COUNTY OF SUFFOLK, NEW YORK, Plaintiff-Appellant-Cross-Appellee, v. FIRST AMERICAN REAL ESTATE SOLUTIONS, Defendant-Appellee-Cross-Appellant, Experian Information Solutions, Inc., doing business as Experian, doing business as Experian Real Estate Solutions, TRW Redi Property Data, also known as Information Systems and Services, Inc., Defendants.
Before: JACOBS, STRAUB, and POOLER, Circuit Judges. Jeltje DeJong, Assistant County Attorney, Hauppauge, NY, on behalf of Robert J. Cimino, Suffolk County Attorney, for Plaintiff-Appellant-Cross-Appellee. Andrew L. Deutsch, Piper Marbury Rudnick & Wolfe LLP, New York, NY (Edward F. Maluf, Christine M. Jaskiewicz, of counsel), for Defendant-Appellee-Cross-Appellant. Frank K. Walsh, Assistant Solicitor General, Albany, NY (Preeta D. Bansal, Solicitor General, Daniel Smirlock, Deputy Solicitor General, of counsel), on behalf of Eliot Spitzer, Attorney General of the State of New York, for amicus curiae State of New York. Michael D. Hess, Corporation Counsel of the City of New York, New York, NY (Leonard Koerner, Katherine Winningham, of counsel), for amicus curiae City of New York.
Plaintiff-Appellant-Cross-Appellee County of Suffolk, New York (“Suffolk County”) appeals from an opinion and order of the United States District Court for the Southern District of New York (John F. Keenan, Judge) granting Defendant-Appellee-Cross-Appellant First American Real Estate Solutions's (“First American”) motion for reconsideration and dismissing Suffolk County's complaint in its entirety for failure to state a claim upon which relief may be granted, pursuant to Fed.R.Civ.P. 12(b)(6). First American cross-appeals from the District Court's denial of its motion for costs and attorneys' fees under the Copyright Act, 17 U.S.C. § 505.
Suffolk County sued First American, and other companies acquired by First American,1 under the Copyright Act of 1976 (the “Copyright Act”), 17 U.S.C. § 101 et. seq. Suffolk County alleged that the defendants infringed its copyrights in its official tax maps by publishing and marketing those maps without Suffolk County's permission. First American moved to dismiss for failure to state a claim, arguing, inter alia, that New York State's Freedom of Information Law (“FOIL”) bars Suffolk County from asserting a copyright in its official tax maps.
The District Court initially denied First American's motion. County of Suffolk v. Experian Info. Solutions, Inc., No. 99 Civ. 8735(JFK), 2000 WL 628731 (S.D.N.Y. May 15, 2000) (“County of Suffolk I”). After granting First American's motion for reconsideration, the District Court then agreed with First American and held that Suffolk County may not use its copyrights to prevent First American from freely disseminating its official tax maps. County of Suffolk v. Experian Info. Solutions, Inc., No. 99 Civ. 8735(JFK), 2000 WL 1010262 (S.D.N.Y. July 21, 2000) (“County of Suffolk II”). The District Court then denied First American's motion for attorneys' fees. Suffolk County timely appealed, and First American cross-appealed from the denial of its attorneys' fees motion.
This case presents several novel issues including (1) whether, and to what degree, deference is due an advisory opinion analyzing the potential conflict between FOIL and the Copyright Act by New York State's Committee on Open Government, which is required by statute to issue advisory opinions regarding FOIL; (2) whether, by enacting FOIL, New York abrogated its municipalities' copyrights; and (3) whether the official tax maps are in the public domain from their inception. We hold that FOIL does not abrogate Suffolk County's copyrights and find that it is possible for Suffolk County to comply with its obligations under FOIL while preserving its rights under the Copyright Act. In so holding, we decline to defer to the Committee on Open Government's advisory opinion. We also find that Suffolk County sufficiently alleged that its tax maps possess enough originality to withstand First American's motion to dismiss. Finally, we find, at least on the record before us, that Suffolk County's official tax maps cannot be deemed, as a matter of law, to be in the public domain since their inception. We thus vacate the judgment below and remand for further proceedings. In light of this disposition, we do not address First American's cross-appeal and dismiss it as moot.
Because this is an appeal from the grant of a motion to dismiss the complaint, we accept as true all factual allegations set forth in the complaint, and any documents attached, incorporated by reference, or integral to the claims asserted, and we draw all reasonable inferences in favor of Suffolk County. See Schnall v. Marine Midland Bank, 225 F.3d 263, 266 (2d Cir.2000).
During 1974, Suffolk County, through its Real Property Tax Service Agency, created and designed a series of original maps (“tax maps”) and an index system reflecting the ownership, size, and location of real property in each of Suffolk County's political subdivisions. Compl. ¶ 10. Suffolk County is required by law to create such tax maps and to make them available to the public. N.Y. Real Prop. Tax Law § 503(1)(a), (2) (McKinney 2000). All tax districts and special district boundaries were created and referenced by Suffolk County on its maps and indices. Compl. ¶ 10. Suffolk County creates new maps and indices annually to reflect alterations in size, shape, and/or location of parcels of land, subdivisions, or roadways. Id. Currently, there are twelve albums representing ten townships containing over 4,600 tax maps, which show over 500,000 parcels of land. Id.
Suffolk County alleges that its “tax maps contain a substantial amount of original material, research, compilation and organization wholly original with the plaintiff and are copyrightable subject matter under the laws of the United States.” Id. ¶ 11. These tax maps, Suffolk County asserts, “are the result of substantial work, effort and expense.” Id. Suffolk County “registered its copyright claims from the initial cartographic compilation in 1974, and during various times thereafter in order to copyright new and amended maps.” Id. ¶ 12. Suffolk County has received copyright registrations for these works and has affixed a notice of copyright to the tax maps it has published or sold to the public. Id. It also affixed a notice of copyright in the introduction to each tax map album. Id. Suffolk County is the sole proprietor of all right, title, and interest in and to such copyrights and in and to its maps. Id. ¶ 14.
Suffolk County alleges that the defendants have infringed its copyrights in the tax maps by publishing and placing on the market, without license or its consent, copies of the tax maps and CD-ROM disks containing the maps. Id. ¶ ¶ 15-16. Suffolk County claims that it notified the defendants of their alleged infringement but that the defendants refused to cease their infringing conduct. Id. ¶ 18. Suffolk County then filed this action seeking to enjoin the defendants from copying, utilizing, and marketing in any manner the tax maps, or any portion thereof, and seeking damages suffered as a result of the defendants' infringement.
First American moved to dismiss for failure to state a claim, arguing that (1) the tax maps lack sufficient originality to qualify for copyright protection because their content is dictated by state regulation; (2) the tax maps are sufficiently analogous to judicial opinions and statutes to be deemed in the public domain from their inception and, hence, not entitled to copyright protection; and (3) FOIL bars Suffolk County from owning a copyright in its tax maps.
New York enacted its Freedom of Information Law to provide the public with greater access to governmental records and to increase public accountability. N.Y. Pub. Off. Law § 84 (McKinney 1988). Under FOIL, state agencies, which include the State's sixty-two counties,2 must “make available for public inspection and copying all records,” subject to certain exceptions not relevant here. N.Y. Pub. Off. Law § 87(2) (McKinney Supp.2001). The covered entities may deny access to those records falling within an enumerated exception and must, if the person seeking access appeals the denial in writing, fully explain in writing the reasons for its denial. Id.; id. § 89(3) & (4). FOIL establishes the Committee on Open Government (the “Committee”), which, among other tasks, is required to furnish advisory opinions to any person or agency. N.Y. Pub. Off. Law § 89(1) (McKinney Supp.2001). The Committee, however, does not substantively participate in the review process established by subdivision 4 of section 89 and only receives a copy of the state agency's determination whether to provide access after an appeal to that agency has been made. John P. v. Whalen, 54 N.Y.2d 89, 95, 429 N.E.2d 117, 120, 444 N.Y.S.2d 598, 601 (1981). The Committee is required annually to propose recommendations for changes in the law to the Governor of the State of New York and the State Legislature. N.Y. Pub. Off. Law § 89(1)(b)(v) (McKinney Supp.2001).
The District Court initially denied First American's motion to dismiss, holding that (1) Suffolk County was entitled to offer evidence regarding the originality of its tax maps in order to support its claim of copyright infringement; (2) tax maps are not in the public domain from inception; and (3) FOIL, by its text, does not prohibit Suffolk County from enforcing its copyrights. County of Suffolk I, 2000 WL 628731, at *3-*5. The District Court refused to defer to two unpublished advisory opinions of the Committee, in which the Committee's Executive Director indicated his view that a local government's claim of copyright would be superseded by FOIL. Id. at *5 n. 2. The effect of FOIL on a local government's copyright was not analyzed extensively in either of these Committee opinions.
