal marshal anticipated he would be met at the subject premises with an armed and dangerous escaped felon who had a history of assaulting officers. Accordingly, the marshal requested a no-knock provision be added to the warrant. A judge authorized the warrant, complete with its no-knock provision; the officers descended upon Ramirez's home with the authority to "break the house" even though notice would not be given. By upholding both the no-knock warrant and the officers' actions as reasonable, the Ramirez Court famously construed § 3109 of the United States Code to "prohibit[] nothing," instead construing the statute as "merely authorizing officers to damage property in certain instances." 65In doing so, the Court gave the force of law to what had before been mere dicta: a "covert entry of a private home does not require authorization in  [*160]  a warrant to be reasonable under the Fourth Amendment." 66To avoid any doubt to the contrary, the Ramirez Court held § 3109 "includes an exigent circumstances exception." 67Crucially, however, this recognition only authorized an officer to dispense with the notice requirement based on the present circumstances. In other words, the Ramirez holding did not explicitly grant authority for the issuance of federal no-knock warrants. 68

    With the exigent circumstances exception now firmly embedded in American law, courts continue to tinker with the circumstances that support a no-knock entry as a reasonable response. In United States v. Banks, the Supreme Court recognized the following factors an officer should consider before entering the premises but after knocking: the size and location of the residence; the location of the officers in relation to the main living or sleeping areas of the residence; the time of day the officers executed the warrant; the nature of the suspected offense; the body of evidence demonstrating the suspect's guilt; the nature and number of the suspect's prior convictions; and any other observations triggering the senses of the officers that reasonably would lead one to believe that immediate entry was necessary. 69

    This much is clear: if an officer perceives, in real-time, the presence of exigent circumstances, he or she may forgo the knock-and-announce requirement. Less clear is why, with an exigency exception permitting an unannounced entry, a no-knock provision in a search warrant is still necessary. A no-knock provision steps in place of an officer's real-time assessment of exigent circumstances by instead anticipating such circumstances. 70For example, the affidavit supporting the no-knock warrant used against Breonna Taylor referenced security cameras around her home. 71In theory, those security cameras would  [*161]  alert the drug dealers - or doers - within the home to the police presence, resulting in drug disposal or possible bloodshed. 72However, both of those outcomes are already factored into the real-time exigency analysis. As to Breonna Taylor's case, the no-knock warrant merely provided legal justification for the Louisville police to prepare their forcible, unannounced entry by battering ram in advance. Ultimately, the state judge who issued that no-knock warrant did so in compliance with what was then state law. 73A more interesting analysis ensues when a federal judge issues a no-knock warrant in a state where such warrants are not authorized by state law.

    III. AUTHORITY TO ISSUE A NO-KNOCK WARRANT

    This section considers the laws governing federal authority to issue a no-knock warrant and how two states that do not permit no-knock warrants - California and Oregon - compare in their own approaches to the knock-and-announce rule.

    A. Federal

    Federal authority to issue a no-knock warrant was congressionally authorized for a brief period prior to 1974. The since-repealed subsection (b)(2) of § 879 of the United States Code read as follows:

    If the judge or United States magistrate issuing the warrant (1) is satisfied that there is probable cause to believe that ... or (B) the giving of such notice will immediately endanger the life or safety of the executing officer or another person, and (2) has included in the warrant a direction that the officer executing it shall not be required to give such notice. Any officer acting under such warrant, shall, as soon as practicable after entering the premises, identify himself and give the reasons and authority for his entrance upon the premises. 74

     [*162]  The Eight Circuit reasoned this authorization was sufficient to support the validity of a no-knock warrant issued by a United States district judge in Thomas v. United States. There, the reviewing court avoided the question of evidence suppression because the predicate posed by Thomas - that the officers did not enter lawfully - was not met. In other words, the federally authorized no-knock warrant was valid. 75This federal authority, however, was relatively short-lived; the subsection permitting a no-knock entry was repealed and superseded in 1974 by § 3109. The timing of § 879's repeal is noteworthy due to the fact it coincided with the close of the Watergate prosecution, two years after President Nixon's resignation. Briefly, no-knock warrants entered the American lexicon following Nixon's declaration of war against drugs. After seeing the devastating aftermath of no-knock raids gone wrong, 76Congress - denied the opportunity to impeach Nixon himself - determined at least this vestige of Nixon's administration would be shown the door. 77

    Section 3109 authorizes an officer to "break open any ... door or window of a house, ... to execute a search warrant, if, after notice of his authority and purpose, he is refused admittance or when necessary to liberate himself or a person aiding him in the execution of the warrant." 78This language - note the notice requirement - stands in stark contrast to the former authority granted to federal judges to issue no-knock warrants. 79Though the Court has construed § 3109 to include an exigent circumstances exception, 80this exception has not carried over to grant federal judges authorization for federal no-knock warrants  [*163]  based on the same facts anticipated ahead of execution. 81In short: federal judges are in a no-knock no-man's land.

    As it happens, federal judges also face uncertainty regarding their authority to issue no-knock warrants for joint state-federal operations. Nearly a quarter century after it was decided, the only case to confront this issue remains United States v. Tisdale. The improbably brief opinion of Tisdale is illuminating as to how future courts may turn if presented with this prickly issue head on.

    In Tisdale, a drug dealer argued against what he deemed an insufficiently particularized showing to support the no-knock warrant executed against him by a joint federal-state task force in New York State. New York, then and now, permits no-knock warrants. 82The court affirmed Tisdale's conviction but sidestepped an opportunity to address a primary criticism of no-knock warrants. Specifically, the court recognized the ability of the officers to consider exigent circumstances while acknowledging a "no-knock provision potentially insulates the police against a subsequent finding that exigent circumstances" were not present when the warrant was served. 83The practical effect should be obvious: police could rely with near impunity on a no-knock provision permitting them to use force to enter unannounced. Twenty years later, this was the exact scenario in the case of Breonna Taylor, albeit without the federal presence. Unfortunately, the Tisdale court summarily dispensed with this criticism by suggesting an officer need only have relied in good faith on the exigencies anticipated in the warrant. 84This "good-faith exception" is best summarized as follows:

    The officers' on-the-spot decision is of necessity a hasty judgment based upon the facts - or reasonably founded suspicion - of the moment. Severe judicial second-guessing is therefore inappropriate.  [*164]  The officer must be given a degree of latitude for good faith judgment as to his own possible peril, ... or as to the possibility for destruction of the evidence, fruits or instrumentalities of crime for which he is obliged to search. If the decision is reasonable under the "exigent circumstances,' the entry is valid. 85

    Ultimately, after extending that good-faith olive branch, the Tisdale court sidestepped the opportunity to directly address the possible outcome of differing state and federal standards concerning knock-and-announce. Until a case that is on point for that tension works its way through the courts, it seems as though a little (good) faith can go a long way.

    B. California

    California's knock-and-announce rule largely tracks its federal analog: an officer executing a warrant may "break the house" if he is denied entry after first giving notice of his position and purpose. 86The difference is how California's courts have approached no-knock provisions following the anticipated presence of exigent circumstances. Two cases from the 1970s - one before the repeal of § 879(b), one after - highlight the deference given to an officer when anticipating or facing such (exigent) circumstances.

    In March of 1972, Riverside County police officers applied for a warrant to search a house where there was probable cause of drug activity. 87A magistrate granted the warrant, effectively creating a no-knock provision by including a line that the officers "need not comply with [the notice provision of] Penal Code Section 1531." 88The police acted on the warrant, completing a covert entry through a broken window where they promptly found ample evidence of drug use. In its analysis, the California Court first addressed the authority of a magistrate essentially to create a no-knock provision where none had been previously authorized. 89The Court compared section 1531 with a  [*165]  companion warrant provision, section 1533. 90The latter included express language authorizing the judge to permit noncompliance with the section "upon a showing of good cause." 91In contrast, section 1531 did not include such direct language, or any language suggesting a judicial override was permissible. 92The Court resolved the differences between the two sections by reasoning the legislature had purposely excluded such an exception from section 1531. 93In the year preceding the Parsley opinion, "12 percent of all search warrants issued in Los Angeles County contained [a no-knock] provision." 94That percentage, the Court held, was statistically significant enough to suggest a judicial bypass of the notice requirement would only serve to swallow section 1531. 95The primary concern was not the safety of the subjects on the receiving end of the warrant. Rather, the Court was concerned officers would abuse the judicial workaround by requesting the provisions in non-emergency situations. 96Ultimately, in a split decision, the Court held the superior court was "without power to institute a practice of issuing [no-knock] warrants." 97

    The Parsley Court also emphasized the importance of a real-time evaluation of exigent circumstances by weighing the "perception and knowledge the officer acquires on the scene immediately prior to effecting entry" against an anticipated scenario used to justify a no-knock warrant. 98In so doing, the Court acknowledged "police officers have no constitutional duty to obtain prior judicial authorization to enter without notice" when exigent circumstances exist. 99This concept underscored the decision in People v. Henderson only three years later, in 1976. The Henderson court held that reliable knowledge of the likely presence of firearms was "sufficient to bring the officers  [*166]  within the no-knock [exigency] exception." 100Therefore, even though the no-knock provision itself was invalid, 101the officers acted reasonably under the knowledge their subject tended to be armed (and, coincidentally, also had a prior history of flushing drugs). 102But, the Henderson court warned, "this belief must be based on specific facts and not on broad, unsupported presumptions." 103In other words, the anticipation of exigent circumstances cannot green light a judicial override of section 1531, but the actual presence of exigent circumstances can.

