Transcripts For CSPAN2 Key Capitol Hill Hearings 20141110

Traditional Privacy Protect it, shouldnt be that difficult of an intuition that when people disclose intimate information to one party, they often dont expect it is going to be given to another party. Whether that is disclosing it to the cloud, whatever that, versus your partner, it seems the more obvious way to look at this would be dont we have some senseof contextual integrity for privacy and qut when you go to your doctor and tell him about your symptoms can expect your doctor will not tell anybody else but your symptoms are sureor instance the pictures of your medical exams. We have plenty of situations where we think about it not related to the charged issue of womens bodies and all the ways we expect our information should be kept confidential within a certain relationship come even if we have voluntarily given it to one party or other parties. When we consider it that way, is helpful to think about what we do in other contexts. Do we protect peoples credit card information . We protect home offices . To protect trade secrets . Is always in which we might be disclosing information all the criminal penalties and parties, people step outside of those contacts and its useful to think about why we should or should not apply remedies here because it certainly is true we can come up with ways for victims to talk about copyright remedies, for them to talk about infliction of Emotional Distress. More people see what these behaviors is difficult to talk after the fact about any type of remedy. Copyright is going to maybe work for Jennifer Lawrence. Its not going to work for the message or to victims who have no recourse. It takes some time to takedown process. Many private citizens are not going to have that cloud. Copyright is not an effective solution for the majority of victims are waiting to think about and situations like relationships gone sour but actual ongoing domestic relationships used to track people and his relationship to keep them from reporting physical abuse of the police are asked in a relationship. Racing would have plenty of results being reported on broadcast. This is a broad category of material that is getting out there in the idea theres any kind of lawsuit for copyright remedy that is responsive to that harm is a bit naive or at least somewhat abstract given what actual the hands experiences have been. I also think it is important again as we try to think about advocacy of legal remedies to think completely about First Amendment values and the goals of section 230 and then not thinking consider how much of an effect, i would say disciplinary effect these types of harms are having on women speh. How many women are afraid ive ever been intimate with anyone or having their web camera hacked or having a hidden camera somewhere recording them having sex or aybe taking pictures of their skirt. How many women are free to commit themselves truly to their careers or i might discourse because they are afraid this is what is going to happen to them. This is the punishment that would be given to them and the last best response will be to clean up the mess afterwards, canada must have tons of money and tons of time, which many will not have because they been fired from their jobs are kicked out of schools. That is really a fan we have to take seriously about how much this is effect and of course not a living and because theres male victims, too, but the real epidemic is using the threat of this behavior, using the actual used as a way to shut women up and drive them offline and as a freespeech matter, as a section 230 matter in fostering open discourse and quality, we shall hear about that. If i may disrupt the order of date, if i go down to david, if you could go in depth warrant some of her opening statement, what are some of the ways the law as it stands has tried to grapple with issues and what are the ways people have looked at adapting laws crafted long before the internet was what it was today to some of these problems a little more new unique to the internet . Yacht, and i think the hacking is the hacking side of the problem. The abuse that above mentioned is one that may well have been in this particular instance of violation and accessing a protected computer without authorization gives rise to those civil and crimina liability under the federal code and it could be applicable. Im obviously not giving obviously not given any Legal Adviser taken a position on whether or not it is, but that assert that one avenue. There are also on the port side, there are both several people have mentioned a number of state law tort ran many were some of this behavior, intentional affliction being one can invasion of privacy which you recognize in most states now for outrageous conduct but this fact dvd. I think its nother. I guess theres a word in response to what mary ann said. I completely agree that to think of copyright as a solution to this problem is naive and not very sensible. But let me just say that the copyright act is one place in the federal code were aggrieved parties can quickly arrange without a lawsuit, quickly arrange to have material taken down from the internet. To takedown procedure is a very powerful thing. So if you have a copy and im not saying for all the reasons mary anne mansion, discovers a small subset, but its not a trivial subset of the problem where people can in fact, at least there is a remedy that is useful in terms of removing material for one reason or another they have a claim on and most websites operate automatically and the message and they have to more or less give you some procedure to follow what they want to claim the copyright community. They must do so. You click, you say and just generally speaking millions of times a day. This operates boost the material from not from the side. One very quick comment i want to make about the notion again as mary anne was saying, does allow have to wait until something bad happens before providing a remedy . In this context the answer may well be yes most of the time. Because this is a lot of what we are talking about falls into the category of protected speech or speech. Theres a serious problem with a prior restraint doctrine. You cant put it up in the first place. That would avoid much of the harm. But tha raises even more serious First Amendment problems than sort of ex post regulation of days, which raises its own problems. So i think that has to be taken has to be thought about more carefully. Rob, you mentioned the Computer Fraud and abuse act. I am sort of reminded several years ago when there are pale and email address was also hacked. What we understand, a similar fashion. A pretty obvious password and some in sa. With her as a weapon testing, with a Password Recovery questions, which reviews Password Recovery questions then you have a Wikipedia Page about you, dont have the answers beyond that page. Hopefully we will all be in a position to make that mistake at some point. The point. To point b. With a lot of information on the internet and dont think about the levels of security. What are the levels of security for information on the internet and how does the law protect those right now . So, a lot of peoples complaint is that is so broad. If you read the text of it, basically says the computer might be on the internet and use it in a way that wasnt specifically authorized by the people who own or control, you can be charged under this, which leads to a can criminalize basic research that needs to be done to solve the problems we are talking about right now. If the webpage is copying of data because you enter the right input, that can be a cfa a crime, even now you have to prove to the owner of the page you have a problem here, fix it. In this case the problem is not they dont protect us, they also have a bunch of other stuff that, you know, criminalizes activity that the people in white cats need to do to stop the people wearing black hats. You know come assert as well because in so many cases it can be hard for prosecutors to figure out which ones to bring. How my tax dollars to we rais. You can say he wa being not very nice with the i. T. System. This fella put a laptop in the closet to download Academic Research tunic of publicly available tax funded research. It was a cfaa prosecution, was threatened with 10 years in jail and committed suicide. Moving into a bundle bit more of now do we have some sense of the lay of the land, what can be done to change the laws and address some of these issues. Im, you mentioned a little bit when laws are being crafted, its very important to understand what you are in unintentionally and at some point mary anne come you can weigh in on this as well. Not so much of the federal level, but the state level to write laws that criminalize. If you could give a rundown of whats been tried and where the pitfalls have come. Scheuer. So i know that professor franks and daniel citroen come as a professor at university of Maryland School of law has been working hard to feature it away to craft model legislation that would allow going after only be identified criminal activities that they want to target with the sort of law and not prevent a whole host of other speech. They are kind of key categories you have to think in this law. What kind of content is covered . The content we are talking about is generally content for tactic under the First Amendment when it is created. A person taking a photo of themselves or have a partner of tears, the nude image is constitutionally protected speech and theres no crime involved in the image at the outset. So trying to define a set of how, is it sexual explicit imagery come as a imagery that reveals different or Sexual Activity and what is the nature of t content and its a big difficult to define because there is afair rain of the sort of could all think of, you know, of ourselves getting exposed to others that we would see as a harassing sort aout her. So trying to define the category of content that would be protected so it is not so broad to include things like a photo of a woman breastfeeding or some other kind of nude that you would capture in Public Places and really try and focus images that are branded as sphere of intimate exchange that the professor franks is talking about. It is also who is potentially liable under these bills is the big question. It seems clear you want to be looking at the person who uploads the photo out of the consent they have or havent received from the person depicted in the photo. Theres also a question of how the laws are drafted. Are they so broad as to been talking about a little bit, what the photo is uploaded . Is a sweeping and a person who looks at the photo that may or may not know the photo was uploaded without consent. So just to give a couple of examples of laws, theres a virginia stattate se that was passed and went into effect this summer in the first prosecution under the law is underway. It is a relatively narrow blog that includes requirements that there is an intent to coerce, harass or intimidate a person by displaying their imminent and tries to define exactly what the content of the image with e. And so, it is an attempt to draft a fairly narrow blog. I dont know if it has been challenged yet under the First Amendment by any groups. On the other hand, the state of arizona also passed a law then again is a nude photo blog. It is trying to restrict the photos shared without their consent. But it would make the display at a publication or fail a nude issues about the consent of the person depicted a felony. That was it to the law. There are no exceptions for newsworthiness. Theres no even real acknowledgment that if somebody poses for a photo for an art exhibit and is clearly given their consent to the person to be included in the exhibit, if someone else than a hose the exhibit online, they havent gotten the consent directly from the model to pick it, it is