Minimum Competence - Daily Legal News Podcast
Minimum Competence
Legal News for Mon 2/26 - SCOTUS Reviews Copyright Law 'Discovery Rule,' Social Media Regulation Debates, IPO Cornerstone Investor Trend and GOP Trump Legal Bill Debates

Legal News for Mon 2/26 - SCOTUS Reviews Copyright Law 'Discovery Rule,' Social Media Regulation Debates, IPO Cornerstone Investor Trend and GOP Trump Legal Bill Debates

On today's episode, we cover the Supreme Court's review of copyright law's 'discovery rule,' social media regulation cases, IPO market trends, and GOP legal bill debates.
Abraham Lincoln holding up a dollar bill, pencil sketch.

This Day in Legal History: National Banking Act

On this day in legal history, February 26 marks a significant national moment with President Abraham Lincoln's signing of the National Banking Act into law in 1863. This significant legislation established the framework for the American banking charter system, introducing a standardized currency and founding the Office of the Comptroller of Currency (OCC) within the Treasury Department. Aimed at consolidating the nation's financial resources to support the Union's efforts during the Civil War, the Act encouraged banks to invest in federal rather than state bonds. Despite its noble intentions to unify the banking system and raise funds for the war, the Act fell short of its financial goals, leading to its refinement and eventual replacement by the National Banking Act of 1864. This initial attempt at banking reform, however, laid the groundwork for the modern American financial infrastructure and represents a foundational moment in U.S. legal and financial history.

The Supreme Court's deliberation on the copyright damages case, Warner Chappell Music Inc. v. Nealy, brings into focus the application of the "discovery rule" in copyright law, a principle allowing for the pause of a statute of limitations when a violation cannot be timely discovered. This principle was scrutinized during the oral arguments on February 21, with the court reevaluating its presence in copyright legislation amid Justice Antonin Scalia's historical skepticism, likening it to "bad wine of a recent vintage." The justices, particularly Samuel Alito and Neil Gorsuch, hinted at the possibility of deferring the decision pending the resolution of another related case, Hearst Newspapers LLC v. Martinelli, to first determine the fundamental applicability of the discovery rule to copyright law.

Despite the circuit courts' unanimous agreement on some form of the copyright discovery rule, its application remains inconsistent and unclear, fueling ongoing debate among copyright lawyers. The Supreme Court's current review could redefine the rule's existence and application, influenced by a contemporary inclination towards a more textual interpretation of laws and less reliance on circuit court consensus.

The controversy stems from Nealy's lawsuit against Warner, alleging unauthorized use of his music rights acquired in 2008, which he discovered only in 2016 due to personal circumstances. The Eleventh Circuit's stance, recognizing the discovery rule, allowed for a broader scope of damages, challenging Warner's appeal and the Supreme Court's previous rulings that rejected other discovery rules.

The timing of the court's consideration of Warner's case, juxtaposed with the pending Hearst petition, raises speculation about the justices' strategic approach to resolving the underlying legal question of the discovery rule's relevance to copyright law. The Supreme Court's decision could potentially consolidate or hold off on Warner's case in anticipation of addressing the broader issue in Martinelli, indicating a strategic pause to ensure a comprehensive examination of the discovery rule's place in copyright jurisprudence.

This case highlights a pivotal moment in copyright law, where the Supreme Court's verdict could either affirm the circuit courts' stance on the discovery rule or upend prevailing interpretations, significantly impacting copyright plaintiffs' ability to claim damages for late-discovered infringements. The outcome could redefine legal strategies and principles surrounding copyright claims, emphasizing the court's evolving stance on statutory interpretation and legal precedence.

Copyright Damages Case Turns on High Court’s Taste for Discovery

The Supreme Court is poised to examine two significant cases that originate from Florida and Texas, both challenging state laws designed to regulate social media companies and their content moderation practices. These laws, advocated by Republicans as measures against the perceived censorship of conservative viewpoints by tech giants, have stirred a broad coalition of opponents from across the political spectrum. Advocacy groups, ranging from the libertarian Goldwater Institute to the progressive Lawyers’ Committee for Civil Rights Under Law, alongside national security officials from various administrations, have submitted amicus briefs. These briefs collectively caution against these laws, arguing they threaten free speech and could hinder efforts to manage harmful content online.

