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Speaker 1: You're listening to Bloomberg Law with June Grosso from Bloomberg Radio.

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Speaker 2: How do I apply round up, whaed and grass killer products?

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Speaker 3: Using roundup weed and grass killer products right is key

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Speaker 3: to maximizing their effectiveness and safety.

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Speaker 1: But plaintiffs say that Roundup is not safe, and Beyer

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Speaker 1: has gotten hammered by jury verdicts totally almost four billion

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Speaker 1: dollars in the last three months, and the company's latest

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Speaker 1: courtroom loss was its biggest since round up cases started

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Speaker 1: going to trial. About five years ago. A Pennsylvania jury

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Speaker 1: awarded two point twenty five billion dollars to a former

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Speaker 1: round Up user who blamed his cancer diagnosis on long

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Speaker 1: term use of the herbicide, and two billion dollars was

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Speaker 1: impunitive damages designed to punish Bayer. The long running litigation,

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Speaker 1: with more than fifty thousand round Up cases still outstanding,

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Speaker 1: has coused some investors to call for a change in

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Speaker 1: Beyer's litigation strategy, but its options seem limited. Joining me

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Speaker 1: is an expert in mass tort litigation, Elizabeth Birch, a

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Speaker 1: professor at the University of Georgia Law School. The long

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Speaker 1: running litigation, with more than fifty thousand round up cases

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Speaker 1: still outstanding. Has caused some investors to call for a

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Speaker 1: change in Beyer's litigation strategy, But the problem is its

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Speaker 1: options are very limited. Joining me is an expert in

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Speaker 1: mass tort litigation, Elizabeth Birch, a professor at the University

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Speaker 1: of Georgia Law School. So, Elizabeth, this latest Beyer verdict

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Speaker 1: was its biggest ever, more than two billion dollars. Aren't

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Speaker 1: companies supposed to learn as litigation goes on and be

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Speaker 1: able to refine and improve their strategy.

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Speaker 3: One would certainly hope. So although I think you know,

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Speaker 3: Bear would probably mention that they've won ten of the

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Speaker 3: last sixteen trials, I think their hope certainly is to

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Speaker 3: try to get a case like this reverse on appeal,

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Speaker 3: and there is some precedent.

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Speaker 2: For that in the past.

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Speaker 3: Back in twenty nineteen, a California jury awarded roughly two

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Speaker 3: point five billion dollars in damages that ended up getting

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Speaker 3: slashed to eighty seven million. So it's still a lot

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Speaker 3: of money, but certainly not money with a.

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Speaker 1: Bee By ors vowed to appeal, express confidence that will prevail,

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Speaker 1: and it says it's not giving up as far as

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Speaker 1: trying cases. But what is it strategy because it did

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Speaker 1: spend about ten billion on settling one hundred and fifty

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Speaker 1: thousand cases.

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Speaker 3: You're right, it absolutely did, and it also indicated I

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Speaker 3: think a year or two ago, that it was planning

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Speaker 3: to pull round Up off the market in the next

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Speaker 3: couple of years. I think the hope being that at

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Speaker 3: some point these cases will stop. But the difficulty that

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Speaker 3: Bear's facing is that there's a long gaps between exposured

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Speaker 3: around Up and then the potential for developing some sort

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Speaker 3: of a non Hodgkins and foma, a different type of

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Speaker 3: cancer and these types of cases. So it's really hard

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Speaker 3: to say, you know, even if we were to pull

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Speaker 3: round Up off the mark at tomorrow when the litigation

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Speaker 3: might end. You know, when they contemplated taking it off

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Speaker 3: the market and indicated that they were going to take

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Speaker 3: it off the market in the future, they were trying

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Speaker 3: to come up with something that was equally effective at

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Speaker 3: killing weeds, and that was going to take some time

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Speaker 3: to develop. With my understanding, so I think they're trying

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Speaker 3: to have some sort of replacement for it as soon

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Speaker 3: as they pull it from the shelf.

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Speaker 1: So Beyer is facing now. Ten trials are expected this

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Speaker 1: year in state courts. It says the companies committed to

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Speaker 1: trying round up cases based on the strength of the science,

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Speaker 1: favorable regulatory assessments worldwide, and approven record of success at trial.

