Copyright and the First Amendment: Where Lies the Public Interest?

The United States Constitution grants to Congress the power ‘[t]o promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.’ The rationale for conferring the limited monopoly of copyright is that the public benefits from the labors of authors and that the copyright monopoly serves to stimulate such creative efforts. The copyright law provides an economic incentive by granting the right to exclude others from certain uses of the copyrighted work. Defining the scope of this right involves a difficult balance between the interests of authors in the control and exploitation of their writings on the one hand, and society's competing interest in the free flow of ideas, information, and commerce on the other hand. Focusing on society's interest in access to certain information, a recent line of cases has excused substantial takings of copyrighted material as permissible ‘fair uses.’ After outlining the scope of copyright protection and discussing the fair use doctrine, this comment will retrace the emergence of a ‘public interest’ criterion and consider its long-term consequences. Lastly, in an effort to accommodate first amendment interests without undermining the creative incentive provided by copyright protection, an alternative criterion will be proposed— that of the necessity of the borrowing of copyrighted material.  

A Chart of Bankruptcy Jurisdiction for Admiralty Lawyers

Jurisdictional gamesmanship is now one of the most important skills for admiralty counsel involved in bankruptcy related litigation. Admiralty lawyers are called upon increasingly to engage in such gamesmanship. In order to do so effectively, however, the rules of the game must be fully understood and appreciated. The significance of disputes unrelated to the merits of controversies has been greatly increased by the Bankruptcy Amendments and Federal Judgeship Act of 1984. Although delay, for its own sake, is unethical, these amendments require counsel to be aware of opportunities to select the forum most likely to produce a favorable result for the client's cause. Counsel who fail to avail themselves of these opportunities run the risk of having a disappointed client question their decisions.

Admiralty lawyers and their clients are thought to be uncomfortable in bankruptcy courts. Accordingly, this article will explore various statutory routes whereby admiralty lawyers can plan their escapes from the bankruptcy court, or, at least, from the bankruptcy judge.

The routes to be discussed include: The distinction among core, non-core, and unrelated proceedings; voluntary and mandatory abstention in bankruptcy proceedings; permissive and mandatory withdrawal of a district court's reference of a bankruptcy matter to a bankruptcy court; jury demand; removal and remand; and abstention in bankruptcy cases.

Bankruptcy judges, under 28 U.S.C.A. § 151, are now a ‘unit’ of the United States District Court, known as the bankruptcy court. The United States District Court has original and exclusive jurisdiction over bankruptcy cases and original, but not exclusive, jurisdiction over bankruptcy proceedings. A United States District Court is authorized to refer any and all bankruptcy cases, or parts thereof, to the bankruptcy courts. It appears that the great majority of district courts have made general referrals of all bankruptcy cases and proceedings to the bankruptcy courts.

Under the present court structure, many admiralty lawyers apparently wish to avoid the unit of the United States District Court known as the bankruptcy court. They would prefer that bankruptcy related admiralty litigation be conducted before a United States District Judge. The district court is, after all, the home of admiralty jurisdiction.

The 1984 Act revives the concept of summary jurisdiction that existed under the Bankruptcy Act of 1898. The new label for summary jurisdiction is core jurisdiction. A brief review of some historical milestones will facilitate an understanding of jurisdiction under the 1984 Act.

Jurisdictional Problems Between Admiralty and Bankruptcy Courts

Jurisdictional disputes between admiralty courts and bankruptcy courts have arisen frequently since bankruptcy courts were inaugurated during our republic's first century. Conflicts between admiralty courts and other courts existed prior to the development of bankruptcy courts, but the principles developed for resolving those conflicts are of little assistance in dealing with disputes involving conflicts between admiralty and bankruptcy courts.  

Bankruptcy--An Historical Overview

The present bankruptcy law of the United States has a scope undreamed of when the bankruptcy power was written into the United States Constitution. Changes in bankruptcy law have developed with geometrical acceleration in the last fifty years. Bankruptcy law has participated in the ‘law explosion,’ of which much was written a few years ago, and has had its own special ‘explosion’ as a result of economic changes and the overhaul of the bankruptcy laws in 1978. When I started my practice of law in a bankruptcy firm thirty years ago, I quickly found out that there were very few attorneys who did business with the bankruptcy referee. The practice of bankruptcy was confined solely to specialists. Only the patent lawyers were as exclusively specialized, and no general firm dealt with a bankruptcy problem other than by referring it to a bankruptcy firm or consulting with bankruptcy counsel. Specialized bankruptcy firms, however, have long been inadequate in number to represent all parties in major proceedings. Thus, general firms across the land are now developing their own expertise. The bankruptcy court is no longer the private club room of a fraternity, but now appears to be full of pedestrians. Firms specializing in bankruptcy retain their importance as counsel in large and complex matters.

There is a bankruptcy law ‘explosion’ indeed. This Institute, which has assembled hundreds of participants to consider a number of very serious papers concerning the impact of bankruptcy law on a single industry and the special doctrines by which that industry has historically dealt with debtors and creditors, is one sign of that explosion. The purpose of this paper is to compare the history of bankruptcy and its principles with the maritime law in order to provide a setting for other papers which follow.

