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Speaker 1: This is Bloomberg Law with June Grossel from Bloomberg Radio.

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Speaker 2: After nine days of deliberations, a jury found Meta and

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Speaker 2: YouTube libel in a first of its kind lawsuit that

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Speaker 2: aimed to hold social media platforms responsible for harm to

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Speaker 2: children from using their services. Los Angeles jurors decided that

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Speaker 2: Meta and YouTube were negligent in the design or operation

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Speaker 2: of their platforms, and that each company's negligence was a

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Speaker 2: substantial factor in causing harm to the plaintiff. The twenty

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Speaker 2: year old woman had argued that her use of social

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Speaker 2: media as a child addicted her to the technology and

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Speaker 2: exacerbated her mental health struggles. The jury awarded her three

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Speaker 2: million dollars in compensatory damages and three million dollars in

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Speaker 2: punitive damages. Her attorney, Mark Lanier said the case is

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Speaker 2: a game changer.

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Speaker 3: I feel like what we're about here is something beyond

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Speaker 3: just trying to make a buck, beyond just trying to

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Speaker 3: help Kayley. I feel like we're about something that is

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Speaker 3: incredibly socially important and responsible.

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Speaker 2: Meta spokesperson Ashley Nicole Davis says the company will appeal.

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Speaker 4: We respectfully disagree with the verdict and will appeal team.

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Speaker 4: Mental health is profoundly complex and cannot be linked to

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Speaker 4: a single app. We will continue to defend ourselves vigorously

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Speaker 4: as every case is different, and we remain confident in

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Speaker 4: our record of protecting teens online.

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Speaker 2: My guest is Colin Walkee, a cybersecurity and data privacy

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Speaker 2: partner at haul Estel. Colin, this is one case among thousands.

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Speaker 2: What does this verdict stand for?

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Speaker 5: This verdict actually stands for the proposition that Meta and

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Speaker 5: YouTube intentionally made their algorithm addictive and negatively impacted someone's

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Speaker 5: mental health as a result. This particular claim is based

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Speaker 5: upon negligence, i e. They knew and owed a duty

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Speaker 5: to individuals to not make their algorithms addictive.

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Speaker 1: They did it anyway.

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Speaker 5: However, you could look at a recent case out of

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Speaker 5: New Mexico to the tune of three hundred and seventy

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Speaker 5: five million dollars where tech companies were found to have

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Speaker 5: violated the consumer protection law. So the difference here is

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Speaker 5: is this is just a traditional negligence theory. There is

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Speaker 5: no statutory action against these companies.

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Speaker 2: Meta argued that the plaintiff had struggle with her mental

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Speaker 2: health separately from her social media use, and they pointed

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Speaker 2: to her turbulent home life and bullying at.

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Speaker 6: School, et cetera, et cetera.

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Speaker 2: Did the jury discount those factors? Did they find they

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Speaker 2: were not contributory?

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Speaker 5: That wasn't the only thing that their attorneys pointed to.

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Speaker 5: YouTube's attorney also pointed to the fact that in all

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Speaker 5: of the evidence presented, only a few moments or a

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Speaker 5: few minutes worth of time was actually proven to have

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Speaker 5: been on YouTube. So I don't think that the jury

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Speaker 5: discounted that fact. I think the jury knew what we

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Speaker 5: all know, which is we reach for our phones when

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Speaker 5: we don't intend to, when we're sitting on their couch

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Speaker 5: without thinking, and why because social media is addictive.

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Speaker 1: And not only that, this case is a long time coming.

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Speaker 5: It's not as though we haven't read tell All book

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Speaker 5: after tell All book about the manner and method by

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Speaker 5: which these tech companies have attempted to make their algorithms

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Speaker 5: more addictive in order to get more attention, in order

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Speaker 5: to sell more advertising. When you are using a free product,

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Speaker 5: you are the product. And so I think the jury

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Speaker 5: knew that, understood it and have lived through it, and

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Speaker 5: simply did what has been a long time coming.

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Speaker 2: I mean, can you compare this to let's say you know,

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Speaker 2: a bakery bakes delicious cakes and you start to gain weight.

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Speaker 2: I mean, are you responsible or is the bakery responsible

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Speaker 2: for trying to make the cakes as delicious as possible

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Speaker 2: to hook you. I know that's a far out example,

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Speaker 2: but I'm just trying to get to the question of

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Speaker 2: where does our personal responsibility or parental responsibility factor in

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Speaker 2: or do the social media company shoulder all the blame.

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Speaker 5: So let me show you the distinction between your example

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Speaker 5: and the tech companies, which is to say, some of

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Speaker 5: the evidence that came out during this trial. For example,

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Speaker 5: was a study that Meta had suppressed and they had

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Speaker 5: conducted it themselves that showed when individuals in particularly youth,

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Speaker 5: put away their phone for a week, there was an

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Speaker 5: actual causative relation. We're not talking correlative relation, We're talking

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Speaker 5: causitive relationship between that showing that there was an effect

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Speaker 5: on mental health. Not only that, but another study that

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Speaker 5: they conducted showed that individuals who are were already predisposed

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Speaker 5: to mental health issues increase their usage of social media

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Speaker 5: and increase their worsening mental health. So these were some

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Speaker 5: of the studies that were shown. So this put meta

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Speaker 5: on notice of what their algorithm were doing. So in

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Speaker 5: your case, if the bakery knew that all of that

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Speaker 5: fat and sugary goods was in fact addicting the individuals,

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Speaker 5: there might be a claim there.

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Speaker 2: So Colin, what's the ultimate answer. Are the social media

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Speaker 2: companies supposed to go out of business?