implied as part of the process has been a model in an art exhibit but under the letter of the law as it currently is in arizona, the website could be in violation of the law. So its done with the best intentions of wanting to get the consent of people depicted in photos before those photos are shared, but not done with a view to just how much sharing of images have been in a way that doesnt violate the initial consent, but also doesnt derive direct explicit consent. This is getting into the weeds of the law, but these are the things we have to think through if were looking at is it possible to craft something that really is very narrowly tailored and anticipates all of these unintended consequences. Mary anne if you could pick up on not to talk about the efforts to change laws at the state level and state level in state level and if any of that could be translated on the fedal level. Yes, definitely too and that his point, this is a difficult task because they are drafting and clear drafting is difficult and im sure everyone knows that. He might end up with some name that is not that great. So that is certainly true and the organization for which i serve as the Vice President , is actually published a guide for legislators trying to make clear what elements we think are constitutionally sound and protected for victims in the pitfalls we think the legislators should avoid and weve been making for quite some time a very narrow definition of what is considered explicit bit serial. We need to be clear about who is responsible for this criminal conduct. When a certain exceptions including the public interest, which is a broad exception, but can include lawenforcement or newsworthiness. Theres a couple things they might diverge. As much as i agree arizonas law has problems and that has made the news recently because they are now suing it. We can look at what the problems are. That was a mistake and when they will fix. As for the rest of it, it is not at all clear there would be as many problems as the aclu and others are trying to make it out to be. The exceptions include images disclosed in public or commercial settings. Anything we talk about is a model issue, photography exhibit will never be a problem and whether you have to get consent from every person every time is also not true in arizona law is the law says when you knew or should have know the image in question was disclosed without consent. Its a pretty good standard to consider, especially we think about revenge porn size. If you are on a revenge porn and associate no idea she is looking at your picture and you are going to share or to suppose that, you have a pretty good idea this is a nonconsent issue. As to the question of who should be responsible as many of you know because of section 230, which allows for immunity of online intermediaries, as far as criminal law goes, to 30 will trump and of these laws actually pose any threat to the immunity. People might be confused, but it cant actually preempt to 30. That is obviously not true theres a federal criminal law that gets passed because as you know section 230 is not absolute. It does not apply to copyright. It doesnt apply to electronic rbc communications, but also doesnt apply to federal criminal law, which is why google, facebook, twitter all have to care about child porn lost because it doesnt write them a blank check for that we can all agree that is a good team. What i want to emphasize his fault is true we have to care about unintended consequences sleeping too much speech, we also have to be worried about that. That is true of every single law. Theres no such thing as a law that doesnt sweep and dissenting were not going to lay sleeping in. The question always has been to not than the contacts but also criminal law generally unbalanced on republishing more good with this plot than bad interest to suggest or have a response, if theres any time you suggest to someone they may not be able to disclose what they want to disclose, that means a disaster for us as a democracy with the internet hasnt proven to be true in many contacts in many contexts and when we can take that weve discussed already is the nca noticed taedown has been going on for some time. Many people were convinced when it was passed in which at the internet down. It looks like the internet is doing okay in light of the fact it is a powerful tool to get people to stop saying there aint been expressing themselves. Same thing true for child porn lost and gambling laws and frankly the same thing is true about trade secrets, identity pass, voyeurism. All kinds of situations in which we have for some time accepted the fact that disclosures of lawful information can be criminalized. If we think about the Identity Theft contacts, none of us want to be criinalized for having a credit card number and we are not. If someone takes the information and uses that an unauthorized way, we say thats criminal. This is not novel. The only thing here that is not novel is we do what they conduct primarily directed at women and we try to treat at the same as we would treat other types of Sensitive Information and perhaps we are resistant to giving the same rights. Maybe that shouldnt be the way we approach this. We really need to think about what we count as privacy, what we consider the social value of saying you cannot actually disclose certain information unless you want to live in a world where theres no Identity Theft, no trade secrets progression, no confidentiality protection at all. In other words, we words, we live in a world of which we restrict speech all the time. The question is one question is when a support that on balance balance to restrict the speech. Some people say that is not what the First Amendment does, but effectively it is because theyre plenty of situations when the Supreme Court has said on balance we have to consider harms and consequences, but many times people dont bring a First Amendment questions. How many people think spam is a First Amendment issue . How many of you think im other than david, but its kind of a rare thing. Disclosing Social Security numbers as a freespeech issue. The question seeking the criminal law, copyright, our law generally, do we think what is going to happen, the people we protect and are able to support a more important than the few things that ight have been otherwise. I dont want to trivialize or underestimat the fact we need to think as much as we can about unintended consequences. Lets are meant ourselves that no law can accommodate every single unintended consequence. Theres always some measure in which we are to pray the people is some measure of their liberty because that is the way buzzword and most of the time when we pass the laws, it is because our society has come up with horrific terrible waste of her people and we cant say we will let that happen because we dont want new laws. It is a question of trying to figure out how we traditionally treat privacy, confidentiality, intimacy and why we hold off and doing that here. Avid. Just a very quick response. Obviously this is a contentious, i guess difference of opinion that is not going to be resolved in a 50 minute program. Just a focus on what mary ann said about looking for ways to craft a law that has more benefit than harm, i would take a position and i think it is supported by lots of authority that that is precisely what the First Amendment does not ask. It doesnt say the way the benefits against the harm. It has a higher threshold in cases involving speech. Merely showing the good outweighs the bad is that the First Amendment is a thumb on the scales of that determination and it does make it more difficult. Its not simply enough to say this is preventing harm when the harm his speech related to require more precision in the drafting of the statute to do Everything Possible to ensure that protected speech, Everything Possible to ensure it isnt swept in. If its an economic crime, we dont have to be that precise. Mary ann is of course right. No law is precise and gets 100 of the bad guys and 0 of everybody else. And the First Amendment context, we were choir efforts to at least move in that direction that are aching to be difficult in this context. Not impossible, but very difficult. Section 230 came up again. I dont know if you want to pick up that conversation as well and how that applies here. Just to say, section 230 is one of the greatest of the last 20 years. It is in large measure it graduations. We are while in Congress Bashing mode all the time, other than those who are sitting in this room i suppose. But section 230 was of critical importance in helping the internet become the internet. In 1996, you couldnt have facebook, tumbler, twitter, you name it. The explosion of User Generated Content on the net was unthinkable without protections against liability. There are many reasons to think there is an active debate about whether this very broad immunity for the intermediaries is a good thing or a bad thing. I guess one thing to consider as part of that debate is tweaking the law a little bit an exception for this, an exception for that, additional instruction for Something Else probably makes it go away in rockford order. There are lots of claimants who would like to see section 230, lots of people who have been detained, whose privacy has been invaded, people who have been scammed, people who have been defrauded, ulcers of things, who would like to see an exception for their harness that were carved out and they have a good argument. Why cant we just make sure there is a remedy in this case . Once Congress Goes down that road and starts carving out exceptions from the floodgates will open and 230 will largely disappear. I think i will be a dreadful thing. Production on offense in the Entertainment Industry are well connected and have suggested all kinds of tweaks that would propose all kinds of liability issues for websites. And yes they have tried and it hasnt worked. I have a little more interested in how we can use the laws use the laws that are beyond the books that prosecutors can go to court with to make life as painful and expensive as possible for the people who went after these users and other likeminded creeps. Welcome i just wanted to build out a little bit on the section 230point. To give an example of those of us who are such staunch defenders, what will it really plays. If you imagine we take a person for a website operator knows or should have known the photo was shared without consent, take the standard we were just discussing. If we had a law that said, you know, imagine i run my own photo hosting website. Ive created the next is to grant. Ive got something way better for filters for photos. I am running my own site and those along the books that says i can be taken to court if someone else knows or should have known he photo uploaded to my site was new to another person shared without consent. Currently under the current law, under 230, i can immediately get out of any website. Thousands of photos uploaded a day. My site is doing well and somebody says a photo of me is on your site and you should have known that i didnt consent to it. Under 230 i dont get dragged into the court case. There is a very clear i cannot be held liable for this and i can go back to doing my business of running a photo hosting website. If the law changed and there was this question of should i have known at this photo was shared without consent, we are in the case has to go to court. I have maybe two or three employees from a business and ive got to hire a lawyer. Im operating on thin margins and ive got to pay legal fees because ive got to defend. So even if we talk about good faith operators who really had no knowledge and couldnt be considered, should have known these kinds of photos from their site. They have to go to court and defend not and that is one of the way this framework would put on operators are not thinking about the giant internet forms