When Technology Disrupts Enforcement of Judicial Decisions

As originally published in Forbes on October 17, 2011.

Contemporary discussions of the relationship between law and technology understandably focus on the inability of the law to keep pace with rapid advancements in technology. Issues related to electronic discoverycloud computingsocial media, and data privacy immediately come to mind. This dynamic has been described accurately as a cat and mouse game. Technology readily fills the role of mouse, always outpacing its counterpart.(Think of Tom and Jerry.) This is unlikely to change in the foreseeable future, if ever.

There are other occasions when the relationship between law and technology is very different. I will call the ultimate effect in these cases “disrupted case law.” In this secondary relationship, the law may be both on point and current. However, the realities of contemporary technology either (1) render irrelevant the significance of the opinion (and appeals in particular) or make the opinions nearly (if not altogether) impossible to enforce.

Let’s look at two recent cases of disrupted case law. See Green v. Blitz (E.D. Tex. 2011) andBarclays Capital Inc. v. Theflyonthewall.com (2d Cir. 2011).

In Green v. Blitz, the U.S. District Court for the Eastern District of Texas found the defendant’s abuse of the discovery process so egregious that it ordered Blitz, which produces gas containers, to provide a copy of the court’s highly detailed opinion and sanctions to every plaintiff in every lawsuit in which it had proceedings against it during the two previous years in light of the similarity of products liability fact patterns that they shared with Green and the possibility that Blitz may have abused the discovery process in prior cases as well. The court didn’t stop there. It also ordered that a copy of its opinion be filed with Blitz’s first pleading in every new lawsuit in which it is a party for the next five years. Blitz filed an appeal to the U.S. Court of Appeals for the Fifth Circuit on April 1, 2011.

Does the appeal really matter?  Yes and no.

Let’s look first at the affirmative response. It’s no stretch to say that the district court’s sanctions were harsh, and probably deservedly so based on facts that demonstrated instructions by the CEO to destroy evidence and a self-described technologically illiterate custodian of electronically stored information (ESI), among other factors. The Fifth Circuit has numerous options. It can affirm the lower court; it can reverse the decision; and, among other procedural possibilities, it can remand the case to the district court with instructions to reconsider its decision based on principles enunciated by the appeals court itself. For Blitz, this legal outcome certainly matters. No party wants to be in a position of having to furnish such documents either retroactively or proactively.

Yet another examination remains – the negative response. Does the outcome of the appeal matter from a practical perspective? Let’s assume that the court reverses the district court and vacates its opinion – a home run outcome for Blitz. Now suppose that in a completely new matter, plaintiff (X) sues Blitz. Upon researching prior case law, (X) discovers the district court’s original opinion and the court of appeals’ reversal thereof. At that point, it’s fair to say that the Fifth Circuit’s opinion is effectively meaningless as counsel considers its case from a practical perspective. Thanks to the district court and the technology—Twitter and online reporting, just to name two—that proliferated its opinion, both officially and unofficially, the damage is done. Counsel at that point will likely conduct a thorough review of possible findings of discovery abuse by Blitz in any case in which Blitz has been or is a party, whether as a plaintiff or defendant. He or she might very well contact the opposing parties in those cases. The damage has not only been done; it is significant enough to have disrupted case law.

Let’s look at a second example.

In Barclays Capital Inc. v. Theflyonthewall.com, the U.S. District Court for the Southern District of New York held that Theflyonthewall.com (“The Fly”), a website devoted to trafficking timely news about the stock market, had misappropriated so-called “hot news” originally published by the plaintiffs—Barclays, Merrill Lynch, and Morgan Stanley—and thus enjoined the site from commenting on any facts related to the banks’ stock recommendations for at least two hours. On appeal, the U.S. Court of Appeals for the Second Circuit reversed the lower court based on its finding that misappropriation of hot news survives only in the “narrow” case where a party is genuinely free-riding. The court remanded the opinion to the trial court for reconsideration based on its instructions. In their appellate briefs, the banks asserted that The Fly, aided in part by new technologies, was thwarting its traditional business model and dissemination of its own reports. The court of appeals gave that argument no weight, as described below.

Earlier this year, I posed the following hypothetical with respect to this very case in an attempt to show that while technology allowed The Fly to recirculate the banks’ information almost instantaneously, that same technology paradoxically made the district court’s order impossible to enforce from an immediate and practical perspective. I asked readers to consider the following scenario before the Second Circuit issue its opinion.

