Tag: Donald Trump

Back to Commandeering Again: David Sacks, the AI Moratorium, and the Executive Order Courts Will Hate

Why Silicon Valley’s in-network defenses can’t paper over federalism limits.

The old line attributed to music lawyer Allen Grubman is, “No conflict, no interest.” Conflicts are part of the music business. But the AI moratorium that David Sacks is pushing onto President Trump (the idea that Washington should freeze or preempt state AI protections in the absence of federal AI policy) takes that logic to a different altitude. It asks the public to accept not just conflicts of interest, but centralized control of AI governance built around the financial interests of a small advisory circle, including Mr. Sacks himself.

When the New York Times published its reporting on Sacks’s hundreds of AI investments and his role in shaping federal AI and chip policy, the reaction from Silicon Valley was immediate and predictable. What’s most notable is who didn’t show up. No broad political coalition. No bipartisan defense. Just a tight cluster of VC and AI-industry figures from he AI crypto–tech nexus, praising their friend Mr. Sacks and attacking the story.

And the pattern was unmistakable: a series of non-denial denials from people who it is fair to say are massively conflicted themselves.

No one said the Times lied.

No one refuted the documented conflicts.

Instead, Sacks’ tech bros defenders attacked tone and implied bias, and suggested the article merely arranged “negative truths” in an unflattering narrative (although the Times did not even bring up Mr. Sacks’ moratorium scheme).

And you know who has yet to defend Mr. Sacks? Donald J. Trump. Which tells you all you need to know.

The Rumored AI Executive Order and Federal Lawsuits Against States

Behind the spectacle sits the most consequential part of the story: a rumored executive order that would direct the U.S. Department of Justice to sue states whose laws “interfere with AI development.” Reuters reports that “U.S. President Donald Trump is considering an executive order that would seek to preempt state laws on artificial intelligence through lawsuits and by withholding federal funding, according to a draft of the order seen by Reuters….”

That is not standard economic policy. That is not innovation strategy. That is commandeering — the same old unconstitutional move in shiny AI packaging that we’ve discussed many times starting with the One Big Beautiful Bill Act catastrophe.

The Supreme Court has been clear on this such as in Printz v. United States (521 U.S. 898 (1997) at 925): “[O]pinions of ours have made clear that the Federal Government may not compel the States to implement,by legislation or executive action, federal regulatory programs.”

Crucially, the Printz Court teaches us what I think is the key fact. Federal policy for all the United States is to be made by the legislative process in regular order subject to a vote of the people’s representatives, or by executive branch agencies that are led by Senate-confirmed officers of the United States appointed by the President and subject to public scrutiny under the Administrative Procedures Act. Period.

The federal government then implements its own policies directly. It cannot order states to implement federal policy, including in the negative by prohibiting states from exercising their Constitutional powers in the absence of federal policy. The Supreme Court crystalized this issue in a recent Congressional commandeering case of Murphy v. NCAA (138 S. Ct. 1461 (2018)) where the court held “[t]he distinction between compelling a State to enact legislation and prohibiting a State from enacting new laws is an empty one. The basic principle—that Congress cannot issue direct orders to state legislatures—applies in either event.” Read together, Printz and Murphy extend this core principle of federalism to executive orders.

The “presumption against preemption” is a canon of statutory interpretation that the Supreme Court has repeatedly held to be a foundational principle of American federalism. It also has the benefit of common sense. The canon reflects the deep Constitutional understanding that, unless Congress clearly says otherwise—which implies Congress has spoken—states retain their traditional police powers over matters such as the health, safety, land use, consumer protection, labor, and property rights of their citizens. Courts begin with the assumption that federal law does not displace state law, especially in areas the states have regulated for generations, all of which are implicated in the AI “moratorium”.

The Supreme Court has repeatedly affirmed this principle. When Congress legislates in fields historically occupied by the states, courts require a clear and manifest purpose to preempt state authority. Ambiguous statutory language is interpreted against preemption. This is not a policy preference—it is a rule of interpretation rooted in constitutional structure and respect for state sovereignty that goes back to the Founders.

The presumption is strongest where federal action would displace general state laws rather than conflict with a specific federal command. Consumer protection statutes, zoning and land-use controls, tort law, data privacy, and child-safety laws fall squarely within this protected zone. Federal silence is not enough; nor is agency guidance or executive preference.

In practice, the presumption against preemption forces Congress to own the consequences of preemption. If lawmakers intend to strip states of enforcement authority, they must do so plainly and take political responsibility for that choice. This doctrine serves as a crucial brake on back-door federalization, preventing hidden preemption in technical provisions and preserving the ability of states to respond to emerging harms when federal action lags or stalls. Like in A.I.