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Speaker 1: It was successful until I think it was October when

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Speaker 1: plaintiffs started racking up victories in California, Missouri, and Pennsylvania

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Speaker 1: state courts. Did something happen where the cases started to

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Speaker 1: turn against Beyer.

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Speaker 3: Yeah, it's hard to pinpoint of particular sea change. They

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Speaker 3: were certainly successful in settling a bulk of those cases

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Speaker 3: through what's known as the multi district litigation process. That's

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Speaker 3: at the federal level, but where they're really facing pressure

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Speaker 3: now is at the state level, particularly in jurisdictions like Philadelphia.

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Speaker 3: You know, I think every case is probably unique in

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Speaker 3: the sense that you're really highlighting the facts of your

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Speaker 3: particular client. And I think what we see in this

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Speaker 3: latest case is not just the use of kind of

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Speaker 3: garden variety round up on a half acre plot of land,

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Speaker 3: but sustained use over a fairly large plot of lands

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Speaker 3: and multiple acres and many many gallons of round up

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Speaker 3: braid at a time. So you really do see a

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Speaker 3: high volume of exposure and it's possible that the cases

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Speaker 3: that have been lost are cases with more casual use,

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Speaker 3: and there.

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Speaker 1: Is pursuing another legal strategy with regard to those state cases.

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Speaker 1: It's trying to convince appeals courts that federal law preempts

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Speaker 1: state claims.

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Speaker 3: Well, the preemption question has been out there for a

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Speaker 3: long time. It's not something that they've been successful on

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Speaker 3: thus far, and so you know, I think that's still

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Speaker 3: a really open question that remains to be seen. But

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Speaker 3: they haven't gotten a lot of traction with it.

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Speaker 1: And there is contradictory scientific evidence introduced in these cases

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Speaker 1: and differing opinions from agencies about whether the chemical and

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Speaker 1: roundup is a carcinogen that's correct, and I.

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Speaker 3: Think that's part of what juries might be struggling with

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Speaker 3: and maybe the reason for the ten wins that they've

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Speaker 3: had at trial. So back in twenty fifteen, part of

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Speaker 3: the World Health organization called the International Agency for Research

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Speaker 3: on Cancer classified the chemical that's used in round up,

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Speaker 3: glycophosphate as part of a chemical that is probably carcinogenic

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Speaker 3: in humans. But the EPA back in twenty ten said

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Speaker 3: there were no risks to human help. So we really

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Speaker 3: have some conflicting findings between different organizations.

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Speaker 1: And yet despite those conflicting findings, the bulk of these

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Speaker 1: awards are punitive damages meant to punish Bayer.

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Speaker 3: Yeah, I mean, you know, the juries are not happy

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Speaker 3: with the evidence that they hear. There is evidence that

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Speaker 3: they are wanting to punish the company. So this isn't

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Speaker 3: just sort of a slap on the risk, let's compensate

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Speaker 3: the victim type of damage awards. This is a you've

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Speaker 3: done something really wrong and we're angry about it kind

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Speaker 3: of award.

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Speaker 1: You know.

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Speaker 3: I think what we see oftentimes is in the headlines.

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Speaker 3: We get these astronomical verdicts because they are so newsworthy.

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Speaker 3: But it's important to remember that in about eighty percent

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Speaker 3: of the cases, judges and juries actually agree on what

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Speaker 3: the amount should be, and so when you see verdicts

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Speaker 3: like this, they aren't necessarily the run of the mill cases.

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Speaker 1: As you mentioned, Beyer has touted its previous success in

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Speaker 1: getting these awards knocked down. It points to three cases

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Speaker 1: before twenty twenty where verdicts totally more than one point

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Speaker 1: four billion dollars were knocked down to one hundred and

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Speaker 1: thirty two million. That's a reduction of near ninety five percent.

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Speaker 1: These appellate court reductions stem from Supreme Court guidance. Tell

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Speaker 1: us about that the.