The contested laws prohibit major social media platforms from censoring content based on viewpoints, demanding transparency in content moderation processes. However, appellate courts have delivered divergent opinions on their legality, highlighting a deep rift over how these regulations intersect with the First Amendment and the rights of private companies versus the public interest.

The US Supreme Court's intervention in Moody v. NetChoice and NetChoice v. Paxton seeks to address this legal discord, with implications far beyond the ideological battle lines initially drawn. Proponents of striking down or cautiously reviewing the laws argue they could restrict the ability of social media firms to curb hate speech and harassment, disproportionately affecting minorities and potentially compromising public safety through the unchecked spread of dangerous content.

The wide array of organizations opposing the laws underscores the complexity of balancing free speech rights with the need for responsible content moderation on digital platforms. Despite their political origins, the cases challenge the Court to make a nuanced judgment that transcends partisan divisions, focusing instead on the broader implications for individual rights and societal welfare.

Top Court Social Media Cases Unite Odd Bedfellows on Free Speech

US Supreme Court to weigh Florida, Texas laws constraining social media companies | Reuters

In response to a sluggish initial public offering (IPO) market, companies are increasingly leveraging cornerstone investors to mitigate the risks associated with going public. These investors commit to purchasing shares early on, often at a more favorable value, and are highlighted in the IPO prospectus, providing a level of confidence and stability to the offering. Notably, cornerstone investors played a significant role in nearly all large IPOs in 2023, a trend expected to continue as the market regains momentum. Despite a significant drop in IPO activity last year, with the total value of IPOs hitting a decade low, lawyers remain optimistic about a revival in offerings across various sectors, including consumer retail, tax, energy, and infrastructure by 2025.

Reddit Inc.'s recent filing for an IPO and successful listings by BrightSpring Health Services Inc. and CG Oncology Inc. signal a potential uptick in market activity. Legal practices are poised to benefit from an increase in IPO-related work, especially after relying on litigation and bankruptcy practices to sustain demand amid last year's downturn. Cornerstone investing, gaining prominence since regulatory changes in 2019, has become a strategic tool for de-risking IPOs in a challenging market environment.

Companies like Arm Holdings Plc have successfully utilized cornerstone investments to attract significant attention to their IPOs, securing major clients like Apple Inc., Nvidia Corp., and Alphabet Inc. as investors. While the broader market conditions remain challenging, with many companies postponing public offerings due to low valuations and high borrowing costs, the strategic use of cornerstone investors offers a pathway to liquidity and public market entry, particularly for firms in the biotech, health, and energy sectors that require substantial capital for growth and development.

IPO Lawyers See Cornerstone Investors Boost Deals in Slow Market

Henry Barbour, a Mississippi committeeman for the Republican National Committee (RNC), has proposed resolutions aimed at halting the party's financial support for Donald Trump's legal battles as he faces numerous criminal trials and civil case judgments. These resolutions also seek to enforce the RNC's neutrality in the presidential race until a candidate secures the necessary delegates for the nomination. Barbour's initiative reflects a desire to redirect the party's focus towards winning elections rather than financing legal fees for its leading candidate, emphasizing that Trump should independently manage his legal challenges.

To advance these resolutions to a vote among the RNC's 168 committee members, Barbour must secure two cosponsors from at least 10 states by a specified deadline. Despite predicting their likely defeat if brought to a vote, this move underscores a broader debate within the party regarding its support for Trump, who remains a dominant figure seeking to consolidate his influence, evidenced by his campaign's significant legal expenses and his efforts to position allies, including Lara Trump, in key RNC roles.

The discussion around the RNC's financial involvement in Trump's legal issues comes as the former president continues to assert his innocence amidst accumulating legal and financial pressures. This internal party challenge coincides with Trump's campaign to reinforce his status as the Republican presidential nominee against potential contenders like Nikki Haley, highlighting the intricate balance between party loyalty, legal entanglements, and the broader electoral strategy against Democrats.

Republican seeks to bar party from paying Trump's legal bills | Reuters

Minimum Competence - Daily Legal News Podcast
Minimum Competence
The idea is that this podcast can accompany you on your commute home and will render you minimally competent on the major legal news stories of the day. The transcript is available in the form of a newsletter at