Applied to an A.I. moratorium, the presumption against preemption cuts sharply against federal action. A moratorium that blocks states from legislating even where Congress has chosen not to act flips federalism on its head—turning federal inaction into total regulatory paralysis, precisely what the presumption against preemption forbids.

As the Congressional Research Service primer on preemption concludes:

The Constitution’s Supremacy Clause provides that federal law is “the supreme Law of the Land” notwithstanding any state law to the contrary. This language is the foundation for the doctrine of federal preemption, according to which federal law supersedes conflicting state laws. The Supreme Court has identified two general ways in which federal law can preempt state law. First, federal law can expressly preempt state law when a federal statute or regulation contains explicit preemptive language. Second, federal law can impliedly preempt state law when Congress’s preemptive intent is implicit in the relevant federal law’s structure and purpose.

In both express and implied preemption cases, the Supreme Court has made clear that Congress’s purpose is the “ultimate touchstone” of its statutory analysis. In analyzing congressional purpose, the Court has at times applied a canon of statutory construction known as the “presumption against preemption,” which instructs that federal law should not be read as superseding states’ historic police powers “unless that was the clear and manifest purpose of Congress.”

If there is no federal statute, no one has any idea what that purpose is, certainly no justiciabile idea. Therefore, my bet is that the Court would hold that the Executive Branch cannot unilaterally create preemption, and neither can the DOJ sue states simply because the White House dislikes their AI, privacy, or biometric laws, much less their zoning laws applied to data centers.

Why David Sacks’s Involvement Raises the Political Temperature

As Scott Fitzgerald famously wrote, the very rich are different. But here’s what’s not different—David Sacks has something he’s not used to having. A boss. And that boss has polls. And those polls are not great at the moment. It’s pretty simple, really. When you work for a politician, your job is to make sure his polls go up, not down.

David Sacks is making his boss look bad. Presidents do not relish waking up to front-page stories that suggest their “A.I. czar” holds hundreds of investments directly affected by federal A.I. strategy, that major policy proposals track industry wish lists more closely than public safeguards, or that rumored executive orders could ignite fifty-state constitutional litigation led by your supporters like Mike Davis and egged on by people like Steve Bannon.

Those stories don’t just land on the advisor; they land on the President’s desk, framed as questions of his judgment, control, and competence. And in politics, loyalty has a shelf life. The moment an advisor stops being an asset and starts becoming a daily distraction much less liability, the calculus changes fast. What matters then is not mansions, brilliance, ideology, or past service, but whether keeping that adviser costs more than cutting them loose. I give you Elon Musk.

AI Policy Cannot Be Built on Preemption-by-Advisor

At bottom, this is a bet. The question isn’t whether David Sacks is smart, well-connected, or persuasive inside the room. The real question is whether Donald Trump wants to stake his presidency on David Sacks being right—right about constitutional preemption, right about executive authority, right about federal power to block the states, and right about how courts will react.

Because if Sacks is wrong, the fallout doesn’t land on him. It lands on the President. A collapsed A.I. moratorium, fifty-state litigation, injunctions halting executive action, and judges citing basic federalism principles would all be framed as defeats for Trump, not for an advisor operating at arm’s length.

Betting the presidency on an untested legal theory pushed by a politically exposed “no conflict no interest” tech investor isn’t bold leadership. It’s unnecessary risk. When Trump’s second term is over in a few years, Trump will be in the history books for all time. No one will remember who David Sacks was.

Who’s Coming to Lunch? What Do Personnel Changes at Copyright Office Mean for MLC?

If you’ve been following the news lately, you’ll have heard that President Trump has made some personnel changes at the Library of Congress and the head of the U.S. Copyright Office (styled as the “Register of Copyrights”). When the dust settles we’ll see if these changes stick, but my bet is they probably will. This is because the President was probably within his authority to replace the Librarian of Congress (a presidential appointee). Remember that the Librarian is a “principal officer of the United States” who ultimately reports to the President. We’ll come back to that point.

Because the Librarian appoints the head of the Copyright Office for an unspecified term and can terminate that person, there’s probably an argument for the President being able to terminate the “Register” directly if there’s a vacancy in the Librarian’s office especially if there’s urgent business before the Copyright Office. Alternatively, there’s definitely an argument for the replacement Librarian, “Acting” or otherwise, to be able to terminate the non-Senate confirmed Register. (See a similar argument from Professor Volokh.)