that deal with millions of pieces of content today and what knowledge standard they have about tens of millions of photos posted on the websites. Even just thinking about small companies, operations to navigate the situation would be vastly more complicated. Sort out the flipside of what professor franks was saying, copyright lawsuits are not send dean people normally do. Its a larger issue we have made about people who can afford to hire employers can be really good at and the rest of us try to stay out of trouble. That is a real harm as well, and to say were not really sure whats going to happen to these set operators, thats a concern, but it cannot be the only concern. People waving their hands and saying we want carveouts too, section 230 already has carveouts, its already been made clear that it doesnt apply for federal criminal law, doesnt apply for copyright. Whose interest does that serve . Its not a natural right. Its not even the First Amendment is a natural right. Its always been a matter of interpretation. Its always been a question of who are we going say gets protection and who doesnt, which interests are so valuable that even section 230 does not apply . First amendment doesnt apply in certain considerations either. So i think its an invitation for us to all think about why is that the case . Why assume its natural or the status quo is better than what we could have instead. Just one final note, the goals of section 230 written in the statute itself includes to insure vigorous enforcement of federal criminal law to deter and punish traffic and obscenity, stalking and harassment by means of computer. Thats what a lot of people seem to forget, its not about lettinger into immediate yeas do whatever they want. There are values and goals that we would do well to ask if theyre being served today. I would love to keep asking questions, and i will, but i want to offer a chance to the audience if anyone has any sort of pressing thoughts theyd like to address to the panel. Right here in the front. [inaudible] which is whats the flaw in the current law. Theres defamation, theres intimidation. Whenever we have a high profile case, theres a desire from people who think they can involve the problem or people who were injured who want a new law specifically for that issue. I dont understand what the flaw is with the current state of law. So the question was, what is the flaw with the current state of law, why do we need a new law in this case . Mary ann, do you want to start . Id be happy to talk about that and to clarify that our work did not start with any profile case. The Jennifer Lawrence hacking incident is not where this started. We started two years ago when average people were being affected by this. Its all the same to me if now society cares about it, well take it. This has been something thats happened to private citizens for years, so were not responding out of a sense of, oh, now that its happened to someone famous, we care. We care about this pause the experience of the victims is none of these laws work. If the image is out there, if it doesnt fit existing harassment or stalking statutes and many of them dont, and just to give you a concrete example from just a couple weeks ago, the california Highway Patrol officers who are arresting women for drunking driving and then taking pictures from her phone and harassing her. Thats not going to be enough. So for those who think that the laws are adequate, i would invite you to do one simple thing which is to ask victims if they think that is true. Ask what has happened when theyve hired lawyers, when they go to Law Enforcement, ask them how many times theyve been told what happened to you isnt a crime, its your own fault for taking these pictures. Find out how many times they get turned away by lawyers saying, yeah, hes basically operating outside of his mothers basement, theres no money there, no reason to pursue this. Were responding to an issue where thousands of victims have come forward and said we cannot get relief from the law, and im not going to second guess those victims because they are the ones who are actually experiencing this firsthand. But if Law Enforcement is telling women its your own fault this happened to you, they are wrong. Thats, i mean, i know you agree with that, but that is not only morally wrong and, you know, a faulty understanding of how its, what it means to, you know, take your own photo or share photos in an intimate setting, but it also probably indicates they dont understand the laws that do exist and they might not be too effective in enforcing new laws. By no means, i hope no one gets the impression, i dont think anyone who thinks criminal laws are the Silver Bullet to this problem. There is none. We are asking Tech Companies to rethink their internal policies, for people to engage in Educational Programs and were engaging in training for Law Enforcement and for others because we want them to understand the stakes. So by no means is it a Silver Bullet, but much like in the 1970s, in the 1960s when Domestic Violence was not considered a crime, when Sexual Assault was largely not considered a crime, especially if it was your husband who assaulted you, there is a social and legal importance to recognizing this is the harm that should be addressed by the law at least in theory. Im glad you sorry. Emma, did you get a chance to well, so i was going to point to if we have, you know, we have a range of laws on the books that might be useful in different cases, you know, whether its a privacy tort, invasion of privacy, Public Disclosure of private fact, whether its going after it from a hacking angle, whether its intentional Emotional Distress, there is a mosaic out there that it is wrong to intentionally cause Emotional Distress to another person, and there are laws against that sort of thing. Its not going to mean that every single instance of this exposure of a private photo is covered. Its true, theres going to be gaps where a case does not fit into every single aspect of or cannot fit into any single aspect of a current law. But if we try to craft a new crime that is expansively enough defined to coffer every single instance of an exposed photo, we are absolutely going to sweep in other kinds of content, other kinds of expression, and that law is not going to survive First Amendment scrutiny. Thats the challenge were facing here. Its very difficult to figure out how to get a law that can, you know, express disapproval over information that doesnt run afoul of the First Amendment. I wanted to call out, you mentioned getting companies to look at the rules they enforce, and writing about guamergate gamergate, people have been targeted for harassment by the gamergate community. And many of them said, you know, facebook has actually gotten better at dealing with this. They take a report seriously, and they do something about it. Twitter hasnt done that yet. If you look at the they do not have a forum to report abuse until this year or last year, which is kind of insane for a network thats been around since 2011. And, you know 2007. I hope theyre doing it more seriously. Twitters not the public internet. They have their own rules. Theyre allowed to change them to make it easier for people who are being harassed or others being harassed to call out to fenders, and they have not done enough. And going back to our sort of case example for the day, a lot of these images not just Jennifer Lawrence, but of celebrities more generally were circulating on web sites and sort of blew up when they hit reddit which really makes some of these images go viral which i believe was ultimately shut down. It was sort of a question of ive heard it said many times the most wonderful thing about the internet is also its greatest flaw, that its sort of, you know, for the users to use the way they want to, and its difficult to say a web site that is based on the idea of people having open forums to share and discuss what they would like also needs to be responsible for then making judgment calls of when it crosses the line. What are some of the difficulties with that, you know, perhaps david or rob might want to jump in somebody said a while back the biggest problem with the internet is the people on it. [laughter] to that point though, i would just say im glad you brought up twitter as an example. To dovetail emmas point about Emotional Distress, this is why i would suggest we need to rethink the emphasis on Emotional Distress. When people are engaging in these activities, the Jennifer Lawrence hacking, the chp, all these different types of, actually, a pretty large number of these cases, why are people doing this . Well, because they think its funny, its entertainment. Its not intended to cause Emotional Distress, so why are we holding onto that as the one thing we would penalize . Why is it better for the person who releases these pictures because hes trying to hurt his girlfriends feelings . Why if hes getting ad revenue, if hes getting bitcoins, why would we say its totally fine if you do it for that, but dont hurt her feelings, that seems like an odd mary ann, dont you need to have as part of a prohibition, you have to i think, maybe i misunderstand, but you have to have some reference to an improper purpose. I mean, youre not saying that, i dont think, like the arizona statute which i think is clearly unconstitutional. You cannot post a picture of someone without their clothes on. Thats not what the statute says. Well, okay. And thats not what youre saying, i assume. Right. There has to be so you, too, have to focus on the um proper purpose improper purpose, i think. Purpose is meant by causing distress, no. It doesnt have to be focused on that because i think theres a conflation between intent and motive. The motive for why someone spies on you in your bedroom, why would that matter . That should not matter, i think. When we look at different categories, and know were back to calling this a sex crime, think about how they typically are worded. Thats not how we think of Sexual Assault. We think of it in terms of consent. There are certain forms and, again, this is true about identity information, this is true about our other forms of privacy. Well, do we only criminalize disclosures of medical records when you intend to distress me with them . No, thats not part of the statute as all. Same thing with Social Security numbers, i didnt mean to hurt your feelings. No one cares. I think when it comes to certain types of intimate information x thats why that has to be colorly stated and narrowly defined, its the lack of consent to do so. And i think its something thats becoming clearer to us as a society that we have serious, deep problems with Sexual Consent understandings in this country. That is true, we can see this in terms of how many Sexual Assaults are actually committed every year, but also in the sense that we seem to take it as a given that it doesnt matter whether a woman especially consented to the use of her body for sexual entertainment or enjoyment. And i think its about time we started to rethink that. Any other question yep, a hand in the back. [inaudible] as a hack, as a hacking. But wasnt this really a phishing instance of phishing rather than a hacking . So the question was, is this an instance of fushing versus hacking . Social engineering is still hacking. Its the easier kind often. Involved some folks being able to give their passwords through whatever false pretense [inaudible] it wasnt necessarily hacking of the icloud. Its unclear exactly what went down. Apple has come out and said their systems were not hacked which is to say that apple writ large was not hacked, but they did not rule out that individuals through sophisticated techniques, whether it was social engineering, whether it was phishing, were able to get passwords for individual accounts that they did not believe, you know, they were authorized two things about apple, theyre