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Speaker 1: Well, I don't think that they're supposed to go out

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Speaker 1: of business.

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Speaker 5: I think that they are supposed to show generalized and

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Speaker 5: neutralized algorithms, not algorithms that are designed to get you hooked.

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Speaker 5: In other words, one thing they could do, for example,

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Speaker 5: is stop infinite scroll. The whole reason why infinite scroll

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Speaker 5: was invented was because ase people got tired of having

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Speaker 5: to wait for their page to load. A little bit

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Speaker 5: of patients built into an algorithm might actually get us

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Speaker 5: off of our phones. And that's one of the things

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Speaker 5: that I find so ironic about this. The entire point

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Speaker 5: of this case is that social media negatively impacts mental health.

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Speaker 5: And I go and I look at the front page

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Speaker 5: of the newspaper after this verdict comes down, and everybody

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Speaker 5: is on their cell phone sharing it in social media.

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Speaker 1: The irony is thick here.

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Speaker 5: And we don't realize that we ourselves are participating in

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Speaker 5: this problem.

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Speaker 6: Will you just explain what infinite scroll is.

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Speaker 5: Yeah, So, anybody who grew up with the Internet between

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Speaker 5: two thousand and about twenty and eleven, if you had

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Speaker 5: a GPS unit, for example, when you were driving, it

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Speaker 5: would show that your car was driving towards the top

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Speaker 5: of the screen, and then once it got to the

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Speaker 5: top of the screen, it loaded more data, so you

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Speaker 5: would know where to drive further. Now it just tracks

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Speaker 5: along as you drive. And so the same thing on

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Speaker 5: social media. You'd get to the bottom of a page

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Speaker 5: and you'd have to wait for it to load. Well,

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Speaker 5: now you don't even have to wait for it to load.

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Speaker 5: It just shows you the next thing that you want

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Speaker 5: to see.

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Speaker 2: So only nine out of the twelve jurors had to

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Speaker 2: agree on each claim against each defendant. Two jurors consistently

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Speaker 2: disagreed with the other ten on whether the tech company

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Speaker 2: should be held liable. So the social media companies now

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Speaker 2: know what kinds of jurors lean toward their position. Will

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Speaker 2: they be looking to select jurors with similar characteristics to

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Speaker 2: those two in upcoming trials?

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Speaker 4: Oh?

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Speaker 5: Absolutely, And I'm confident that Meta and the tech companies

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Speaker 5: spend tons of money on jury consultants and identifying the

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Speaker 5: type of juror they want. And I'm confident now that

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Speaker 5: they've identified these two jurors, their personality profiles will be

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Speaker 5: what is sought out in the future. I mean that

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Speaker 5: being said, Meta has already indicated it's going to appeal,

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Speaker 5: so they have legal arguments to appeal from, and then

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Speaker 5: they may have some factual arguments to appeal from. And

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Speaker 5: the fact that you have two descending jurors certainly helps

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Speaker 5: that case. But at the end of the day, jury

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Speaker 5: verdicts are typically fairly sacred and they're very hard to overturn.

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Speaker 5: So absence the judge making an error on the law

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Speaker 5: or the jury really abusing their findings of fact, I

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Speaker 5: think this verdict stent.

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Speaker 2: The jury was out for nine days forty hours over

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Speaker 2: nine days, so they must have been struggling with some

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Speaker 2: aspect of the plaintiff's case, right, Well, it.

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Speaker 5: Could be something that was holding them up from a

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Speaker 5: liability standpoint. To your point earlier, well, this individual did

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Speaker 5: have mental health issues in any event, is that really

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Speaker 5: the cause here, because we have to prove its causative.

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Speaker 5: But I think more to the point, it could also

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Speaker 5: be on the damage valuation. This woman was ultimately awarded

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Speaker 5: three million dollars in actual damages and three million dollars

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Speaker 5: in punitive damages. Sometimes the fight isn't over the liability.

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Speaker 5: The fight is is, okay, how much do we award?

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Speaker 2: And where huge liability for the companies could have come

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Speaker 2: in is in the punitive damages. I mean, three million

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Speaker 2: dollars in punitive damages is just a drop in the

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Speaker 2: bucket to Meta or Google. Isn't it usually the case

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Speaker 2: that when you hear about these huge verdicts, most of

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Speaker 2: it is in the punitives.

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Speaker 5: Absolutely absolutely, and so whether the evidence shows that their

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Speaker 5: actions were willful and wanton and in reckless disregard of.

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Speaker 1: The plaintiff's rights. And they're going to point back.

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Speaker 5: To those studies where the individuals new at Meta the

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Speaker 5: consequences of these algorithms. And so, for example, one famous

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Speaker 5: jury verdict that resulted in a several hundred million dollars

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Speaker 5: perunit of damage award was likened to a parking ticket.

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Speaker 5: If I make one hundred thousand dollars a year and

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Speaker 5: I get a parking ticket for one hundred and fifty dollars, well,

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Speaker 5: you know that's really one percent.

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Speaker 1: Of my income or whatever. That comes out to be

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Speaker 1: point oh one.

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Speaker 5: And so if you did the same thing to Meta's point,

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Speaker 5: you know, sixty billion dollars in profits last year, that

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Speaker 5: can be a fairly big number just for a speeding ticket.

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Speaker 2: You know. Lawyers for both platforms consistently pointed to the

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Speaker 2: safety features and guard rails they each have available for

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Speaker 2: people to monitor and customize their use. I guess the

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Speaker 2: jury didn't think much of those well.

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Speaker 5: And part of the issue in this particular case, if

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Speaker 5: I recall correctly, is that this individual actually started before

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Speaker 5: Instagram had begun the age control checks and those sorts

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Speaker 5: of things. So if the facts had been different to

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Speaker 5: your point earlier June, the jury might go, well, there

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Speaker 5: were rental controls, there was age verification.