After First American's motion was briefed and submitted, but before the District Court filed County of Suffolk I, the Committee issued a third advisory opinion regarding the effect of FOIL on a state agency's copyright.3 Unlike the prior opinions, this advisory opinion contained substantial analysis. First American moved for reconsideration solely on the FOIL issue, emphasizing this third advisory opinion, and argued that the District Court should defer to the Committee's interpretation of FOIL unless that interpretation is irrational or unreasonable. The District Court agreed, granted the motion for reconsideration, and then dismissed Suffolk County's complaint in its entirety. The District Court found that this new advisory opinion was neither irrational nor unreasonable. County of Suffolk II, 2000 WL 1010262, at *5. The District Court further analyzed FOIL and Suffolk County's obligation to create tax maps by law. The District Court concluded that prohibiting Suffolk County from enforcing its copyrights would not generate an economic disincentive to creating tax maps. Id.
Suffolk County timely appealed the order dismissing its complaint. In its appeal, Suffolk County challenges both the District Court's decision to grant First American's motion for reconsideration and the dismissal of its complaint. In this appeal, we have also received the benefit of the participation of amici curiae State of New York (“State”) and City of New York (“City”). Amici argue on behalf of their interests in their use and development of geographic information systems (“GIS”).4 We note the amici's interests not because we intend to decide how FOIL impacts GIS, but because we recognize the broader context that many of the issues raised on appeal implicate.
In a subsequent order, the District Court denied First American's application for an award of costs, including reasonable attorneys' fees, pursuant to 17 U.S.C. § 505, finding that Suffolk County's case was neither frivolous nor objectively unreasonable. First American timely cross-appealed from this order. Given our disposition of this appeal, however, we do not address the merits of First American's cross-appeal.
On appeal, Suffolk County contends that the District Court abused its discretion in granting the motion for reconsideration based on the third Committee advisory opinion because, Suffolk County argues, that opinion was neither controlling precedent nor a change in the applicable law.
Preliminarily, we must address whether the grant of a motion for reconsideration is appealable. In Shrader v. CSX Transportation, Inc., we expressed “grave doubts” whether such a motion is appealable, even if we properly had jurisdiction over the case for independent reasons. 70 F.3d 255, 256 n. 1 (2d Cir.1995). As we noted, such a decision, by itself, would not be an appealable final order sufficient to provide an appellate court with jurisdiction. Id. But because we found that the merits of the motion at issue in Shrader were easily resolved, we proceeded to address them without suggesting that the grant of a motion for reconsideration is in fact reviewable. See id. at 256-57 & n. 1 (finding that the district court's decision to reconsider its earlier ruling was not an abuse of discretion).
Here, First American provided the District Court with a new advisory opinion, containing substantial analysis, authored by the entity specifically charged by FOIL with providing advisory opinions regarding that statute-in short, a decision “that might reasonably be expected to alter the conclusion reached by the court.” Id. at 257. Although we ultimately disagree with the weight the District Court accorded this new opinion, we cannot say that it exceeded its allowable discretion in reconsidering its earlier order. As in Shrader, however, we do not suggest that the grant of a motion to reconsider is necessarily reviewable. See id. at 257 n. 1.
We review de novo a district court's decision to dismiss a complaint for failure to state a claim upon which relief may be granted. See Friedl v. City of New York, 210 F.3d 79, 83 (2d Cir.2000). “The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims.” Villager Pond, Inc. v. Town of Darien, 56 F.3d 375, 378 (2d Cir.1995) (internal quotation marks omitted), cert. denied, 519 U.S. 808, 117 S.Ct. 50, 136 L.Ed.2d 14 (1996). To establish a claim of copyright infringement, “a plaintiff with a valid copyright must demonstrate that: (1) the defendant has actually copied the plaintiff's work; and (2) the copying is illegal because a substantial similarity exists between the defendant's work and the protectible elements of plaintiff's.” Hamil Am. Inc. v. GFI, 193 F.3d 92, 99 (2d Cir.1999) (internal quotation marks omitted), cert. denied, 528 U.S. 1160, 120 S.Ct. 1171, 145 L.Ed.2d 1080 (2000).
B. May States, and Their Subdivisions, Obtain a Copyright?
Although the federal government does not possess a statutory right to obtain copyright protection for its works, 17 U.S.C. § 105, the Copyright Act is silent as to the rights of states or their subdivisions. Nor is there an indication in the statute that copyright ownership is limited to private persons. See 17 U.S.C. § 101 (“ ‘Copyright owner,’ with respect to any one of the exclusive rights comprised in a copyright, refers to the owner of that particular right.”); id. § 102 (noting simply that copyright protection subsists “in original works of authorship ․”). By specifying a limitation on ownership solely against the federal government, the Copyright Act implies that states and their subdivisions are not excluded from protection under the Act. See Bldg. Officials & Code Adm. v. Code Tech., Inc., 628 F.2d 730, 735-36 (1st Cir.1980) (“Works of state governments are therefore left available for copyright protection by the state or the individual author․”); Nat'l Conf. of Bar Exam'rs v. Multistate Legal Studies, Inc., 495 F.Supp. 34, 35 (N.D.Ill.1980), aff'd, 692 F.2d 478 (7th Cir.1982); 1 melville B. Nimmer & David Nimmer, Nimmer on Copyright § 5.06[A], at 5-81 n.1 (2001); cf. Real Estate Data, Inc. v. Sidwell Co., 809 F.2d 366, 371 (7th Cir.1987) (indicating that, under the Copyright Act of 1909 “work-for-hire” doctrine, the county, which contracted for the production of tax maps, was presumed to be the copyright owner (rather than the creator of the maps)). Thus, Suffolk County may own a copyright under the Copyright Act. The question remains whether Suffolk County has sufficiently alleged that it possesses a valid copyright in its tax maps.
C. Should Suffolk County Be Permitted to Present Evidence as to the Maps' Originality?
To allege a claim of copyright infringement, Suffolk County must claim that a substantial similarity exists between the defendant's work and the protectible elements of its work. To be “protectible,” these elements must be original. See Feist Publ'ns, Inc. v. Rural Tel. Serv., Co., 499 U.S. 340, 345-49, 111 S.Ct. 1282, 113 L.Ed.2d 358 (1991) (holding that a compilation of facts does not qualify for copyright protection unless it possesses sufficient originality, that is, “it possesses at least some minimal degree of creativity”); Streetwise Maps, Inc. v. Vandam, Inc., 159 F.3d 739, 747 (2d Cir.1998). As an alternate ground for affirmance, First American argues that Suffolk County's tax maps lack sufficient originality, and are hence not subject to copyright protection, because the content and the form of the maps are dictated by state law and regulations.
In Streetwise Maps, we addressed what portion, if any, of a map could be protected against copyright infringement. We noted that items such as street location and landmarks were “physical facts”-and thus not protected elements-but recognized that the presentation of such physical facts could be original. Id. at 747-48; accord Mason v. Montgomery Data, Inc., 967 F.2d 135, 141 (5th Cir.1992). We thus focused on “the overall manner in which [the plaintiff] selected, coordinated, and arranged the expressive elements in its map, including color, to depict the map's factual content.” Streetwise Maps, 159 F.3d at 748. The level of creativity required to demonstrate that the work is original “ ‘is extremely low; even a slight amount will suffice.’ ” Mason, 967 F.2d at 142 (quoting Feist, 499 U.S. at 345, 111 S.Ct. 1282). Suffolk County's complaint alleges that its “tax maps contain a substantial amount of original material, research, compilation and organization wholly original with the plaintiff.” Compl. ¶ 11. The District Court thus correctly found that Suffolk County has sufficiently alleged that its work is protected.
D. Did the New York Legislature, by Enacting FOIL, Abrogate Suffolk County's Copyright?
The New York State Legislature may enact laws that impact the property or affairs of local governments, such as Suffolk County, especially on matters of state concern. See City of New York v. State of New York, 94 N.Y.2d 577, 589-90, 730 N.E.2d 920, 925-26, 709 N.Y.S.2d 122, 127-28 (2000); see also Kelley v. McGee, 57 N.Y.2d 522, 535-39, 443 N.E.2d 908, 912-15, 457 N.Y.S.2d 434, 438-41 (1982) (tracing evolution of home rule amendment to New York State's Constitution); cf. Williams v. Mayor of Baltimore, 289 U.S. 36, 40, 53 S.Ct. 431, 77 L.Ed. 1015 (1933) (“A municipal corporation, created by a state for the better ordering of government, has no privileges or immunities under the Federal Constitution which it may invoke in opposition to the will of its creator.”). Thus, although a state and its subdivisions may own a copyright as a matter of copyright law, it may be that Suffolk County is not permitted to do so in this instance. The question becomes whether New York's Legislature, by enacting FOIL, has ceded Suffolk County's copyright.
