September 24, 2014

Hiring Your First Worker? Read On.

By Kristine Sova

Whether you're working with independent contractors or hiring your first employee, building a business team brings with it a whole new area for compliance: labor and employment law.

Labor and employment laws cover everything from payroll and workers compensation to workplace posters to preventing discrimination and harassment in the workplace.

Unfortunately, there is no single government agency that oversees or enforces labor and employment laws, which in turn means there isn't a central government source for the small or new employer to turn to for purposes of determining which laws do or do not apply to them. Further complicating matters for the small or new employer is the fact that different laws apply to employers of different sizes. The magic number is not the same, and it's not always a "high" number like 15 or 20. Many of the laws, particularly at the state or city level, apply to employers with only a single employee.

While these factors don't make it easy for young businesses to achieve compliance with labor and employment laws, the unfortunate truth is that difficulty is not a defense to a claim that a business violated the law. Here, we offer three early markers to assist young NYC businesses in identifying when they should be active in their labor and employment law compliance efforts.

Marker Number 1: Before you hire your first worker.

Once you've decided to hire your first worker (as either an employee or independent contractor), you should be talking to a labor and employment lawyer. A number of New York State labor laws, predominantly affecting wages, apply to employers with only one employee, as do a number of payroll obligations, such as tax withholding, wage reporting, and unemployment insurance contributions. The federal Immigration Reform and Control Act, which requires employers to verify the eligibility of their employees to work in the U.S., and the NYC Earned Sick Time Act, which mandates providing sick time to employees, also apply to employers with only one employee.
While these same laws and obligations don't apply to independent contractors, too often independent contractors are misclassified and are really employees. A check-in with counsel before hiring any worker can help ensure that a young business wards off the many problems attendant with misclassification, and otherwise assist with compliance with the applicable laws.

Marker Number 2: Before you hire your fourth employee.

NYC employers should talk to a labor and employment lawyer about further compliance measures before they hire their fourth employee. At four employees, more labor and employment laws apply, including the New York State Human Rights Law and the New York City Human Rights Law, both of which prohibit discrimination and harassment in the workplace, and also require accommodation of disabled and pregnant employees.

Marker Number 3: Before you hire your fifteenth employee.

NYC employers should talk to a labor and employment lawyer about additional compliance measures before they hire their fifteenth employee. At fifteen employees, federal anti-discrimination laws such as Title VII and the Americans with Disabilities Act apply. At twenty employees, still more laws will apply, including the federal Age Discrimination in Employment Act and two additional provisions of the New York State Labor Law requiring blood donation leave and bone marrow donation leave.

September 23, 2014

Long-Awaited NFL Drug Policy to be Put to the Test

By Alexandra Goldstein

Last week the National Football League (NFL, League) and NFL Players Association (NFLPA) unveiled a series of improvements to overhaul the League's performance enhancing substance and substance abuse policies, including the addition of human growth hormone (HGH) testing.

I. Performance Enhancing Substance Policy.

The new performance enhancing substance policy is the culmination of over three years of negotiations, which began just prior to the 2011 NFL season when the parties were negotiating a new collective bargaining agreement (CBA). At the time, the NFL pushed to implement HGH testing; the NFLPA countered that there was not a reliable test for HGH and any testing would therefore be premature. In order to ratify the CBA and move forward with the 2011 NFL season, the parties agreed to HGH testing in principle, tabling a discussion of specific methods. The final 2011 CBA codified the parties' intentions to collectively develop an HGH testing protocol over "several weeks," however once the CBA was signed, negotiations on HGH testing stalled.

The new policy ushers in changes in disciplinary procedures and appeals. A player's first violation of the policy will result in suspension without pay for up to six games. The length of the suspension will depend on the violation: a player will receive a two game suspension for the use of masking agents, such as diuretics; a four game suspension for testing positive for HGH or other banned substances; and a six game suspension in the event that the player attempts to tamper with the test. After a player's first violation, they are subject to escalating suspensions; a second violation will result in a player being suspended without pay for 10 games, and in the event of a third violation, a player will be banned from the League for a minimum of two years.

Previously, a player who tested positive during the off-season was subject to the same suspension lengths as in-season violations. Under the new policy, a player who violates the policy during the off-season will be referred to the League's substance abuse program. Due to the change to how off-season violations are handled, the NFL and NFLPA announced that three players who had previously been suspended for four games under the League's old performance enhancing substance policy had been reinstated. The suspensions of Wes Welker of the Denver Broncos, Orlando Scandrick of the Dallas Cowboys, and Stedman Bailey of the St. Louis Rams were retroactively shortened, which made them eligible to return to their teams and play in week three.

The League's new policy brings the NFL closer to being in-line with the existing Major League Baseball (MLB) and International Olympic Committee (IOC) HGH testing. The IOC began implementing HGH testing during the 2004 Athens Olympics. At the time, testing was limited to detecting HGH use within hours; in 2012, they implemented a new biomarker test capable of detecting HGH use within weeks. In January 2013, the MLB and MLB Players Association announced that they would begin random in-season HGH testing, as well as testing all players for baseline testosterone levels that could help identify changes indicative of HGH use. The NBA and NHL have yet to implement HGH testing, but both leagues have expressed interest in revising their drug policies to include HGH.

II. Substance Abuse Policy.

The NFL and NFLPA also announced updates to their substance abuse policy, which notably includes marijuana and alcohol use. While marijuana rules have been relaxed, the League is toughening-up on DUI offenses.

Under the new policy, the threshold for a positive marijuana test has been raised from 5 nanograms per milliliter (ng/ml) to 35 ng/ml. Despite more than doubling the threshold, 35 ng/ml still sits on the low-end of the spectrum for sports-based marijuana testing; the MLB rules only kick-in at 50 ng/ml and the IOC allows athletes to skate on anything below 150 ng/ml.

The new policy also adds two stages to the previous series of suspensions. Under the old substance abuse policy, a player was referred to the League's substances abuse program for his first violation of the marijuana policy, with subsequent violations receiving a four game fine, a four game suspension, and a one-year ban from the NFL. The new policy adds a two game fine before a four game fine, and a 10-game suspension will be levied before a player received a one-year banishment. Due to the implementation of additional stages, previously banned Cleveland Brown's wide-receiver, Josh Gordon, will receive a retroactive 10-game suspension, making him eligible for play beginning in week 11.

While marijuana rules have been relaxed, more stringent policies have been implemented for a DUI. A player's first offense will result in a two game suspension without pay, whereas a player will be suspended without pay for at least eight games for a second DUI. In either event, a player can be suspended for additional games, where there are extenuating circumstances, such as a death or the egregious nature of the DUI offense.