    Throughout the 1970s, California courts appeared aligned regarding when entering without notice is permissible (emergency, a la Parsley 104), but had not yet given considerable attention to when such entry was reasonable. California eventually confronted the latter issue when it determined the method of entry should be considered in the reasonableness analysis, nearly a decade before the Supreme Court required the same in Wilson v. Arkansas.

    In People v. Neer, an officer walked up to a screen door at night, backlit by the benign activity of the inhabitants within. 105Once at the threshold, the officer simultaneously announced his position (officer) and purpose (warrant) while walking through the unlocked door. 106Here, again, the court emphasized the importance of evaluating the scene in real-time. That officer's entry was not objectively supported by a good faith belief that exigent circumstances - either emergency or drug flushing - existed. 107Rather, the officer appeared to act first and justify later. 108

     [*167]  In Neer, the actions of the officer - notice and entry - were simultaneous. 109It is appropriate then that the Neer court also addressed the reasonableness of the length of time between notice and denial of entry (therefore justifying the officer's "breaking of the house."). Forcible entry under the Neer court's plain reading of section 1531 is not permissible unless the occupants are "given an opportunity to surrender the premises voluntarily." 110Again, the court took pains to underscore the importance of evaluating the circumstances for exigencies in real-time. Where a direct refusal is absent, "implied refusal exists when there is [an] unreasonable delay in responding to the officers' announcement under the circumstances of the case." 111Because the record in Neer did not support the existence of an unreasonable delay, the officer's entry in the absence of any actual exigency was unreasonable. 112

    This theme has held firm through recent cases considered in California's courts. For example, the subject on the receiving end of a search and arrest warrant was in a peculiar position in People v. Byers. There, Byers's roommate gave voluntary consent to officers to search the apartment he shared with Byers. 113However, consent of a roommate to access a home is trumped by a co-occupant who is present and denies entry to a co-occupant's private space(s). 114Further, because Byers's roommate gave consent while physically outside the apartment, his consent did not absolve the officers from adhering to the knock-and-announce rule. 115Yet the court did not give much weight to the "road [of] speculation" in determining the proper time between notice and entry, focusing instead on the remedy afforded unjustified no-knock entries. 116The reasonableness of those officers' entry instead  [*168]  turned on whether they had reasonable suspicion of exigent circumstances present at the time they served the warrant. 117Ultimately, such circumstances were deemed present, thereby justifying the officers' no-knock entry. 118

    On balance, California law permits its officers to forgo the knock-and-announce requirement when faced with exigent circumstances. However, those officers may not anticipate such exigencies by way of a no-knock warrant. The result: officers must make a real-time assessment of the facts on the ground when they execute a search warrant.

    C. Oregon

    Oregon, a relative rarity among its state peers, 119requires much more than the standard knock-and-announce rule. This is true even though Oregon's constitutional language on unreasonable searches and seizures tracks - almost identically - with the federal Fourth Amendment. 120Rather, Oregon requires its officers to "give appropriate notice of the identity, authority and purpose of the officer to the person to be searched, or to the person in apparent control of the premises to be searched." 121Lest this Reader think this is a familiar standard, subsection (3) of section 133.575 of the Oregon Revised Statutes dictates the "executing officer shall read and give a copy of the warrant to the person to be searched." 122If no one is home, the warrant must be "suitably affixed to the premises" - for example, taped to the door. 123

     [*169]  In State v. Gassner, an Oregon appellate court construed this provision to require more than the minimum federal protections when it comes to the knock-and-announce rule. 124In Gassner, state officers had the apartment manager open the defendant's door concurrent with a knock, but no announcement. 125Once inside the apartment, the cops found the 1,000-odd pills they had expected to find. 126However, the defendant gave no indication he would (or could) easily dispose of that quantity of pills. 127The court instead recognized that drug-related offenses seem to involve a higher expectation of exigent circumstances without creating a blanket exception to the notice requirement, 128while simultaneously recognizing the "Fourth Amendment sets the extreme outer limits on permissible unannounced searches." 129In doing so, the Oregon court created an intermediate standard for evaluating no-knock entries in drug cases: something greater than the slight burden required by federal law, 130but less than the stringent 1:1 factual assessment espoused by California courts. In essence, Oregon courts require a showing of probable cause that a small amount of easily disposable evidence is at the subject property. Or, if no quantity is known, the officers must reasonably believe the evidence might be destroyed after giving notice. 131

    Gassner's holding, at least for drug cases, effectively required officers to evaluate the totality of the circumstances at the time they executed the warrant. After Gassner, if the drugs stashed at the subject property were too much to flush within a few seconds' notice, then a  [*170]  no-knock entry may not be justified. The Oregon court signaled it would not abide officers who relied on a specific quantity of drugs (1,000 pills) to establish probable cause and then fail to contextualize what that quantity meant in terms of the warrant execution and a no-knock entry.

    Nearly twenty years after Gassner, the Oregon Supreme Court expanded the exigency exception to Oregon's knock-and-announce requirement in State v. Ford. The Ford Court recognized the long tradition of Oregon's knock-and-announce rule 132and later developments in the law encompassing property rights, 133as well as safety 134and privacy 135concerns. It also acknowledged the apparent national consensus among states to uphold no-knock entries based on an officer's apprehension of peril. 136

    Ford involved an ex-convict methamphetamine user with outstanding warrants for his arrest who the police reasonably believed owned a few concealable firearms. 137Though the felon, Charles Ford, had no prior convictions for violent activity, a SWAT-style tactical team wearing military fatigues used a battering ram to break down Ford's door. 138The Oregon Court held probable cause that Ford had guns formed the basis of the "officers' apprehension of peril," 139which was sufficient to excuse their no-knock entry. 140In so holding,  [*171]  the Court construed Oregon's knock-and-announce rule to include an "apprehension of peril" exception. 141To hold otherwise would be

    preposterous ... that an officer cannot act consistent with legitimately held safety concerns when executing a warrant on a suspected drug user believed to be in possession of drugs, stolen property and weapons, unless the officer has knowledge that the person has used the weapons in a violent manner or has a history of violence. 142

    Here, the Oregon Court again appeared to recognize the duty incumbent upon officers executing a warrant to evaluate all the circumstances before dispensing with the notice requirement. 143If an officer has no reason to believe their life or limb is threatened, then compliance with the notice requirement would not "create a risk to the entering officers' safety." 144

    The primary thrust of both the Gassner and Ford holdings involved the legality of no-knock entries under certain circumstances. More recently, in State v. Foster, the Oregon Supreme Court focused instead on the remedy following a no-knock entry. The Foster Court's analysis of when an officer evaluates the totality of circumstances is timely, at least for purposes of this Comment.

    In Foster, Oregon state sheriffs needed to serve a restraining order on a person believed to be staying at a particular house. The home was known to the deputies for having large groups of armed people. 145The homeowner (Foster), his father, and their comrades often became violent with law enforcement, requiring the routine deployment of at least four deputies for any one contact. 146And so, when four deputies descended upon Foster's home just before midnight, the deputy in charge directed his officers to surround the house to mitigate the potential  [*172]  for the occupants to flee or surround the deputies. 147One of those deputies went right up to a lit bedroom window on the side of Foster's home and looked inside. 148After the officer saw Foster prepare a pipe with methamphetamine, the deputies entered Foster's home, without knocking, to arrest him. 149

    To be sure, the deputy saw at least a small amount of easily disposable drugs through the bedroom window, which would have sufficed to meet the exigency exception for a no-knock entry. 150However, that deputy saw those drugs from presumably hallowed ground in Fourth Amendment 151jurisprudence: Foster's curtilage. 152True, each respective court assessing the facts of Foster recognized the inherent privacy interest that Foster had in the area immediately surrounding his home. 153However, this privacy interest was easily overcome by the responding officers' prior knowledge of potential violence. 154Rather than "uncharitably second-guess [the] officer's judgment" 155about Foster and his cohort's violent history, the Foster Court upheld the officer's position in the flowerbed as lawful under Oregon's "officer safety doctrine." 156This doctrine requires a showing of specific and articulable facts that the "citizen might pose an immediate threat of serious physical injury to the officers or to others then present." 157These facts can be drawn from prior contacts with the target subject(s) over at least six years without those facts becoming "stale." 158After all, "human tendencies [to commit violence] have a longer shelf life"  [*173]  than easily disposable amounts of drugs. 159Put differently, that the officer reasonably suspected Foster and his house guests could have become violent trumped Foster's constitutional privacy right to be protected against unlawful searches. The lawful position of the officer made for a valid plain-view search through the window into Foster's home. Seeing Foster with his meth pipe provided probable cause for Foster's arrest and the potential Foster could dispose of the meth seen by the officer. However, the fact that the officers could have availed themselves of the drug-related exigency exception was inconsequential. Because of Foster and his various houseguests' violent history, the responding officers were entitled to breach Foster's curtilage and then lawfully enter his home without notice. 160

    After Foster, to summarize Oregon's posture on no-knock warrants and entries is to endure whiplash between two branches of its government. If, as the Foster Court reasons, "the timing of the officer's knowledge [of the exigent circumstances] is not the point of invoking the officer safety doctrine," 161then why not permit no-knock warrants? No-knock warrants based on probable cause of the potential for exigent circumstances are anathema to the Oregon legislature under section 133.575, subsection (3) of the Oregon Revised Statutes. However, the Oregon judiciary permits exactly that - without a warrant and without regard to when the officer became aware of the possible dangers. Foster does not require the officer to assess the totality of the circumstances present at the time they execute a warrant. Rather, Foster's holding makes lawful a trespass onto a citizen's curtilage to make a plain-view search through a bedroom window. 162Surely the privacy, and other potential constitutional rights of Oregon's citizenry, would be better served if officers had to at least meet the higher threshold of probable cause before peering into a window at midnight. If a no-knock warrant on probable cause can still end in disaster - even tragedy - 163then what is to say an officer's lawful snooping through a bedroom window will not end similarly?