not generous with specifics about their products in cases like this, and they have a history their device security, everyone who ive known whos looked at touch id on the iphone thinks that great. Their cloud security, theyve had some real issues with it. And also to that question, does that matter . Is that a significant distinction that were talking about . You know, weve talked about how theres a difference between this case and where you have sort of perhaps a violation under the cfaa, so where does the distinction of how the image was gotten come into play . Well, isnt it, i mean, i think back to what mary anne was saying about if you think consent is the fulcrum for or the line, then whether you have hacked into someones account or have a photograph that was sent to you or you have access to that account in a perfectly reasonable way, i mean, all of those would matter and would have to be sort of evaluated, i guess, as part of the i mean, theres a much larger debate here, and i think mary anne would agree, about the role of consent generally with respect to information on the internet. Theres an active International Debate now with respect to the socalled right to be forgotten in european, the various european laws where because if you no longer consent to have information that has been published about you, you can sort of withdraw the consent, and web sites have to delete information that may be floating around about you. And, again, not to beat a dead horse, but the familiar landscape in a sense for the debate, the First Amendment debate which has sort of been in the background of this consent to privacy information debate for many years, what will it do to the free flow of information if you have to show that you have consent in some form for passing on a piece of information. Do you this is related to this idea, i think, that the people should own the information about them. They should own the information about them. It should be a property interest even in the information about them and, therefore, people have to come to them if they want to publicize various things about them. That has serious, just very difficult issues about that we could call free speech or First Amendment issues because it will it is very difficult to evaluate whether consent has been given in in many circumstas or to find out how you demonstrate consent, and it would have a very serious impact on the sorts of things. You know, can you tell people you saw me i always use this as an example about owning information can you tell people i saw david post at this thing in the ray bunn Office Building . If i own that information, you cant. Its an extreme example. Nobody suggests we should have such a law. But thats the issue, i think, with respect to sort of balancing the free flow of information op on the one hand against reasonable requests for a showing of consent with respect to some information on the other. I think that right. And its one of the reasons im optimistic about this particular type of material, because this seems to be a fairly easy way to fix this. That is to say, have consent forms. Just ask them to sign the form, and you can disclose away. Make it easy. We have Something Like that when it comes to model releases, medical records. If you really want to submit this information and you think it is con sense consensual, then make sure you have documented evidence. We can fix this. This is actual not nearly as hard as things like the right to be forgotten. Its very specific, and it could be resolved through paperwork. I saw one more hand. Right here. So given that there are already takedown regimes for child pornography and these other protected what have you, would it be that much more burdensome to require search engines, facebook, other Tech Companies to also take down revenge pornography . And what do you think it would possibly impede the growth of small tech businesses . I im sorry. Well, so there are a couple of things that you really have to keep in mind when youre talking about a notice in takedown regime. First and foremost, what a notice and takedown regime does is give a person the ability, the right, a mechanism to tell, say a web site host, to take down someone elses content, take down something that was uploaded by another perp. And this has been a mechanism that has been helpful in taking down infringing copies of movies and songs, but it is giving a person an ability to say take down what that other person has uploaded. So the potential for abuse of these systems are very high. When you look at Something Like the dmca, there are a number of different safeguards built into the system based on, you know, what you have to include in a notice. Its got to include the ability to you have to identify yourself including contact information, you have to attest that you are the legitimate owner of this copyright. The person who uploaded the content originally has the ability to push back and to say, no, this is actually my content, or ive been making a fair use of this copyrighted work or what have you, and it puts the information back up online and leaves the two of them to fight it out in court. Not as simple as saying give somebody an easy form to fill out, and the information comes down, and youre set. Theres a lot that needs to go into figuring out how to construct this takedown mechanism so that its not so vulnerable to someone using it to say i dont like what that person said, so im going to follow a takedown request and abuse the system. One, i think one of the real challenges, too, that we have to think about when were talking about questions around nude images is that theres a sensitivity and a privacy interest that the person depicted in the image might have. If its your photo thats been posted without your consent online, you will want to file a takedown request and get that taken down. If you have to identify yourself in that request, that could cause some privacy concerns. But if its somebody else trying to abuse the system, if youve uploaded your photo, say, under a pseudonym and youre happy with the photo being out there but you dont actually want it connected with your real name, and somebody else is trying to abuse the system to get that content taken down, your ability to respond and say, no, no, thats actually me, leave it up, requires you to discan close who you are. Theres some complicated issues thinking about the strings of nude imagery on the interknelt. Some of it is internet. Theres a lot of it is that uploaded anonymously but with the full concept of the people depicted in it. So as were looking at the possible effects and intended consequences, thats another one we have to take into account. David . Yeah. Just to follow up a little bit. And i think notice and takedown regime is worth exploring in this context. Just from your question, just to clarify, the existing notice and takedown schemes and in particular the copyright one which has been the one that is section 512 does require, as emma was saying, its the burden is op the aggrieved party on the aggrieved party. Its not, it doesnt say google or facebook or twitter, you know, has to take stuff down. If its copyright infringement, it says you have to respond to the copyright owners identification of the infringing material. Which i think is a very important has been very contentious over the last four or five years in the courts working that out. Theyve more or less come to that resolution that its the obligation of the aggrieved party to and its not a trivial obligation to find the material and then to send the notice in at which point the process kicked in, as emma said. There are all sorts of protections. You do have to be careful about allowing something to be abused. If its too easy to submit a takedown notice, people will be using it for purposes that have nothing to do with the harm theyre trying to protect existence. But all those, i think, are, you know, the devils in the details. You should know that. And i think the copyright takedown regime, if one wanted to go in that direction for these sorts of problems, i think would be worth looking at cowerfully to see carefully to see how well its worked, what hasnt worked about it, that might be able to at least streamline getting at, you know, hundreds of millions of copyrightinfringing, the files are taken down weekly under section 512. So in that sense it has removed i know that Copyright Industries arent crazy about it because they have to go find the material, they dont like that. But on the other hand, it does have a salutary effect. Its done the job pretty well. Its provided a process at scale, and scale is always important when youre talking about the internet. Whatever were talking about, were talking about millions of hits. And at scale it has allowed for the automation of takedown. But yet protecting the people who have uploaded and giving them an avenue to say, hey, wait a second, this is fair use, or i didnt post it, or its not infringing or whatever the defense might be. That would be an interesting comparison, to look at that carefully and see how it could be modeled to work on this problem might be a useful avenue of approach, actually. Ou mentioned search engines, and one thing we should be careful about going too far. Somebody like youtube can have content idd to look for copyrighted material being uploaded, a, because google own us. , but also a known universe of copyrighted material that they can use to match against this. There is no such thing when it comes to peoples private photos. And trying to do a general searching match, you know, web mail sites can do automated screening against child pornography because theres no consensual anything there. Thats flat out illegal. And theres this hash database that they can do a search against compared to the image, the mathematical shortcut to whats in that database. And doing that for the broader universe [inaudible] sending the picture of a naked person an email, thats not going to work. Just one clarification, though, with child pornography, it isnt quite that easy because its not also easy to tell whether the person is, in fact, a minor. Not necessarily more onerous in figuring out whether a picture was consensual. And unfortunately, weve broken our promise to keep it to about 60 minutes, but we were close. Wonderful conversation that im sure could continue for hours, but we appreciate all of you coming. We appreciate the net caucus having us here today. Thanks very much. [applause] [inaudible conversations] that hearing on capitol hill last week, congress is back this week as the Midterm Election results are settled for the most part. The focus will be on wrapping up work of the 113th congress. The house is back wednesday for work on ten bills. Also well see the House Republican conference hold their leadership elections thursday. Democrats are canted to expected to hold theirs on november 18th. The senate is back on wednesday also, work on a Childcare Development block grant program. Off the floor both parties will hold their leadership elections thursday. See the house live on cspan and the senate here on cspan2. And president obama is overseas all this week, starting in beijing, china, today for meetings at the asiapacific Economic Cooperation forum. Wednesday the president will meet with the chinese president , and thursday and friday hell be in myanmar for more economic meetings. And itll all conclude with a visit to australia for the g20 Leaders Summit and a major policy address. The cspan cities tour takes booktv and American History tv on the road, traveling to u. S. Cities to learn about their history and literary life. And this weekend we partnered with Charter Communications for a visit to madison, wisconsin. Work for everyone. The communitys large. It is a glorious service. This service for the country. The call comes to every citizen. It is an unending struggle to make and keep government representative. Bob la follette