The text of FOIL provides no clear indication that the Legislature intended to abrogate a covered entity's copyright. FOIL provides only that “[e]ach agency shall, in accordance with its published rules, make available for public inspection and copying all records,” subject to certain exceptions that are not relevant here. N.Y. Pub. Off. Law § 87(2) (McKinney Supp.2001); see also id. § 89(3) (McKinney Supp.2001) (requiring each entity subject to FOIL to provide the person requesting the record access or a written denial of access, and for those records to which it provides access, to provide, upon payment of a fee, a copy of the record to the requester). FOIL is silent as to the existence of, and the effect of requiring disclosure on, any preexisting copyright the state agency may possess. FOIL is also silent as to what may occur after a state agency discloses its records. When the current version of FOIL was enacted in 1977, there was an established recognition that certain state entities could possess a copyright, see, e.g., N.Y. Jud. Law § 438 (McKinney 1983) (requiring that the copyright of the statement of facts, head notes and all other notes prepared by the law reporting bureau must be taken by and shall be vested in the Secretary of State); Opinion of the N.Y. Att'y Gen., 180 U.S.P.Q. 331, 1973 WL 20304 (1973) (citing prior opinion concluding the same). Because FOIL was enacted against such a baseline, yet did not specifically address the impact on a state agency's copyright, this silence is deafening. By the statute's plain language, the extent of the state agency's obligation is to make its records available for public inspection and copying. It is one thing to read this provision to permit a member of the public to copy a public record, but it is quite another to read into it the right of a private entity to distribute commercially what it would otherwise, under copyright law, be unable to distribute.
First American attempts to read legislative abrogation from the policies favoring broad access to governmental documents and the presumption of openness inherent in FOIL. First American fears that state agencies, armed with the weaponry of copyright infringement suits, will convert FOIL's goal of maximum access into a reality of minimum access. First American trumpets a portion of the legislative declaration introducing the law that states that “the public, individually and collectively and represented by a free press, should have access to the records of government in accordance with the provisions of this article.” N.Y. Pub. Off. Law § 84 (McKinney 1988). This statement, in a preamble no less, may assist in the determination of the Legislature's purpose, but it certainly is not conclusive. See N.Y. Stat. § 122 (McKinney 1971) (observing that while a preamble may illuminate the statute's purpose and intent, “it enacts nothing, contains no directives, and may not be resorted to as fixing terms of the statute”). First American's reading requires a degree of inference that fails to overcome the limited scope of the obligations dictated by the plain language of the act-that a state agency must make its records available for public inspection. Moreover, First American ignores the fact that the free press or an individual seeking to use the state agency records to educate others or to criticize the state or the state agency may be protected by the Copyright Act's fair use doctrine. See 17 U.S.C. § 107; On Davis v. The Gap, Inc., 246 F.3d 152, 173-76 (2d Cir.2001).
Both First American and the State as amicus point to the existence of pending legislation or proposals for legislative action to prove their respective contentions that the Legislature intended FOIL to preclude or not to preclude a state agency's assertion of its copyright.5 In this situation, however, attempting to extrapolate from these bills, which have not yet been enacted, what the Legislature that enacted FOIL intended with respect to a covered entity's copyright is of questionable utility. Cf. 2B norman J. Singer, Sutherland Statutes and Statutory Construction § 49.11 (6th ed.2000) (indicating that a subsequent legislative interpretation of a statute is not conclusive of the meaning of the former statute, and may either be read to indicate that the construction of the first statute is the same as the new enactment or to provide evidence that the prior statute meant the contrary of the new enactment). At best, these bills reflect concern that FOIL does not satisfactorily address the ability or inability of a covered entity to assert its copyright. In any event, as we have stated, the plain language of FOIL suggests that it did not abrogate a covered entity's rights under the Copyright Act. Cf. Ratzlaf v. United States, 510 U.S. 135, 147, 114 S.Ct. 655, 126 L.Ed.2d 615 (1994) (holding that even when there “are ․ contrary indications in the statute's legislative history ․ we do not resort to legislative history to cloud a statutory text that is clear”). Therefore, we conclude that the Legislature, by enacting FOIL, did not abrogate Suffolk County's copyright.
E. What Degree of Deference, If Any, is Due Advisory Opinions by the Committee on Open Government?
Although the District Court correctly acknowledged that in some instances the opinions of the Committee are entitled to deference, that is not true here. In this case, the Committee was interpreting the effect of FOIL on rights provided by the Copyright Act-an area outside of the Committee's limited expertise as defined by statute. See N.Y. Pub. Off. Law § 89(1)(b)(i) & (ii). Moreover, the Committee was also engaged in statutory interpretation of FOIL and an evaluation of the policies behind the Copyright Act.
From the perspective of judicial review over agency determinations denying [FOIL] requests, committee advisory opinions carry such weight as results from the strength of the reasoning and analysis they contain, but no more.
Id. at 96, 429 N.E.2d at 121, 444 N.Y.S.2d at 602; see also Buffalo News, Inc. v. Buffalo Enter. Dev. Corp., 84 N.Y.2d 488, 493, 644 N.E.2d 277, 279-80, 619 N.Y.S.2d 695, 697-98 (1994) (rejecting Appellate Division's decision to defer to the Committee's interpretation of “agency” within the Public Officer's Law but upholding Appellate Division's order only after conducting its own statutory interpretation). The Court of Appeals has also held that deference to an agency opinion is “not required ․ if the issue is one of statutory interpretation, dependent on discerning legislative intent, as statutory construction is the function of the courts.” Newark Valley Cent. Sch. Dist. v. Pub. Employment Relations Bd., 83 N.Y.2d 315, 320, 632 N.E.2d 443, 445, 610 N.Y.S.2d 134, 136 (1994) (holding that issue of whether a school district's duty to negotiate a smoking policy was preempted by statute or policy is a question of law that must be independently examined by courts). Because the Executive Director rested his decision on his interpretation of the Copyright Act and engaged in statutory interpretation of FOIL, New York courts would not be required to defer to his opinion, and indeed, would be required to analyze independently both FOIL and any conflicts FOIL might raise with the Copyright Act.
F. May Suffolk County Comply with FOIL and Preserve its Copyright?
FOIL emphasizes broad public distribution to further the goal of opening government and explicitly permits the copying of state agency records. While one possible reading of these statutory aspects is to permit publishers, including commercial publishers, to disseminate agency records as widely as possible, it is not the only reading. We find that the better reading, one consistent with the plain language of FOIL, is to permit Suffolk County to maintain its copyright protections while complying with its obligations under FOIL.
First, FOIL does not explicitly address what a recipient may or may not do once it receives the agency records; it provides only that the state agency must make the records available for public inspection and copying. See N.Y. Pub. Off. Law § 87(2). Suffolk County may comply with both these mandates while maintaining its copyright. FOIL also does not prohibit a state agency from placing restrictions on how a record, if it were copyrighted, could be subsequently distributed. Cf. Weisberg v. United States Dep't of Justice, 631 F.2d 824, 828 (D.C.Cir.1980) (“Deciding that copyrighted materials are subject to [the federal Freedom of Information Act (“FOIA”) ], however, does not resolve whether any particular FOIA request should be granted, and if so, under what terms.”). FOIL restricts only the fee which an agency may charge for copying or reproducing the record. N.Y. Pub. Off. Law § 87(1)(b)(iii). Moreover, concluding that FOIL prohibits the state agency from initiating an infringement action also prevents that agency from taking action in the event that a reproduction inaccurately portrays the content of its record. Although there are limits to a state agency's ability to restrict access to its records, see M. Farbman & Sons, Inc. v. New York City Health and Hosps. Corp., 62 N.Y.2d 75, 80, 464 N.E.2d 437, 439, 476 N.Y.S.2d 69, 71 (1984) (“FOIL does not require that the party requesting records make any showing of need, good faith or legitimate purpose․”), Suffolk County is not attempting to restrict initial access but is attempting to restrict only the subsequent redistribution of its copyrighted works. There is nothing inconsistent between fulfilling FOIL's goal of access and permitting a state agency to place reasonable restrictions on the redistribution of its copyrighted works. For example, an agency's choice to notify the recipient that a portion of the record is protected by copyright law or an agency's requirement that the recipient enter into a licensing agreement if it wishes to distribute the record commercially does not restrict initial access but only what the recipient may do once it acquires access.
It is true that Suffolk County's tax maps, because they are used in “making up the assessment rolls,” N.Y. Real Prop. Tax Law § 503(1)(a), go to the heart of the purposes of FOIL: providing the public access to the operation or decision-making functions of government. A commercial publisher may be an effective means for distributing those records as widely as possible. One could thus attempt to draw a distinction between copyrighted materials such as the tax maps and those copyrighted materials that do not directly impact the governmental agency's decision-making. But this distinction ignores the fact that FOIL, by its text, simply does not distinguish among governmental functions that are performed in the exercise of the government's public role, its proprietary role, or as a hybrid of both roles. See N.Y. Pub. Off. Law § 86(4) (McKinney 1988) (defining “record” as “any information kept, held, filed, produced or reproduced by, with or for an agency ․ in any physical form whatsoever ․”); id. § 87(2) (McKinney Supp.2001) (enumerating specific categories of governmental records that the agency may exempt from disclosure).
To the extent First American raises fears that a state agency will use its copyright to prevent all but the most meager access to its copyrighted materials, see Henry H. Perritt, Jr., Sources of Rights to Access Public Information, 4 wm. & Mary Bill Rts. J. 179, 205 (1995), those fears are largely quelled by the legal mechanisms preventing a state agency from doing so. The assertion of a copyright does not fall within FOIL's limited exceptions permitting an agency to deny access. See N.Y. Pub. Off. Law § 87(2); id. § 89(2)(b) (McKinney Supp.2001).