     [*174] 

    IV. PROPOSED LEGISLATION ADDRESSING THE INTERSECTION OF DRUG LAWS AND NO-KNOCK ENTRIES

    This Comment has thus far examined the lack of explicit authority for federal judges to grant no-knock warrants and how differently states like California and Oregon approach no-knock warrants and the "exigency exception" to no-knock entries. The real rub, of course, comes when there is a tension between state and federal law on these topics. Nowhere is this more evident than in the federal criminalization of possession, cultivation, use, or sale of Schedule I drugs, including marijuana. 164Recall that an easily disposable quantity of drugs is already sufficient to excuse compliance with the notice requirement in California and Oregon. But what results when federal judges are asked to sign off on warrants intended to enforce against said possession, cultivation, or use of marijuana in those states where marijuana is legal? This is analogous to the issue that the court avoided addressing in Tisdale, and one that is increasingly timely given the number of states that have legalized marijuana for various purposes. 165To avoid any unnecessary confusion by the courts, Congress must - at minimum - pass House Resolution number 1280 (the "George Floyd Justice in Policing Act").

    A. An Overview of the Legalization of Marijuana

    Perhaps unsurprisingly, California, closely followed by Oregon, Alaska, and Washington, led the pack among their sister states when the group of four legalized marijuana for medical uses in 1996 and 1998. 166Oregon again found its place near the front of the line when  [*175]  it legalized recreational use of the drug in 2014. 167California followed in kind by 2016. 168In the two decades sandwiched between the legalization of medical and recreational marijuana, former President Barack Obama signaled a downshift in how the Department of Justice ("DOJ") would (and should) enforce federal drug laws, specifically those involving medical marijuana. 169Then-Attorney General Eric Holder announced at a press conference in 2009 that the DOJ effectively deprioritized cracking down on marijuana dispensaries otherwise complying with state laws. 170This position reflected a veritable sea change from the strict enforcement under President Obama's predecessor, former President George W. Bush. 171In his detailed memorandum released seven months after Attorney General Holder's press conference, then-Deputy Attorney General David Ogden gave a non-exhaustive list of factors that could be considered when determining whether prosecution may be warranted against marijuana dispensaries. 172That list, and the Obama/Holder position generally, reflected a commonsense approach to the ad-hoc legalization of medicinal marijuana among the states.

    In 2012, Colorado and Washington legalized recreational marijuana. 173The advent of state ballot initiatives threatening the same result across the country prompted the DOJ to release a memorandum giving the Executive Branch-equivalent of a raised eyebrow. While purportedly preserving the status quo, the DOJ's 2013 memorandum put states on notice that it would strictly enforce federal marijuana laws if it found any state's regulatory scheme governing recreational use of the drug to be sub-par. 174Two years later, the Government Accountability  [*176]  Office ("GAO") released its findings after investigating the DOJ's efforts to monitor the effects of marijuana legalization, and factors affecting DOJ enforcement of federal drug laws. 175If the 2013 memorandum was a raised eyebrow, the 2015 GAO report was the equivalent of a shrug. In analyzing Colorado's and Washington's approaches to regulating marijuana, the GAO highlighted those states' adequate oversight of licensing, facility location and security measures, inventory tracking, labeling and packaging, and consumer restrictions. 176Backed by fifty pages of careful review of each state's regulatory approach, the GAO's summary findings essentially encouraged other states to simply document their plan for DOJ monitoring, and the DOJ to document its monitoring process of the same. 177

    Lest the nation's pot-users rejoice in that lame-duck policy position of the Obama era, former Attorney General Jeff Sessions snapped the country to attention by uncoupling the odd bedfellows of state and federal marijuana laws. In his 2018 memorandum, Attorney General Sessions reminded the country that the federal "statutes reflect Congress's determination that marijuana is a dangerous drug and that marijuana activity is a serious crime." 178Significantly, at least for the purposes of this Comment, Attorney General Sessions's focus on marijuana meant a focus on a highly profitable and rapidly-growing market segment. 179At least in some states, like Oregon, that rapidly growing market segment is actually run by the state itself as part of its regulatory scheme. 180

     [*177]  Though the times may finally be changing with respect to the decriminalization of cannabis, 181the current Biden Administration has not yet released definitive guidelines 182on the topic. Absent any surprise action from the Senate, 183or an updated DOJ policy release, Attorney General Sessions's policy position still stands. 184The result is that private citizens exercising their state-statutory right to use marijuana recreationally, a la a modern-day Parsley, may still remain subject to a federally issued no-knock warrant, a la Tisdale. Further, while unlikely, it remains possible that a Drug Enforcement Agency agent could approach a federal judge or magistrate to pre-emptively authorize a no-knock entry against a state-run dispensary in Oregon. These scenarios necessitate that Congress clarify the authority of the judicial branch to authorize no-knock warrants by passing the George Floyd Justice in Policing Act.

    B. The JUSTICE Act

    In the wake of Breonna Taylor's death, a few bills intending to rectify some of the wrongs contributing to that ill-fated execution of an unjustified no-knock warrant have been introduced in each chamber of Congress. 185Among those bills is House Resolution number 677, better known by its short title: the Just and Unifying Solutions To Invigorate Communities Everywhere Act of 2021, or simply, the JUSTICE Act. The JUSTICE Act, introduced in the House of Representatives in February of 2021, addresses many of the concerns raised following the murders of George Floyd, Walter Scott, and Breonna  [*178]  Taylor. These include the use of chokeholds, alternatives to use-of-force, related training requirements, and no-knock warrants. 186

    The JUSTICE Act generally deals with each issue by de-emphasizing a particular law enforcement practice through onerous reporting requirements and financial penalties 187or restricting local enforcement agencies from receiving federal spending. 188The JUSTICE Act handles the use of no-knock warrants with the former, a combination of reporting and financial penalties. 189Specifically, any state and local law enforcement agency receiving federal funds must complete detailed annual reports under pain of having their budgets significantly reduced. These reductions start at twenty percent after the first year of noncompliance, with incremental increases of five percent in each subsequent year of continuing noncompliance. 190It is worth noting the JUSTICE Act does not ban the use of no-knock warrants, nor does it change the legal justification - the reasonable suspicion standard - required to request one. The JUSTICE Act merely signals to state and local enforcement agencies that they need to work a little harder on the backend to justify a no-knock warrant on the front end.

    Unfortunately, the JUSTICE Act muddies the water of federal judicial authority to authorize no-knock warrants by not explicitly mentioning it. The definition of a "no-knock warrant" within section 102 of the JUSTICE Act does not clarify which court, state or federal, may authorize such a warrant. 191Rather, there is only a passing reference to one being issued by a "court of competent jurisdiction [upon finding] reasonable suspicion that knocking and announcing" would pose a danger, inhibit the investigation, or lead to evidence destruction. 192An equally minor reference as to which parties can execute a warrant  [*179]  appears later in the text of the JUSTICE Act. There, the Act's text makes clear a no-knock warrant can be executed by a federal law enforcement agency, exclusive of its state counterparts. 193True, state court judges can issue federal warrants, though that is the exception to the norm. 194Therefore, for all its good, the JUSTICE Act falls far short of resolving the gap in federal jurisdiction over no-knock warrants in place since 1974. In any case, the JUSTICE Act has remained stalled in the House subcommittee on Crime, Terrorism, and Homeland Security since March 22, 2021. 195

    C. The George Floyd Justice in Policing Act

    Another bill addressing no-knock warrants - though named for a different victim of militant policing - is House Resolution Number 1280, known as the George Floyd Justice in Policing Act of 2021 ("George Floyd Act"). The George Floyd Act addresses many of the same societal ills arising from police brutality as the JUSTICE Act. In some regard, the George Floyd Act could be considered companion legislation to the JUSTICE Act. For example, the George Floyd Act mandates trainings for federal law enforcement officers on the topics of racial profiling, bias, and procedural justice. 196By comparison, the JUSTICE Act requires recruitment and educational programs based largely on racial reconciliation. 197However, the George Floyd Act goes beyond the JUSTICE Act by banning outright no-knock warrants for drug-related cases. 198

     [*180]  Section 362 of the George Floyd Act - aptly titled "Ban on No-Knock Warrants in Drug Cases" - explicitly requires any law enforcement officer to first announce his or her authority and purpose before executing a search warrant. 199Thus, the notice requirement implied by the history and tradition of Fourth Amendment jurisprudence is made express - at least where drugs are involved. Logically, this narrowly tailored ban also effectively nulls the drug-related exigency exception to the notice requirement at all levels of law enforcement. Further, the George Floyd Act partially dispenses with the issue of whether federal judges and magistrates can authorize no-knock bans by making the thing being sought - the no-knock warrant - itself unlawful. The simple ban, spanning only three clauses on barely more than one of the 140 pages comprising House Resolution 1280, at last makes clear the Nixon-era "no-knock law" would be gone for good.