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Speaker 1: Those sorts of things.

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Speaker 5: But it also begs the question whether or not those

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Speaker 5: companies are actually fulfilling their requirements on the back end

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Speaker 5: to verify and the evidence that would show to the contrary.

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Speaker 2: So, as I mentioned, this is just the first verdict.

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Speaker 2: Do you think that Meta now goes out and tries

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Speaker 2: to start settling. Do you think they're going to take

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Speaker 2: the long road and say, well, wait for the appeal,

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Speaker 2: wait to see how other cases shake out.

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Speaker 5: Yeah, I mean, I found it odd that they wanted

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Speaker 5: to use this as their test case, but they clearly

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Speaker 5: have and they have a creative First Amendment argument with

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Speaker 5: regard to.

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Speaker 1: The whole problem with prosecuting. Previously has been thought that

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Speaker 1: section two.

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Speaker 5: Thirty of federal law, which says that social media companies

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Speaker 5: cannot be liable for the information that is posted on

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Speaker 5: their website.

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Speaker 1: This lawsuit says.

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Speaker 5: That that's true, but they can be held liable for

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Speaker 5: the decisions and the algorithms that show that content, how

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Speaker 5: all that content is portrayed. And typically in intellectual property law,

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Speaker 5: those are considered editorial rights. We are editing what you

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Speaker 5: are seeing. Why is that a problem? And so there's

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Speaker 5: a First Amendment case that they are alleging here. And

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Speaker 5: so if it goes up on appeal, makes to the

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Speaker 5: Supreme Court, and the Supreme Court insulates them from liability.

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Speaker 1: They're not likely to settle anything in the future.

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Speaker 5: And that's why I think they'll keep prolonging in this

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Speaker 5: litigation at least through that opinion.

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Speaker 2: Do you think people are jumping the gun too much?

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Speaker 2: They're comparing this to the tobacco litigation and the global

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Speaker 2: settlement there, and the opioid litigation. I mean, it seems

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Speaker 2: like we're just at the starting gate.

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Speaker 1: I do think it's the starting gate.

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Speaker 5: But I think that so many people, in spite of

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Speaker 5: their constant social media usage, have been expecting this to

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Speaker 5: come for so long that it does feel like the

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Speaker 5: big tobacco settlement a scenario the opioid issues. But what

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Speaker 5: I will tell you is that at least with regards

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Speaker 5: to tobacco, to your point, June, three million dollars is

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Speaker 5: a drop in the bucket, And last year Metapos is

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Speaker 5: sixty billion dollars in profit. In nineteen ninety seven, the

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Speaker 5: year before the tobacco settlement got entered into Philip Morris,

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Speaker 5: their profits were magnitudes of orders less than that, like

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Speaker 5: five billion. And so the point here is is Meta

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Speaker 5: and these other tech companies have plenty of money to

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Speaker 5: continue to fight on. Even if they settle a billion

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Speaker 5: dollars yere and a billion dollars there, they have plenty

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Speaker 5: of money to keep fighting.

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Speaker 2: So bottom line, Colin, how depressed do you think Meta

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Speaker 2: and Google should be about this verdict?

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Speaker 4: Well?

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Speaker 5: I don't know, because if you look at the approach

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Speaker 5: that our government has taken to regulating AI and data

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Speaker 5: privacy in general, which is to say we.

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Speaker 1: Don't and we won't.

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Speaker 5: I would not be surprised at all if what you

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Speaker 5: see is a bunch of legislation coming down the pike,

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Speaker 5: pushed by tech industry lobbyists that says we're insulating these

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Speaker 5: companies from these types of lawsuits. The only manner and

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Speaker 5: method by which you consue these companies is for X, Y,

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Speaker 5: and Z and negligence. Ain't one of them some sort

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Speaker 5: of insulation from their liabilities. I can see that happening,

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Speaker 5: and I can see the legislators, if history is prologued,

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Speaker 5: bending over backwards to accommodate that request.

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Speaker 2: When I look at the big picture, social media is

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Speaker 2: so entwined with our everyday lives, whether it's Instagram or

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Speaker 2: TikTok or whatever, or whether it's just looking at the

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Speaker 2: news and getting caught up in one news story after

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Speaker 2: the other, I find it hard to believe.

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Speaker 6: That there'll be a time when it won't be.

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Speaker 2: If you want to use the word addictive, I mean

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Speaker 2: it's all around us.

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Speaker 1: Well to that point.

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Speaker 5: So a few years ago, there was an editorial I

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Speaker 5: believe it was in the New York Times, and what

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Speaker 5: it spoke about was the future. The number one indicator

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Speaker 5: right now if you are in poverty is whether you smoke, period,

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Speaker 5: end of sorty. And so the argument here was in

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Speaker 5: the future, those who are impoverished are going to be

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Speaker 5: the ones utilizing social media for free. They're the ones

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Speaker 5: who are going to be bought and sold and exploited.

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Speaker 5: The individuals who have money will be able to subscribe

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Speaker 5: and obtain their privacy through paying for the product into

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Speaker 5: the future.

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Speaker 1: And so if you think.

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Speaker 5: About it from that perspective, yeah, social media will always

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Speaker 5: be around, but not necessarily in the way that we

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Speaker 5: see it today.

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Speaker 2: Is there a big lesson from this verdict?

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Speaker 5: I think that this should be a lesson to everyone

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Speaker 5: who says we can't regulate tech, because we don't need

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Speaker 5: to regulate tech. We need to apply the laws that

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Speaker 5: we currently have on the books in the same area

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Speaker 5: and method and we can get the same results.

