Legal News for Fri 12/6 - SCOTUS Debates IRS Sovereign Immunity, OpenAI Seeks to Consolidate Copyright Suits, A Split on Adding Judgeships and Trump's Latest Bozo

Minimum Competence

This Day in Legal History: 13th Amendment Ratified

On December 6, 1865, the United States formally abolished slavery with the ratification of the 13th Amendment to the Constitution. This historic amendment declared that "neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction." Its passage marked the culmination of decades of abolitionist struggle and the bloody Civil War, which had torn the nation apart over the issue of human bondage.

The amendment was first passed by Congress on January 31, 1865, but required ratification by three-fourths of the states to become law. This final step was achieved when Georgia, the 27th state needed for approval, ratified it. Although President Abraham Lincoln had issued the Emancipation Proclamation in 1863, freeing slaves in Confederate-held territories, the 13th Amendment went further by permanently outlawing slavery throughout the entire country, including states loyal to the Union.

The amendment also laid the groundwork for subsequent constitutional changes aimed at achieving racial equality, including the 14th and 15th Amendments. However, it was not the end of systemic racial oppression. In the years that followed, practices like sharecropping and the rise of "Black Codes" sought to perpetuate the subjugation of African Americans. The amendment's exception clause—allowing involuntary servitude as punishment for crimes—also became a basis for exploitative practices in the penal system, with effects still debated today.

Nevertheless, the ratification of the 13th Amendment remains a cornerstone of American history, symbolizing the nation’s legal commitment to freedom and human dignity. It was a monumental step in the ongoing journey toward civil rights and justice in the United States.

The U.S. Supreme Court is examining United States v. Miller, a case involving the IRS and a bankruptcy trustee, which centers on whether sovereign immunity allows the IRS to keep payments made by a company before bankruptcy. The dispute arose from All Resort Group Inc.'s payment of $145,000 to cover its directors’ personal tax debts three years prior to its bankruptcy filing. The trustee argues these payments were fraudulent transfers since the company was insolvent at the time, and the IRS should return the funds like any other creditor.

Justices across ideological lines expressed skepticism of the IRS’s claim that state fraudulent transfer laws and extended lookback periods, typically used by bankruptcy trustees, are inapplicable due to sovereign immunity. Justice Kavanaugh warned that reversing lower court rulings in favor of the trustee could enable fraud by allowing debtors to misuse company funds while shielding the IRS from clawback actions.

The IRS maintains that the trustee's actions exceed the two-year lookback period allowed under bankruptcy law and that sovereign immunity blocks state law-based extensions. Critics argue that siding with the IRS could undermine bankruptcy trustees' avoidance powers, giving the government an unfair advantage over other creditors.

Justices, including Barrett, Kagan, and Jackson, questioned the IRS's reasoning, suggesting it contradicts bankruptcy law's intent to treat the government like other creditors in such cases. Legal experts noted that Utah's fraudulent transfer laws, used to extend the recovery period, align with federal principles, challenging the IRS's "peculiar" stance.

IRS Climbing a Steep Hill in Bankruptcy Trustee Clawback Dispute

OpenAI plans to request the centralization of eight copyright and Digital Millennium Copyright Act (DMCA) lawsuits into a multidistrict litigation (MDL) in New York and California, according to statements made to a federal judge. These lawsuits allege that OpenAI infringed on copyrights during the training of its large language models. Plaintiffs include prominent names like The New York Times, comedian Sarah Silverman, and author Ta-Nehisi Coates.

OpenAI assured the court it will continue participating in discovery while the request is reviewed by the Judicial Panel on Multidistrict Litigation. Notably, one DMCA claim by Intercept Media Inc., alleging OpenAI removed copyright management information from its content, recently survived a motion to dismiss. However, OpenAI successfully defended against a similar suit from Raw Story Media Inc. and Alternet Media Inc.

The company has also sought to merge suits filed by The New York Times and Daily News LP. OpenAI is represented by Morrison & Foerster LLP, Latham & Watkins LLP, and Keker Van Nest & Peters LLP, while the authors are represented by the Joseph Saveri Law Firm LLP and Cafferty Clobes Meriwether & Sprengel LLP. The case underlines ongoing legal challenges for AI companies related to copyright and content use.