Suffolk County also cannot restrict the subsequent dissemination of its work completely. First, the Copyright Act “protect[s] only the form of expression and not the ideas expressed.” New York Times Co. v. United States, 403 U.S. 713, 726 n. *, 91 S.Ct. 2140, 29 L.Ed.2d 822 (1971) (Brennan, J., concurring); see also Feist Publ'ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 348-49, 111 S.Ct. 1282, 113 L.Ed.2d 358 (1991) (compilation of facts, if sufficiently original, is entitled to copyright protection although the facts contained therein are not); Attia v. Soc'y of New York Hosp., 201 F.3d 50, 54 (2d Cir.1999) (“A copyright thus protects not the author's ideas, but only her expression of them.”), cert. denied, 531 U.S. 843, 121 S.Ct. 109, 148 L.Ed.2d 67 (2000). Second, the fair use doctrine, codified in section 107 of the Copyright Act, strikes a balance between the rights of a copyright holder and the interest of the public in disseminating information. 17 U.S.C. § 107 (The “fair use of a copyrighted work ․ for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright.”). The fair use doctrine “permits [and requires] courts to avoid rigid application of the copyright statute when, on occasion, it would stifle the very creativity which that law is designed to foster.” Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 577, 114 S.Ct. 1164, 127 L.Ed.2d 500 (1994) (internal quotation marks omitted).
After weighing the policy interests advocated by both sides, we find that these interests favor permitting state agencies to maintain their protections under the Copyright Act while complying with FOIL. Thus, it is possible for Suffolk County to comply with its obligations under FOIL while preserving its rights under the Copyright Act.
G. Are Suffolk County's Tax Maps in the Public Domain from Inception?
First American also contends that, even if we find that Suffolk County may assert its copyright while complying with its obligations under FOIL, we cannot do so in this case because Suffolk County's tax maps should be viewed as being in the public domain, and, hence, uncopyrightable. While conceding below that this is a matter of first impression, First American argues that the tax maps are sufficiently analogous to statutes and judicial opinions, which courts have found may not be copyrighted because they are in the public domain since their inception. See, e.g., Banks v. Manchester, 128 U.S. 244, 9 S.Ct. 36, 32 L.Ed. 425 (1888) (state judicial opinion); Howell v. Miller, 91 F. 129 (6th Cir.1898) (state statutes); Bldg. Officials & Code Adm. v. Code Tech., Inc., 628 F.2d 730, 735 (1st Cir.1980) (hereinafter “BOCA”) (suggesting but not deciding that state-promulgated regulations modeled on a privately developed code are in the public domain).
The determination that no one may own a copyright in statutes and opinions arises not from a specific provision of the Copyright Act, but from a “judicial gloss” on the Act. BOCA, 628 F.2d at 735. In Banks, for example, the Supreme Court held that as a matter of public policy judges may not own a copyright in the fruits of their judicial labor. See 128 U.S. at 253, 9 S.Ct. 36. Because judges “receive from the public treasury a stated annual salary ․ and can themselves have no pecuniary interest or proprietorship, as against the public at large,” they cannot own a copyright. Id. Considerations of due process and fair notice also motivated the Banks Court: the “whole work done by the judges constitutes the authentic exposition and interpretation of the law, which, binding every citizen, is free for publication to all․” Id. If judges owned a copyright in their opinions, theoretically, they could restrict dissemination of the law. Thus, two considerations influence whether a particular work may be properly deemed in the public domain: (1) whether the entity or individual who created the work needs an economic incentive to create or has a proprietary interest in creating the work and (2) whether the public needs notice of this particular work to have notice of the law. See Practice Mgmt. Info. Corp. v. American Med. Assoc., 121 F.3d 516, 518-19 (9th Cir.1997); BOCA, 628 F.2d at 734-35. We consider each factor in turn.
Copyright benefits the public by providing an incentive to stimulate artistic creativity through the grant of a temporary monopoly to a copyright owner. See Twentieth Century Music Corp. v. Aiken, 422 U.S. 151, 156, 95 S.Ct. 2040, 45 L.Ed.2d 84 (1975). The Banks Court found such an incentive for the creation of judicial opinions unnecessary. But Banks, to us, represents more than the simple syllogism concluding that the public owns works produced by government employees merely because it pays their salaries. Rather, Banks is properly read as requiring a determination whether the particular governmental entity or employee has adequate incentive to create the work absent copyright protections. See Practice Mgmt., 121 F.3d at 518 (“The copyright system's goal of promoting the arts and sciences by granting temporary monopolies to copyrightholders was not at stake in Banks because judges' salaries provided adequate incentive to write opinions.”); cf. Legi-Tech, Inc. v. Keiper, 766 F.2d 728, 735 (2d Cir.1985) (recognizing, although rejecting in the specific context, the potential that the profit motive created by copyright may provide incentive for governmental creation). Judges and legislators do not need additional economic incentives to, respectively, write opinions or enact legislation.
Many works of government, however, due to their expense, may require additional incentives in order to justify their creation. See Kidwell, 1989 Wisc. L.Rev.. at 1023; David S. Levitt, Copyright Protection for United States Government Computer Programs, 40 iDEA: The Journal of Law and Technology 225, 247-50 (2000). As the amici contend and as the sponsor for the GIS Bill advocates in his Sponsor's Memorandum, see supra note 5, GIS may well be such an example. Thus, we are unable to declare a general rule that works by state governmental authors are automatically in the public domain from their inception. Some of the evidence relevant in determining whether the tax maps are original will also be relevant in determining whether Suffolk County required an additional incentive to create those maps. For example, if the existence and content of Suffolk County's maps are purely dictated by law, it is likely that Suffolk County needed no additional incentive to create them. As we have indicated that Suffolk County is entitled to present evidence whether its tax maps are original, see supra section II.C., we cannot say as a matter of law whether the tax maps are such that no additional incentive for their creation is necessary. What we can say, however, is that Suffolk County is entitled to present evidence whether it needed the additional incentives provided by copyright law to create its maps. It is for the District Court in the first instance to determine what additional incentives, if any, were needed for the maps' creation and for the manner by which Suffolk County chose to express the data contained therein.
Due process requires that before a criminal sanction or significant civil or administrative penalty attaches, an individual must have fair warning of the conduct prohibited by the statute or the regulation that makes such a sanction possible. See, e.g., McBoyle v. United States, 283 U.S. 25, 27, 51 S.Ct. 340, 75 L.Ed. 816 (1931) (criminal punishment); United States v. One 1973 Rolls Royce, V.I.N. SRH-16266, 43 F.3d 794, 819 (3d Cir.1994) (applying rule of lenity to civil forfeiture provisions that are punitive and quasi-criminal in nature); Gen. Elec. Co. v. EPA, 53 F.3d 1324, 1328-29 (D.C.Cir.1995) (administratively assessed fine).
Here, the tax maps themselves do not create the legal obligation to pay property taxes but are merely a means by which the government assesses a pre-existing obligation. The “fair warning” required under the Due Process Clause is satisfied through the notice provided by the statute that establishes the obligation to pay property taxes. There is no allegation that notice of this statute is not generally available. See BOCA, 628 F.2d at 734 (“So long as the law is generally available for the public to examine, then everyone may be considered to have constructive notice of it.”). Moreover, there is no allegation that any individual required to pay the applicable property tax has any difficulty in obtaining access to either the law or the relevant tax map, for Suffolk County is required by FOIL to disclose such a map on request. See Practice Mgmt., 121 F.3d at 519; Veeck v. Southern Bldg. Code Cong. Int'l, Inc., 241 F.3d 398, 403 (5th Cir.2001); Texas v. West Publ'g Co., 882 F.2d 171, 177 (5th Cir.1989), cert. denied, 493 U.S. 1058, 110 S.Ct. 869, 107 L.Ed.2d 953 (1990). Notice concerns simply are not present here.
In sum, on the record before us, we cannot conclude as a matter of law that Suffolk County's tax maps are in the public domain since their inception. We do conclude that Suffolk County has stated a valid claim upon which relief could be granted. Therefore, Suffolk County is entitled to present evidence in support of its copyright infringement claim.
For the foregoing reasons, we conclude that the District Court erred in dismissing Suffolk County's complaint. We hold that the New York State Legislature, by enacting FOIL, did not abrogate Suffolk County's copyright in its tax maps. We conclude that it is possible for Suffolk County to comply with its obligations under FOIL while preserving its rights under the Copyright Act. We find that Suffolk County sufficiently alleged that its tax maps possess enough originality to withstand a motion to dismiss for failure to state a claim. Finally, we find, at least on the record before us, that Suffolk County's official tax maps cannot, as a matter of law, be deemed to be in the public domain since their inception. Accordingly, we vacate the order of the District Court and remand for further proceedings consistent with this opinion. In light of this disposition, we dismiss First American's cross-appeal as moot.
1. On January 1, 1998, First American acquired the business of Experian Information Solutions, Inc. (“Experian”), including the selling of information concerning real property ownership alleged in the complaint. At oral argument before this Court, counsel for First American confirmed that prior to its acquisition of Experian, Experian had acquired TRW Redi Property Data, the remaining defendant.