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Speaker 1: This is a negligence claim. It's common law.

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Speaker 5: It's been around for hundreds of years, so I think

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Speaker 5: it was a long time coming, and we'll see what.

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Speaker 1: Happens on appeal.

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Speaker 2: Colin, do you think the defendants have a good chance

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Speaker 2: on appeal.

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Speaker 1: I do not necessarily like their first Amendment argument, I e.

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Speaker 5: That it's editorial commentary, because again you're going back to

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Speaker 5: thinking about advertising for tobacco companies. They knew what they

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Speaker 5: were portraying in these advertisements was addictive, you know, the

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Speaker 5: product was.

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Speaker 1: So I don't know that goes very far.

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Speaker 5: And I haven't seen any strong arguments that the judge

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Speaker 5: made a huge factual errors or someth along those lines.

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Speaker 5: Evidence chariers trial. So I think it's gonna be a

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Speaker 5: hard road to hoe. And let's think get that first

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Speaker 5: mimic claim in.

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Speaker 2: Thanks so much, Colin. That's Colin Walkee, a cybersecurity and

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Speaker 2: data privacy partner at Holestell. The Supreme Court threw out

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Speaker 2: a copyright infringement verdict against Cox Communications, dealing a major

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Speaker 2: blow to music industry efforts to hold internet providers responsible

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Speaker 2: for piracy by their customers. Any unanimous decision, the justices

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Speaker 2: said Cox couldn't be held liable for failing to shut

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Speaker 2: down the accounts of people who repeatedly downloaded and distributed

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Speaker 2: songs without permission. A federal appeals court had upheld the

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Speaker 2: jury's finding that Cox contributed to infringement by its subscribers.

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Speaker 2: My guest is an expert in intellectual property law. Shambalganesh,

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Speaker 2: a professor at Columbia Law School, tell us about the

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Speaker 2: Supreme Court's decision today.

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Speaker 7: Okay, So Fox versus Sony Communications was the Court being

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Speaker 7: asked to reconsider what the level of intent is under

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Speaker 7: a doctrine called contributory infringement in copyright law, which traces

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Speaker 7: itself back to decisions of the Court, the most prominent

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Speaker 7: of which was Sony versus Universal City in Post nineteen

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Speaker 7: seventy six. But a basically judge made doctrine that wasn't

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Speaker 7: codified in the statute that says that someone who actively

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Speaker 7: encourages or induces infringement could themselves be liable for infringement.

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Speaker 7: So it was a case examining contributory infringement and its

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Speaker 7: scope around the prong of intent by the person who's

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Speaker 7: doing the encouraging. And so the question was the liability

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Speaker 7: of an Internet service provider for potential knowledge that it

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Speaker 7: had that some of its users based on IP addresses

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Speaker 7: were engaged in illegal copyright infringement, and the question was

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Speaker 7: whether that satisfied the intent requirement when this knowledge was

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Speaker 7: made available to the Internet service provider, and despite subsequent

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Speaker 7: requests and notices, it didn't terminate the services of the subscribers.

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Speaker 7: Many of them it allowed to continue, and it knowingly therefore,

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Speaker 7: in some sense allowed the illegal activity to go on.

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Speaker 7: So the question was whether this knowledge was sufficient to

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Speaker 7: satisfy the intent requirement, and the Supreme Court says no.

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Speaker 7: The Supreme Court says no. What contributory infringement requires on

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Speaker 7: the intent prong is very specific, as we've told you

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Speaker 7: before in our prior decisions referencing Sony versus Universal and

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Speaker 7: then later on MGM versus Grockster, two major decisions where

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Speaker 7: the Court clarified what it means. The first thing it

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Speaker 7: says is, well, the two meanings of intent for our

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Speaker 7: purposes are one, if there's an active encouragement of the

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Speaker 7: infringement by specific actions. That was the Grockster case where

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Speaker 7: a peer to peer file sharing service was marketing itself

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Speaker 7: for usage for infringement. That active inducement, active encouragement. That's

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Speaker 7: the first prong. And the second one is if a service,

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Speaker 7: it says, is specifically tailored to infringement. So if the

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Speaker 7: service being offered by the provider is tailored for infringement. Well,

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Speaker 7: how do we understand if it's tailored for infringement? Here

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Speaker 7: the Court says, if that service is not capable of

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Speaker 7: substantial non infringing uses. So, if it's capable of substantial

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Speaker 7: non infringing users, that means it wasn't tailored to the infringement.

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Speaker 7: But only if it's not capable of substantial noninfringing uses

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Speaker 7: we could say that it's tailored to the infringement, not

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Speaker 7: simply on the basis of knowledge we have never held before.

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Speaker 7: The Court says that mere knowledge is sufficient for satisfying

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Speaker 7: the intent prong and here Cox did not satisfy either

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Speaker 7: of them, and as a result cannot be held liable.

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Speaker 7: So it reverses the decision of the Fourth Circuit on

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Speaker 7: contributory infringement.

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Speaker 6: So the decision was unanimous.

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Speaker 2: And if the Supreme Court's precedence was so clear, how

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Speaker 2: did the Fourth Circuit get it so wrong?

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Speaker 7: Yeah, the honest answer is the Supreme Court's prior president

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Speaker 7: was not this clear. So there is a oversimplistic reiteration

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Speaker 7: of the prior precedent by Justice Thomas, writing for the majority.