III. Impact.

Despite the lengthy negotiation period, fines and suspensions under the new policies will be implemented immediately. Under the performance enhancing substance abuse policy, HGH testing is set to begin as soon as the end of this month, though more likely during the first few weeks of October.

Reaction to the new policies has been mostly positive, with many seeing it as a long overdue response to broader attitudes about drug and alcohol use. The new policies also mark a shift in power - while under most circumstances, Commissioner Roger Goodell retained the exclusive power to hear appeals under the old policy, appeals will now be put before "third-party arbitrators jointly selected and retained by the NFL and NFLPA."

September 22, 2014

Week in Review

By Martha Nimmer

Unleash the Secret Weapon: McBrunch

First there was the McRib, and now, it appears that fast food giant McDonald's has its sights set on a new venture: brunch, or, "McBrunch," specifically. With fast food dining options increasing around the world, and with the move towards more health-conscious food choices becoming more popular at home, the world's largest restaurant chain seems eager to regain some its lost market share by launching "a new secret weapon," i.e. brunch. To that end, McDonald's has begun the process of securing a trademark for the term "McBrunch," according to documents filed this summer with the U.S. Patent and Trademark Office.

This move into the brunch market suggests that McDonald's intends to "expand its late-morning weekend menu in an effort to boost sales." A report released earlier this month by Fortune showed that the burger giant's global sales fell 3.7% in August, while sales decreased domestically by 2.8% during the same period. This change in the U.S. is due, in part, to new breakfast options being offered by Taco Bell and Starbucks.

Hopefully, McDonald's knows not to offer McEggs Benedict.

Return to Peru

Nine works of art by the 18th-century artist Miguel Cabrera will be returning to Peru this month, six years after having been stolen from a church in downtown Lima. Thieves in July 2008 made off with almost 80 paintings and other objects from La Casa de Ejercicios Espirituales in the Peruvian capital over the course of two separate burglaries. In October of that year, a man named Brian Bates "consigned [one of the Cabrera works] to an unspecified New York auction house." The FBI eventually seized the work, entitled "The Resurrection of Lazarus," on February 18th of this year. According to a separate forfeiture order, the remaining eight paintings were given to an auction house in Cedar Falls, Iowa. The individual who consigned the eight paintings denied "knowing that the works had been reported stolen, and the FBI seized them" in early 2009.

In a news conference announcing the works' repatriation to Peru, U.S. Attorney Preet Bharara said that no arrests had been made in connection with the stolen artwork, but noted that the investigation was ongoing.

Don't Mess With the Honey Badger

The man behind the YouTube sensation of 2011 has sued two T-shirt companies for using his trademarked phrase, "Honey Badger Don't Care," on their merchandise. Christopher Gordon, the creator of the viral video "The Crazy Nastyass Honey Badger," took old National Geographic footage of an African honey badger and dubbed the video with his own wacky, profanity-laced narration that described the animal's outlandish behavior. Gordon's video quickly went viral, and currently has more than 69 million views on YouTube. Seeking to capitalize on the wild popularity of the hit, Gordon copyrighted his video narration and trademarked the phrase "Honey Badger Don't Care" for merchandise, including T-shirts.

Now, the YouTube star is accusing companies and LOL Shirts of trademark and copyright infringement, trademark dilution and unfair competition. In a lawsuit filed in Los Angeles federal court, Gordon alleges that: "Defendants not only sold infringing merchandise, but strategically chose to advertise their infringing merchandise by using plaintiff's video, which was generating millions of views." The complaint goes on to state that "[d]efendants even provided a website link to plaintiff's video, right alongside their advertisements of infringing merchandise, causing customer confusion and ramping up unlawful sales in the process." Gordon claims that he asked representatives from the companies to stop producing and selling the merchandise, which they agreed to do "only after generating substantial sales" and "only after sales of the infringing merchandise began declining."

Where's the Warhol?

A Florida couple has sued a Scottsdale, Arizona-based art gallery for conversion and breach of fiduciary duty arising from the gallery's unauthorized sale of the couple's Andy Warhol painting. The painting, entitled "Red Shoes," depicts women's shoes sprinkled with diamond dust.

According to the complaint, filed in Maricopa County by Amy Koler and Stephen Meyer against American Fine Art Editions, Phillip Koss, Jacqueline Carroll and Jeff Dippold, the gallery was supposed to store the work for the couple while they relocated to Florida. The plaintiffs claim that Phillip Koss, who worked as a gallery manager at American Fine Art, and employee Jeff Dippold, "suggested that plaintiffs keep the Red Shoes piece at AFAE's gallery and an arrangement by which AFAE would agree to store and insure the piece through AFAE's business insurance in return for plaintiffs' agreement that AFAE could display the piece and use it to help market sales of other similar works." The complaint goes on to state that defendants Koss and Dippold knew from discussions with the plaintiffs that they did not want to sell the painting. Koler and Meyer claim that they even had to tell Koss and Dippold, on more than one occasion, that they wanted to keep the painting.

Eventually, the couple returned to the Scottsdale gallery and learned that "Red Shoes" had been sold. The defendants claimed that the sale had occurred months earlier, and refused to produce any paperwork from the sale or even discuss the price paid for the piece. One of the defendants offered to pay the plaintiffs $65,000--the amount the plaintiffs paid in 2005 for the work--but Koler and Meyer adamantly refused, saying the painting is worth a lot more today.

The plaintiffs are seeking the return of "Red Shoes", and damages for conversion, breach of contract, breach of fiduciary duty, negligence, fraud and unjust enrichment.

Center for Art Law Case Updates

The following case selection first appeared in this week's Center for Art Law newsletter:

• Statkun v. Klemens Gasser & Tanja Grunert, Inc, 13 Civ. 5570 (S.D.N.Y. Mar. 2014) -- J. Kaplan found VARA/Copyright Act Sec. 106A violation and awarded $3,500 statutory damages to the artist who's work was cut down to size by an art dealer.

• Matter of Richard L. Feigen & Company, 824996. (N.Y.T.C, July 22, 2014) -- J. Winnifred Maloney of the Division of Taxation denied art dealer Richard Feigen sales tax refund claim from 2011 seeking $215,626 on the sale of a forged Max Ernst painting "La Foret" that was sold in 2004. To recover the sales tax, the dealer should have claimed his refund within a three-year window after filing sales tax return, which closed in 2008. While the dealer argued he should have been able to avail himself of the statute of limitations contemplated by the CPLR 213, and thus have six years, the decision was based on Tax Law §1139(c), which stipulates that financial matters close sooner. The decision upheld earlier determinations of the Division of Taxation's Audit Division and the Bureau of Conciliation and Mediation Services. In other words, this ruling allows the US government to reap financial benefits from unfortunate sales of fake art; whether the risk is to be born exclusively by the dealer may yet be revisited on appeal. Attorney for Feigen, Malcolm Taub, partner at Davidoff Hutcher & Citron.