3. It does not appear that either party brought this new advisory opinion to the District Court's attention before it filed County of Suffolk I.
4. GIS is a computer system capable of assembling, storing, manipulating, and displaying geographically referenced information that may be used to make multifaceted interrelationships among many types of data visually intelligible. GIS is used in a wide range of applications, including economic development and environmental management.
5. First American included in its appendix three bills that were before the 223rd Legislature-two to amend the Executive Law to foster GIS and to provide for licensing of GIS records, and one to amend FOIL to permit state agencies to charge a reasonable fee to persons who acquire GIS records pursuant to a FOIL request. Because oral argument was held after that legislative session, we take judicial notice of the introduction of a similar bill seeking to amend FOIL now before the 224th Legislature. Currently pending before the Legislature is a bill, introduced on February 28, 2001, to amend FOIL in order to permit state and municipal agencies to license GIS and to charge persons a reasonable fee (not to exceed the fair market value of the record) when those persons acquire GIS records through a FOIL request. See A 5778, 2001 Leg., 224th Sess. (N.Y.2001) (hereinafter “GIS Bill”); Sponsor's Mem., Assemb. Mem. in Support, B. No. A. 5778, available at http:// leginfo.state.ny.us:82/INDEX1.html. In the Sponsor's Memorandum, the sponsor explained that because FOIL permits agencies to charge only for the cost of reproducing requested materials and does not permit agencies to place restrictions upon future dissemination of that material, local governments have become unwilling to invest further in developing GIS because GIS data, requested and disclosed pursuant to FOIL, was later resold at a high profit. Other entities, such as utilities, the sponsor opined, were becoming “increasingly reluctant” to share GIS data with the government for fear that their data will end up in the public domain.The Committee on Open Government recommended that the State Legislature “take action to waive the ability of the government agencies in New York to claim copyright protection,” except “where the record reflects scientific or academic research.” State of New York, Department of State, Committee on Open Government, 2000 Report to the Governor and the State Legislature on New York State's Open Government Laws and Related Issues at 3 (emphasis added). This recommendation appears to have been incorporated in a separate bill, introduced on March 27, 2001, to amend FOIL in order to require that all public records that are, or could reasonably be made, available be accessible on the Internet. See A 7778 B, 2001 Leg., 224th Sess. (N.Y.2001); Sponsor's Mem., Assemb. Mem. in Support, B. No. A. 7778 B, available at http://leginfo.state.ny.us:82/INDEX1.html. In the Sponsor's Memorandum, the sponsor of this bill indicated that one of the bill's purposes was “to ensure that the Freedom of Information Law maximizes the accessibility of records.” Both of these bills have been referred to the Committee on Governmental Operations.
6. Despite the Executive Director's conclusion that the state agency could not assert its copyright due to the inherent purposes of FOIL, the Committee subsequently recommended that the New York State Legislature “take action to waive the ability of government agencies in New York to claim copyright protection.” See supra note 5.


Claim submitted on stipulated facts, exhibits, issues and briefs without an evidentiary hearing.
1. What is the proper determination of the date of Claimant’s cervical injury?
2. What is the appropriate average weekly wage and compensation rate for the purposes of calculating the indemnity benefits referable to Claimant’s cervical injury?
1. At all relevant times, Claimant has been an employee and Defendant an employer within the meaning of Vermont’s Workers’ Compensation Act.
2. In 2005 Claimant asserted a workers’ compensation claim for bilateral upper extremity pain that he alleged was caused by progressive injury due to his work for Defendant.
3. Defendant accepted Claimant’s claim for bilateral wrist injuries as compensable, with a date of injury of July 1, 2005. This claim was assigned State File No. X-4039.
4. Claimant was originally diagnosed with bilateral carpal tunnel syndrome.
5. A Wage Statement (Form 25) was prepared and filed for the twelve weeks prior to July 1, 2005, which showed an average weekly wage of $640.48. However, no Form 25 was obtained from the concurrent employer for this period until May 25, 2006. At that point, Claimant’s average weekly wage for the twelve weeks prior to July 1, 2005 was recalculated to be $817.47.
6. Claimant did not lose any time from work as a result of his July 1, 2005 injury until March 22, 2006. On that date he underwent a right-sided carpal tunnel release.
7. During the twelve weeks prior to March 22, 2006 Claimant was employed by a concurrent employer, the Air National Guard. Wage statements were obtained from both employers, which documented a combined average weekly wage of $1,269.54. This yields a compensation rate of $846.36.
8. An Agreement for Temporary Total Disability Benefits (Form 21) was entered into and approved by the Department, providing that beginning March 25, 2006 Defendant would pay temporary total disability benefits at the rate of $846.36 weekly.
9. Claimant returned to work on May 15, 2006 and continued to work until December 2, 2008.
10. On December 2, 2008 Claimant underwent a repeat right-sided carpal tunnel release.
12. On or about October 13, 2009 Claimant, through his counsel, filed an Employee’s Notice of Injury and Claim for Compensation (Form 5), in which he alleged “cervical degenerative disk disease aggravated by heavy work; disk herniation caused/aggravated by heavy work” and a “progressive” date of injury.
13. This Form 5 was given a new State File No. BB-0900.
15. On April 22, 2010 the commissioner held a formal hearing on the disputed issue of whether Claimant’s cervical disc surgery was causally related to an injury arising out of and in the course of his employment for Defendant.
16. By a written decision issued on August 5, 2010 the commissioner concluded that Claimant’s cervical condition was neither caused nor aggravated by his employment for Defendant.
17. Claimant appealed the commissioner’s decision to the Superior Court, Franklin County Unit.
20. Claimant initially experienced improvement in his right upper extremity after his first carpal tunnel release in March 2006. However, within months of that surgery he again complained of right upper extremity pain, numbness and tingling. A second right carpal tunnel release in December 2008 provided no relief.
1 The 26-week calculation period was in keeping with legislative amendments to 21 V.S.A. §650(a), effective July 1, 2008.
2 Though incorrectly stated in their Stipulation of Facts, the parties agree that this is the correct date of Claimant’s cervical surgery.
21. Based on these findings, Dr. Rinehart concluded that Claimant’s symptoms were more likely related to cervical pathology rather than to any carpal tunnel problem. As a result, he recommended that Claimant undergo cervical surgery.
23. Double crush syndrome is a condition that occurs when a single nerve becomes pinched in two distinct areas. In Claimant’s case the nerve was pinched in his wrist and also in his neck. The preferred course of treatment in this type of situation is to release the nerve first at the wrist, as that is the least invasive procedure. In some circumstances doing so will correct the impingement in the neck as well, and the more invasive cervical surgery can be avoided.
24. Unfortunately, Claimant had continued to have symptoms after his carpal tunnel releases, such that cervical surgery was now necessary. Dr. Barnum performed that surgery on December 23, 2009. Claimant recuperated for approximately six weeks thereafter. He returned to work full time on February 1, 2010.
25. Claimant credibly described the symptoms in his right arm as 80 percent improved following his cervical surgery. The pain in his left arm he described as 100 percent resolved.
26. As a consequence of Claimant’s compensable cervical injury, I find that Defendant is obligated to pay temporary total disability benefits for the period from December 23, 2009 to February 1, 2010 as well as permanency benefits specifically referable to that condition.
27. Claimant’s average weekly wage for the 26 weeks prior to December 23, 2009 was $814.41. This yields a compensation rate of $542.96.
1. The principal disputed issue in this case concerns the appropriate average weekly wage and compensation rate for indemnity benefits payable as a consequence of Claimant’s December 2009 cervical surgery. Resolving this dispute requires a determination as to when the “injury” necessitating that surgery occurred.
2. Vermont’s workers’ compensation statute provides that an injured worker’s average weekly wages “shall be computed in such manner as is best calculated to give the average weekly earnings of the worker during the 26 weeks preceding an injury . . .” 21 V.S.A. §650(a). Elsewhere, in the context of its notice and statute of limitations provisions the statute states, “The date of injury . . . shall be the point in time when the injury . . . and its relationship to the employment is reasonably discoverable and apparent.” 21 V.S.A. §656. Workers’ Compensation Rule 3.0540 reiterates this language, and the Vermont Supreme Court has consistently applied it in cases involving notice and statute of limitations disputes. Longe v. Boise Cascade Corp., 171 Vt. 214, 219 (2000); Hartman v. Ouellette, 146 Vt. 443, 447 1985).
3. Aside from notice and statute of limitations issues, neither the statute nor the Supreme Court has delineated what constitutes the “date of injury” for the purposes of determining the rate at which temporary disability benefits should be paid. In prior decisions, the commissioner has at times held that the “date of injury” in this context is not the date upon which the injury itself occurred, but rather the date upon which it became disabling. See, e.g., V.S. v. Kenametal, Inc., Opinion No. 19-07WC (August 2, 2007); Plante v. Slalom Skiwear, Inc., Opinion No. 19-95WC (May 24, 1995). In other cases, the average weekly wage calculation has been based solely on the date when the injury and its relationship to the employment became reasonably discoverable and apparent, regardless of when it first became disabling. See, e.g., Hepburn v. Concrete Professionals, Inc., Opinion No. 16-03WC (May 14, 2003); Groman v. Peck Auto and Glass and Middlebury College, Opinion No. 3-95WC (March 13, 1995). In all cases, the commissioner has applied the analysis that best incorporates the statute’s intent with respect to indemnity benefits – to replace wages lost as a direct result of a compensable injury. Orvis v. Hutchins, 123 Vt. 18 (1962).