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Speaker 7: I think one of the things that's very glaring in

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Speaker 7: the opinion is how there is an oversimplification of the

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Speaker 7: entire complexity of the doctrine that was present not just

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Speaker 7: in the Supreme Court's own prior presidents, but the way

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Speaker 7: in which the intermediate courts of appeal had understood those

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Speaker 7: precedents and applied it in case after case. So there's

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Speaker 7: a simplification here. So just to give you an example,

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Speaker 7: one of the things that the majority doesn't talk about

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Speaker 7: is the fact that when Congress enacted the nineteen seventy

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Speaker 7: six Act and put in place Section one zero six,

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Speaker 7: which deals with the different kinds of infringement, the legislative

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Speaker 7: history makes clear that Congress used a phrase to authorize,

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Speaker 7: and it used that phrase specifically to recognize that contributory

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Speaker 7: infringement was meant to continue under thenineteen seventy six Act,

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Speaker 7: which was a doctrine that had been created by courts before.

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Speaker 7: Just as Thomas is basically saying right now that all

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Speaker 7: that generativity around the contributory infringement doctrine that existed before

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Speaker 7: is off the table, these are the only two variants.

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Speaker 7: He's effectively saying that, let's treat this almost as though

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Speaker 7: Its a textualist claim that unless it falls within the

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Speaker 7: narrow parameters of what we have said before, there is

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Speaker 7: no basis for contributory infringement. And that's the striking part

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Speaker 7: of the opinion in some ways, which is not that

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Speaker 7: the decision is problematic in any way or form. I

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Speaker 7: think many people believed that Cox should have won. The

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Speaker 7: outcome is not the problematic thing. It's what he does

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Speaker 7: with the doctrine of contributory infringement and really the role

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Speaker 7: of the courts, where he's basically saying that the room

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Speaker 7: for innovation and expansion, which has been the hallmark of

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Speaker 7: this entire area, is off the table. It's only these

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Speaker 7: narrow parameters that need to be complied with in the

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Speaker 7: expansion of the doctrine. And the reason that's problematic is

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Speaker 7: one June, just as you pointed out, the Court itself

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Speaker 7: had adopted a very different approach in MGM versus Rockster.

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Speaker 7: It introduced inducement which did not exist in the statute.

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Speaker 7: And secondly, Congress intended that generativity to continue. So there's

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Speaker 7: something institutional going on here where Justice Thomas does not

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Speaker 7: want the courts to continue developing it. When I say

403
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Speaker 7: Justice Thomas, writing for the majority.

404
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Speaker 2: So is that why two of the liberal justices Sonya

405
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Speaker 2: so To Mayor and Katanji Brown Jackson joined in a

406
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Speaker 2: concurrence saying the Court went too far in insulating Internet

407
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Speaker 2: service providers and the Court should have left open the

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Speaker 2: possibility of suits against companies that intentionally assist specific instances

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Speaker 2: of infringement.

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Speaker 7: That's exactly right. I think the concurring opinion by Justices

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Speaker 7: Sotomayor and Jackson agrees with the result, but it is

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Speaker 7: vehement in its disagreement on the reasoning adopted to come

413
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Speaker 7: at that because the concurrence, they see what Justice Thomas

414
00:22:01,920 --> 00:22:05,280
Speaker 7: the majority is doing is stifling the further creation of

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Speaker 7: expansion of contributory infringement to domains that Congress and the

416
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Speaker 7: Court itself indicated required potential expansion. And so Justice Sotomayor's

417
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Speaker 7: opinion actually goes to some lengths to indicate how such

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Speaker 7: an expansion should actually happen, How you might want to

419
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Speaker 7: look at instances where specific knowledge actually can be a

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Speaker 7: basis of intent. And she says, look, if you have

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Speaker 7: absolute certainty that something is going to be used for

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Speaker 7: a bad purpose, shouldn't that heightened level of knowledge be

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Speaker 7: equivalent to intent and therefore satisfy the prong. So you

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Speaker 7: give a product to someone when they come to you

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Speaker 7: saying I want to use it for X purpose and

426
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Speaker 7: X purpose only, and you say sure and give them

427
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Speaker 7: your product, Well, you have a heightened level of knowledge

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Speaker 7: that is the kind of intent that is sufficient for

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Speaker 7: the purposes of contributory infringement and the understanding of the

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Speaker 7: reasoning of the majority, she says, takes that entirely off

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Speaker 7: the table, and that.

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Speaker 1: Should not be the case.

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Speaker 7: But she's also very ready to point out that even

434
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Speaker 7: in that expanded universe, it did not exist here, which

435
00:23:06,880 --> 00:23:09,439
Speaker 7: is why she agrees and concurs with the results. So

436
00:23:09,480 --> 00:23:13,880
Speaker 7: she says, even under that modified, expanded standard of hers

437
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Speaker 7: differing from the majority, Cox would not be liable because

438
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Speaker 7: she basically says that while Cox may have had specific

439
00:23:22,080 --> 00:23:26,520
Speaker 7: knowledge as to the IP addresses which were committing the infringement,

440
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Speaker 7: what she points out is there is not a singular

441
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Speaker 7: correlation between an IP address and an individual user, right,

442
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Speaker 7: so multiple users could be associated with an IP address.

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Speaker 7: In fact, many IP addresses are establishments where you have

444
00:23:40,720 --> 00:23:44,280
Speaker 7: multiple users and employees. So all that they had was

445
00:23:44,320 --> 00:23:49,240
Speaker 7: the IP address specific knowledge, not the individual act specific knowledge,

446
00:23:49,320 --> 00:23:51,520
Speaker 7: and she says because of that, Cox would not be

447
00:23:51,600 --> 00:23:52,880
Speaker 7: found liable even under.