• Anders Karlsson v. John Leo Mangan III, Art Possible LLC, et al.,2:14-cv-04514-R-JPR (S.D.C.A, Jun. 11, 2014) -- Arizona Plaintiff is seeking damages from residents in New York, Florida, Colorado and California alleging multiple fraudulent schemes to sell fake artworks of famous artists together with fake authentication and provenance documents. Plaintiff is seeking, among other reliefs, compensatory damages, actual damages, punitive damages and attorney fees. Attorney representing Plaintiff is Meir Westreich.

• Sotheby's v. Kwok (UK, June 2014) -- Auction house sues a client for £3m for failure to pay for purchases. (

The Center for Art Law strives to create a coherent community for all those interested in law and the arts. Positioned as a centralized resource for art and cultural heritage law, it serves as a portal to connect artists and students, academics and legal practitioners, collectors and dealers, government officials and others in the field. In addition to the weekly newsletter (, the Center for Art Law subscribers receive updates about art and law-related topics through its popular art law blog ( calendar of events ( The Center for Art Law welcomes inquiries and announcements from firms, universities and student organizations about recent publications, pending cases, upcoming events, current research and job and externship opportunities. To contact the Center for Art Law, visit our website at: or write to

September 20, 2014

Sony and Viacom Ink Landmark Deal: Part II

By Jacob Reiser

Viacom recently announced an agreement with Sony to provide at least 22 of Viacom's networks for Sony's planned new web-based TV service. A major selling point of Sony's new service is expected to be its cheaper price as compared with cable TV for similar live programming offerings. The announcement of the agreement with Viacom is somewhat ironic, as Viacom is currently facing an antitrust lawsuit in Federal Court, accusing it of contributing to high cable TV prices.

In a sealed Complaint, Cablevision alleged that Viacom's policy of "bundling" popular networks with unpopular ones violates antitrust law and amounts to coercing distributers to pay for networks that their customers don't want. Cablevision's complaint asserts that Viacom engaged in a "per se" illegal tying arrangement in violation of both Federal Antitrust Law and the New York State Donnelly Act, the latter of which parallels Federal Antitrust Law. As the Complaint was sealed and not yet made available to the public, all information about the allegations contained in the Complaint are taken from Cablevision's press release concerning the lawsuit, available at:

Bundling is the practice of selling networks to cable and satellite providers in a package, where, for example, if a cable company wants to buy highly rated networks, such as MTV and Comedy Central, it must also buy lower rated networks. Comcast alleged that in Viacom's case, some of its networks are so popular that they are "commercially critical" and cable distributers are forced to buy them at any price. By wielding control of the "tying" product, i.e., the must-have networks, Viacom is able to insulate the "tied" product, i.e., the low rated networks, from competition. According to Cablevision, bundling forces consumers to pay for networks they've never wanted and is a major factor in high cable bills.

For the lawsuit to succeed, Cablevision must prove that Viacom's licensing practice not only harms consumers but also impairs competition by forcing Cablevision to carry networks they don't want, instead of competing networks that could be potentially more profitable.

Viacom argues that it does not demand that distributors buy anything. It only encourages cable companies to purchase smaller networks by providing incentives in the form of lower prices for bigger networks when purchased together with smaller ones. "Viacom's programming licensing arrangements are flexible, competitive and the result of good-faith negotiations with distributors," the company said in a statement.

However, the U.S. District Court for the Southern District of New York does not concur with this characterization. The court recently denied Viacom's motion to dismiss, stating that "Cablevision has pleaded facts sufficient to support plausibly an inference of anticompetitive effects." (

The terms of Viacom's agreement with Sony were not disclosed and it is unclear if Viacom maintained its ordinary licensing practices in the deal. However, a quick look at the 22 networks Viacom agreed to provide Sony reveals that many of the lower rated networks Cablevision alleges would not be purchased but-for Viacom's oppressive bundling policy, such as Centric, Logo and Palladia, are included in the deal. Sony, for its part may be willing to stomach the cost of the bundle if the web-TV service is only part of a more comprehensive strategy to sell more game consoles and other consumer electronics, in which case Sony would recoup the bundling costs on the increased sales of hardware.

Sony and Viacom Ink Landmark Deal: Part I

By Jacob Reiser

Last week, Viacom announced it had reached an agreement with Sony to stream at least 22 of Viacom's networks on Sony's forthcoming web-based TV service, which Sony expects to roll out sometime this year. The agreement amounts to the first shot fired against the traditional cable model and could mark the beginning of a new era in television.

Viacom is a programming giant whose network offerings include such popular networks as Comedy Central, MTV and Nickelodeon. The agreement immediately lends credibility to Sony's new service and demonstrates that major content providers view web-based TV as a legitimate new distribution platform and a viable alternative to cable TV.
Web-based TV is aimed at so called "cord cutters", or those unwilling to pay for Cable TV. According to a source quoted by the New York Times (NYT), this year marked the fourth consecutive year in which the number of viewers cancelling their cable subscription rose. According to the NYT article, this trend is pronounced in 25 to 34 year olds, the demographic most coveted by television advertisers. Increasingly, Millennials are simply unwilling to pay upwards of $80 a month for cable subscription when so many low cost alternatives are available, such as Netflix and Hulu. (

Although much about Sony's anticipated new service is still unknown, it will likely cost significantly less than cable. According to the same NYT article, one television executive estimated that the service will be priced somewhere between $15 and $30 dollars a month. Like Netflix and Hulu, Sony's web-based service will provide video-on-demand programming; but in contrast to those companies, Sony's service will also provide live original programming, which until now was only available on network or cable TV.

Cable companies are not oblivious to the new trend among viewers and are also scrambling to position themselves for the future. Dish Network, DirecTV and Verizon have all announced plans to create new web-based TV services. Yet Sony is the first to strike a deal with a major content provider of Viacom's stature. By securing a deal with Viacom, Sony is positioning itself to hit the market with the most attractive content.

Sony may have another advantage over those cable companies -- it also sells consumer electronics. In its press release announcing the Viacom deal, Sony announced its plan to offer its service to owners of PlayStation game consoles and Sony internet-enabled devices, such as smart TV's and Blu-ray players. According to Sony, over 75,000 people already own a Sony internet-enabled device, thereby presenting a captive audience to whom Sony can market its new service. Additionally, Sony's distribution platform is a huge incentive for content providers to join with Sony, because the young demographic that providers covet is precisely the one that owns PlayStation consoles. Viacom currently enjoys a 25.9% viewership share among young people aged two to 34 years.