OpenAI to Seek to Centralize Eight Copyright Lawsuits Against It

House Democrats are divided on a Senate-passed bill to add 66 judgeships to federal district courts, with some wary of granting Donald Trump the opportunity to appoint new judges during his presidency. The JUDGES Act, which aims to address judicial shortages in heavily burdened districts, represents the first major expansion of the federal judiciary since 1990. While some Democrats, such as Reps. Doris Matsui and Eric Swalwell, emphasize the urgent need for additional judges in their states, others, like Rep. Jerrold Nadler, oppose the timing, accusing Republicans of strategically advancing the bill after Trump’s election win.

The legislation proposes phasing in new judgeships over the next three presidential terms, beginning with 11 appointments in 2025 and another 11 in 2027. Courts in states with Democratic senators would receive 37 permanent seats, while those in Republican states would gain 26 permanent and three temporary positions.

Supporters argue that the measure addresses pressing judicial workloads, such as in California’s Eastern District, where judges face one of the nation’s highest case-to-population ratios. However, critics suspect political maneuvering, with Rep. Zoe Lofgren questioning why Republicans waited until after Trump’s victory to advance the bill.

House Judiciary Chairman Jim Jordan hopes to pass the measure quickly, and experts note Republicans may secure enough Democratic support despite objections. The judiciary’s policymaking body and federal judges back the bill, though its timing and implications for Trump’s influence over the judiciary remain contentious.

House Democrats Split on Bill to Add Judges After Trump Win (1)

Donald Trump announced David Sacks, venture capitalist and co-founder of Craft Ventures, as his pick for the newly created position of AI and Crypto Czar. This role will oversee federal policy on artificial intelligence and cryptocurrency, with a focus on boosting U.S. leadership in these sectors. Sacks, a prominent Trump supporter and Silicon Valley figure, has ties to Elon Musk and was a key fundraiser for Trump’s campaign. He is also set to lead the Presidential Council of Advisors for Science and Technology.

Sacks’ responsibilities will include crafting a legal framework to provide clarity for the crypto industry, a sector Trump has pledged to support after previously criticizing it. He will also influence the regulation and adoption of AI, countering Biden-era executive orders on AI oversight, which Trump has criticized as stifling innovation.

Despite holding investments in crypto and enterprise software, Sacks will not be required to divest his assets, though conflict-of-interest rules will limit his involvement in specific decisions. Known for advocating free speech and opposing "Big Tech bias," Sacks aligns with Trump’s broader deregulatory agenda. His appointment, alongside crypto advocate Paul Atkins to lead the SEC, signals a strong focus on deregulation for digital assets and tech industries.

Trump Names David Sacks as White House AI and Crypto Czar (2)

This week’s closing theme is by Ludwig van Beethoven – a composer of some note.

Ludwig van Beethoven, one of the towering figures of classical music, revolutionized the art form with his innovative compositions and bold vision. Born in Bonn in 1770, Beethoven's life spanned the Classical and Romantic eras, and his works embodied the bridge between these two periods. Despite his struggles with hearing loss, he composed some of the most enduring and transformative music ever written. Among his celebrated symphonies, the Symphony No. 7 in A Major, Op. 92, stands out for its infectious energy, rhythmic innovation, and emotional depth. Premiered in 1813, the symphony's exuberance earned it a special place in audiences' hearts, with the second movement, Allegretto, becoming an instant favorite.

This week, we spotlight Franz Liszt's masterful piano transcription of Beethoven’s Symphony No. 7. Liszt, a virtuoso pianist and composer of the Romantic era, was renowned for his transcriptions, which brought orchestral works to the solo piano repertoire, allowing a wider audience to experience their brilliance. His transcription of the Seventh Symphony captures not only the rhythmic vitality and dramatic contrasts of Beethoven's original but also its delicate nuances and grandeur.

The second movement, in particular, shines in Liszt's version, with its solemn, almost hymn-like theme resonating deeply on the piano. Its hypnotic pulse and poignant melody reveal the emotional core of Beethoven’s vision, even in a solo performance. This piece embodies the interplay of intensity and elegance that defines Beethoven’s work and showcases Liszt's genius as both interpreter and innovator.

Without further ado, Ludwig van Beethoven’s Symphony No. 7 in A Major, Op. 92.

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