    The George Floyd Act binds non-federal enforcement agencies by withholding federal grants from any state or local government that fails to ban no-knock warrants in drug cases by the Act's deadline. 200Fortunately, the financial repercussions for noncompliance under the George Floyd Act have teeth. Specifically, the bill withholds funds for noncompliance for each year the state or local government fails to pass bans on no-knock warrants in drug cases. 201Unfortunately, this bill also remains stalled after being introduced to the Senate in March 2021. 202

    CONCLUSION

    The George Floyd Act offers the closest view yet of what could happen, legislatively speaking, to address the lethal consequences of no-knock warrants gone wrong. But it does not go far enough. Only an express restriction of all no-knock warrants that is tethered to significant  [*181]  grants of federal funding will simultaneously resolve the issues discussed herein. Unlike in Tisdale, officers would no longer be insulated by their good faith belief of anticipated exigencies when later findings make clear such beliefs were either unfounded or stale. 203A complete ban on no-knock warrants would force officers to justify their actions for bypassing notice requirements by strictly enforcing the rule that officers make real-time assessments of any apprehension of danger. 204Moreover, federal judges and magistrates could no longer rely on whatever authority is available to authorize no-knock warrants as Richards or Singer imply in dicta.

    The stakes for passing no-knock warrant reform are dangerously high. People continue to die because local, state, and federal law enforcement can lawfully subvert their ancient right to be free from a state actor's unreasonable intrusion into their homes. 205Like Breonna Taylor, people of color are disproportionately impacted. 206If the swell of people protesting across the country is any indication, the time is ripe for action to address how and when police, including federal officers, can interact with private citizens, especially within private homes. One such way to meaningfully address a narrow aspect of those legitimate concerns is to ban no-knock warrants. If that cannot be done, then the Senate must ban no-knock warrants for drug-  [*182]  related cases vis-a-vis the George Floyd Act. Merely requiring onerous reporting and educational program requirements at risk of Congress closing its purse strings - a la the JUSTICE Act - is unacceptable.

    The use of battering rams to forcibly enter a home without notice must never again be justified by shoddy investigative work. 207 Richards made clear that the showing of exigent circumstances is not high. An unscrupulous officer can still easily exploit that threshold by pointing to a "good faith," reasonable belief their life could be in danger from announcing their presence and purpose. But, absent any present dangers, officers must presume that an uninvolved party would answer the door if given the opportunity. 208Congress should codify this presumption by banning federal no-knock warrants and requiring state officers executing a lawful no-knock warrant make real-time assessments of possible exigencies or risk forfeiture of federal funding. Hopefully, the call for no-knock warrant reform following Breonna Taylor's death will not be in vain.




    California Western Law Review
    Copyright (c) 2022 California Western School of Law 

    Footnotes

  • INTRODUCTION

    In 2004, Mylan Pharmaceuticals substantially raised the price of its life-saving product, EpiPen, from $ 100 to $ 600.

    1At that time, EpiPen had yearly sales over $ 1 billion and enjoyed close to a 90% market share in the United States. 2This severe price hike was compounded by three important considerations. First, EpiPens (also referred to as "pens") are used by people who have severe allergies, who carry the pens with them for use in life-threatening situations. 3Second, people who carry EpiPens must carry two pens with them at any given time because if they use one pen and do not receive emergency care within fifteen minutes, they will need to administer a second dose. 4Third, EpiPens have a short shelf life: most dispensed EpiPen prescriptions expire within one year. 5Even if a person receives a pen that has an expiration date of more than twelve months, if left unused during the shelf life, the pen will still need to be replaced. 6Combined, these circumstances give the appearance that the pharmaceutical industry is willing to exploit consumers' EpiPen dependency to generate large profits. 7In doing so, they place the brunt of the impact of their profit gains on consumers. 8

    As a brand name drug, EpiPen enjoys a period of patent protection in the market place, prohibiting generic alternatives of the product from entering the market. 9However, once a brand name drug loses its exclusivity period in the market, generic pharmaceutical manufacturers  [*185]  can enter the marketplace and compete with the brand name drug, offering a cheaper version of the same drug. 10When multiple generic alternatives enter the market, it promotes competition and drives down drug prices, which in turn benefits consumers. 11

    The pharmaceutical sector has been recognized as "the most profitable industry" in the nation for more than thirty years. 12Many pharmaceutical firms realize enormous profits from their brand-name, blockbuster drugs. 13Because prescription drug prices are not government regulated, pharmaceutical firms may sell their drugs at any price they choose. 14Although many believe brand-name drug companies justify the cost of their drug by their need to recover costs of research and development, this is not exactly the case. 15In fact, in the  [*186]  United States' free market system, brand name drug companies "price [their] drugs at as high a price as the market will allow." 16With costs ranging from the hundreds of millions to billions of dollars to bring a drug to market, pharmaceutical companies naturally seek patent protection for their inventions. 17However, brand-name drug companies earn profits far exceeding the costs of innovation, and realize increased corporate profitability. 18Admittedly, pharmaceutical companies reside within the for-profit industry, and it is not a crime to make substantial profits. 19Recognizing that, where will society draw the line on drug makers' profits at the expense of their health and welfare?

    The framers of the Constitution recognized the importance of protecting technological advancements in the sciences for limited periods to incentivize innovators to pursue new discoveries. 20The patent system allows patent holders (hereinafter patentees) the right to exclude others from making, using, and selling their inventions. 21This allows  [*187]  patentees to reap the significant financial benefits of monopolizing the market, and these benefits function as an incentive for their contributions. 22Patent laws provide patentees the exclusive right to exclude others for a term of twenty years. 23Therefore, long patent terms can realize large profits, enticing competition from other drug makers that are allured by patentees' financial gains in their prospective market area. 24

    Case law from both the Supreme Court and the Federal Circuit show that existing patent laws permit generic pharmaceutical companies to make strategic decisions to engage in infringing behavior. 25Existing patent laws surrounding remedies for infringement allow pharmaceutical companies to adopt an "act first, ask for forgiveness later" approach to employ infringing activities as a business model. In many ways, this approach benefits society by providing generic alternatives at lower costs for consumers. However, in specialized areas of pharmaceutical innovation, such as mRNA COVID-19 vaccine production, this Comment will demonstrate how legitimized infringement can harm society in times when we are the most vulnerable.

    Part I of this Comment discusses patent laws that impact infringement within the pharmaceutical industry. Part II looks at the methods used to determine damages for patent infringement suits. It will also demonstrate how varying judicial decisions create unpredictable outcomes in infringement litigation suits. Part III then considers how the lack of guidance from the courts allow pharmaceutical companies to implement deliberate patent infringement into their business models. Part IV weighs the benefits and drawbacks of deliberate patent infringement in the pharmaceutical industry. This Comment will conclude by arguing that, although deliberate patent infringement generally benefits society by decreasing costs and increasing drug  [*188]  treatment availability, in the context of specialized pharmaceutical products like mRNA COVID-19 vaccines, infringing activities ultimately do more harm than good.

    I. CURRENT PATENT LAWS THAT IMPACT THE PHARMACEUTICAL REALM

    A strong patent system is fundamental to promoting scientific and technological advances across industries such as pharmaceutical research, drug development, biotechnology, and medical technology. 26Patent protection fosters growth among investors, manufacturers, shippers, and suppliers, creates jobs, and stimulates the economy. 27Brand-name drug makers have harnessed their scientific discoveries and turned their blockbuster drugs into revenues reaching into the billions. 28Furthermore, patenting these discoveries and intangible assets create a great amount of value for pharmaceutical companies and their investors. 29Overall, society as a whole benefits when drug companies patent their products. Not only do patents provide a blueprint of how to recreate a product, they lead to more drug discoveries and innovation. 30

    In spite of these benefits, there remains unsolved tension between the patent system's dual purposes: (1) incentivizing innovation, and (2) compensating those who distribute that information in the public domain. 31There is high entrepreneurial value in rewarding patentees for their discoveries: inventors can realize profits for their inventions and can use resources to develop new technologies and bring them to market. 32There is also high societal value in public disclosure of patented  [*189]  technologies that allows other inventors to build on the prior art and foster development. 33While the dual benefits of the patent system can help society in the short term by lowering drug prices, these benefits are greatest among small molecule or chemically derived drugs. By contrast, for highly specialized pharmaceutical products, like mRNA COVID-19 vaccines, third party pharmaceutical firms that attempt to replicate these vaccines hinder our long-term progress by impeding vaccine production and distribution.

    This section discusses some of the current patent laws that act within the dual purposes of the patent system. Subsection A discusses the Hatch-Waxman Act and highlights how existing patent laws encourage patent infringement among pharmaceutical companies. Subsection B details the compulsory licensing provisions in the United States Code ("U.S.C.") and takes a brief look at a time where compulsory licensing was contemplated in the Nation's history. Subsection C then discuss the Defense Production Act and how it has been utilized in response to the Coronavirus pandemic. Both compulsory licensing laws and the Defense Production Act have been contemplated in the wake of the ongoing Coronavirus pandemic. 34These laws permit the Nation's leaders to react and respond in times of urgent need. 35Understanding how these laws have and may be used in the future is important in understanding how dangerous they can be when employed in very specialized fields of innovation such as mRNA vaccines.