September 19, 2014

An Examination of the Legal Issues Surrounding Ray Rice's Indefinite Suspension and Contract Termination


On February 15th, Baltimore Ravens running back Ray Rice and his then-fiancée, Janay Palmer, were involved in a physical altercation in a casino elevator in Atlantic City, New Jersey. The fallout from this incident has dominated headlines in recent weeks, culminating with the announcement that the Ravens have terminated Rice's contract and National Football League (NFL, the league) Commissioner Roger Goodell has suspended the running back indefinitely. This saga presents a plethora of moral and legal questions -- many of which are addressed below -- but before we get to those, take a brief review of the events that led us to this point.


Following the altercation, which occurred at the since-closed Revel casino, Atlantic City police arrested both Rice and Palmer (,0,132362.story) and charged them with Simple Assault-Domestic Violence. Shortly after the incident, leaked casino security footage hit the internet, showing Rice dragging his unconscious fiancée out of the elevator. Charges against Palmer were ultimately dropped, but a grand jury indicted Rice on third-degree aggravated assault in March (, and he pleaded not guilty in May. Rice was accepted into a pretrial intervention program, avoiding trial. Upon completion of the program (a minimum of one year), the charges against him will be dismissed.

On July 24th, the NFL announced that after meeting jointly with Rice and Palmer, who had by then married, Commissioner Goodell had informed Rice in a letter that he would be suspended without pay for two games, and fined one additional game check. ( This decision was met with nearly universal criticism (, as most observers considered the punishment far too lenient (, particularly in light of the heavy-handed suspensions the league hands down for lesser offenses (more on this below). (
In the wake of the public outcry over Rice's two-game suspension, the NFL announced that it was enacting a new, stricter domestic violence suspension policy. ( The policy, which also covers assault, battery and sexual assault involving physical force, calls for first time offenders to receive a six game suspension. Second time offenders are to be banned indefinitely, but can apply for reinstatement after one year.

In a letter to all 32 NFL owners, Commissioner Goodell addressed the Rice suspension:
"I take responsibility both for the decision and for ensuring that our actions in the future properly reflect our values. I didn't get it right. Simply put, we have to do better. And we will." Then, on Monday, TMZ released a "new" security video recording of the assault. This recording, taken from a security camera inside the elevator, showed Palmer strike (and perhaps spit on) Rice, who immediately responded with a devastating punch to her face. Palmer flew backwards into the elevator wall and was left unconscious. Seconds later, the door opened and Rice dragged her out of the elevator.

Unsurprisingly, this video created an immediate media firestorm. Commentators renewed their harsh criticism of Commissioner Goodell's decision to suspend Rice for only two games. The reaction of the NFL, and of the Ravens, to the release of this video was swift. By midday, the news broke ( that Rice had been released by the Ravens and suspended indefinitely by the NFL.

Shortly after announcing the increased suspension, the NFL released a statement declaring that:"We requested from law enforcement any and all information about the incident, including the video from inside the elevator. That video was not made available to us and no one in our office has seen it until today." (
The commissioner, in an interview on CBS This Morning with co-host Norah O'Donnell, reiterated the NFL's denial that anyone within the league office had seen the video showing the punch prior to its public release, and that its gruesome nature, combined with Rice's allegedly misleading testimony, prompted him to dramatically increase the suspension. ( He told O'Donnell that the league office "assumed that there was a video. We asked for video but we were never granted that opportunity." (

The Ravens, who had not taken any disciplinary action against Rice until this point (and were prohibited from doing so by the Collective Bargaining Agreement (CBA) - see below), promptly released its starting running back once the video became public. The video "changed things," said the team's head coach, Jim Harbaugh(
In the wake of these events, numerous stories have emerged regarding what the NFL office knew, when its people knew it, and whether the commissioner or anyone else saw the video prior to its release. On Thursday, the NFL announced that it had ordered an independent investigation to be conducted by former FBI director Robert S. Mueller. ( The investigation is to be overseen by two prominent and well-respected NFL owners, Art Rooney of the Pittsburgh Steelers and John Mara of the New York Giants.

On Tuesday, the players' union, the NFL Players Association (NFLPA, the union), announced that it is appealing Rice's suspension. ( The appeal would normally be heard by Commissioner Goodell, though in this case because the commissioner will serve as a witness, it is expected that an outside arbitrator will be appointed.

This case raises a plethora of interesting legal questions, such as:

• Why was Rice initially suspended for only two games, when players who commit far less serious infractions are handed much stiffer penalties?

• Does the commissioner have the power to suspend a player twice for the same infraction, or to modify an existing suspension? Does that violate the protection against double jeopardy afforded by the Fifth Amendment?

• Under the terms of the CBA, can Rice be punished by both his club (release) and the league (suspension)?

• Finally, when it levied the initial two-game suspension, did the NFL already know exactly what had occurred in that elevator? Had league executives already seen the video? Does it matter?

Personal Conduct v. Drug Policies

As alluded to above, the NFL's initial two-game suspension of Rice was met with stinging criticism from fans and media members alike. Many were quick to point out that seemingly minor infractions, such as testing positive for marijuana or Adderall, can carry much harsher penalties than the one Rice received.

It is important to note, however, that not all suspensions are created equal. Violations of the NFL's recreational and performance-enhancing drug policies carry uniform suspensions that have been negotiated and defined through collective bargaining between the league and the NFLPA. The league's Personal Conduct Policy (, on the other hand, does not carry uniform punishments for specific infractions. Rather, it grants the commissioner broad power to consider each case individually and determine the proper sanction given the facts at hand. This all-encompassing policy covers criminal acts as well as other conduct deemed below the standard expected by the league.

While criminal activity is clearly outside the scope of permissible conduct, and persons who engage in criminal activity will be subject to discipline, the standard of conduct for persons employed in the NFL is considerably higher. It is not enough simply to avoid being found guilty of a crime. Instead, as an employee of the NFL or a member club, one is held to a higher standard and expected to conduct oneself in a way that is responsible, promotes the values upon which the league is based, and is lawful.

Regarding punishment, the policy grants the commissioner enormous leeway in determining the proper discipline in each case. The specifics of the disciplinary response will be based on the nature of the incident, the actual or threatened risk to the participant and others, any prior or additional misconduct (whether or not criminal charges were filed), and other relevant factors.