is probably the most important political figure in Wisconsin History and one of the most important in the history of the 20th century in the United States. He was a reforming governor. He defined what progressivism is. He was one of the first to use the term progressive to selfidentify. He was a United States senator who was recognized by his peers in the 950s as 1950 as one of the five greatest senators in American History. He was an opponent of world war i, stood his ground advocating for free speech. Above all, bob la follette was about the people. In the era after the civil or war, america changed radically from a nation of Small Farmers and small producers and small manufacturers, and by the 1870s, 1880s, 1890s we had concentrations of wealth, we had growing inequality, and we had concern about the influence of money in government. So he spent the later part of the 890s giving speeches all over wisconsin. If you wanted a speaker for your club or your group, bob la follette would give a speech. He went to county fairs, he went to every kind of event that you could imagine and built a reputation for himself. By 1900 he was ready to run for governor, advocating on behalf of the people. And he had two issues, one, the direct primary. No more selecting candidates in convention. Two, stop the interests; specifically, the railroads. Watch all of our events from madison saturday at noon eastern on cspan2s booktv and sunday afternoon at two on more than history tv on cspan3. The 2015 cspan student cam video competition is underway, open to all middle and High School Students to create a 57 minute documentary on the theme, the three branches and you, showing how a policy, law or action by the executive, legislative or Judicial Branch of the federal government has affected you or your community. Theres 200 cash prizes for students and teachers totaling 100,000. For the list of rules and how to get started, go to studentcam. Org. The Supreme Court last week agreed to hear a new challenge to the Affordable Care act. The issue, whether the Obama Administration overreached in extending tax credits and subsidies for Health Care Exchanges established by both the state and federal government. The Cato Institute hosted a discussion about the current split in the circuit courts over the question. Speakers included attorneys, Health Care Experts and indianas attorney general. All right . Okay. All right, good morning. Welcome to this conference. I am david boaz, executive Vice President of the Cato Institute. Appreciate having you here. Uhuh know there are going to to be more people i know there are going to be more people coming in, but were going to go ahead and get started. The the subject of our Conference Today is this in a democracy under the rule of law, does the executive branch of government have the power to implement laws the way the president would prefer they had been written, or is it the executive bound by the law the same way you and i are . The four lawsuits were talking about today involve the Patient Protection and Affordable Care act or obamacare. But they are not lawsuits about obamacare. They are lawsuits about the rule of law. Back in 2011 the urs couth irs quietly implemented, quietly reversed its interpretation of a crucial aspect of the ppaca. It announced it would implement the Health Care Laws Health Insurance subsidies and the penalties on employers and individuals who failed to purchase Coverage Even in states that did not establish a socalled Health Insurance exchange. Michael cannon, one of our scholars here at cato, and professor jonathan adler, who will be speaking later today, were the first to blow the whistle on this problem. The aca, they pointed out, only authorizes those taxes and those subsidies in a state if the state establishes an exchange. The irs persisted, its been pending billions of dollars in subjecting tens of millions of employers and individuals to penalties that are not permitted by the aca, not authorized by an act of congress. As you might imagine, the people subjected to those illegal taxes dont like that, and thats why they have filed four lawsuits pruitt very burwell and indiana very irs. Rather than challenging the irs, the plaintiffs are claiming that the executive branch of the government is not implementing the law faithfully. They are asking the courts to force the irs to do so. Despite the fact that the president has come under bipartisan criticism for unilaterally rewriting parts of his health care law, a lot of people thought these lawsuits were crazy; that is, until someone unearthed this video of Health Economist Jonathan Gruber who is wildly hailed widely hailed as one of the key architects of the aca. Sorry, i talked a little too fast here. Jonathan gruber, as many of you know, was a key architect of governor romneys Health Care Plan which was itself sort of an architect of president obamas Health Care Plan, and Jonathan Gruber was discovered halfway through the discussion of all of these things making this point about the aca. [background sounds] youre a state and you dont set up an exchange, that means your citizens dont get their tax credits. There is a guy who knows more about this law than anybody else does, and he says if youre a state and you dont set up an exchange, that means your citizens dont get their tax credits. He could read. He could write. He helped create it. Thats what he said. The fact that two out of three standing opinions issued by federal courts in these cases sided with the plaintiffs against the government didnt hurt in changing peoples minds about the viability of the lawsuits either. This conference is very timely. Tomorrow the Supreme Court will meet to decide whether to take up one of these lawsuits. Two of those lawsuits were filed by state attorneys general, and we are delighted to have both of them here with us today. In just a moment well be hearing from Indiana Attorney general greg zeller, at lunch, scott pruitt who was the first to challenge the irs in court. In between, we will have one panel of scholars debating the legal merits of these cases and another debating the impact this issue is having and could have on health care reform. Were proud to hold this Conference Today and proud of the role the Cato Institute has played in this and other areas to make president s of both parties respect the rule of law. Now its my honor to introduce our opening keynote speaker for the event. On october 8, 2013, greg zeller became the fourth person and the second attorney general to file a legal challenge to that irs regulation in indiana v. Irs. He was joined as a plaintiff by 39 Indiana School systems. Those Public School systems complained that they have had to eliminate jobs and reduce the hours of noncertified support staff including bus drivers, Food Service Staff and instructional assistants to fewer than 30 hours a week because the irs is unlawfully subjecting them to the employer mandate even though the statute itself says they are exempt. The irs illegal mandate did create one job, however. One School System had to hire someone to make sure its parttime employees were not working too much. Greg zoeller has been indianas 42nd attorney general since 2008. Prior to state government, he spent ten years as an assistant to senator and Vice President dan quayle, first in the Senate Office and then in the office of the Vice President. He was also in private practice for ten years after getting his law degree from the Indiana University school of law where he now in addition to being attorney general also teaches constitutional law. Welcome, greg zoeller. [applause] well, thank you, david, and thank you to the Cato Institute for hosting this. Im glad the leadin kind of took away some of the things that i was going to point out, so ill be able to kind of condense this, and hopefully, we can take some questions. But let me do just a few things as part of my own leadin. Im almost sorry that you mentioned my ten years in the federal government with senator and Vice President quayle. In indiana id deny can it, you know . Deny it. Ive learned the federal government is not a wellloved institution, and Congress Even worse. So i dont know, i guess it was a clintonesque kind of deny, deny, deny. [laughter] i say that that was my brother, skippy, who was actually in the white house, and it was not your attorney general. But i think ive resolved my checkered past by suing the federal government a number of times. Thats very popular in the state of indiana. Let me, let me explain, you know, when i come to washington, i have to explain a little about states. What youve read in book withs and what people think about states in washington often is not exactly true. So first of all, its true that all states are sovereign, and yet all states are not alike. Since were sovereign, we have our own ability to create our sovereign government in the way that we choose. Indiana is one of is six states that has chosen what i think is a little more conservative path from our history, and weve created the office of the attorney general as a statutory office. The other states are all Constitutional Office holders, but i serve as indianas attorney general under statutory authority. And the distinction is one that i think merits some attention, because if youre a Constitutional Officer, you have some of the areas of [inaudible] which would allow you to do things based on the need of the population that you serve. If youre a statutory officer, you represent state government. So the claims that we bring are much more aligned with defending the sovereign state. We dont have the same expansive role to be able to represent the people as individuals. So i think its a distinct that play distinction that plays out in this area. A little history that proves out that point, in the lead up to the passage of the Affordable Care act, our senator, richard lugar, recognized that under the statute of the attorney general, that my office was able to do research for the senators. So this dates back to kind of the quaint days when senators represented state legislators under the 17th amendment. So senator lugar, seeing the coming of the Affordable Care act, asked my office to do a report. Some months later we created a 55page report that told the senator that there were some substantial constitutional issues being raised by the way theyve structured the Affordable Care act, and i threw in kind of in conclusion that should it pass in its current form which at the time it was unlikely, everybody assumed that it would be changed when it went through the house and back to the senate so i said that if it passed in its current state, i would feel compelled to challenge the constitutionality. So id already anticipated what would happen, but i didnt realize that they would pass it in the same form. When it did pass, there were a number i think 13 attorneys general who filed maybe minutes after the president s signature. Indiana was not one of those. The original lawsuit focused on individual mandate. And, again, since i dont represent individuals in that same capacity, my office, i felt, may lack standing to bring a claim based on the individual rights of our citizens as opposed to the authority of the state. So what we did is we worked with some of my colleagues later in the first amended complaint that was filed, we added the complaint dealing with the expansion of medicaid under what we felt was a coercive mandate prosecute federal government to coerce a sovereign state. So we joined in the whole lawsuit. But our real focus was on that relationship between the federal government and the state being coerced to expand our Medicaid Program or lose me all of the monies that we currently were getting from the previous deal with the federal government. So i think that, as you look through the courts decision, chief Justice Roberts again, ill throw out a shoutout to our hoosierborn Supreme Court justice but