    A. Hatch-Waxman Act of 1984 and the Common Law Research Exemption

    Before the enactment of the Hatch-Waxman Act of 1984, there were virtually no generic drugs competing with brand name drugs in the marketplace. 36Even after a brand name drug's patent expired, the brand name medication retained a market monopoly for years. 37Due  [*190]  to the high costs associated with engineering drugs and the long Food and Drug Administration (FDA) approval process, generic drug companies did not seek approval to market brand name alternatives. 38

    For over two centuries, courts have recognized a judicially created research exemption from patent infringement. 39In its simplest terms, the research exemption provides that using a patented invention is not an act of infringement if the use is only for the purpose of experimentation for research purposes. 40This early common law research exemption allowed patented inventions to be used under certain circumstances, without the patentee's consent, so long as the use of the invention did not garner an accused infringer any profits. 41Therefore, the use of a patented invention was not permitted in situations where such use would further the user's legitimate business. 42The existing patent law and research exemptions to patent infringement endeavored to find a middle ground. 43In allowing researchers to use patented inventions in their research without threat of legal action for patent infringement, scientists were granted the opportunity to further progress by building off of another's patented technology. 44This arm of the patent system is what helped society, in general, advance.

    The benefits of common law research exemptions from patent infringement liability and the strong economic considerations in providing greater access and affordability to pharmaceutical consumers were clear. Accordingly, Congress enacted the Hatch-Waxman Act of 1984. 45Section 271(e)(1) of the Act lays out the congressional grant of the "safe harbor" research exemption:

     [*191] 

    It shall not be an act of infringement to make, use, offer to sell, or sell within the United States ... a patented invention ... solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs ... . 46

    Through this Act, Congress sought to benefit the public. The Act enabled generic drug companies to capitalize on the research and development of patent protected brand name drugs and bring their own generic alternatives to market as soon as the patent term expired. 47

    Under the Hatch-Waxman Act, generic drug companies are permitted to use the patented drug's specification as a reference to generate the data required to submit to the FDA for regulatory approval without the threat of liability for patent infringement. 48This includes permitting a generic drug maker to use the brand name drug company's original safety and efficacy data in their new drug application (NDA), thus saving them years of time researching and wading through the regulatory process. 49Included in this abbreviated approval process, generic drug makers must prove their generic drug is bioequivalent to the brand name drug. 50Bioequivalency is proven by showing, among other requirements, that the generic drug will deliver  [*192]  the same active ingredients to the recipient's bloodstream over the same amount of time and in the same concentration as the brand name drug. 51

    To be granted approval and enter the market as soon as the brand name patent expires, the generic drug company must file an Abbreviated New Drug Application (ANDA) with the FDA before the brand name drug's patent expires. 52In addition to filing an ANDA, the generic drug company must file a certification based on one of four grounds for each patent claiming the brand name drug. 53Under what is commonly known as "paragraph IV certification," the generic drug manufacturer asserts the patent claiming the brand name drug is invalid or, alternatively, that the manufacture, use, or sale of the generic drug will not infringe the brand name, patented drug. 54The application of an ANDA utilizing certification under paragraph IV of the Hatch-Waxman Act typically results in patent infringement litigation 55because in submitting this application, the generic drug company seeks FDA approval to market a drug before the brand name drug's patent expires. 56Under paragraph IV certification, the generic drug maker asserts that their alternative drug product should be permitted to enter the market in view of the patented drug. 57Brand name drug companies then have a forty-five day window to file a complaint against the generic drug maker for infringement. 58When infringement  [*193]  litigation arises, the generic drug maker can challenge the validity of the brand name drug's patent and attempt to determine rights regarding infringement claims. 59

    Under the Hatch-Waxman Act, the first generic drug company to file an ANDA - proving either invalidity or non-infringement - is awarded a 180-day period of exclusivity. 60This bars other generic drug manufacturers from selling within that timeframe, and awards the first filer a chance to gain a large share of profits in the brand name drug's market. 61The Hatch-Waxman Act paved the way for generic drug manufacturers to capitalize on the success that brand name drug manufacturers cultivated, and ushered in a new era of generic alternatives. 62The Act ultimately benefits society by decreasing costs and increasing drug accessibility through encouraged competition among generic drug manufacturers once a brand name drug's patent term expires. 63

     [*194]  In 2005, patent infringement litigation centered around the common law research exemption and the statutory research exemption when Merck KGaA v. Integra Lifesciences I, Ltd. reached the Supreme Court. 64Integra owned five patents for short peptides known as RGD peptides. 65The company sued drug maker, Merck, and Dr. Cheresh, who were researching the anti-angiogenic properties of various RGD peptides. 66Together, their goal was to reach FDA application for a new drug candidate. 67The Court considered whether use of patented inventions in preclinical research where results of the research are not included in an FDA application are nonetheless exempted from infringement by 35 U.S.C. § 271(e)(1). 68The Court held the infringement exemption extends to all uses of patented inventions that are reasonably related to the development and submission of any information under the Food, Drug, and Cosmetics Act, applying a broad view of the research exemption. 69Moreover, so long as there is a reasonable basis for believing that research experiments will produce relevant information for investigational new drug applications (INDs) or NDAs, use of patented compounds in preclinical studies is exempt from infringement. 70Thus, the Hatch-Waxman Act paved the way for small molecule, chemically derived, generic pharmaceuticals to enter the market. 71It also provided the statutory exemption for using patented inventions in research.

     [*195] 

    B. Compulsory Licensing

    The Constitution provides that private property shall not "be taken for public use, without just compensation." 72This provision recognizes the important public good that can come from fairly compensating for patented inventions, while balancing the burdens placed on inventors seeking to build on prior art. Congress recognized that because valuable inventions serve such a high public good, the need to carve out an exception for the use of the invention without authorization may be justified. Thus, Congress delineated the action and remedy for patentees when the government uses their patented invention without authorization. 73

    When a patented invention is used or manufactured by or for the United States without a license, the reasonable and entire compensation for use of the patented invention is the patentee's remedy. 74The United States may use the compulsory licensing power to take privately owned patented inventions to serve the public. 75However, this power is only used under extreme conditions, such as when the patented invention meets vital public health needs, in national emergency, or when there are strong societal interests in accessibility to the invention. 76Yet, the United States has declined to invoke its power to grant compulsory licenses in the past. 77

    Under the compulsory license provisions, the government can force a brand name drug maker to grant a license to a generic manufacturer to produce a drug for the United States. 78Alternatively, the  [*196]  government can use its power under the compulsory license provisions to force a brand name drug maker to produce more of a drug than it originally desired. 79This may cause a drug maker to make more of a drug at a less profitable rate and can force a drug maker to buy more raw materials and supplies, or use its manufacturing capacity past the point of profitability, causing the company to lose money. 80

    In 2001, the government threatened to use its power under the compulsory licensing provisions on Bayer Pharmaceuticals to stockpile a patent-protected medication, Cipro (ciprofloxacin), in response to the Anthrax biological terrorism threat. 81Fears of potential shortages put pressure on lawmakers to use the provision to contract with generic manufacturers to produce ciprofloxacin to increase supplies of the drug. 82Although ciprofloxacin is not the only drug to treat Anthrax, it is a first line drug of choice to treat the virus. 83Government officials eventually reached an agreement with Bayer and decided against a compulsory license of the drug. 84The agreement provided that Bayer would produce several hundred million tablets of Cipro for the United States at a rate of seventy-five to ninety-five cents per tablet. 85At that time, the retail price of Cipro was $ 5.32 per tablet, 86equating to a roughly eighty-six percent discount per unit that Bayer had to absorb.

    C. Defense Production Act

    The Defense Production Act is an authority used to support homeland security, under the direction of the President. 87Pursuant to presidential authorization, the Defense Production Act expedites and expands  [*197]  supplies of materials and services from the industry sector to promote national defense. 88On March 2, 2021, President Biden triggered the Defense Production Act to expand production of Johnson & Johnson's COVID-19 vaccine using Merck's prescription drug manufacturing facilities. 89The Executive Order directed "immediate actions to secure supplies necessary for responding to the pandemic, so that those supplies are available, and remain available, to the Federal Government ... as well as to America's health care workers, health systems, and patients." 90The move came after Johnson & Johnson (J&J) experienced difficulties producing its vaccine during the COVID-19 pandemic. 91

    In response, the United States Department of Health and Human Services collaborated with Merck to adapt Merck's facilities to allow "rapid large-scale manufacturing of vaccines" to boost the J&J vaccine supply. 92In addition to allowing J&J to use its facilities, Merck also used some of its facilities to produce the J&J vaccine itself. 93Although the Order facilitated increased production of J&J's patented vaccine by permitting Merck to manufacture it, 94that result did not come without its drawbacks.