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Speaker 3: Supreme Court back in the nineties decided several cases, a

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Speaker 3: trilogy of cases on punitive damages that capped essentially capped

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Speaker 3: the ratio between compensatory damages and punitive damages is no

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Speaker 3: greater than nine to one. Now, there can certainly be

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Speaker 3: some exceptions to that, but in general, the Supreme Court

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Speaker 3: has weighed in. So this is what we think would

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Speaker 3: be appropriate. But the Supreme Court really has not gotten

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Speaker 3: involved in these types of mass toward settlements. In fact,

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Speaker 3: the closest that we've really seen recently has been the

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Speaker 3: argument in front of the Supreme Court over the Purdue pharmacate,

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Speaker 3: where the Stackler family is trying to freeride on the

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Speaker 3: bankruptcy of Purdue to avoid civil liability for the opioid epidemic.

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Speaker 1: What about negotiating a global settlement? Is that a possibility

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Speaker 1: for Beayer.

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Speaker 3: I think it's going to be really difficult for them

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Speaker 3: at this point. They certainly try to negotiate a global settlement.

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Speaker 3: Several years ago, when they tried to certify these cases

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Speaker 3: as a class action in federal court. That was a

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Speaker 3: move that was denied by the judge in the federal

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Speaker 3: multi district litigation.

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Speaker 4: It would be.

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Speaker 3: Really difficult, I think, without plain of consent and plane

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Speaker 3: offs attorney's consent to get any sort of a global settlement,

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Speaker 3: given that we're now looking at individual state court litigations.

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Speaker 1: And as you mentioned, a settlement couldn't cover future cases

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Speaker 1: that are going to be filed because Roundup is still

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Speaker 1: on the market exactly.

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Speaker 3: So you can't sue just because you've been exposed to

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Speaker 3: a chemical. You can only sue once something has manifested,

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Speaker 3: some sort of injury has manifested, which means that if

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Speaker 3: it takes some ten to fourteen years between the exposure

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Speaker 3: to the product and the development of the disease, that

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Speaker 3: we're going to be looking at these types of lawsuits

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Speaker 3: for many years to come.

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Speaker 1: But plaintiffs who sue in the future, are they on

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Speaker 1: notice of the possible cancer causing a agents in roundup?

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Speaker 3: So this is one of the questions that we'll have

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Speaker 3: to see in the future. You know that the cases

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Speaker 3: that we're seeing right now don't have notice about this

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Speaker 3: potential for cancer. But in tort law, there's something called

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Speaker 3: the assumption of the risk, and defense called comparative fault,

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Speaker 3: which means you know, for example, that if you're a

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Speaker 3: smoker and you've been smoking for a long time, but

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Speaker 3: you know that smoking can cause lung cancer, then you

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Speaker 3: bear some sort of fault in continuing to smoke. So

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Speaker 3: we may see defenses like that becoming more successful in

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Speaker 3: the future.

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Speaker 1: Also, Bay already increased its litigation fund from eleven point

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Speaker 1: six billion to sixteen billion in twenty twenty one, but

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Speaker 1: the lawsuits keep piling up. Does it even have enough

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Speaker 1: in its litigation coffers to cover the verdicts and settlements,

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Speaker 1: et cetera.

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Speaker 3: Well, I mean that certainly remains to be seen. No

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Speaker 3: money goes to the victims while cases are on appeal,

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Speaker 3: and as you know, appeals can last for a couple

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Speaker 3: of so certainly there's that question if Bear is going

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Speaker 3: to continue to face these types of billion dollar verdicts,

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Speaker 3: whether at some point it's going to become an issue.

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Speaker 3: But they haven't indicated that they are considering filing for bankruptcy.

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Speaker 3: To my knowledge, the shareholders are certainly watching this. So

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Speaker 3: this is a litigation that is the thorn in the

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Speaker 3: side of Bear.

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Speaker 1: Can the round Up litigation be compared to Johnson and

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Speaker 1: Johnson's TALC litigation.

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Speaker 3: It is similar Like round up. There is a latency

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Speaker 3: period in TALC, particularly between the exposure to TALC. Some

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Speaker 3: would say that's exposure to TUT laced with asbestos, between

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Speaker 3: the exposure and the development of the disease. So I

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Speaker 3: think both Johnson and Johnson and the TOUT cases and

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Speaker 3: Bear in the round up cases are struggling with how

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Speaker 3: do we get closure in a case like this where

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Speaker 3: there are likely to be in many more cases than

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Speaker 3: the pipeline for years to come.