The vagueness of this policy, and the fact that Commissioner Goodell himself (or his appointee) hears all appeals under it, has come under intense criticism from players and observers alike. This tension memorably came to a head in 2012, during the infamous New Orleans Saints bounty scandal. ( Regardless, the terms of the policy in effect at the time of the original two-game suspension did give Commissioner Goodell free reign to determine for how long Rice would be suspended. Conversely, as mentioned above, drug policy violations carry well-defined punishments, negotiated between the league and union, which explains why Cleveland Browns wide receiver Josh Gordon received a one-year suspension for his third marijuana violation.(

The Commissioner's Power to Modify an Existing Suspension, and the Prohibition on Double Penalties

The NFL Personal Conduct Policy, to which the players contractually assented through collective bargaining, grants the commissioner the power to discipline a player for "conduct detrimental to the integrity of and public confidence in the National Football League." Article 46 of the 2011 NFL CBA (, which outlines the commissioner's disciplinary authority, limits the extent to which a player may be disciplined more than once for the same "act or conduct": "Section 4. One Penalty: The Commissioner and a Club will not both discipline a player for the same act or conduct. The Commissioner's disciplinary action will preclude or supersede disciplinary action by any Club for the same act or conduct."

Importantly, while this clause does prohibit the discipline of a player by both his club and the commissioner, it does not include a "double jeopardy" clause (prohibiting prosecution for the same offense twice following acquittal or conviction) like the one found in the Fifth Amendment of the U.S. Constitution. Therefore, the commissioner is not expressly barred from revisiting an existing suspension (or other discipline) in the event that new facts or evidence come to light. Further, because the suspension of a player is not a criminal matter tried in a court of law, but rather an employer-employee disciplinary matter governed by a CBA, the Fifth Amendment's protection against double jeopardy does not apply.

Therefore, in the event that the league discovers evidence that the player lied, his conduct was more reprehensible than originally thought, or of a separate infraction entirely, the commissioner can impose increased discipline. Here, the question of whether Rice was entirely truthful and forthcoming in his June disciplinary meeting with Commissioner Goodell remains unresolved, and NFL and club sources have given conflicting answers when asked just that.

Commissioner Goodell told CBS that details of Rice's story were "not consistent" with what appears on the video (, and that "it was ambiguous about what actually happened." ( In even stronger terms, Commissioner Goodell's letter to the NFLPA outlining the justification for Rice's increased suspension stated that the new video "shows a starkly different sequence of events" than what Rice told him during his June disciplinary meeting. ( Conversely, Ravens General Manager Ozzie Newsome -- who was in the room when Rice met with Goodell -- publicly declared that the story Rice told to Ravens officials matched the video. "What we saw on the video was what Ray said. Ray didn't lie to me," Newsome said. (

As noted above, while the commissioner does have the authority to modify an existing suspension in light of new facts or previous false testimony, Article 46 of the CBA prohibits the discipline of player by both the league and his club for the same act or conduct. Here, Rice was ultimately suspended indefinitely by the commissioner and released from his contract by the Ravens. At first glance it appears that he was disciplined by both the league and his club for the same act or conduct. However, "discipline" imposed by a team refers to monetary fines or suspensions. A club is permitted to terminate a player's contract for any lawful reason, and conclusive video evidence of domestic violence is certainly a lawful justification for releasing a player. Therefore, Rice's release likely did not constitute "discipline," and did not violate Article 46 of the CBA. Nonetheless, NBC Sports' Mike Florio reported on Sunday night that Rice has not ruled out the possibility of filing a Non-Injury Grievance against the club under CBA Article 43, alleging that the Ravens improperly terminated his contract.

What the NFL Knew, When, and Why it Matters

Upon announcing Rice's increased suspension, and in the days that followed, Commissioner Goodell maintained that no one in the NFL had seen the elevator video, or knew exactly what transpired that night, at the time the initial two-game suspension. However, mounting evidence indicates that this is not entirely true.

In February, one day after the assault, Deadspin reported: "A witness who saw the altercation at Revel claimed that Rice hit Palmer 'like he punched a guy, knocked down and dragged her out of the elevator by his feet' before security arrived." ( Further, the Atlantic City Police Department's report from the time of the incident noted: "After reviewing surveillance footage it appeared both parties were involved in a physical altercation. The complaint summons indicates that both Rich [sic] and Palmer struck each other with their hands."

The criminal complaint, filed in Atlantic City Municipal Court on February 15th, alleges Rice committed "assault by attempting to cause bodily injury to J. Palmer, specifically by striking [her] with [his] hand, rendering her unconscious, at the Revel casino." The complaint is a public record. (

Additionally, contrary to what the commissioner told CBS, ESPN Outside the Lines reported last week that at his June 16th disciplinary hearing with Goodell, Rice confessed to hitting his fiancée in the face, knocking her unconsciousness. (
Finally, a law enforcement official speaking on condition of anonymity told the Associated Press last week that he had sent the video showing the punch to an NFL executive in April (, and that the league had acknowledged its receipt and contents. It should be noted that in a letter to NFL owners last Wednesday, the commissioner emphasized that: "Once a criminal investigation begins, law enforcement authorities do not share investigatory material (such as the videos here) with private parties such as the NFL . . . As the New Jersey Attorney General's office said yesterday, 'It would have been illegal for law enforcement to provide [the] Rice video to [the] NFL.'"(

Similarly, in a statement released the day after the announcement of the increased suspension, the league said:
We do not interfere with law enforcement investigations. We cooperate with law enforcement and seek any information that can be appropriately provided. (

The commissioner stated in the letter to the owners that the NFL did not request the video directly from the casino because New Jersey law prohibited the casino from turning over material to a third party during a law enforcement proceeding. His emphasis that New Jersey law prohibited the league from obtaining the video from either the police or the casino perhaps implies that even if the NFL did receive the video from a rogue law enforcement source (as the Associated Press story alleges), he and his fellow high-ranking NFL executives intentionally did not view it.

Regardless, whether or not league officials saw the video prior to Rice's initial suspension, there was little doubt about what occurred in the elevator that night. In fact, Rice himself told Commissioner Goodell as much back in June, and the police report and criminal complaint are quite clear.

Clearly, questions abound as to who, if anyone, inside the NFL office knew what -- and when. Whether Rice chooses to challenge the suspension through a grievance under the CBA, a petition for a court injunction lifting the suspension, the NFLPA filing an unfair labor practices charge, or even suing the league for monetary damages, the critical questions will be whether the second video actually revealed any new information to the league office, and whether Rice lied or left out crucial details when he met with the commissioner in June.

If the NFL truly had no knowledge of what transpired inside the elevator -- or at least cannot be proven to have known -- Rice will have a very difficult time getting his suspension overturned. However, there is considerable evidence that the second video did not in fact shed any new light on the incident at all. Certainly, public outrage reached a boiling point in the hours following the video's release. However, whether or not anyone within the league office had seen the video prior to the decision to only suspend Rice for two games, it can hardly be argued that the new video revealed any additional material facts of the case, considering the content of the first video, witness statements, police report, criminal complaint, and Rice's June admission.