    In March 2021, a third-party firm, Emergent BioSolutions, announced it would begin manufacturing J&J's COVID-19 vaccine at its Baltimore, Maryland, facilities. 95Emergent produced drug substance for J&J as part of the vaccine supply chain. 96The drug substance -  [*198]  which is the active pharmaceutical ingredient of the vaccine - was produced at Emergent's facility. It was then shipped to others in the supply chain for filling and finishing in preparation of distributing the vaccine. 97

    Workers at Emergent's Baltimore facilities mixed up ingredients meant for AstraZeneca's COVID-19 vaccine with the J&J COVID-19 vaccine; however, the ingredients were not interchangeable. 98The error contaminated fifteen million doses of the J&J vaccine, and halted the facility's production of both vaccines while the FDA investigated. 99Quality control verifications of the vaccine indicated that a batch of drug substance failed to meet quality standards. 100Although none of the doses made at Emergent's facilities had been authorized for use in the United States, the impact of the mix up was felt worldwide. 101Millions of doses had been shipped across the globe, and regulatory agencies in the recipient countries had to ensure their doses were safe for use. 102

    The Emergent BioSolutions vaccine mixup illustrates the complexity of vaccine production and the expertise required to produce mRNA vaccines. 103In an already strapped COVID-19 vaccine production scheme, where raw materials and mRNA vaccine manufacturing know-how strains vaccine production, 104the error wasted valuable  [*199]  resources. This shows that even experienced drug makers may lack the knowledge and experience required to make COVID-19 vaccines. 105In fact, Pfizer CEO Albert Bourla says it could take "years" for many companies to attain the knowledge and capabilities needed to produce mRNA COVID-19 vaccines. 106

    Although, in theory, authorizing another manufacturer to make COVID-19 vaccines could help reach populations other countries could not reach, 107it may not actually alleviate the production issues surrounding vaccine manufacturing. Allowing pharmaceutical companies that lack the manufacturing capacity or expertise to produce COVID-19 vaccines to insert themselves in the vaccine production space can interrupt the supply chain and cause raw material shortages and delays. 108In fields such as specialized mRNA COVID-19 vaccines, using the Defense Production Act to put vital supplies in the hand of those less able can prove counter-productive, even deadly. 109  [*200]  The safest, most effective way to scale up vaccine production, according to Bourla, "is to do it in-house," concentrating raw materials, supplies, and products at the source, where competent, quality controlled vaccines can be made. 110Thus, in the area of specialized mRNA COVID-19 vaccines, patent infringement will not benefit society, but rather, will hamper the process of getting critical vaccines to patients across the globe and harm society's interests in the long term.

    Although the Defense Production Act can help support homeland security by mobilizing resources in critical times of need, it is a powerful tool that can have unexpected and unintended consequences.

    II. DETERMINING DAMAGES IN PATENT INFRINGEMENT LITIGATION

    Existing patent laws permit pharmaceutical companies to adopt the "act now, ask for forgiveness later" approach to business decisions regarding infringing activities. This is shown in several examples of the court's handling of the following methods used to determine damages and remedies for patent infringement. Subsection A discusses methods used to determine reasonable royalties in patent infringement suits. Subsection B then discusses the principle of apportionment, used in multi-component products in patent infringement cases. Subsection C reviews enhanced damages and demonstrates how the Supreme Court grants discretion to district courts in awarding enhanced damages under existing patent laws. Finally, subsection D discusses the grant of discretion to district courts in the decision to award injunctions in infringement suits.

    Each of the methods discussed in this section reference different factors used for determining damages. These discrepancies lead to  [*201]  unpredictable results. When coupled with discretionary judicial decision making, these methods for determining patent infringement remedies have resulted in pharmaceutical companies' adoption of an "act now, ask for forgiveness later" approach to infringing activities. The courts' wide discretion to grant remedies in patent infringement suits have evolved into an implicit permission for pharmaceutical companies to employ infringement activities as business decisions. Admittedly, generic pharmaceutical companies' patent infringement activities serve society's interests in the short term, by providing lower cost, generic alternatives to brand-name drugs. However, patent infringement in highly technical areas of the pharmaceutical sector, like mRNA COVID-19 vaccines, will ultimately harm society in the long term.

    A. Reasonable Royalty

    Section 284 of the Patent Act provides for monetary damages and a reasonable royalty to compensate patentees for an infringer's use of a patented product. 111The statute requires a damages award notwithstanding a jury's determination of damages. 112Compensation may be determined by proving "lost profits, a reasonable royalty, or a combination" of both methods. 113

    To obtain damages for lost profits owing to the infringement, a patentee must show: (1) market demand for their patented product; (2) absence of acceptable, non-infringing alternatives to satisfy market demand; (3) the patentee's manufacturing and marketing ability to capitalize on the demand; and (4) the profits the patentee would have gained but for the infringing product's availability in the market. 114Patentees who fail to meet all prongs of the test are entitled to recover only a reasonable royalty. 115A reasonable royalty is the amount a person desiring to manufacture and sell a patented product would be  [*202]  willing to pay to produce and sell the patented item. 116Under these subjective circumstances, courts construct hypothetical negotiations to arrive at a royalty amount that would have been agreeable to the involved parties prior to the initial act of infringement. 117

    In Georgia-Pacific Corp. v. U.S. Plywood Corp., the court established a fifteen-factor test to guide its analysis of the hypothetical negotiation; these factors are still being applied, some forty years later. 118Among the factors are inquiries into items such as: comparable licenses, objective properties of hypothetical licenses, bargaining positions of the parties, licensing policy of the patentee, benefits of the patented product, market value of the product, impact on infringer's profits, expert testimony, and the economic impact on what the parties would have agreed upon before infringement began. 119The Georgia-Pacific factors contain both reinforcing and contradicting effects, resulting in unpredictable royalty awards. Demand for carefully constructed testimony supported by the particular facts of the case is required for reasonable royalty analyses. 120However, good advocacy and adequate evidentiary proof can tip the scales heavily in either direction. 121

    Other standards used to determine the royalty rate have since fallen out of favor. In Uniloc USA, Inc. v. Microsoft Corp., the court abolished the "twenty-five percent rule" as an "abstract and largely  [*203]  theoretical construct." 122This rule conferred to the patentee twenty-five percent of the value of the accused product. 123The court reasoned "[the twenty-five percent rule] is a fundamentally flawed tool for determining a baseline royalty rate in a hypothetical negotiation," because "it fails to tie a reasonable royalty base to the facts of the case." 124The court noted the patentee bears the burden of proving damages in infringement suits; to meet that burden, the patentee's proffered expert testimony regarding damages must sufficiently relate to the facts of the case. 125Moreover, under the Georgia-Pacific factors, evidence "must be tied to the relevant facts and circumstances of the particular case at issue and the hypothetical negotiations that would have taken place in light of those facts and circumstances at the relevant time." 126

    The reasonable royalty standard held firm in Integra Lifesciences I, Ltd. v. Merck KGaA (the "Integra Action"). There, on remand from the Federal Circuit, the district court was ordered to calculate a reasonable royalty supported by the record. 127The jury had initially awarded Integra $ 15 million in damages against Merck for infringement of its RGD peptides. 128However, the Federal Circuit found insufficient evidence to support that amount. 129In response, the district court considered a hypothetical negotiation between the parties and analyzed the record for evidence of "sound economic and factual predicates." 130The record supported that as of August 1994, Telios (Integra) was amenable to a licensing agreement with Merck for $ 1.5  [*204]  million per year. 131After determining the infringement period was fifty-one months, the court calculated a reasonable royalty of $ 6.375 million 132for Integra's RGD patents. 133It would seem the nearly fifty-eight percent decrease in the damages award was likely far more reasonable to the party responsible for paying the sum - Merck.

    B. Apportionment

    A different method is applied when determining reasonable royalties for multi-component products. There, the "final royalty base and royalty rate must reflect only the value conferred by the infringing features of the product, and no more." 134Put differently, the reasonable royalty is the measure of the "value of what was taken." 135When both patented and unpatented features comprise a product, a determination of the value added by the patented features is paramount to calculating damages. 136The jury must "apportion the defendant's profits and the patentee's damages between the patented feature and the unpatented features [using] reliable and tangible evidence." 137Apportionment can be determined in a variety of ways. For example, "by careful selection of the royalty base to reflect the value added by the patented feature, where that differentiation is possible; by adjustment of the royalty rate so as to discount the value of the product's non-patented features; or by a combination thereof." 138Ultimately, the indispensable requirement is that a reasonable royalty award be contemplated only "on the incremental value the patented invention adds to the end product." 139

     [*205]  The Ericsson, Inc. v. D-Link Sys. case exemplifies the principle of apportionment. In 2010, Ericsson brought suit against D-Link Systems for patent infringement of its WiFi technology used in electronics to wirelessly connect to the Internet. 140The jury found that D-Link infringed Ericsson's patents and awarded Ericsson $ 10 million in damages. 141D-Link appealed, arguing in part that Ericsson's damages theory violated the "entire market value rule," (EMVR). 142The entire market value is the value of the whole product, inclusive of all components. The EMVR stands for the concept that damages can be based on the entire market value of a product only where the patented feature at issue is what drives market demand for the product as a whole. 143Accordingly, if the patented feature is not the item driving the multi-component product's market value, relying only on the EMVR could mislead the jury. 144Ultimately, the court required the jury to apportion the incremental benefit Ericsson's patented WiFi technology added to the value of D-Link System's multi-component products. 145Unfortunately for Ericsson, the court vacated the original damages award after finding the lower court failed to properly instruct the jury on this apportionment principle. 146

    C. Enhanced Damages

    In an effort to protect patented inventions, Congress provided for enhanced damages to deter bad-faith infringement via 35 U.S.C. § 284. 147This patent damages statute makes clear "the court may increase the damages up to three times the amount found or assessed." 148  [*206]  However, courts have varied in their application of this provision. 149Typically, a jury must first determine whether an alleged infringer has committed acts warranting increased damages. 150Then the judge will decide whether and to what extent to enhance the damages awarded to the patentee. 151Central to this determination "is the egregiousness of the defendant's conduct based on all the facts and circumstances." 152