4. Turning to the current claim, I conclude that the date of Claimant’s cervical injury was July 1, 2005. This was the date assigned to his complaints of bilateral upper extremity pain, which Defendant accepted as compensable. The Superior Court jury since has determined that Claimant’s cervical complaints were also causally related. Having now been diagnosed as a double crush syndrome, the medical evidence establishes that both complaints likely resulted from the same primary injury.
5. Defendant argues that Claimant’s cervical injury, and particularly its relationship to his employment, did not become reasonably discoverable and apparent until April 2009, when Dr. Rinehart first posited that his ongoing symptoms were originating in his neck rather than in his wrists. I disagree. That the complaints referable to Claimant’s July 1, 2005 compensable injury were initially misdiagnosed as involving solely carpal tunnel syndrome rather than a double crush syndrome as well does not change the date of their occurrence. An injury claim begins with a symptom or complaint, not a diagnosis.
6. I conclude, therefore, that the date of Claimant’s compensable injury, which includes both his upper extremity and his neck complaints, was July 1, 2005.
7. Establishing the date of Claimant’s injury does not resolve the dispute as to how to calculate his average weekly wage and compensation rate, however. This is because Claimant has endured three separate periods of disability – the first following his March 2006 carpal tunnel surgery, the second following his December 2008 carpal tunnel surgery, and the third following his December 2009 cervical surgery. According to the statute, 21 V.S.A. §650(c), in circumstances such as this the rate at which benefits must be paid may be subject to change.
8. Section 650(c) states, “When temporary disability . . . does not occur in a continuous period but occurs in separate intervals each resulting from the original injury, compensation shall be adjusted for each recurrence of disability to reflect any increases in wages or benefits prevailing at that time.” According to Claimant, this means that whichever date yields the highest average weekly wage – in this case, March 22, 2006 – is the one that must control his current compensation rate.
9. Historically the Department has interpreted the language of §650(c) to mandate that a claimant’s compensation rate can only be adjusted upward, that is, when his or her wages have increased since a prior period of disability, but never downward, that is, to reflect a decrease in wages during the intervening period. See, e.g., Bollhardt v. Mace Security International, Inc., Opinion No. 51-04WC (December 17, 2004).
10. As the commissioner previously has observed, this interpretation makes sense when the work injury itself accounts for the reduction in earnings. Griggs v. New Generation Communications, Opinion No. 30-10WC (October 1, 2010). In this case, for example, Claimant should not be penalized if at some point after March 22, 2006 the functional restrictions imposed as a result of his work injury precluded him from maintaining his concurrent employment for the Air National Guard. If that is in fact what happened, then his compensation rate thereafter should reflect the loss of those wages. This would be in keeping with the spirit of workers’ compensation – to provide wage replacement benefits that compensate fully for an injured worker’s diminished earning capacity. Orvis, supra at 22.
11. Fairness also requires, however, that Claimant not receive a windfall should the evidence establish that his reduction in earnings was due to circumstances completely unrelated to his work injury, such as a personal decision not to continue his concurrent employment. See, e.g., D.P. v. GE Transportation, Opinion No. 03-08WC (January 17, 2008). To hold otherwise would amount to wage enhancement, not wage replacement. Griggs, supra.
12. The parties have not submitted any evidence as to why Claimant’s average weekly wage was lower in both December 2008 and December 2009 than it had been in March 2006. Without such evidence, I cannot determine which date is most compatible with the statute’s intent – to replace rather than supplement lost wages.
13. Under these circumstances, rather than making a determination based on incomplete information, it makes better sense to allow the parties an opportunity to present additional evidence, whether by stipulation, affidavit or formal hearing.
Based on the foregoing findings of fact and conclusions of law, the date of injury referable to Claimant’s cervical condition is determined to be July 1, 2005. The parties shall have 30 days from the date of this decision within which to present additional evidence and/or to request an evidentiary hearing as to the issues raised in Conclusion of Law No. 12 above.
DATED at Montpelier, Vermont this 14th day of September 2012.


Analysis: U.S. Supreme Court Upholds the Affordable Care Act: Roberts Rules?
Today, June 28, 2012, the U.S. Supreme Court issued its decision upholding the Patient Protection and Affordable Care Act of 2010 (the "ACA" or "Act"). The decision marks the culmination of a legal battle and public debate that began soon after the ACA was enacted. The Court upheld the individual mandate, perhaps the most controversial provision of the ACA, but limited the expansion of Medicaid under the ACA. All provisions of the ACA will continue to be in effect, with some limits on the Medicaid expansion. In order to prevent a constitutional violation due to the Medicaid expansion portion of the ACA, the Court held that the Secretary of the Department of Health and Human Services ("Secretary") is not permitted to apply §1396c of the Act to withdraw existing Medicaid funds to a state for failing to comply with the requirements set out in the expansion provisions. Though today's decision will have far-reaching effects in political discourse, the Court emphasizes its deference to Congress and its sensitivity to its judicial role: "We do not consider whether the Act embodies sound policies. That judgment is entrusted to the Nation's elected leaders. We ask only whether Congress has the power under the Constitution to enact the challenged provisions."
On March 23, 2010, President Obama signed the ACA into law. The 2700-page Act contained numerous provisions that, when implemented, would alter the health insurance and health care delivery systems in the United States more significantly than any federal law since the creation of the Medicare and Medicaid programs in 1965. Significant ACA provisions include the expansion of coverage under federal health care programs, such as Medicaid; the creation of new programs to integrate and reform health care delivery, such as the Medicare Shared Savings Program; and the minimum coverage provision at §1501 of the ACA that requires, with limited exceptions, individuals to maintain minimal essential health care coverage as of 2014 (commonly referred to as the "individual mandate") or make a "shared responsibility payment". After the enactment of the ACA, individuals, organizations, and 26 states brought suit against the federal government alleging, among other things, that the individual mandate and Medicaid expansion were unconstitutional. After multiple federal appeals court decisions with diverging opinions, the Supreme Court granted review.
This article will discuss the four main issues at play during the oral arguments, highlights of the Court's decision, and implications of the Court's decision.
In March 2012, the Supreme Court heard three days of oral arguments focusing on four issues: (1) whether the Court could even hear arguments about the constitutionality of the ACA; (2) whether the individual mandate was unconstitutional; (3) if so, whether the individual mandate, and potentially other provisions of the ACA, could be "severed" from the remaining portions; and (4) whether the Medicaid expansion provisions of the ACA were constitutional.
1. Could the Supreme Court Even Hear the Case?
Before the Court addressed the constitutionality of the individual mandate and Medicaid expansion, the Court determined that the Anti-Injunction Act ("AIA") did not apply to the lawsuits challenging the ACA. Under the AIA, courts may not hear lawsuits that attempt to restrain the imposition or collection of a tax. If the AIA did apply to the ACA lawsuits, the Court would have been prevented from hearing the case until the parties had exhausted other remedies.
The Court held that the AIA did not prevent the Court from hearing the challenge to the individual mandate because the mandate is not a "tax" for purposes of the AIA. This decision is not surprising given that during oral argument, the Court expressed skepticism about whether the AIA applied to the case and whether the case could be considered an exception to the AIA.
Today's decision is interesting in that it distinguishes between whether a law is a "tax" for purposes of Congress's taxing power versus the Court's jurisdiction under the AIA. The government argued that the mandate was not a tax for purposes of the AIA but that it was a tax for purposes of Congress's constitutional authority. At oral argument, Justice Alito noted to the Solicitor General "[t]oday you are arguing that the penalty is not a tax. Tomorrow you are going to be back and you will be arguing that the penalty is a tax." Justice Scalia also questioned the Solicitor General regarding the labeling of the mandate as a "penalty" rather than a "tax": "The President said it wasn't a tax, didn't he?"
Despite these exchanges, Chief Justice Roberts ultimately focused on whether Congress intended for the AIA to apply. The Court agreed with the government and held that Congress's decision to describe the shared responsibility payment in §5000A(b)(a) as a "penalty" and not a "tax" demonstrates that Congress did not intend for the AIA to prohibit jurisdiction.
2. Is the Individual Mandate Constitutional?
The central issue in the case was whether Congress had the power under the Constitution to mandate that individuals purchase health insurance and assess a tax or penalty against those individuals who refuse or fail to purchase such insurance. As a general principle of the U.S. federalist system, the federal government may only pass laws under those powers that are enumerated in the Constitution, such as the Commerce Clause. All other powers remain with the individual states. The ACA lawsuits challenged the individual mandate as an unconstitutional use of the Commerce Clause.
The Court telegraphed its skepticism with the Commerce Clause justification during oral argument in March. The justices questioned whether the government was "creating commerce" and whether the penalty associated with the individual mandate was actually a proper exercise of the taxing power.