If it turns out that NFL executives were already aware of what happened in the elevator when levying the original suspension, Rice may well succeed on his anticipated challenge to the indefinite suspension. In that case, a judge could reasonably declare that the commissioner's actions were "arbitrary and capricious," and award Rice monetary damages and/or grant him an injunction lifting the indefinite suspension. Similarly, an arbitrator could overturn the suspension on appeal, holding that the video did not provide sufficient additional evidence to warrant the drastically increased suspension. That is, of course, unless the NFL can demonstrate that Rice lied to or misled the commissioner during their June disciplinary meeting.

Did the NFL Fail to Adhere to Its Own New Policy?

Another question regarding the NFL's handling of the Ray Rice case relates to the league's new domestic violence policy, enacted in the wake of the public outcry against Rice's initial two-game suspension. The new policy calls for a six-game suspension for a player's first offense. Left unanswered to this point is why, so soon after enacting the new policy, Commissioner Goodell declined to follow it when Rice had no recorded history of domestic violence. It has been suggested that the act of dragging Palmer from the elevator could be considered a separate violation -- different "act or conduct" -- than punching her just moments before. ( That argument is, I believe, unconvincing.

A more convincing argument could be made that the act of assaulting his fiancée constituted the first offense, and lying to the commissioner constituted the second offense. This seems to be the justification offered in Commissioner Goodell's letter to the NFLPA explaining the basis for the increased suspension. However, as described above, the extent to which Rice lied to or misled the commissioner is in question, as league and club officials have offered conflicting reports.

Courts' Deferential Standard of Review

Were Rice to seek an injunction lifting the indefinite suspension, it is important to remember that courts employ an extremely deferential standard when reviewing an organization's interpretation and enforcement of its own rules. The NFL would argue, as it has successfully in the past, that as a member of the NFLPA, Rice has contractually assented to resolve disputes through the league's collectively bargained rules and appeals process, rather than through challenges in court. (

To secure an injunction, Rice would need to demonstrate that the NFL had abused its power, rendering its actions "arbitrary and capricious." This would likely require a showing that one or more high-ranking league executives exhibited flagrant dishonesty or deception, and that his increased suspension was not based on reasonable grounds. Mere ineptitude does not suffice.

Therefore, should Rice bring his case to the courts (as he has indicated he might,0,905928.story), he will have to clear a very high threshold to convince a judge to intervene and issue an injunction. Without conclusively demonstrating that Goodell or other high-ranking league executives had viewed the elevator video and therefore flagrantly abused their power and acted arbitrarily in increasing his suspension, it seems unlikely that such a claim will succeed.

Moving Forward

Clearly, this situation is not going away any time soon. A plethora of unanswered questions remain, and more information should surface in the coming days and weeks. It will be fascinating to learn what the NFL-ordered internal probe directed by former FBI director Mueller will uncover, and how the arbitrator appointed to hear Rice's appeal will rule. Seemingly, the ultimate resolution to the saga will come down to whether the NFL saw the video and lied about it, and/or whether Rice was dishonest in his meeting with Commissioner Goodell -- and whether either side can prove any of it.

September 18, 2014

Ray Rice's Appeal Could Be One of NFLPA's Biggest Victories to Date: Here's Why

By Max Horowitz

Let's be clear about something up front: At this point, it would be approaching futility to try and find anyone who wants to defend Ray Rice.

However, as of Tuesday, the National Football League Players' Association (NFLPA) became tasked with one of the more difficult assignments in its 58 year history: it has to defend him. Not his actions (those are indefensible), but rather his rights.

The NFLPA's formal filing of an appeal of Ray Rice's indefinite suspension to the National Football League's (NFL's)offices in New York City comes as no surprise to those familiar with the law. Yes, Rice's actions have sparked intense reaction and debate across "NFL Nation" about exactly to what sort of standard of personal conduct that professional sports leagues should hold their player-employees, but that is not the issue at hand for the NFLPA. As the legal representative of the NFL players as a whole, it is the job of the NFLPA to ensure that each and every player is secure in his rights under the Collective Bargaining Agreement (CBA), federal labor law, and general principles of constitutional law as a whole. Based on NFL Commissioner Roger Goodell's responses to the Rice situation, coupled with the evidentiary timeline and the relevant provisions of the CBA, it seems almost certain that the NFLPA will be able to do just that.

The Evidentiary Timeline

The most critical piece of the Ray Rice appeal is the evidence that will be presented to the neutral arbitrator at the upcoming hearing of this case (the date will be set within 10 days from Tuesday's filing, pursuant to the CBA). Pending any sudden surprise reveals by either party, the following timeline lists the compelling components of the Rice-Goodell saga:

• February 15: An altercation in a casino elevator between Ray Rice and Janay Palmer occurs in Atlantic City, New Jersey. A police complaint says that Rice "attempted to cause bodily injury" to Palmer, and that Palmer "attempted to cause bodily injury" to Rice. Both are charged with simple assault-domestic violence, though Atlantic City prosecutors would later drop Palmer's charge.
• February 19: TMZ Sports releases security video showing Rice dragging Palmer out of an elevator.
• March 27: A New Jersey grand jury indicts Rice on the charge of third degree aggravated assault. At the time, the Baltimore Ravens release a statement supporting Rice.
• April 9: A law enforcement officer allegedly sends NFL executives a video of Rice striking Palmer. In an interview with The Associated Press on September 10th, the officer reveals this information, and also plays a 12-second voicemail from an NFL office number confirming that the video arrived, in which the caller allegedly says "You're right, it's terrible."
• May 1: Rice pleads not guilty and applies for the state's pretrial intervention program. Prosecutors offer Rice a plea bargain, sparing him jail time in exchange for anger management counseling. Prosecutor Diane Ruberton claims that the State has video beyond the February 19th TMZ video that, along with other evidence, would "confident[ly] a conviction at trial."
• May 20: Rice is approved into the state intervention program.
• July 24: The NFL suspends Rice for two games for domestic violence.
• August 28: After significant backlash from public criticism of the NFL's handling of Rice's incident, the NFL's Personal Conduct Policy is changed. First-time domestic violence offenders are to be given an automatic six-game suspension.
• September 8: TMZ Sports releases the full video from inside the Atlantic City casino elevator, which showed Rice punching Palmer in the face, rendering her unconscious, and dragging her out of the elevator. That same day, the Ravens terminate Rice's contract, and the NFL increases Rice's suspension to indefinite. Both Ravens Head Coach John Harbaugh and NFL Vice President of Corporate Communications Brian McCarthy assert that their organizations had only that day seen the video from inside the elevator.
• September 10: CBS News airs interview with Commissioner Goodell in which he says he cannot rule out Rice never playing in the NFL again. That same day, Goodell sends a memo to all NFL team owners that the NFL asked law enforcement officials for the video from inside the elevator on multiple occasions, but that the office was told that releasing evidence from an ongoing criminal investigation was illegal in New Jersey. This is also the day that a law enforcement official told The Associated Press that someone in the NFL received the elevator interior video back in April.
• September 16: The NFLPA files an appeal to the NFL offices, seeking a hearing to overturn the indefinite suspension by the NFL.