    The Supreme Court recently considered enhanced damages in Halo Electronics, Inc. v. Pulse Electronics, Inc. 153In Halo, the Court considered whether the two-part test from In re Segate -used to determine when a district court could increase damages - adhered to § 284. 154The Court rejected the Segate test as "unduly rigid," stating it "impermissibly encumbers" the district court's discretion to enhance damages. 155The Court recognized § 284 permits courts to exercise discretion when awarding enhanced damages against those adjudged guilty of patent infringement. 156However, the Court emphasized district courts should continue to rely on precedent established through the "sound legal principles" developed over nearly two centuries of interpretation and application of the Patent Act. 157

    The Court further acknowledged that patent law balances the desire to promote innovation through patent protection and the need to  [*207]  permit the "imitation and refinement through imitation" required to advance a competitive marketplace. 158The Court reasoned this balance is disrupted when courts award enhanced damages in "garden-variety" cases. 159Still, "enhanced damages [need not] follow a finding of egregious misconduct." 160Instead, courts should continue to weigh the particular facts of each case in its decisions on whether to order damages, and for how much. 161In analyzing the facts at bar, courts need only apply a preponderance of the evidence standard to satisfy the evidentary burden under § 284. 162

    Justice Breyer's concurrence noted the Court's references to "willful misconduct" do not justify enhanced damages in situations where the evidence shows only that the infringer knew about the patent, without more. 163Rather, Justice Breyer posited that enhanced damages are a disciplinary sanction imposed on those who engage in conduct that is either "deliberate" or "wanton." 164Further, although "intentional or knowing" infringement may justify a court in handing down a punitive sanction, the Court uses the term may, not must. 165Thus, it is the circumstances of the infringer's behavior that "transforms simple knowledge" into egregiousness, "and that makes all the difference." 166Therefore, because the district court has discretionary power to enhance damages, appellate courts review decisions under the abuse of discretion standard. 167

    The Halo decision reinforced the district court's discretion to award enhanced damages; accordingly, district court judges have devised their own methods to address allegations of willful infringement throughout the litigation stages. 168Some courts will settle allegations  [*208]  of willfulness early on through pre-trial motions to dismiss or motions for summary judgment. 169Other courts will leave the determination of willfulness to the jury. 170Still more, in cases finding willful infringement some courts refuse to enhance damages while others use their power to award triple damages to the plaintiff. 171

    D. Injunctive Relief

    In accordance with the remedies provision of the Patent Act, Congress recognized that injunctions may be granted to prevent patent rights violations when justice so requires. 172Congress thus granted the district courts discretion to award injunctions in infringement suits 173"on terms the court deems reasonable ... to prevent others from violating rights secured by patents. 174The decision in eBay Inc. v. MercExchange L.L.C. reiterated this principle of patent law.

    In eBay, the Supreme Court held that "well established principles of equity determined by the courts require a plaintiff seeking a permanent injunction to satisfy a four-factor test." 175The patentee must show: (1) he has suffered irreparable harm, (2) money damages are inadequate to compensate for his injury, (3) an equitable remedy is justified, and (4) the public interest would not be harmed by a permanent injunction. 176Again, the Court reiterated the district courts' discretion in determining whether to award a permanent injunction. 177Precedent does not dictate that injunctions should automatically follow a finding of patent infringement; rather, district courts "may" grant injunctive relief in its discretion, on terms it may deem reasonable. 178Put differently, eBay directs district courts to consider the four-pronged test, and other considerations it deems reasonable, when granting permanent injunctions to protect patent rights.

     [*209] 

    III. THE IMPLIED "ACT NOW, ASK FOR FORGIVENESS LATER" APPROACH TO INFRINGING BEHAVIOR

    The following section highlights examples of cases that resolved with limited remedies awarded and limited injunctions granted. These examples support the premise that existing patent laws permit pharmaceutical companies to adopt an "act now, ask for forgiveness later" approach to infringing activities. Subsection A considers how courts have interpreted existing patent laws, declining to exact enhanced damages in some cases, thus permitting pharmaceutical companies to adopt such a business model. Subsection B then reviews injunctions as a remedy for infringement, providing examples of situations in which courts have resolved to grant or deny injunctions.

    Because district courts vary on whether to award enhanced damages and injunctions, pharmaceutical companies are left free to adopt an "act now, ask for forgiveness later" approach to patent infringement. The result? Legitimized patent infringement may occur when small-molecule generic drugs enter the market before their counterpart brand name drug patents expire. True, society benefits from the lower drug costs for consumers. This model, however, may be unworkable for mRNA COVID-19 vaccines.

    A. Limited Remedies

    The Federal Circuit in Presidio Components, Inc. v. American Technical Ceramics Corp., relying on Halo's holding, held that an enhanced damages award "does not necessarily flow from a willfulness finding." 179Yet, the Halo Court did not propose a test to determine the behavior which warrants enhanced damages. 180Rather, Halo required the courts' consideration of the totality of the circumstances to determine whether enhanced damages are "appropriate on a case-by-case basis." 181In light of this guidance, courts have held "the continued sale of [an] infringing product without removing its infringing capability is merely typical infringement behavior that is not a proper  [*210]  basis for awarding enhanced damages." 182Thus, a "potential patent infringer may not be deterred whatsoever from committing willful infringement" if they perceive they may face enhanced damages even without a finding of willful infringement. 183The Supreme Court's emphasis to exact triple damages only in "exceptional" cases of infringement cautions against enhanced damages awards, therefore indirectly supporting patent infringement as a viable business strategy. 184

    By way of a hypothetical, a pharmaceutical company could seek approval of a generic product to enter the market as an alternative to a successful brand name drug. If the pharmaceutical company is later found liable for patent infringement, it can then use a portion of its profits to pay out a limited damages award. Entering the market with an alternative to a block-buster drug could net billions of dollars in profits. Yet having to pay a mere portion of that revenue for engaging in infringing activities could be a rational, viable decision for the company. With profits in the hundreds of millions, paying damages, even triple damages, may be perceived as merely a cost of doing business.

    The reality of the hypothetical was laid bare in Integra Lifesciences I, Ltd. v. Merck KGaA. There, the Federal Circuit Court ordered the lower court to re-calculate damages in conformity with the record. 185Though it affirmed the previous ruling that Merck willfully infringed Telio's (Integra) RGD patents, the Federal Circuit did not find sufficient evidence to support the $ 15 million award. 186Instead, it determined a reasonable royalty would have been $ 6.375 million. 187Furthermore, the court found there was no factual basis in the record to increase or decrease the hypothetical royalty. 188Therefore, although  [*211]  the jury found Merck guilty of willful infringement, the award announced by the district court not only reduced the awarded damages, it did not include any enhanced damages. 189Litigation costs notwithstanding, Merck's approach to patent infringement made good business sense: the royalty they were ordered to pay was a mere fraction of their bottom line realized by infringing Integra's patent.

    B. Limited Injunctions

    Although courts have awarded injunctions in cases where a patentee satisfies the four-pronged test, courts have also declined to grant permanent injunctions in several different cases. 190Courts have denied requests for injunctions in cases where the patentee has a history of granting licenses to others to use or manufacture the patented invention, and where the patented product was incorporated into a larger product. 191Injunctions have also been denied in cases where the patentee failed to commercialize the patented invention to bring it to market. 192Where the courts decline to grant injunctions, the infringer is permitted to continue using and making the patented invention and must pay the patentee a royalty for the duration of the patent term. 193

    In two separate, but related suits, a brand name drug maker sued two generic manufacturers for infringement of its patent on Biaxin XL (clarithromycin extended release), an antibiotic used to treat bacterial infections. 194In Abbott Labs. v. Andrx Pharms., Inc., Abbott sued Teva Pharmaceuticals after Teva filed an ANDA seeking to market a generic version of Abbott's Biaxin XL. 195The court granted Abbott a preliminary injunction because it found that Abbott had established a likelihood of success on the merits, and that entry of a generic competitor would likely "crush the [extended-release clarithromycin] market." 196  [*212]  On appeal, the Federal Circuit found the prior art of a related patent, known as the ""190" patent, owned by Abbott did teach of the desirability of making a compound leading to the features claimed in the patent at issue, the ""718 patent." 197Stated differently, the prior art of Abbott's "190 patent could lead a person with ordinary skill in the art to reasonably expect success in making the extended-release clarithromycin. 198Based on that prior art, Teva had raised a substantial question of invalidity of claims 2 and 4 of Abbott's "718 patent. 199Teva also raised substantial questions regarding the validity of several claims of Abbott's patents regarding the improved gastrointestinal side effects from extended-release clarithromycin formulations. 200Thus, the court found Abbott did not establish a likelihood of success  [*213]  on the merits of their claims, 201and vacated the preliminary injunction ruling by the lower court. 202

    However, in a separate case regarding Abbott's extended-release clarithromycin patents, the Federal Circuit upheld a lower court's grant of a preliminary injunction. 203In Abbott Labs. v. Sandoz, Inc., Abbott sued Sandoz in response to Sandoz filing an ANDA for its generic version of extended-release clarithromycin. 204The Federal Circuit decided there was no reversible error in the lower court's ruling on anticipation and obviousness, and that Abbott was likely to prevail on the merits. 205Furthermore, Sandoz was unlikely to succeed in establishing inequitable conduct on the "718 and a related "616 patent on either of the two bases Sandoz advanced. 206Sandoz had argued that Abbott made a material misrepresentation in a submission to the Patent and Trade Office (PTO) because an inventor failed to analyze statistical significance in clarithromycin concentrations of extended-release and immediate-release formulations. 207Sandoz also argued that Abbott intended to deceive the PTO because Abbott failed to disclose  [*214]  the results of clinical trials on taste perversion. 208The court reasoned that neither the statistical significance nor the results of the taste perversion trials were material to the patentability of the claims. 209Based on the record, Abbott showed a reasonable likelihood of proving infringement. 210Moreover, the court held the equitable factors considered for preliminary injunctions weighed in Abbott's favor and upheld the lower court's ruling. 211The court reasoned that the public interest is best served by enforcing patents which have a substantial likelihood of being valid and enforceable. 212Unfortunately for Abbott, only Sandoz's infringement, not Teva's, sufficed to justify an injunction against further infringement of Abbott's "718 patent.