the three points that were made clear in his decision was, first, there were limits on the Commerce Clause which i think many states were glad to see that they finally had reached the cabining function. So there are limits to the Commerce Clause authority of congress. Second, they did strike down the mandatory expansion of medicaid. Again, i think it was his words that a gun to the head is the type of coercion that is not allowed under the constitution. And finally, in saving the constitutionality of the case or of the Affordable Care act, he found there was a taxing authority being implemented by the federal government in which they had that authority to have a tax penalty. So when you look through the history since the passage and the Supreme Courts decision, all of the states have now made their choice whether to create an exchange concern i think theres 16 now that have their own exchange theres eight who have come up with a hybrid between a state and federal exchange, and the remaining 26 states including indiana have only a federal exchange. And that was the decision of a sovereign, in each case, based on our authority as a state sovereign. Its not mandated by the federal sovereign, it was something that each state chose. Its not the way the Affordable Care act was written, because if you look at the first few paragraphs of the act, it says this is an exercise of Commerce Clause authority. Thats what we defended against, thats what we challenged. We were, ill admit, a little bit surprised about the saving under a tax penalty. But thats not the subject of my remarks today. The real issue, if you think about it from the perspective of indiana and one of six states that are statutory creatures, its really a question of whether the federal government how has authority to regulate state sovereigns under the taxing authority. We know that the federal government can regulate states as employers under the Commerce Clause authority which, again, the first two paragraphs make it pretty clear congress thought they were exercising that Commerce Clause authority. You have the Supreme Court precedent that says that since states hire employees out of the stream of commerce, were subject to federal regulation under fair labor standards acts and things like that. So the history of that commerce or clause authority goes back to National League of cities where the states actually won under a 54 vote saying that we were not subject to federal regulation under or comrce clause. Then garcia overturned that, again, 54, saying that the federal government can require states as employers to be subject to those fair labor standard or acts standard acts and terms and conditions of employment. Now, im still not happy about garcia and, frankly, id like another shot because 54 is not exactly, you know, lets say a permanent rule that the federal government can regulate my state and all sovereigns under Commerce Clause authority. But again, its the current rule of law, and ill respect it even without liking it. But the question remains when chief Justice Roberts says that this is not an exercise of Commerce Clause authority, its really a tax penalty. So now the question under kind of the rule of law is whether the federal government has the ability through the irs to regulate my sovereign state under a taxing authority. You know, and again, what has been taught in law schools all around the country over the the years is that states as sovereigns are not subject to federal taxation. We dont have a tax form that we fill out. So i point that all out really to demonstrate that under our challenge its not so much just and, again, scott pruitt can explain from a Constitutional Officers position the focus on challenging the act but i think ours really lends itself to this question of federalism, whether the precedent will now be set that the irs can regulate our states under a taxing authority thats hitherto unknown. This tax penalty is not the same as a regular tax. So if you read the, what i would consider a somewhat draconian tax penalty, the math is that you count up how many employees you have. The state of indiana has 28,000 employees, and you multiply 2,000 times your work force, and that is your tax penalty. Even if you were just to miss a few employees being covered under the Affordable Care act. So, again, this is that same type of threatening coercion that doesnt really fit in the relationship between sovereigns. This 39 School Corporations who have joined i was talking to a few people in the hall who are usually not standing next to me during my election process, lets leave it at that but they were very concerned about the way we educate our children and the way our School Corporations as a part of our sovereign government has been structured. We have a school board, they elect the people who run the school, and they use parttime workers. So its bus drivers, the teachers aide, the people that work in the cafeteria. Under indianas law 30 hours or 37. 5 hours, anything less than that is part time. A lot of our schools are run by parttime employees under our statute. Now theyre busy trying to comply with 30 hours as fulltime, so they, therefore, had to create a whole process of moving people down to 30 hours or less. It is a fulltime job to keep track of that because of the nature of this draconian tax penalty. When they came to me with their, lets say, complaints, i said that i would be perfectly willing to defend this they were sued if they were sued under a tax penalty as i am willing to defend my state. But as i thought about it, it was not enough to wait to be penalized, but to challenge in advance. So i think the idea of a declaratory action that would raise this to the courts so that before rerestructure our sovereign restructure our sovereign governments Employment Structure to comply with a federal dictate, in keeping with the nature of federalism and the sovereignty of my client, i thought it was better to challenge in advance. And, again, its not a challenge over all of obamacare which as its been kind of labeled. But it really reflects the fact that where the federal government can require the sovereign state as an employer under their taxing authority to be subject to the same dictates as if it were under the Commerce Clause as originally written. So the 56 million threat of the state is a tax penalty that i didnt to wait to have to defend. I thought i would bring it in advance. So were now to the point where were, weve already had our oral argument. I thought it went fairly well, as they go. But at stake is really the intergovernmental tax immunity that weve lived with as part of our Federalist Society and the sovereignty of each. Ive joked among our legislators and some of them didnt think it was a joke but ive talked about if there was a tax penalty, we could have 100 reciprocal tax. The state could have a dollar for collar tax on any tax penalty subject to any of our sovereign aspects, entities in our state. So if you think about it, if were going to break the deal between the sovereigns of intergovernmental tax immunity, if the federal government has the tax penalty authority, does that mean that states as sovereigns themselves might have some taxable right over our federal players . So, again, i said it as a joke. Im not sure whether its, might show up as a bill later in indianas legislature when they come back in january. But i think treating states not as sovereigns, but as taxable entities, is really the issue that we raise for peoples consideration. And you i know theres a number of people from the academy. If you contend that states are taxable entities and can be taxed as employers, its not about health care. Its not about obamacare. Its really about the question of federalism and what is left of federalism if the federal government with has the ability to regulate states under their taxing authority . So with that question, i think ill conclude by saying, you know, it is the obligation of states to check the federal government. I often complain that weve not done enough. We often accept federal funds and essentially have sold part of our sovereignty, and we complain about the strings, but we have entered into a deal with a sovereign and are subject to the rules and regulations. I do think that its time that states do more in the role of checks and balances that our constitutional authors thought we would play. And, again, i can complain that we no longer have the ambassadors of our states in the worlds greatest deliberative body, but i do think without a senate that will check the federal government on behalf of states, its going to be left to attorneys general and our state governments to do more in terms of being sovereign and challenging the acts of our federal sovereign friends when they get out of line. So with that, ill conclude, and we take questions . I think we might have time for one or two questions. Are there people with questions . Right there and, please, wait for a microphone to get to you so everybody can hear. And please give us your name and affiliation. If any that youre willing to anytime to. Admit to. Im sam cassman, Competitive Enterprise Institute. In regard to the gruber video, the gruber video was discovered a few days after the how big and king rulings were handed down. By the way, i dont know if Richard Weinstein is here in the audience, i think he ought to be thanked for having been the first to actually find it, reserved for cei, the credit for launching it into its welldeserved, viral notoriety. But my question is, if you look at the oklahoma ruling, that has a very interesting discussion of the gruber video. And i was wondering to what extent, if any, that video played a role in the more recent briefing and or hearing in your case . Well, it was an unusual oral argument in front of the District Court. Judge lawrence asked for it because he did have some questions that he thought would help in a framework of oral arguments. So were still at the District Court level, and it was not were not briefing and arguing in front of the court of appeals. So it was very limited in terms of his questions, and i think it really didnt explore anything like what i saw come out of the oklahoma case that went up to court of appeals. Another question . Well, in that case we are exactly on time. So thank you, general zoeller, and youre not taking a break here. [applause] let me simply ask the panelists for the first panel to come up here. [inaudible conversations] [inaudible conversations] [inaudible conversations] a we ready to start . Good morning. My name is bob barnes. I cover the Supreme Court. [inaudible] my job will be to give them subtle signs that theyve gone on too long, Something Like that. And to move things along to sort of help with your questions when you have some. And also if i find that our panelists are agreeing too much, ill try to be devils advocate a little bit and see what we can do about that. So thanks to cato for doing this. And let me introduce the panel to you. Jonathan adler is the im not going to pronounce it right. You do it. Memorial professor of law, direct arer of the center of business law and regulation at the case western reserve University School of law. He teaches courses in environmental, administrative and constitutional law. His work has appeared in publications ranging from the harvard environmental law review and Supreme Court economic review to the wall street journal and usa today. Hes testified before congress a dozen times, his work has been cited in the u. S. Supreme court. Adler is contributing editor to National Review online and a regular contributor to the popular legal blog the vollett conspiracy which is hosted at washingtonpost. Com. He is the coauthor of taxation without representation the illegal irs rule to expand tax credits under the ppaca, which appeared in the Journal Health matrix. Hes credited with being responsible for the current litigation. Prior to