The Legal Arguments: What Evidence Will Rule the Day?

The relevant provision of the 2012 NFL-NFLPA CBA in this case comes from Article 46, entitled "Commissioner Discipline." Section 4, entitled "One Penalty," states: "The Commissioner and a Club will not both discipline a player for the same act or conduct. The Commissioner's disciplinary action will preclude or supersede disciplinary action by any Club for the same act or conduct (emphasis added)."

Looking directly at strict textual interpretation, the CBA's only express prohibition of multiple punishments for the same conduct is between the Commissioner and the Club, in this case Goodell and the Ravens, respectively. Some, including those within the NFLPA who are addressing Rice's options, might argue that the Commissioner's decision to increase the two-game suspension to an indefinite period would trump the Ravens' decision to terminate Rice's contract with the team. Though a plausible argument based on what the text offers, it is less likely to succeed based on what the Ravens did in this case.

The Club decided to back its player at the outset of this case in March, and maintained that position up until the September 8th release of the elevator interior, at which point it terminated his contract. Granted, it was a sudden decision by the team, one which came a few hours after the TMZ video was released and which was handed down before the NFL decided to increase the length of Rice's suspension. Nevertheless, to say that the termination of a player's contract for conduct detrimental to the team --- a fixed condition of employment found in every Standard Player Contract -- is equivalent to "discipline" or "disciplinary action" under Article 46, Section 4 would be a logical, yet easily deflected argument. Think of the difference this way: releasing a player from his contract would be the equivalent of the dropping of a bad habit altogether, whereas imposing discipline on a player would be the equivalent of punishing a player for that bad habit. The former is a contract law principle, one that the CBA's reach skims but does not control, while the latter is a provision born and cemented into the CBA's language, and therefore has compelling control. That likely explains why the NFLPA is planning to take Rice's appeal on a different, more fundamental route, and not the one offered in the CBA text.

The other route, which the NFLPA will likely argue at the upcoming hearing, is that of traditional federal constitutional law: the Double Jeopardy Clause of the Fifth Amendment. Article 70 of the CBA, entitled "Governing Law and Principles," makes it clear that the CBA is to be construed pursuant to governing federal law, and if not covered by such law, then the laws of the State of New York, where the NFL's offices are located (New York constitutional law does not differ from federal law when it comes to Double Jeopardy, so it will not be discussed as it is implied from this article's federal law treatment). Note, however, that the CBA in Article 46, Section 4 does not specifically condemn the practices of federal Double Jeopardy as stated in the U.S. Constitution, which prohibits a criminal defendant from being punished twice for the same offense.

The reconciliation between the CBA's version of "One Penalty" and the Federal Constitution's version of "Double Jeopardy" is where this appeal will achieve precedent status. As the CBA states in Article 70, the default governing law for CBA disputes is that of federal law. Due to the CBA's lack of a rule to apply when a final NFL punishment decision for a personal conduct violation is later increased, the CBA would therefore impliedly be interpreted to include the principle of federal Double Jeopardy in order to fill that gap. This would mean that once Commissioner Goodell and the NFL executives made the decision in July to suspend Ray Rice for two games under the Personal Conduct Policy, it became the final decision on the matter. Concurrently with the NFL's decision, Rice's New Jersey criminal case and resulting penalty were also finalized. Therefore, once that sequence of activity ended, that theoretically should have been the end of the discipline, regardless of how fans and media personnel may have reacted to the NFL's decision.

However, as the story goes, public outcry became too much for the NFL to handle. The policy change on August 28th was a clear example of Goodell and the NFL attempting to slap a Band-Aid on a punctured artery. Nevertheless, despite the fact that first-time offenders would now be subject to an automatic six-game suspension, such an increase in punishment could not have been, and was not in actuality, applied to Ray Rice's two-game suspension. Rice had already been tried criminally by the State of New Jersey and investigated privately by the NFL, so his punishment could not be overturned under federal Double Jeopardy principles.

In the same vein, the NFLPA will seek to argue that the increase of Rice's suspension from two games to indefinitely is a similar violation of federal Double Jeopardy. Although the NFL may argue that it never saw the elevator interior video of Rice punching Palmer unconscious until September 8th, the NFLPA will likely counter with evidence of the law enforcement officer's September 10th interview with The Associated Press, which alleged that the NFL knew of and viewed that same interior elevator video earlier on April 9th, three months before the two-game suspension was assessed. In other words, the window for discovery and investigation was wide open by the time Rice was investigated by the NFL for this incident. It would therefore be crippling for the NFL (and, conversely, clinching for the NFLPA) if a neutral arbitrator were to find that the NFL did in fact know about and/or view the graphic elevator interior video when they gave Rice his two-game suspension, as the increase in punishment on September 8th would be clearly violative of Double Jeopardy principles if that were the case.

Where Do We Go From Here?

The hearing to come will be one to pay close attention to, as it will become the starting point for future NFL Player Conduct Policy violations down the line. While both disregarding and recognizing how impressively vague the textual construction of that policy had been for years, there is still a sign for hope out of this appeal. Granted, there is an inherent systemic problem in the NFL culture that it took this long, vast and varying public outcry, and a slowly forming lynch mob forming around Roger Goodell's tenure as Commissioner to finally get an appropriate policy advancement for domestic violence abuse by NFL players. Still, progress is progress, and this appeal will hopefully provide some sort of benchmark with which a standard can be set as to what professional sports leagues expect of the personal conduct of their player-employees.

It also must not be forgotten that this ruling will have immediate effect on the Player Conduct Policy's implementation, as more and more personal conduct incidents have been coming out of the NFL woodwork as of late. Minnesota Vikings Running Back Adrian Peterson's two child abuse allegations, Carolina Panthers Defensive End Greg Hardy's assault and death threat conviction and appeal, San Francisco 49ers Defensive End Ray McDonald's domestic violence allegation, and others are currently awaiting the resolution of their criminal cases, but they all are in the Ray Rice boat as well: they are waiting to see what the NFL, their employer, does with them. This appeal, the starting point, will be the immediate catalyst to the NFL's personal conduct problems, and will be helpful in allowing a league historically relaxed on player off-field conduct to finally get on the proper track back towards a positive reputation.