448
00:23:52,680 --> 00:23:55,960
Speaker 2: Herbert Coming up, I'll continue this conversation with Columbia Law

449
00:23:56,000 --> 00:24:02,440
Speaker 2: School professor Balganesh. The Supreme Court today sided with internet

450
00:24:02,520 --> 00:24:07,280
Speaker 2: service provider Cox Communications in its copyright fight with record

451
00:24:07,359 --> 00:24:12,840
Speaker 2: labels over illegal music downloads by Cox customers. The justices

452
00:24:13,000 --> 00:24:17,520
Speaker 2: ruled unanimously that Cox bears no liability for the copyright

453
00:24:17,600 --> 00:24:21,760
Speaker 2: violations of its customers, reversing a jury verdict and lower

454
00:24:21,760 --> 00:24:25,640
Speaker 2: court rulings. I've been talking to Columbia Law School professor

455
00:24:25,720 --> 00:24:30,080
Speaker 2: sham Baganesh. Do you think that Cox, in arguing us

456
00:24:30,200 --> 00:24:33,679
Speaker 2: sort of scare tactics and saying, well, we could be

457
00:24:33,720 --> 00:24:37,280
Speaker 2: cutting off a whole university because of one person, or

458
00:24:37,960 --> 00:24:42,040
Speaker 2: a grandma because her grandchild is pirting music.

459
00:24:42,880 --> 00:24:45,440
Speaker 7: Yeah, so I think they did use that, and that's characteristic,

460
00:24:45,480 --> 00:24:47,679
Speaker 7: of course, as you know of Supreme Court arguments painting

461
00:24:47,720 --> 00:24:52,040
Speaker 7: the doomsday scenario of an expensive holding. Did that play

462
00:24:52,160 --> 00:24:55,520
Speaker 7: into it? Perhaps some, But I don't believe that the

463
00:24:55,560 --> 00:24:58,240
Speaker 7: decision coming out the other way in terms of saying

464
00:24:58,240 --> 00:25:00,840
Speaker 7: we're taking knowledge off the table was driven by the

465
00:25:00,840 --> 00:25:04,080
Speaker 7: doomsday scenario kind of you know, worst case, here's what

466
00:25:04,119 --> 00:25:06,320
Speaker 7: will happen if we adopt the alternate approach. Why do

467
00:25:06,400 --> 00:25:08,240
Speaker 7: I say that. I say that for two reasons. One,

468
00:25:08,520 --> 00:25:10,960
Speaker 7: I think the Court has in the past, when presented

469
00:25:11,000 --> 00:25:13,840
Speaker 7: with these kinds of doomsday scenarios, even in copyright, been

470
00:25:13,920 --> 00:25:16,280
Speaker 7: willing to split the difference in some ways and come

471
00:25:16,359 --> 00:25:18,720
Speaker 7: up with a compromise solution, saying we don't need to

472
00:25:18,760 --> 00:25:21,280
Speaker 7: go all the way to say any knowledge is enough.

473
00:25:21,600 --> 00:25:24,000
Speaker 7: We can, you know, slice and dice what kind of

474
00:25:24,040 --> 00:25:26,960
Speaker 7: knowledge is requirement. And that's what Justice Sotomayor.

475
00:25:26,640 --> 00:25:27,160
Speaker 1: Does, right.

476
00:25:27,400 --> 00:25:29,760
Speaker 7: She says, Look, even though I'm willing to accept a

477
00:25:29,840 --> 00:25:33,840
Speaker 7: level of knowledge as being possible in contributory infringement, I'm

478
00:25:33,840 --> 00:25:36,360
Speaker 7: not ready to accept that it's just any knowledge. I'm

479
00:25:36,400 --> 00:25:39,200
Speaker 7: looking for heightened and specific knowledge. So I don't think

480
00:25:39,240 --> 00:25:41,879
Speaker 7: it was the sort of worst case doomsday scenario that

481
00:25:42,000 --> 00:25:45,200
Speaker 7: was motivating the Court. It may have played a role,

482
00:25:45,240 --> 00:25:48,200
Speaker 7: perhaps amongst some of the justices, but I really do

483
00:25:48,240 --> 00:25:50,359
Speaker 7: think that at the end of the day, what seems

484
00:25:50,400 --> 00:25:52,159
Speaker 7: to be playing a real role in the majority of

485
00:25:52,160 --> 00:25:55,640
Speaker 7: his opinion is this vision of what the judicial role

486
00:25:55,720 --> 00:25:58,560
Speaker 7: should be in copyright lawmaking and June. To be honest,

487
00:25:58,560 --> 00:26:02,360
Speaker 7: that's giving me the big pause, which is that this

488
00:26:02,400 --> 00:26:05,680
Speaker 7: is not just a one off opinion. Justice Thomas has

489
00:26:05,800 --> 00:26:10,040
Speaker 7: made these views clear, interestingly in two prior opinions. One

490
00:26:10,240 --> 00:26:13,080
Speaker 7: he wrote the majority opinion in Star Athletica. If you remember,

491
00:26:13,440 --> 00:26:16,840
Speaker 7: this was an opinion about the design of cheerleading uniforms

492
00:26:17,240 --> 00:26:20,600
Speaker 7: and whether they would become eligible for copyright protection. And

493
00:26:20,720 --> 00:26:23,439
Speaker 7: we had a vast amount of case law from the

494
00:26:23,480 --> 00:26:26,960
Speaker 7: Intermediate Court of Appeals, multiple Courts of Appeals that had

495
00:26:27,000 --> 00:26:30,680
Speaker 7: developed standards for operationalizing what was called a separability test.

496
00:26:31,040 --> 00:26:33,679
Speaker 7: But what's striking in that opinion is what he says, right,

497
00:26:33,800 --> 00:26:37,199
Speaker 7: which is that developing a test is not a question

498
00:26:37,400 --> 00:26:41,520
Speaker 7: of looking for the best copyright policy. That is Congress's job.