Liens and Liquidation: Preferences, Strong Arm Clause, Fraudulent Transfers, Equitable Subordination, Priorities and Other Limitations on Liens Claims

Litigation arising out of vessel arrests and overlapping bankruptcy actions has presented a number of new and challenging questions in the field of maritime creditors' rights. These problems are of particular concern to admiralty practitioners who suddenly find themselves immersed in the unfamiliar intricacies of the Bankruptcy Code. This article addresses two broad areas in which the bankruptcy law most directly affects maritime creditors: (1) the power of the trustee to set aside transfers and (2) the treatment of maritime liens as secured claims in bankruptcy. Curiously, aside from commentary on the jurisdictional issues, little has been written on these subjects in either admiralty or bankruptcy texts. It is assumed for purposes of this discussion that the bankruptcy court has won whatever jurisdictional battle may have been fought with an admiralty court over the issue, that reorganization of the debtor is not an option, and that the bankruptcy court is exercising its powers over core proceedings to adjudicate maritime liens and liquidate maritime assets. Nevertheless, admiralty practitioners will be happy to discover that maritime liens are generally treated with great respect by the bankruptcy courts and are dealt with according to time-honored admiralty law principles.

Chapter 11 Strategies and Techniques--Creditors Committees, Effective Use of Plan Provisions, Objections to Confirmation, Financing a Chapter 11 Case, 'Cramdown' and How it Works

Most shipping companies are not susceptible of being reorganized under Chapter 11 of the U.S. Bankruptcy Code, as amended, (the ‘Code’) or the bankruptcy or insolvency laws of leading foreign maritime nations. Moreover, despite the present depressed state of key segments of the maritime industry and the recent incidence of maritime insolvencies, few companies in the industry have sought protection under Chapter 11. For those companies that have filed under Chapter 11, rehabilitation has been rare. The reasons behind these phenomena are instructive in identifying those elements necessary for a successful plan of reorganization. Some elements are peculiar to the maritime industry. Some certainly are not.  

The Uniform Commercial Code and Bankruptcy

To a commercial lawyer, the mention of bankruptcy and the Uniform Commercial Code in one sentence strongly suggests a series of well-known problems—principally the problems relating to the need to perfect security interests under Article 9 of the U.C.C. in order to prevent the bankruptcy trustee from disregarding the security interest under section 544 of the Bankruptcy Code. Admiralty lawyers may tend to think of an entirely different series of problems when they hear the word bankruptcy—such as which part of the federal district court, admiralty or bankruptcy, administers the property with which they are concerned. Nevertheless, the specter of bankruptcy requires that admiralty lawyers become familiar with the uncertain boundaries between admiralty jurisdiction and ordinary commercial law, including the U.C.C., which governs many common maritime business transactions, lest a bankruptcy trustee complete their education for them. The admiralty practitioner must know the answers to two related questions: (1) what must be done in common commercial shipping transactions so that, under the Uniform Commercial Code, the rights of creditors are not inadvertently lost to the bankruptcy trustee; and (2) in which transactions must attention be paid to Uniform Commercial Code principles as well as, if not in lieu of, traditional admiralty procedures?  

Vessel Arrest Before and After Bankruptcy--The Automatic Stay

With the recent economic downturn and the change from an excess demand for fossil fuels to an oversupply, there has been a tremendous reduction in marine transportation requirements. As a result, both charter rates and utilization rates for vessels have rapidly fallen. The cash flow of companies operating vessels has been reduced to the point where there is insufficient net income to meet debt service on obligations that were incurred in a far better economic climate. Consequently, there are many seriously delinquent ship mortgages and unpaid maritime liens on all types of vessels, both those operating offshore, and those which work on inland waterways. This in turn has created difficult choices for borrowers and lenders. This article will address the problems faced by creditors holding ship mortgages or maritime liens on vessels when considering whether to foreclose on their collateral. It will discuss problems that arise both before and after the debtor has filed a petition for relief under Chapter 7 or Chapter 11 of the U.S. Bankruptcy Code.  

The Protection & Indemnity Club and Bankruptcy: An English Perspective

The purpose of this paper is to discuss, from the viewpoint of a corporation lawyer, protection and indemnity (P&I) clubs under circumstances where the club concerned has become financially embarrassed. As a corporate lawyer, this writer is accustomed to seeing the assets of an insolvent company realized and disposed of in accordance with the normal rules imposed by the country of incorporation. The concept behind P&I clubs—that of a company being a conduit, in some cases the only conduit, for mutual dealings between owners insuring one another severally—is quite difficult to grasp. When considered in the context of an insolvent club winding up, the concept assumes the aspect of fantasy.  

The Impact of a Member's Insolvency or Bankruptcy on a Protection & Indemnity Club

This paper is written for the 1980's, an era when owners and operators of merchant ships have experienced serious financial troubles. Hopefully these problems will wane in the next decades.