So whatever the sequence, the result is likely the same. Was it prudent? No. Was it well-handled? No. Is it enforceable? Quite probably. That doesn’t mean that those who are terminated can’t or shouldn’t pursue claims, but I think it does mean that their respective replacements are going to take over. The topic that is front and center in most discussions of these movements is Big Tech’s lobbying on AI and that is well to be concerned about because today is Wednesday and Big Tech is still trying to screw us. In that regard it is a day like any other.

But there is other pending business before the Copyright Office that will now be supervised by a Department of Justice lawyer with an entirely different background and set of relationships to all prior Registers. My bet is that the culture at the Copyright Office is about to change. I would say change radically, but I’d be skeptical that anything in Washington changes radically. For example, remember that the Library of Congress/Copyright Office public database apparently uses an older Oracle database system and/or COBOL or PL/SQL for data processing.  The user interface is HTML with embedded JavaScript, and uses CGI or early Java-based web tools for query submission. That’s right–1998 technology. Helloooo DoGE.

One item of pending business is the 5-year redesignation oversight review of the MLC’s operations and a review of the MLC’s investment policy on the $1.2 billion black box (or more) that is gradually inching its way toward a market share distribution with little or no explanation.

For reasons known only to the lobbyists who wrote Title I of the Music Modernization Act, the Copyright Office was given oversight of the MLC and its hedge fund.   As anyone could have predicted who’d studied the culture of the Copyright Office for five minutes, that oversight is effectively meaningless.  The MLC has just refused to allow any transparency over their hedge fund—over a billion dollars of other people’s money—and the Copyright Office so far has let that happen.  As Guy Forsyth wrote, Americans are freedom loving people and nothing says freedom like getting away with it.

So there’s a deeper structural issue with the MLC’s oversight: the Copyright Office is required to review the MLC every five years, but it has no real enforcement powers other than refusing to redesignate the quango which would create a huge disconnect between the sunny narrative of aspirations for the “historic” Title I of the MMA that created the MLC and the dark underbelly of the utter failure of that legislation that no one talks about at parties. Unlike executive agencies like the DOJ, FTC or SEC, the Copyright Office can’t subpoena records, issue fines, or force compliance. Its first five-year review—launched in January 2024—is now grinding on in its second year, with no public recommendations or reforms issued to date despite the requirements of the moment.

With an emphasis on regulatory accountability, the Trump administration might push for more rigorous oversight of the MLC’s operations, including its data practices and how it invests the black box OPM funds. Oversight could be enhanced through a combination of Copyright Office audits and a potential executive branch role—such as a streamlined agency focused on government efficiency. The goal: protect creators’ money and ensure the MLC’s compliance without increasing taxpayer burden. Costs for such oversight could, and arguably should, be charged back to the MLC which is funded by the richest corporations in commercial history.

In fact, beefing up the Copyright Office’s oversight role may actually be required. As Professor Volokh observes:

The answer appears to be that the Library of Congress is actually an Executive Branch department for legal purposes [and not in the Legislative Branch], though it also provides some services to Congress. Indeed, I think it has to be such a department in order to have the authority that it has over the implementation of copyright law (via the Register of Copyrights): As Buckley v. Valeo (1976) made clear, in a less famous part of its holding, Congress can’t appoint heads of agencies that exercise executive powers.

Of course the Librarian has to be confirmed by the Senate, although under vacancies rules, an acting Librarian has pretty much the full authority of the office for 210 days without Senate confirmation. The Register is not Senate confirmed, so there’s an odd juxtaposition where Trump’s Acting Librarian could be replaced, but the Register is not subject to the 210 day clock.

This is all down in the weeds in Appointments Clause land. But you get the idea. Paul Perkins, who was serving as an Associate Deputy Attorney General at the U.S. Department of Justice, will soon be looking at the MLC. My understanding is that Mr. Perkins is the deputy of Todd Blanche, who is now taking over as acting Librarian. (Todd Blanche who currently serves as the 40th United States Deputy Attorney General, having been confirmed by the Senate. He was formerly a partner at Cadwalader and former federal prosecutor in the SDNY.)

And just wait til DoGE gets a load of that COBOL programming and a billion dollar hedge fund at a quasi governmental agency. Remember, the Presidential Signing Statement for the Music Modernization Act–signed by Trump 45–specifically designates the MLC board members as inferior officers of the United States. That means on a certain level that they report to the Librarian, a new twist for music business executives. If it comes to a showdown between Trump and the MLC, my money is on Trump. So there’s that.

Time will tell. But one thing is certain: The DOJ lawyer coming in to supervise the entire situation is unlikely to care whether he’ll ever have lunch in that town again.