499
00:26:42,000 --> 00:26:45,120
Speaker 7: Our task is simply to interpret the text of the opinion,

500
00:26:45,320 --> 00:26:48,040
Speaker 7: and then he goes to develop a framework which has

501
00:26:48,119 --> 00:26:49,760
Speaker 7: obvious workability.

502
00:26:49,200 --> 00:26:49,879
Speaker 1: Issues with it.

503
00:26:50,320 --> 00:26:53,040
Speaker 7: But he says something very similar in another dissenting opinion.

504
00:26:53,359 --> 00:26:56,560
Speaker 7: This was a case Public Dot Resource dot Org versus

505
00:26:56,640 --> 00:27:01,119
Speaker 7: Georgia having to do with the copyright ability of annotated

506
00:27:01,200 --> 00:27:04,199
Speaker 7: codes of Georgia, and the majority opinion was written by

507
00:27:04,280 --> 00:27:08,159
Speaker 7: Chief Justice Roberts. Justice Thomas wrote the dissenting opinion in

508
00:27:08,160 --> 00:27:11,040
Speaker 7: that case, and what he did very interestingly was he

509
00:27:11,160 --> 00:27:16,120
Speaker 7: called out Chief Justice Roberts as taking the Court's opinion

510
00:27:16,400 --> 00:27:21,040
Speaker 7: in a direction beyond the appropriate judicial role of courts

511
00:27:21,119 --> 00:27:23,840
Speaker 7: in copyright. And I think what I'm seeing in the

512
00:27:23,880 --> 00:27:26,919
Speaker 7: majority opinion here is him very much hewing to that

513
00:27:27,000 --> 00:27:30,800
Speaker 7: worldview that courts need to stay in their lane, interpret

514
00:27:30,800 --> 00:27:35,439
Speaker 7: the statute, not go beyond trying to look at the

515
00:27:35,560 --> 00:27:40,280
Speaker 7: narrow areas where Congress has left some room open for

516
00:27:40,400 --> 00:27:43,360
Speaker 7: courts to develop and should not be taking the law

517
00:27:43,400 --> 00:27:46,000
Speaker 7: and taking it in new directions. And insofar as the

518
00:27:46,040 --> 00:27:49,120
Speaker 7: Court had done that before in both Sony and Groster,

519
00:27:49,520 --> 00:27:51,800
Speaker 7: his view is maybe we need to really stop there.

520
00:27:51,840 --> 00:27:54,080
Speaker 7: We do not want to go beyond that. And as

521
00:27:54,119 --> 00:27:56,760
Speaker 7: I said, my concern with that is that ignores the

522
00:27:56,800 --> 00:28:01,439
Speaker 7: fact that Congress wanted courts to go beyond that. Congress said,

523
00:28:01,560 --> 00:28:04,800
Speaker 7: this is an area that we are preserving by putting

524
00:28:04,800 --> 00:28:07,600
Speaker 7: in one word in the statute, and that preservation is

525
00:28:07,640 --> 00:28:10,480
Speaker 7: meant to indicate that this doctrine thrives, even though we're

526
00:28:10,520 --> 00:28:13,920
Speaker 7: not specifically referencing the doctrine. But he doesn't even cite

527
00:28:13,960 --> 00:28:16,520
Speaker 7: to that legislative history nor talk about it. It may

528
00:28:16,560 --> 00:28:18,040
Speaker 7: well be that he wanted to ignore it, but the

529
00:28:18,040 --> 00:28:20,120
Speaker 7: fact that he's not engaging it, I think is quite telling.

530
00:28:20,960 --> 00:28:26,320
Speaker 2: So according to Justice Thomas's opinion, what would it take

531
00:28:26,560 --> 00:28:32,679
Speaker 2: to hold an Internet service provider responsible libel for piracy

532
00:28:33,080 --> 00:28:34,080
Speaker 2: by their customers?

533
00:28:34,600 --> 00:28:36,439
Speaker 7: Yeah, so let's look at either of his prongs. So

534
00:28:36,520 --> 00:28:40,440
Speaker 7: one is if the Internet service provider is encouraging the infringement.

535
00:28:40,480 --> 00:28:43,240
Speaker 7: So if the internet service provider were to advertise it saying, hey,

536
00:28:43,280 --> 00:28:46,160
Speaker 7: we're going to look the other way if you infringe it, oh,

537
00:28:46,200 --> 00:28:49,240
Speaker 7: it would advertise its terms of service by saying, oh,

538
00:28:49,320 --> 00:28:52,400
Speaker 7: our terms of service are lenient to downloaders, we do

539
00:28:52,480 --> 00:28:56,760
Speaker 7: not kick you off if you are illegally downloading copyrighted

540
00:28:56,800 --> 00:28:59,320
Speaker 7: content or things like that. That could be interpreted as

541
00:28:59,440 --> 00:29:03,440
Speaker 7: active encouragement. But that's an extreme example, I think. The

542
00:29:03,480 --> 00:29:06,240
Speaker 7: other one, which is what comes closer to what was

543
00:29:06,280 --> 00:29:09,640
Speaker 7: an issue here, is the tailoring of the service and

544
00:29:09,720 --> 00:29:12,800
Speaker 7: whether that was capable of non infringing use.

545
00:29:13,160 --> 00:29:13,760
Speaker 1: So, in other.