In a 5-4 decision (with Justices Ginsburg, Breyer, Sotomayor, and Kagan joining Chief Justice Roberts), the Court concluded that the individual mandate was constitutional and could be upheld under Congress's taxing power as the imposition of a tax on those who do not have insurance. However, the individual mandate could not be sustained under the Commerce Clause or the Necessary and Proper Clause.
A key issue involved whether Congress was creating commerce by requiring individuals to purchase health insurance. During oral argument, Justice Kennedy questioned the government on whether it could "create" commerce by requiring an individual to perform an affirmative act and then regulate that act under the Commerce Clause. The government argued that health care is unique since nearly all persons will be in the health care market at some point, many times the choice to be in the market is uncontrollable and unpredictable, and the result of being uninsured shifts costs to the insured.
In today's opinion, the Court emphasized that Congress's broad power to regulate commerce "presupposes the existence of commercial activity to be regulated." Roberts noted that the mandate creates activity to "compel individuals to become active in commerce by purchasing a product" rather than regulating existing commercial activity. Consequently, the individual mandate cannot be upheld under the Commerce Clause.
The dissent also rejected the use of the Commerce Clause to support the constitutionality of the individual mandate. Justice Scalia wrote "[t]he Federal Government can address whatever problems it wants but can bring to their solution only those powers that the Constitution confers, among which is the power to regulate commerce… Article I contains no whatever-it-takes-to-solve-a-national-problem power."
• Necessary and Proper Clause.
The Court also assessed whether the individual mandate was constitutional under Congress's power under the Necessary and Proper Clause because the mandate was integral to the guaranteed issue and community rating provisions of ACA. The Court rejected the government's argument, concluding that this would give Congress the "extraordinary ability" to create the predicate necessary to the exercise of its power.
• Is the Individual Mandate Actually a Tax?
Despite holding that the Commerce Clause and the Necessary and Proper Clause do not support the constitutionality of the individual mandate, the Court found that the mandate could be sustained under Congress's taxing power. The Court held that "Congress had the power to impose the exaction in §5000A under the taxing power, and that §5000A need not be read to do more than impose a tax. That is sufficient to sustain it." Consequently, while the ACA's description of the shared responsibility payment as a "penalty" and not a "tax" is "fatal" to the application of the AIA, Congress's choice of words does not "control whether an exaction is within Congress's constitutional power to tax." Instead, the "mandate can be regarded as establishing a condition—not owning health insurance—that triggers a tax—the required payment to the IRS."
The Court then offered a straightforward analysis of its taxing power: "[t]hose subject to the individual mandate may lawfully forgo health insurance and pay higher taxes, or buy health insurance and pay lower taxes. The only thing they many not lawfully do is not buy health insurance and not pay the resulting tax."
Justices Ginsburg, Breyer, Sotomayor, and Kagan joined Justice Roberts's majority opinion holding the mandate constitutional under Congress's taxing power. The Court's liberal justices would have held the individual mandate constitutional under the Commerce Clause as well, but avoided issuing a concurring opinion that would support a constitutional differentiation but make no practical difference in the implementation of ACA.
Justice Scalia's dissent is also not surprising, as it echoes his comments at oral argument. The dissent notes, "[w]hat is absolutely clear… is that there are structural limits upon federal power—upon what it can prescribe with respect to private conduct... Whatever may be the conceptual limits upon the Commerce Clause and upon the power to tax and spend, they cannot be such as will enable the Federal Government to regulate all private conduct…"
3. Is the Individual Mandate Severable from the Rest of the ACA?
When a statute or law is held unconstitutional, the Court may eliminate certain provisions of the statute (severing it) or strike the entire statute. At issue with regard to the severability issue was whether other ACA provisions could and/or should be severed from the individual mandate provision if the individual mandate was found unconstitutional. Since the individual mandate was found constitutional, the Court did not address the severability of other ACA provisions.
4. Is Medicaid Expansion Under the ACA Constitutional?
Perhaps the most unexpected component of today's decision is the limitation imposed on the ACA's Medicaid expansion. Medicaid funds medical care for needy individuals through a federal and state partnership under which the federal government provides matching funds to states that agree to comply with federal requirements. Congress may change Medicaid requirements, and participating states must amend state Medicaid plans to comply with changes in federal law. Under the ACA, Congress expanded Medicaid eligibility to certain individuals under age 65 who do not receive Medicare and who have an income up to 133% of the federal poverty level. The ACA requires states to provide limited Medicaid coverage to these newly eligible individuals beginning in 2014. Funding of the expansion will not follow traditional matching guidelines; instead 100% of the expansion will be paid for by the federal government through 2016, with the federal share decreasing to 90% by 2020.
Congress's authority under the Constitution includes spending funds, and setting conditions on the spending of those funds, in order to promote the general welfare. However, Congress's spending power is limited such that it cannot use the power to compel states to adopt federal policies. At issue was whether the ACA unconstitutionally compels states to expand Medicaid by making expansion of Medicaid eligibility a requirement for receipt of federal Medicaid funds despite increased federal funding to subsidize the expansion.
The majority concluded that the Medicaid expansion is constitutional. However, the Court held that it would be an unconstitutional expansion of Congress's authority under the Spending Clause for the federal government to withhold Medicaid funding to the states for non-compliance with the ACA's expansion provisions. Writing for the Court, Chief Justice Roberts noted that "Nothing in our opinion precludes Congress from offering funds under the ACA to expand the availability of health care, and requiring that states accepting such funds comply with the conditions on their use. What Congress is not free to do is to penalize States that choose not to participate in that new program by taking away their existing Medicaid funding."
Rather than invalidate the Medicaid expansion in its entirety, the Court adopted a more limited remedy of severing the penalty provisions from the ACA. Section 1396c gives the Secretary the authority to withhold all further Medicaid payments to the state if the Secretary determines the state is out of compliance with any Medicaid requirement, including those contained in the expansion. The Court ruled that the Secretary could not use this section to withdraw existing Medicaid funds for failure to comply with the requirements set out in the expansion. However, §1396c remains applicable to the existing Medicaid program, and it could be used by the Secretary to withdraw funds provided under the ACA if a state that has chosen to participate in the expansion fails to comply with the requirements of the ACA.
Whether denominated as a mandate or a tax, the Court's validation of Section 1501 avoids much of the uncertainty that would have resulted if the ACA was struck down. Providers may proceed, for now, with the assumption that the ACA will reduce the burden of providing care to uninsured and underinsured individuals. The Court's ruling also relieves providers of the need to re-think, or undo, other operational and strategic planning that was implemented under the ACA, such as the move away from fee-for-service to value-based and quality-based reimbursement in an accountable care environment; bundling; bonuses; incentives for various ACA initiatives in areas such as electronic medical records, public health, preventive care, and others; physician quality reporting initiatives; requirements for tax-exempt hospitals such as community health needs assessments, financial assistance, and billing and collection policies; and many other areas of the ACA that might have collapsed with the whole ACA house of cards if the ACA had been struck down in its entirety. Hospital stocks surged ahead on the initial news of the Court's decision while insurance company stocks fell, suggesting the market's assessment of the winners and losers from the case.
From a constitutional law perspective, the path taken by the Court in reaching its decision is extremely important. On the one hand, the Court's conclusion that the individual mandate could not be justified under either the Commerce Clause or the Necessary and Proper Clause confirms that the Court will continue to police the boundaries of Congressional power in a federalist system. Congress may have the power to regulate commerce – what people do – but it does not have the power to compel commerce – what people do not do. In a similar vein, the Court concluded that the Medicaid penalty provisions ran counter to the nation's "system of federalism" as Congress improperly went beyond pressure to compulsion.
On the other hand, in upholding the individual mandate under Congress's power under the Taxing Clause (even notwithstanding statements by the President and the Congress that this was not a tax), the Court gave deference to Congress in searching for any reasonable construction of the law in order to save the ACA from unconstitutionality. The Court also found the means to preserve the expansion of Medicaid by severing only the penalty provisions. In so doing, the Chief Justice remained true to his philosophy of judicial restraint rather than judicial activism, placing himself firmly in the company of Justice Oliver Wendell Holmes, Jr. and Justice Felix Frankfurter.
The Medicaid ruling is significant for states – and for providers. This means that each state will have the ability to determine whether or not to accept the Medicaid expansion terms, without the risk of losing all of its Medicaid programs should the state decide not to agree with expanded eligibility requirements. The ACA was structured so that most everyone had health care coverage – either through employer-provided plans, insurance purchased by individuals, or government-provided programs. The ACA expanded eligibility for Medicaid to provide health care for poor persons who do not have employer-sponsored insurance and who would be unable to pay for their own health insurance. If a state declines to enact the expansion, there will be a gap. The size of the gap—or the number of uninsured individuals—will depend on how eligibility standards are set. For providers, this likely translates into uncompensated care.
In Wisconsin, Medicaid eligibility has been more expansive than required by the federal government. Therefore, the question about what carrots and sticks apply to the Wisconsin Medicaid program is not clearly answered in the decision. This will likely be the subject of consideration and potential debate as the Wisconsin legislature develops the next biennial budget.