    IV. SOCIETAL BENEFITS & DRAWBACKS TO INFRINGEMENT

    There are several recognized benefits to pharmaceutical drug companies choosing to engage in infringing activities. Robust patent protection encourages innovation, and aids in the advancement of society. Moreover, the research exemption to patent infringement promotes the production and sale of generic drugs, which in turn provides consumers a wider variety of generic alternatives, and lowers drug costs. However, there are also many drawbacks to patent infringement in the pharmaceutical realm. For example, pharmaceutical companies faced with less-robust patent protection may no longer be incentivized to innovate. This, in turn, negatively impacts society by leading to less advancements and less innovation. As the world continues to cope with the coronavirus pandemic, many pharmaceutical companies have expressed desire to imitate the success of mRNA COVID-19 vaccines. However, in the highly specialized area of mRNA vaccines, patent infringement will not only hinder society's progress, it may cost people their lives. Thus, this is one area of the  [*215]  pharmaceutical realm where patent infringement activities will harm society.

    Subsection A discusses the benefits flowing from the Hatch-Waxman Act and shows how more drug competition leads to lower costs for consumers. Legitimized patent infringement, sanctioned by patent laws, as in the Hatch-Waxman Act, facilitates pharmaceutical companies' "act now, ask for forgiveness later" approach to infringing activities. Again, those activities benefit society in the short term, lowering costs and increasing competition in the market. Subsection B considers negative incentives to innovate and harmful effects of patent infringement in specialized pharmaceutical areas.

    A. Wider Access to Drug Treatments Translates into Decreased Costs for Consumers

    The Hatch-Waxman Act was designed with the goal of lowering prices on pharmaceutical products by increasing competition and bringing generic alternatives to the market sooner. 213Legislators recognized that pharmaceutical patent infringement meant more competition and cost-effective alternatives to the brand name drugs available to the public. 214

    In fact, legitimized infringement was sanctioned by patent laws. 215Congress's grant of research exemptions and encouragement of generic drug development in the Hatch-Waxman Act show how drug development accomplished by imitating patented products is valued in our  [*216]  society. 216Under the provisions of the Hatch-Waxman Act, a generic drug company can use a patent protected drug's published specification to develop its generic alternative, then try to sell its product in the market. 217If litigation arises regarding the infringing activity, the generic drug company can attempt to have the drug's issued patent invalidated, permitting the drug company to sell its version in the market. 218Legislators also recognized that society benefits when generic drugs enter the market. 219As a patent term is set to expire, the more generic drug companies that are poised to deliver their own cheaper alternatives increases competition and drives costs down. 220

    Borrowing the research and development of brand-name drug makers leads to substantial savings for the generic drug companies. In 2002, pharmaceutical companies invested, on average, $ 800 million to bring a drug from development to the market. 221Under the provisions of the Hatch-Waxman Act, the cost to reverse engineer a generic medication and receive FDA approval for it is a mere one or two million dollars. 222Generic manufacturers also enjoy the success of their brand-name counterparts by reaping the benefits of the prior marketing groundwork and recognized therapeutic benefits of the brand name drug. 223The cost savings opportunity presented by the Hatch-Waxman Act, along with the marketing success of brand name drugs, provide ample incentives for generic drug companies to invalidate brand name drug patents to permit early entry of their generic versions in the market.

    In this current state of patent laws, the lure of market shares of a successful brand-name drug product 224entices pharmaceutical companies to adopt an "act now, ask for forgiveness later" approach to patent  [*217]  infringement. Under the Hatch-Waxman Act, generic pharmaceutical companies are practically invited to engage in infringing activities, and their actions are seemingly protected under the reading of current patent laws. 225Once the pharmaceutical company files an ANDA, the act of infringement may be realized and challenged. 226But at that point, the generic pharmaceutical company can make a business decision to press on in its quest to have the brand-name drug's patent invalidated, ushering an unfettered entry into the market. 227As the first ANDA filer, the company may realize a partial monopoly in the market, for a limited time, as the first and only generic alternative to the brand name drug upon a successful challenge. 228Either way, the pharmaceutical company is gambling with a reasonable chance of winning. As legislators saw the benefit of wider access to generic drugs when generic manufacturers are able to enter the market upon patent term expiration, pharmaceutical companies also recognized the benefit of engaging in this sanctioned activity under pain of potential infringement litigation. Ultimately, existing patent laws permit pharmaceutical companies to take this risk and may even implicitly encourage it.

    B. Decreased Incentives for Innovation and Progress

    A major drawback to pharmaceutical patent infringement is its impact on negative incentives to advance pharmacological innovation. Pharmaceutical companies enjoy patent protection for their blockbuster drugs, and claim to recoup the costs of developing the drug during the patent term. 229In turn, this incentive for market monopolization encourages new drug development and innovation. 230  [*218]  Pharmaceutical companies are intricately important to the advancement of our society 231because their work transcends the healthcare field into commerce and ultimately the national economy. 232Thus, it can be argued that pharmaceutical companies that choose to infringe drug patents ultimately harm society, generally.

    If pharmaceutical companies are not given sufficient patent protection, they will have less motivation to innovate. Brand name drugs cost upwards of hundreds of millions of dollars over the course of bringing a candidate drug from the research and development stage, through FDA approval, to the market. Because of this lengthy and costly process, there would be far less incentive to innovate and pioneer new drug therapies if drug patents were not adequately protected. This would lead to less innovation across the pharmaceutical industry, as drug companies would be less inclined to spend money to develop new drugs. Without the protections patents offer pharmaceutical firms, it is unlikely that advanced COVID-19 mRNA vaccines would have been developed. Ultimately, insufficient patent protection would lead to less drug discovery, less innovative disease treatments, and would negatively impact the advancement of society.

    Furthermore, considering the current global pandemic and the progress of society, there are strong public policy reasons to justify willful patent infringement. Countries across the globe are scrambling to obtain vaccine doses for their populations. 233After the "Omicron" coronavirus variant was detected in the U.S. in early December 2021, shortly after being identified in Botswana and South Africa just weeks prior, 234it is apparent that no one is safe until everyone is safe. 235The interconnectedness of the global economy means that even if areas far  [*219]  across the globe are being impacted by COVID-19, the result will be production delays, losses of economic activity, and friction among channels of commerce: the repercussions will be felt worldwide. 236Moderna, maker of one of the mRNA COVID-19 vaccines, pledged not to enforce its patents related to COVID-19 for the duration of the pandemic. 237However, as seen in the example of the Emergent BioSolutions vaccine production mishap, errors can cause huge production delays and even loss of human life. In the context of highly specialized mRNA COVID-19 vaccines, where technical skill and know-how is required to produce the vaccines, 238willful patent infringement among pharmaceutical manufacturers could severely impact global efforts to address the pandemic.

    CONCLUSION

    Although the U.S. patent system generally protects patents, statutory grants for research exemptions and case law encourage an "act now, ask for forgiveness later" approach to infringing activities. This approach is made possible through the unpredictable outcomes of remedies awarded in patent infringement suits. As shown, the reasonable royalties and apportionment systems are subject to vast judicial discretion. By limiting awards through damages and injunctions, judges ultimately incentivize willful infringement.

    Pharmaceutical companies' pro-infringement business model typically benefits consumers by ushering in competition in the small molecule pharmaceutical drug market, which translates into lower drug costs. Therefore, there are major advantages to patent infringement in the pharmaceutical industry when considering the economic impact of  [*220]  generic drug availability in the marketplace. However, when the patented product is something as intricate as mRNA COVID-19 vaccines, patent infringement can harm society by shunting important materials and supplies away from vaccine producers, ultimately causing delays and wasting valuable resources. 239In critical times, such as a global pandemic, a pervasive infringement approach to pharmaceutical activities can be both harmful and deadly. Compromising the quality of vaccines, including contaminating its component substrates, will delay effective prevention efforts and prolong the efforts aimed at combating COVID-19. 240Ultimately, in specialized areas of the pharmaceutical industry sector, infringing activities will hinder our progress as a society.

    Where should we draw the line on patent infringement and brand-name drug makers' profits in the context of the health and welfare of society? At least for highly specialized pharmaceutical products, like mRNA COVID-19 vaccines, society is better served by discouraging infringing behaviors among third party pharmaceutical firms. Keeping the limited supply of raw materials concentrated in the hands of mRNA COVID-19 vaccine patentees will help to ensure quality vaccine products are maintained. Discouraging mRNA COVID-19 vaccine production by generic pharmaceutical manufacturers should be pursued for the time being. The lack of mRNA vaccine production know-how and production manufacturing capabilities, coupled with supply chain issues, can lead to significant safety issues. Producing these advanced vaccines in-house will assure the highest quality. The result will enable vaccine makers to reach populations in need, aiding our society as a whole.

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