546
00:29:13,640 --> 00:29:16,600
Speaker 7: Words, if the service were itself tailored in a way

547
00:29:17,160 --> 00:29:21,680
Speaker 7: that was specifically for infringing uses. And now again that

548
00:29:21,720 --> 00:29:25,000
Speaker 7: would perhaps be tailored technologically or some kind of protection

549
00:29:25,520 --> 00:29:28,520
Speaker 7: for infringing services. That might be the kind of situation

550
00:29:28,680 --> 00:29:31,680
Speaker 7: that would satisfy the second one. But as you can see,

551
00:29:31,760 --> 00:29:35,400
Speaker 7: these are so narrow and they're in some ways outlandish that,

552
00:29:35,560 --> 00:29:39,240
Speaker 7: as Justice Sotomayer points out, it's a really really low

553
00:29:39,320 --> 00:29:42,720
Speaker 7: bar for them to obtain protection. In other words, it's

554
00:29:42,760 --> 00:29:46,040
Speaker 7: a high bar for liability. Where she effectively says that

555
00:29:46,160 --> 00:29:48,360
Speaker 7: ISPs are now in some sense scott free.

556
00:29:48,840 --> 00:29:53,240
Speaker 2: There's a similar case, a music industry suit that seeks

557
00:29:53,280 --> 00:29:56,120
Speaker 2: as much as two point six billion dollars from Verizon.

558
00:29:56,600 --> 00:29:57,840
Speaker 6: Is that suit dead as well?

559
00:29:58,240 --> 00:30:00,520
Speaker 7: I think very very likely. I have to go back

560
00:30:00,520 --> 00:30:01,840
Speaker 7: and look at what the nature of the argument is,

561
00:30:01,880 --> 00:30:04,320
Speaker 7: and I do believe contributory infringement was one of them.

562
00:30:04,440 --> 00:30:07,000
Speaker 7: So it's important to recognize that this case was about

563
00:30:07,120 --> 00:30:10,040
Speaker 7: one doctrine of indirect lively, it was a contributory infringement.

564
00:30:10,440 --> 00:30:13,680
Speaker 7: So insofar as that case is claim about contributory infringement

565
00:30:13,720 --> 00:30:17,480
Speaker 7: goes and if they were relying on a heightened knowledge requirement,

566
00:30:17,520 --> 00:30:20,040
Speaker 7: I think it absolutely is they would have to recast

567
00:30:20,080 --> 00:30:22,080
Speaker 7: it in terms of one of the two available prongs

568
00:30:22,320 --> 00:30:25,560
Speaker 7: that the majority opinion recognizes. I think one additional thing

569
00:30:25,560 --> 00:30:28,800
Speaker 7: I will say June is. It is surprising but important

570
00:30:28,800 --> 00:30:31,960
Speaker 7: to note that Justice is Sodomyer and Jackson wrote this

571
00:30:32,080 --> 00:30:35,280
Speaker 7: concurring opinion because it's not always the case that you

572
00:30:35,280 --> 00:30:37,959
Speaker 7: have a concurring opinion that is so firmly on the

573
00:30:38,000 --> 00:30:41,000
Speaker 7: same side as the outcome, but writes in extra eight

574
00:30:41,120 --> 00:30:43,720
Speaker 7: or nine pages to talk about the flaw and the reasoning.

575
00:30:44,160 --> 00:30:45,960
Speaker 7: And I think that just goes to show you the

576
00:30:45,960 --> 00:30:49,440
Speaker 7: point that I'm making, which is how oversimplified the reasoning

577
00:30:49,440 --> 00:30:52,040
Speaker 7: of the majority is. I will say it to people

578
00:30:52,080 --> 00:30:54,280
Speaker 7: who have been following this area, if you just look

579
00:30:54,320 --> 00:30:57,160
Speaker 7: at the complexity of the briefing in the case, looking

580
00:30:57,200 --> 00:31:00,320
Speaker 7: at different versions of intent and the common life law

581
00:31:00,640 --> 00:31:03,000
Speaker 7: and how they had been structured, there's a sense in

582
00:31:03,040 --> 00:31:06,240
Speaker 7: which the majority basically is saying, we don't care one bit.

583
00:31:06,720 --> 00:31:09,120
Speaker 7: Our task is to look at what we have said

584
00:31:09,160 --> 00:31:12,360
Speaker 7: before narrow grounds. We can get to this in a

585
00:31:12,520 --> 00:31:15,760
Speaker 7: very very simplistic way. What are you talking about? And

586
00:31:15,800 --> 00:31:19,520
Speaker 7: I think that's the most in some ways surprising, if

587
00:31:19,560 --> 00:31:21,080
Speaker 7: not bewildering, part of the opinion.

588
00:31:21,360 --> 00:31:25,160
Speaker 2: I think Justice Thomas's opinions have bewildered some of us before.

589
00:31:25,680 --> 00:31:29,040
Speaker 2: Thanks so much for joining me tonight. That's Columbia Law

590
00:31:29,040 --> 00:31:32,640
Speaker 2: School Professor sham Balganesh. And that's it for this edition

591
00:31:32,680 --> 00:31:35,320
Speaker 2: of The Bloomberg Law Show. Remember you can always get

592
00:31:35,320 --> 00:31:38,480
Speaker 2: the latest legal news on our Bloomberg Law Podcast. You

593
00:31:38,520 --> 00:31:42,600
Speaker 2: can find them on Apple Podcasts, Spotify, and at www

594
00:31:42,760 --> 00:31:47,040
Speaker 2: dot bloomberg dot com, slash podcast Slash Law, And remember

595
00:31:47,040 --> 00:31:50,000
Speaker 2: to tune into The Bloomberg Law Show every weeknight at

596
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597
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Speaker 6: Wall Street Time.

598
00:31:52,120 --> 00:31:54,800
Speaker 2: I'm June Grosso and you're listening to Bloomberg