joining case western, adler worked on the u. S. Court of appeals for the d. C. Circuit. He has a b. A. From yale and a jd from george mason University School of law. United states District Court for the Southern District of new york. And the chief judge Dennis Jacobs of the u. S. Court of appeals for the second circuit. Before entering academia, he practiced civil litigation in seattle, whitecollar criminal defense and civil litigation in new york. Brianne gorod and i hope i set it right. I am trying so hard, is Constitutional Accountability Centers appellate counsel. She joined from private part is that of melanie and my nurse ratios count on the firm Supreme Court and appellate practice. Prior to joining bellevue mayor she was adviser of the office of Legal Counsel at the justice department. She also served as a law clerk for Justice Stephen breyer. Her academic right and have appeared in the yell law journal, duke law journal, Northwestern University law review, washington mop review, american University Law review. She is one of the drafters of an amicus brief filed on behalf of members of congress and state legislators. She received her jd from law school and same university. Last but not least, Professor James blumenstein is professor of constitutional law and policy at Vanderbilt University and also director of the Health Policy center at vanderbilt. And they in economics from yale in an lb degree from yale. Hes an elected member of the institute of medicine at the National Academy of sciences could have served as a member of a committee on the adequacy of Nurse Staffing at hospitals and Nursing Homes in this member of the advisory kennel the study of defensive medicine of medical technology, office of technology assessment. He served as former tennessee governor bill brothersons council on 10 care reform and thats tennessees Medicaid Program. He also has litigated constitutional issues instead of federal court including donkey blumenstein and Tennessee Secondary School of the public association. I was grateful for the lawsuit because it allowed me to read about High School Football and cover the Supreme Court at the same time. Most recently hes written and spoken about the states constitutional challenge to the expanded advocate component of the Affordable Care act on the successful front of the court brief on the issue in the Supreme Court and is specified before congress about the issue for the subsidies under the aca can accrue to income qualified person to purchase medical insurance on federally run exchanges. If youve heard, one of these cases committed peel from the Fourth Circuit is that the Supreme Court, at least was. I didnt check this morning, we expect to be on the private conference list that the court takes up tomorrow. We dont find out right away what the court will do about this. There has been a pattern of some of you know that if the Court Decides to take a case they you generally wait a week later to announce it. Supposedly to see if theres any flaws that they didnt see the first time or the court of horse could decide not to take bpo or simply simply hold onto it for a while. So while there is some action plan for tomorrow, it is unlikely we will find out right away exactly what the court decided. With that, im going to turn things over to professor blumenstein who is going to start us off. Thank you very much. Jim blumenstein from vanderbilt law school. I am delighted to be here. I want to give a shout out to michael cannon and john ocker who were really the stars that the issue that we are going to be talking about whose work has really been as crystallized and Michael Johnston have pursued with vigor, not just within intellectual and academic background but with a real sense of mission. Tom miller will be on the second panel at aei has also been an extremely important in working on this issue and of course the Competitive Enterprise Institute as well. This case and the issue was poohpoohed in the peking man and mouse was just in the introduction, the case over this one of the cases, the king case out of virginia is now paying them before the Supreme Court and the court will decide for potentially could decide tomorrow whether to take up the case or just one that case will be reviewed if at all. It reminds me of the story i like to tell about the danger of jumping to conclusions and be too sure whats going on and taking measures that are not prudent. Its story of a home. A woman answers the home. She says im within a cleaning service. He says would you please but my wife on the phone and the woman says im sorry but shes unavailable. Why she unavailable unless shes upstairs with a man in the bedroom. The guy says how would you like to earn some money quick she says how much . 10,000. What i have to do . I want you to take the gunmen that table the vestibule and go upstairs and shoot my wife and the banshees with. 10,000 . You have a deal. So he hears the drawer opening, walking up the steps, your server open the door and the shot rings out into shots rang out. She comes back down and says i shot your wife in your wife in the banshees with wanted to dispose of the body . Of what you do drag them down the steps across the patio. And dumped them in the pool. Theres no pool here. He said is this 5556789 . So you have to be careful about jumping to conclusions before you have all the facts. I think a lot of the opponents of this case in this story has jumped to conclusion with potentially serious consequences. The issue here is whether the Affordable Care act allows the irs to provide tax credits to residents of states that have not set up Health Insurance exchanges. That is to say where the federal government runs the exchange. The federal government runs exchanges in about two thirds of the state. The subsidy affects the Large Employer mandate because the mandate that is triggered by the law is triggered when one employee receives a federal subsidy. So if there is no subsidy available, then the employer mandate does not kick in. The Affordable Care act and theres been a lot of kind of sophisticated discussion and excessively in my view, complicated discussion. But the basic point is this. The Affordable Care act makes provision for two types of exchanges, where persons can purchase medical care and medical insurance. Section 1311 of the statue says that states shall any uses the mandatory language shall establish an exchange. This cannot work at the federal government cannot require states to establish an exchange under a principle called the anticommandeering principle. So when this was drafted, somebody would raise the constitutional law looked over this and decided that this is not a workable solution. The typical at this very large law, folks did not go back and change the language. So you have language that clearly contemplates that states should be the source of the exchange is, but realizes constitutionally it cannot be done not by because the anticommandeering principle. So then you have section 1321 that talks about his states to elect. Theres nothing that talks about state electing. Clearly, the idea was for states to do this, but section 1321 is a fallback provision, what i have called that lukes provision. Because 1311 cannot mandate that states set up an exchange. 1321 provides the federal government shall set up an exchange of the state elects not to set up such an exchange. This is by any stretch sloppy drafting because one would think if you have a provision that allows for the election of state, the language shall in 1311 wouldve been change, but thats not the case. So the language as a constitutional matter cannot be enforced in her team 21 does the right thing. It says that states do not set up an exchange of the federal government any uses the word shall set up an exchange. Section 1401 of the Affordable Care act provides for subsidies for income qualified persons in the range of 100 to 400 of poverty. It means that if you have under 100 of poverty income, you do not qualify for a subsidy. Many states have not expanded medicaid as a result of the nfib decision and as a result, there were folks who have incomes under 100 of poverty who do not qualify for medicaid. They dont get the subsidy. They dont qualify for subsidy. So, what are the requirements for a subsidy . Under section 1401, there are basically two, that the exchange must be established by a state and secondly, it must be established by a state under its authority under section 1311. Both elements by a state, not on behalf of the state, under section 1311, are expressly illuminated in limiting terms in section 1401. There is no comparable subsidy provided for those enrolled in an exchange established by the federal government under section 1321. So at the end of today, that really should only need to say. I can sit down and thats the end of the discussion. But thats not the end of the case. The irs as was stated earlier has adopted a rule that the subsidies apply, the federal ban and staterun exchanges, even that theres no statutory operation for that. In fact, quite the opposite. So what is the plaintiffs claim in these cases . The core claim that subsidies are provided for staterun exchanges under section 1311 and not for federally run exchanges under section 1321. There are several rationales. Jonathan adler and michael can and have put forth important work, scholarly work that the limitation of the subsidies was in fact purposeful. When the federal government realized that it could not mandate that the states the exchange, the policy goal to have the exchanges but was not possible. Bribery is. And therefore the subsidies were designed to encourage the states to upset the gatekeepers and the legislative history supported by us, this was in an easement on the part of the federal government to set up an exchange. You cant force them them, the u. K. Broadband or incentivize them to. He would be a good place. Michael can have been promoting us. We are going to play the longer clip year. Can you run the group are clicked for me . If the states dont provide, federal government has been slow in putting out backstopped partly because they want to squeeze the states to do it. What is important to remember politically as if you are state exchange, that means your citizens to get tax credits. I hope thats a blatant of political reality that they realize theres billions of dollars at stake here. Once again, the politics can get ugly around us. And so, one of the architects of the structure of plan. His economic model was influential in driving miss. They donate Jonathan Gruber to read the statute. The idea was section 1311 states should run exchanges. The provision indicated the federal government could not force the states to do it and the incentive structure was put in place to encourage and strongly incentivize the states, but the states will serve as gatekeepers. Another, my view them as as as the Court Circuit said, the language that the language says what it says. It is what it is. Very important philosophical prints. The Affordable Care act provides subsidies to one exchange and says nothing about a subsidy for another kind of exchange. What the congress did is key. We dont psychoanalyze the congress. Its what a day. There is a case called real order retirement word again for which he famously says we look at the statue and we determined that the statute did. We dont go back around and look at the purpose and broader but the real terms. We look at what it actually did. In this case, what congress did is not what it is intended as the critical part and judge griffis and the d. C. Circuit picked up en masse and basically said if theres a god in the statue, its really for congress, separations of powers issues. Im going to come back and make closing comments about that point. So, one of the course of Fourth Circuit and the dissent in the d. C. Circuit, what was the rationale . This is the rationale that developd with one of the