The case is Golan v. Holder.
What is truly outrageous is that this infringes on the rights of creators who have relied on these public domain works in order to create new "derivative" works. They will now be obligated to pay money to those who hold the copyright in the (previously public domain) underlying work in order to distribute their new "derivative" work.
As the court says: "If the parties are unable to agree on reasonable compensation, a federal court will determine the amount of compensation."
This is a shameful disgrace to the free flow of information, art and expression.
Read it here:
Updated thoughts: The ruling focuses on a First Amendment Constitutional challenge to what Congress has done. It rejects the First Amendment challenge, but I wonder if it might also be vulnerable to a (long-shot) challenge under either the Contracts or Takings clauses of the Constitution.
It theoretically might. But the problem with this theory is that it might inadvertently invite the courts to accept the flawed analogy between IP and real property. Plus, such an argument might inadvertently end up locking in the current (and outrageously long) copyright terms - effectively holding that Congress would also not be able to shorten them without financially compensating authors who had already created works with the understanding that they would be protected under the longer terms.
These are just my current random thoughts on the matter. I'd be curious to read the thoughts of other Constitutional theorists on this (amateur and otherwise).