Fifty law students in the Big Apple attend their First Amendment class on a Tuesday morning.  Having studied the “hot news” doctrine and misappropriation, they are eager to read what their professor expects is an imminent decision in the Second Circuit’s Theflyonthewallcase. In the middle of class, RSS feeds begin to flood News Readers with articles from professional journalists who similarly had been awaiting the opinion. In anticipation of the case, the journalists conducted interviews, studied precedent, and indeed many had two versions of their article prepared depending on which way the case was decided and the nuances of the court’s reasoning. The students begin to read one article after another and learn that the Second Circuit not only has affirmed the district court’s issuance of the injunction against The Fly, but has also delved into the serious issues posed by the case and has reasoned that the current “hot news” doctrine . . . need not be reformulated in light of all the developments in technology since 1997. All that is irrelevant, the court finds. Fifty students understand full well the immediate legal implications of the case. Yet how many do you think will Tweet those articles within minutes?  How many will write a full blog post within an hour of class?  What would you do?  And who’s going to enforce any such ruling?

As we now know, the Second Circuit reversed. The court acknowledged the role of new technologies in this realm. It stated: “Unfairness alone is immaterial . . . . The adoption of a new technology that injures or destroys present business models is commonplace.” As for The Fly’s actual activity, the Electronic Frontier Foundation, author of an amicus brief in the cases, notes that the court held that The Fly was not free-riding off the banks, but rather was actually reporting on the fact of those firms’ recommendations, as opposed to passing those recommendations off as its own. There’s certainly a difference, although it’s not difficult to see why the banks don’t think so. The court stated:

We do not perceive a meaningful difference between (a) The Fly’s taking material that a firm has created (not “acquired”) as the results of organization and the expenditure of labor, skill, and money, and which is (presumably) salable by a Firm for money, and selling it by ascribing the material to its creator Firm and author (not selling as The Fly’s own), and (b) what appears to be unexceptional and easily recognized behavior by members of the traditional news media — to report on, say, winners of Tony Awards or, indeed, score of NBA games with proper attribution of the material to its creator. (emphasis in original)

Although the court avoided a more thorough First Amendment examination of the hot new doctrine, it acknowledged new technology-based manners of communications – even online journalism outside of the mainstream.

Let’s return to my hypothetical for a moment, as the Second Circuit’s decision hardly renders it moot. Other federal courts (e.g., those in other circuits) not bound by that court are very likely to face the same or highly similar fact patterns, although perhaps not involving banks’ financial recommendations. (The Second Circuit consists of Vermont, Connecticut, and New York, and thus New York City’s financial center.) Let’s put aside for a moment the possibility of a disagreement (split) between the circuits and what might be asked of the Supreme Court at that point. The question still remains: If we change the law school in my scenario to one in Southern California and the relevant circuit to the Ninth (California, Oregon, Washington, Hawaii, Alaska, Arizona, Nevada, Montana, and Idaho), how will the court enforce an opinion contrary to that of the Second Circuit; that is, an opinion in line with the district court in Theflyonthewall.com, which was reversed.

All of this begs an important question. What should courts do when faced with a scenario where technology will disrupt case law after the fact?

First, they should acknowledge the obvious: we no longer live in an era whenThe Wall Street Journal and similar traditional sources are the first to report on judicial decisions that can only be found on costly research services or by obtaining copies from the court. (This was true in the late 1990s, it not more recently.) Within minutes of an opinion being issued, it is discussed, tweeted, and dissected on respectable legal blogs such as SCOTUSblog and by reporters with almost instantaneous online deadlines. This immediacy may make it difficult or impossible to implement viable enforcement mechanisms before their holdings become practically irrelevant. And those violations may occur immediately, as in my scenario.

Second, advances in technology do not justify shying away from difficult decisions. Within our system of horizontal federalism and separation of powers at the federal (and, separately, the state) level, courts do not have the power to enforce their judgments in the trenches. As President Andrew Jackson famously (and purportedly) said of the Supreme Court’s decision inWorcester v. Georgia (1832): “[Chief Justice] John Marshall has made his decision; now let him enforce it.” And what might have been the fate of desegregation had States not openly abused the Court’s “with all deliberate speed” standard? The courts were unable to enforce that standard directly, although federal judges such as the famous “Fifth Circuit Four” applied tremendous pressure on state and federal authorities at great risks to themselves. (For an amazing account of the Fifth Circuit Four’s role in desegregation in the south, I highly recommend Jack Bass’ Unlikely Heroes.)

The absence of relevant or enabling technological advancements has never prevented parties from flouting judicial decisions. Parties were simply not able to do so as quickly – and perhaps so obviously – as they can today. Just as the law lags behind technology, so too does enforcement. Courts cannot always predict when enforcement mechanisms can give legs to their decisions, nor is it their job to do so. Moreover, when a court strikes down the use of technology (e.g., the federal government’s use of GPS tracking of suspected criminals), the use of which, unlike my hypothetical in Theflyonthewall, are less likely to be used immediately to defy courts, those decisions can in fact carry bite—and likely will be not be disrupted—even if courts don’t have the means for enforce those decisions themselves.