Max Horowitz is a graduate of the Syracuse University College of Law, Class of 2014, where he obtained a Certificate of Completion for the Entertainment and Sports Law Certificate Program. He graduated from Florida State University in 2010 with a Bachelor of Arts in Creative Writing. Max blogs about any and all sports law topics, but his true specialty lies within the legal issues surrounding the National Hockey League.

Photographers Action Against The Google Book Project Is Settled

By Joel L. Hecker

This suit, American Society of Media Photographers, Inc. et al v. Google, Inc., Case No. 10-CV-02977 (DC) in the Southern District of New York, arose out of the 2005 Authors Guild and Association of American Publishers class action lawsuit against Google (the Authors Guild Litigation) in connection with Google's scanning of books from university libraries, without the consent of the copyright owners of the books scanned, which became known as the Google Book Search Project litigation. The Authors Guild Litigation alleged that Google's acts, as part of the Google Book Search Project, constituted copyright infringement.

The Authors Guild Litigation eventually reached the point where a proposed settlement was submitted to the court for approval. However, the Amended Proposed Settlement specifically excluded almost all photography and graphic art works. As a result, the American Society of Media Photographers (ASMP), Graphic Artists Guild (GAG), Picture Archive Council of America (now known as Digital Media Licensing Association (PACA)), North American Nature Photography Association (NANPA), and various other organizations and individual photographers attempted to intervene in the Authors Guild Litigation and thereby have such organizations and the visual artists they represented be included in any resulting settlement.

On November 4, 2009, Judge Denny Chin, who was assigned to the case, denied the motion and refused to permit such intervention, concluding that these visual artists had acted too late (the case was then four years old), and in his view, the Google Book Search Project primarily involved textual content and not visual works. Judge Chin stated in his denial of the motion that: "Frankly, in the context of an online database that is searchable using keywords, it makes sense to prioritize the rights of word-based material." [It should be noted that these words, written in 2009, have basically been made obsolete by technology and circumstances, as searchable pictorial content is very much an everyday occurrence in 2014.]

ASMP and the others disagreed and filed their own class action lawsuit against Google on April 7, 2010, alleging copyright infringement by Google of visual artwork arising out of the Google Book Search Project.

The ASMP Complaint

The 21 page complaint alleged that it was "designed to redress the most widespread, well-publicized and uncompensated infringement of exclusive rights in images in the history of book and periodical publishing." That "evil" was, of course, the Google Book Search Project, under which Google was essentially scanning entire library collections and thereby creating digital archives of what eventually was intended to be an online database of all of the world's books.

All in all, the complaint can be summarized as alleging that Google was committing massive copyright infringements of visual works similar to its infringements of text-based works (as alleged in the Author's Guild Litigation) and that the visual artists must be included in the process.

Dismissal of the Authors Guild Litigation

Judge Chin, now an appellate judge sitting on the Second Circuit Court of Appeals, initially approved class action status in the Authors Guild Litigation, which decision was reversed by the Second Circuit as premature since he had not first ruled on the Fair Use defense raised by Google. On remand, Judge Chin found that Google's acts did indeed constitute fair use and accordingly dismissed the Authors Guild complaint. That decision is now on appeal.

The Photographers Action Settlement

The parties to the photographers' case issued a press release on September 10, 2014 indicating that they are "pleased to have reached a settlement that benefits everyone and includes funding for the PLUS Coalition, a non-profit organization dedicated to helping rights holders and users communicate clearly and efficiently about rights in works."

Further terms of the agreement are apparently confidential. The parties pointed out that since the settlement is only between the parties to the litigation, court approval of the terms of the settlement is not required. This is so because, although the action was commenced as a class action on behalf of photographers and other visual artists similarly situated, no motion had yet been made to confirm a class or classes in the litigation, and therefore this settlement will not be binding on any party other than the parties to the action.

The settlement also does not affect the current appeal in the Authors Guild Litigation from Judge Chin's dismissal of their class action against Google on the grounds that Google's Book Project constituted fair use.

Kienitz v. Sconnie Nation LLC.- Seventh Circuit

By Barry Werbin

A significant new decision (9/15/14) by the Seventh Circuit has affirmed the district court's finding of fair use in Kienitz v. Sconnie Nation LLC, but expressly rejected the concept of transformative use. This was a well-publicized case that used a posterized, low resolution, photograph of Paul Soglin, the mayor of Madison, Wisconsin, on a T-shirt to make a political commentary about his having participated in the Mifflin Street Block Party many years earlier.

This is the first Circuit court to expressly reject transformative use, and it has done so rather emphatically. The court found it unnecessary to address transformative use, finding that it was "not one of the statutory factors" under Section 107, despite the Supreme Court having previously mentioned it in Campbell v. Acuff-Rose Music. It specifically expressed skepticism about the Second Circuit's application of transformative use in the Cariou case, emphasizing that: "asking exclusively whether something is 'transformative' not only replaces the list in §107 but also could override 17 U.S.C. §106(2), which protects derivative works. To say that a new use transforms the work is precisely to say that it is derivative and thus, one might suppose, protected under §106(2). Cariou and its predecessors in the Second Circuit do not explain how every 'transformative use' can be 'fair use' without extinguishing the author's rights under §106(2)."

The Court ultimately affirmed the finding of fair use based on a direct application of the four factors in §107, placing particular emphasis on the fourth factor concerning the effect on the potential market for the copyrighted photograph: "A t-shirt or tank top is no substitute for the original photograph. Nor does Kienitz say
that defendants disrupted a plan to license this work for apparel. Kienitz does not argue that defendants' products have reduced the demand for the original work or any use of it that he is contemplating." The Court further emphasized that Kienitz had licensed the photograph to Soglin (which had been taken at Soglin's 2011 inauguration) for "no royalty" and was "posted on a public website for viewing and downloading without cost."

The fact that the defendant intended the shirt to make a political statement also influenced the Court's decision under the first factor. Nevertheless, the Court took the further unusual step of noting its displeasure with "lazy appropriators," who were not intended to be protected by §107, emphasizing that the defendant did not need to use the plaintiff's photograph to create its lampoon, and that the T-shirt was not used to mock (parody) the photograph itself but Mayor Soglin. The Court further noted that Kienitz, as a photographer, could have his livelihood negatively affected if his clients going forward believed portraits taken for dignified purposes could end up on T-shirts and be used in a derogatory manner. Nevertheless, because Kienitz failed to raise these additional arguments, the Court was compelled to find fair use.

Whether this signifies a slow shift among courts away from transformative use remains to be seen, but if so, that would be a sea change. Kienitz v Sconnie Nation - 7th Circuit.pdf