Perhaps the greatest impact from the ACA decision will be felt in the upcoming elections. The Court's characterization of the individual mandate as a "tax" will shape the political debates in the months to come. House Speaker John Boehner, presidential candidate Mitt Romney, and their supporters have already vowed to repeal the ACA following the decision, using the ACA "tax" as their rallying cry. As a result, some uncertainty will remain through and beyond the fall as elected officials sort out what provisions should remain and what should be modified or eliminated. Some of the provisions have proven popular with voters; other provisions have not. And, absent a Republican sweep in November, a total repeal of the Act is not likely. Nonetheless, Wisconsin Governor Scott Walker indicated that the state would not take action to implement provisions of the ACA until after the November elections and that he is counting on the next president and Congress to repeal it.
David Edquist brings a risk management approach to his work with the firm’s health care and business clients that is based on over thirty years of experience in litigating commercial disputes in state and federal courts and before various administrative tribunals.
Jeff Mark is a member of both the Health Care Practice Group and the Business Practice Group. Jeff advises hospitals, multi-institutional health care systems, physician groups and specialty providers regarding a variety of transactional health care related matters including affiliations, acquisitions and divestitures; fraud and abuse; Stark; physician agreements; and equipment and office space leasing arrangements.
Jeff also advises individuals, corporations, and partnerships regarding general corporate transactional matters including the negotiation and documentation of stock and asset-based transactions involving the merger, purchase or sale of operating divisions and stand-alone business entities; the selection and formation of business entities; transition planning, including buy and sell agreements, first rights of refusal and restrictions on the sale of equity interests; leasing arrangements; and the negotiation and documentation of a variety of other contractual arrangements.


The Continued Disparity Between Crack and Powder Cocaine in Federal Sentencing.
In simple terms, crack cocaine and powder cocaine are the same substance yet in different forms. However, it is far worse to be prosecuted for crack cocaine than powder cocaine. There is an 18:1 disparity bewtween the weight of the crack or poweder cocaine when calculating a federal base offense level. For example if a defendant pleads guilty to one count of conspiracy to possess with the intent to distribute cocaine base (crack cocaine), involving a total of weight of 20.6 grams. The base offense level for 20.6 grams of crack cocaine is twenty (20). The base offense level for 20.6 grams of powder cocaine is twelve (12). There is an extreme eight (8) level disparity in this case between crack cocaine and powder cocaine which could result in possibly several more years in prison if caught with crack cocaine. You can see this by looking at the Federal Sentencing Table here.
...To continue the history, the Sentencing Commission, even before Kimbrough and Spears were handed down, recognized its earlier mistake and recommended in 1995 that Congress remove the disparity altogether, establishing instead a 1:1 ratio between crack cocaine, in comparison to powder cocaine. This, the Sentencing Commission concluded, should be done even assuming, arguendo, that crack cocaine, in comparison to powder cocaine, might produce a more rapid “high,” might be conducive to more addictive behavior, and might even be associated with more violence, because, in the Commission’s view, such effects, if any, materially varied in individual cases and hence could be better dealt with by the application of specific enhancements to individual defendants rather than by imposing an across-the-board disparity between crack and powder weights.
Thereafter, the Commission made further attempts to rectify its original error, without success. Further still, the Department of Justice, in 2009, itself advocated the adoption of a one-to-one ratio, again without success.
Finally, however, in 2010, in what can only be regarded as a political compromise having no empirical rationale, Congress reduced the crack-to-powder cocaine disparity from 100-to-1 to 18-to-1, where it currently stands. See Fair Sentencing Act, 124 Stat. 2372.
You can view this case in it's entirety at United States v. Gardner.
The Gardner court presided over the resentencing of a defendant convicted of offense’s involving 3.6 kilograms of crack cocaine. The court ultimately found no rational support for the 18:1 ratio, and consequently applied a 1:1 ratio and treated the quantity of crack cocaine attributed to the instant defendant’s offenses of conviction as if it were the equivalent quantity of powder cocaine under the Guidelines.
I would argue that a court should follow the reasoning of numerous courts across the country and find the 18:1 ratio disparity is unjustified and there is no reason crack cocaine should be scored higher than powder cocaine. The defendant’s criminal history and propensity for recidivism should not play a role in the Court’s determination of his base offense guideline calculation. There is no good reason why a defendant should face several more years in jail for a different form of the same substance. As quoted above, the Sentencing Commission and numerous courts, including the United States Supreme Court, have concluded there is no rational basis for such a disparity when dealing with the same substance. The chief directive of § 3553(a) is that the court “shall impose a sentence sufficient, but not greater than necessary” to comply with the purposes identified by Congress in § 3553(a)(2). Under § 3553(a)(2)(A), a sentence should reflect the seriousness of the offense. If the Sentencing Commission and numerous courts agree that there is no good basis for different sentences between crack and powder cocaine, then the crack penalties overstate the seriousness of crack offenses. Therefore, a court should not follow the overstated guidelines in regards to the 18:1 ratio between crack and powder cocaine.
 Numerous other courts have reached a similar conclusion. See e.g., United States v. Williams, 788 F.Supp.2d 847 (N.D.Iowa 2011); United States v. Whigham, 754 F.Supp.2d 239 (D.Mass. 2010); United States v. Wiliams, 2010 WL 1325229 (S.D.Ill. Mar. 30, 2010); United States v. Lewis, 623 F.Supp.2d 42(D.D.C. 2009); United States v. Gully, 619 F.Supp.2d 633 (N.D. Iowa 2009); Henderson v. United States, 660 F.Supp.2d 751 (E.D. La. 2009); United States v. Medina, No. 08CR256-L, 2009 WL 2948325 (S.D.C.A. Sep. 11, 2009); United States v. Owens, Crim. No. 08-48 Erie, 2009 WL 2485842 (W.D. Pa. Aug. 12, 2009).


Q. What is a decennial filing or decennial report?
A. In general, it is a report of an entity’s continued existence or use of certain marks. 54 Pa.C.S. § 503, § 1314, § 1515. Decennial filings are made every ten years during the years ending with the numeral "1" (e.g. 2001, 2011, 2021). The legislative intent for requiring these filings is to identify business names or marks that are no longer in use so that they may be reissued and placed back into the stream of commerce.
Q. Who is required to file a decennial report?
A. All domestic and foreign profit and nonprofit corporations, limited liability companies, limited partnerships, limited liability partnerships that are not also limited partnerships, business trusts, insignias and "marks used with articles and supplies" that have not made a new or amended filing with the Bureau of Corporations and Charitable Organizations from January 1, 2002 through December 31, 2011 shall during the year 2011, file in the Department of State a report that they continue to exist. 54 Pa.C.S. § 503(b)(1), § 1314(b), § 1515(b). Fictitious names and trademarks are not required to make decennial filings.
Any domestic and foreign business corporation and non-profit corporation, limited liability company, limited partnership, limited liability partnership that is not also a limited partnership or business trust that has made a new or amended filing with the bureau from January 1, 2002 through December 31, 2011 other than a decennial filing, a name reservation, name search, consent to appropriation of name or fictitious name registration.
Any nonqualified foreign business corporation which has registered its name pursuant to 15 Pa.C.S. §4131 (requiring annual renewal of the name).
A corporation that has had officer information forwarded to the Department of State by the Department of Revenue during the preceding ten years under 15 Pa.C.S. §1110 (relating to annual report information).
Q. When are the above required to file the decennial report?
A. The decennial report must be filed every ten years in the years ending with the numeral "1" (e.g. in the calendar year 2011, from January 1, 2011 through December 31, 2011; in the calendar year 2021, from January 1, 2021 through December 31, 2021).
Q. What if an entity required to file a decennial report does not receive a notice?
Q. How will entities required to file a decennial report be notified?
A. On or after November 1, 2010, the Department gave notice of the decennial filing requirement to all affected associations or entities. The notice was made by mail at the registered office address of each affected entity, and was accompanied by appropriate decennial filing forms and instructions. 15 Pa.C.S. § 132(d). Decennial Report - Insignia/Mark Used With Articles or Supplies or Decennial Report of Association Continued Existence accompanied the notice. From November 2010 through September 2012, a separate database was available on the Bureau's website that identified all entities which were required to file a decennial report in 2011.
Q. Is there a fee associated with the filing of the Decennial Report?
A. The filing fee is $70, made payable to the Department of State.
Q. What are the consequences if a corporation or other association which is required to file a decennial report does not make a Decennial filing?
Q. What are the consequences if an entity with a registered insignia or a mark used with articles and supplies does not file a Decennial Report?
Q. What if a decennial report is filed after the deadline?
A. A corporation or other association which has failed to file a report from January 1 through December 31, 2011 may do so at any later time, which filing shall reinstate the name of the corporation or other association on the register unless its name has been appropriated during the period of the delinquency. 54 Pa.C.S. § 505 If an association is not sure if it is required to file a decennial report, it may call the Bureau's customer service line at (717) 787-1057.
Q. Will there be forms to complete for the decennial filing requirement?
A. The 2011 decennial filing forms are available on the forms page as of December 30, 2010.