colleagues in the constitutional accountability center, my old friend kyl lazarus. That is section 1321 allows for the federal government to stand in the shoes and as they stand in the shoes, under section 1321, the federal government can set up such an exchange as contemplated by section 13. Excuse me, 1311. This is somewhat problematic because theres an express provision for subsidy for staterun exchanges and no such comparable provision in any explicit way for the federal changes under 1321. And it equates the language established by the state but the concept of established on behalf of the state. Those are not the same things from a textual point of view and also the point of view gets to decide. The state governments or incentivize and the federal government is now standing in the shoes, but its very different. And its the federal government has the authority to set up an exchange. It says nothing about the subsidy itself. I find this to be an awful lot of analytical weight on a small analytical term. The courts have looked at the broader intent. This is what i call the psychoanalysis to subsidize the mrs. Problematic also. It is true theres language in the Affordable Care act that there is a goal of establishing or moving towards universal coverage. But intent is not in this abstract notion is not really satisfying. It proves too much. Here is the example. Clearly, congress wanted to expand medicaid and in fact acted to coerce states to expand medicaid by threatening him with the loss of all medicaid if they didnt expand medicaid. In the nfib case, the Supreme Court seven to two felt that it was enforceable. Now we have situations where nearly half the states are not expanding medicaid. At the subsidy structure is such that folks up in the 100 to 4 of poverty range qualify for subsidies. In states like tennessee but theres no expansion of medicaid, u. S. Folks who were too poor for subsidy. Its totally irrational situation. After the 100 of 400 come you qualify for subsidy. If youre not on medicaid and you fall under 100 of poverty, theres no federal subsidy for you. If we look at abstract intent, why cant the irs issue a vote that says if youre not on medicaid, you have incomes under 100 of poverty qualify for subsidy on the exchange. Certainly if you look at the bright intent, that is the congress wouldve wanted because they thought everyone would fall under medicaid. Under the nfib case, that is not the case. Can congress can the irs come in and say Congress Really wanted to cover as many people as possible in the language in the loss is 100 to 400 of poverty, but it never contemplated states would refuse to expand medicaid and never contemplated the nfib case and therefore we estimate an assertive agency as a regulatory body contact expand the subsidies. No one has even thought that would be possible and yet under the principle of looking at the overall intent, that is where you go. Why would that not be valid under circumstances even though the language of the statute limits the subsidy from 100 to 400 of policy. This is problematic. Further, no provision suggest the irs has a specific gap filling role. In order for there to be a catholic role, if done enough to to look at the broad overall context. You have to look at the issue the Supreme Court has said are there particular context. The particular context of a particular issue, there is nothing that suggests congress contemplated a role for the irs under the circumstances. So the question is what is in that adler and canon are not right that this was not an intentional strategy, but in fact was the groups provision and something that congress had sloppy drafting about. I would argue even under those circumstances, which is the best Case Scenario for the government that its not the role the government to fill in a gap of this type of a sloppy drafting. Sloppy drafting should be cured by congress, not by the agency and not by the executive branch. This is what legislatures do. Certainly the Supreme Court has said this a number of times, but if a statute doesnt play out exactly the way some of its proponents wouldve liked to to play out, the right way to do this is to go back to congress and get a change or affect. So what are the effect . I may just include the effects. If the plainness prevail, there will be a battle in the state. The number of 5 million have suggested, that there will be a battle of the states. A lot of pressure on states like tennessee and others that have not established an exchange to establish the exchange. That is not a static situation. There will be tremendous pressure to do that will be Business Climate on one hand versus subsidies for more folks. Then in terms of broad issues, i mention the separation of power. That is what this is really about you but about the fact the republicans now control the house . After next week we will have a stronger position in the senate and may even control the senate. This is a stronger reason for courts not to allow the agency to intervene. The politics have not held on the Affordable Care act. The democrats, advocates have 60 votes in the senate. White majority in the house. The people voted as they are much narrower margins of the senate and the dems have lost control of the house. The new deal was institutionalized. People remember this. When there is successful challenges brought president roosevelts first term. He had a landslide in 1936 and was able to implement a second term and that is where a lot of the new deal was ultimately institutionalized. The political process has moved in a different direction in the courts did in this case strictly construe the law and enter into a dialogue and basically require the advocates of the Affordable Care act to negotiate with the republicans and require republicans to negotiate with democrats because of the plaintiffs then it will be a politically on sustainable position. On the question decided tomorrow, theres no purpose in waiting. I will talk about this if we have questions. I think that issue is for tomorrow. Professor adler, well let others talk about why you may be wrong. You tell us why you are right. I think i have some slides. There we go. It is a pleasure to be back here. I want to start off by saying about how i got involved in the issue. Back in 2011 i was asked to present paper at a congress on Health Care Policy at the university of kansas who cannot federal state interactions. Ive done quite a bit looking at the way the federal government and state governments interact and regulatory programs, where the federal government tries to use various tools, whether its conditional funding, even conditional tax treatment to interstate cooperation. So in preparation, i did what one wouldve thought you should do with a big statute like the is i actually sat down and read the statutes. One of the reason i mention that is because some of you may recall theyre actually quite a few folks who said when it came to complex legislation and even when it came to this specific law, that people come including members of congress shouldnt read the statute. One blog at the Washington Post actually had an item entitled, dont read the bill. The fact we are here is perhaps a consequence of the fact sometimes people didnt read the bill. I read the bill and i noted that i presented in early 2011 the way the statute is plainly written, tax credits as the authorized by congress. The irs only has the authority to back as a tax credit insofar as congress has authorized to do so for the person of Health Insurance and exchanges established under section 1311 are not otherwise authorized. And a room filled with state officials, including the state commissioner, no one thought this was controversial in february 2011. The irs had yet to promulgate a rule for suggested would authorize tax credit and moreover, no one really thought states were going to refuse. The assumption was states would fall in line much like the assumption that states perform on medicaid and no one ever contemplated by Something Like this could be litigated. This only after the irs promulgated a rule after folks challenge the authority to issue the rule and the prospect of litigation became real to people tried to come up with arguments about why the text of the statute could work. The irs promulgated in its rule offered no meaningful justification. No citation of statutory authority, no legislative history. It gave a very general paragraph, which in future years will probably be exhibita afford in most cases, courts like the d. C. Circuit routinely reject us an explanation of the statutory interpretation and explanation that would have been reject it in any other case but one of those significance. Jim is already talked about the language. This section 1311 talking about the changes. Saying the state is still too established to take other steps to implement the law that hhs shall establish and operate. Why is that important . Congress saw the different and establishing the act creating of authorizing at initiating and creating the sanctity and running it throughout the statue, the board established is used to identify the entity is that is creating something under Whose Authority is created. Section 1401 authorizing tax credits and exchanges established by the state under 1311 from 1311, 1311 from the language used repeatedly section 1401. Language added to section 1401 at different times during the drafting process. So we really should we able to stop the language. But to express references by the state in section 1401. The crossreferences, one is in the definition of the premium assistance not. The other is coverage month. I put those there. I highlighted the provision because that was added late in the drafting process. The reference established by the state in the previous amount is language after it comes out of the Senate Finance committee and later on in the process, the senate leadership, including Senate Majority leader harry reid are sitting around the table, making finetuning adjustments, going through line by line. They add established by the state again in section 1401. It is merely referencing exchange is the same as saying a change to satisfy the state. There wouldve been no reason to do this. The section 1311 and 1321 are the same, there would be no reason to do this. If reference to section 1311 is by definition an exchange established by the state, they would be no reason to do this. Yet they did it. The government and the irs rule has failed to come up with an explanation of why this would happen and why the language should be there. The best explanation has been a skamania shorthand for exchange. It is longer required members of congress to add additional language of multiple times in the drafting process. That is just not credible. It is not taking language seriously. It is not taking the fact that every late in the statute was that bush used to modify exchange, it involves the provision in which the statute is either serving to induce a cooperation or to coordinate state and federal action. Established by the state is not used anywhere else in the statue. The provisions serving that purpose. In terms of why would congress do this because this is the question. Why would Congress Everything to do Something Like this. The condition of the state cooperation. They did that on medicaid. They offered a lot of inducement on medicaid, but because congress cant commandeer, at who a new congress could make states a good offer, but it had to be an offer in the states that refuse to accept the Medicaid Expansion of the statute was written would leave the poorest and most Vulnerable People in that state without any help under the Medicaid Program. That is the way the statute was written, conditioning a whole lot on states willingness to go along. They would do that with medicaid. Why would they do it here . After all, congress has done this before. Commerce has routinely said tax credits or other benefits are