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Speaker 1: If you were advising Behar, how would you advise them

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Speaker 1: to handle all these cases? I mean try to settle.

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Speaker 3: I mean it's a real problem. There's not a way

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Speaker 3: to get any kind of global resolution based on the

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Speaker 3: types of things that we know now. So the easiest

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Speaker 3: way to try to do something like that would be

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Speaker 3: the file bankruptcy. But bere has not indicated that I

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Speaker 3: know of that they have any sort of plans of

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Speaker 3: filing bankruptcy in the future. But in order to try

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Speaker 3: to get rid of state and federal cases in any

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Speaker 3: kind of holistic settlements, most defendants are looking at bankruptcy.

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Speaker 1: Thanks so much for those insights, Elizabeth. That's Professor Elizabeth

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Speaker 1: Burg of the University of Georgia Law School. Coming up

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Speaker 1: next on the Bloomberg Law Show, we'll look at some

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Speaker 1: possible grounds for Trump's appeal of the eighty three point

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Speaker 1: three million dollar defamation verdict. I'm June Grosso and you're

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Speaker 1: listening to Bloomberg. Before last Friday, Donald Trump used to

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Speaker 1: frequently rail against advice columnist e Gene Carroll, even after

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Speaker 1: he was found guilty of sexually abusing her.

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Speaker 5: And I'm going to explain, I don't know who the

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Speaker 5: hell she is. I have no idea. They called me

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Speaker 5: up years ago and they said, do you know about

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Speaker 5: this woman twenty five or thirty years ago? She doesn't

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Speaker 5: even know the date, the time, the month, the season.

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Speaker 5: She has no idea.

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Speaker 1: But Trump didn't get to explain that or much of

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Speaker 1: anything else at the defamation trial. And since a jury

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Speaker 1: delivered a stunning eighty three point three million dollar verdict,

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Speaker 1: there has been, perhaps justice stunning silence from the former

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Speaker 1: president on Egene Carroll. It took only three hours of

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Speaker 1: deliberations for a Manhattan federal jury to return the verdict

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Speaker 1: that Trump defamed Carol. Trump called the verdict absolutely ridiculous,

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Speaker 1: as did his attorney Alina Haba.

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Speaker 3: We will immediately appeal.

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Speaker 1: We will set aside that ridiculous jury. But it will

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Speaker 1: take more than filing papers to appeal the verdict. Trump

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Speaker 1: will need to put up a hefty amount of cash

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Speaker 1: if he doesn't secure a bond. Joining me is former

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Speaker 1: federal prosecutor Robert miss A partner McCarter in English, Bob

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Speaker 1: Trump's behavior in the courtroom was, by all accounts, off

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Speaker 1: the charts, muttering as Carol testified, sparring with the judge

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Speaker 1: who threatened to kick him out of the courtroom, and

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Speaker 1: this drama of storming out of the courtroom during the

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Speaker 1: closing arguments. Egene Carroll's attorney, ROBERTA. Caplan, has said in

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Speaker 1: an interview with Politico that it was Trump's own behavior

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Speaker 1: that convicted him.

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Speaker 2: Well, I think that it did, because what typically happens

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Speaker 2: is that jurors form a bond with the presiding judge.

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Speaker 2: The judge has time to talk to them during the trial.

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Speaker 2: He sometimes will make general small talk with him while

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Speaker 2: they're waiting for the trial to begin, and they form

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Speaker 2: a bond with the judge, and they look to the

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Speaker 2: judge as the arbiter of how this proceeding ought to

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Speaker 2: go forward. They see that the judge controls the courtroom.

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Speaker 2: The judge makes the decisions. And if jurors see a

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Speaker 2: defense lawyer or a defendant acting in a way that

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Speaker 2: seems to disrespect the judge and disrespect the process, often

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Speaker 2: juries will find that distasteful and that's not good for

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Speaker 2: the outcome of the defendant.

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Speaker 1: And his behavior also played into Caplan's closing arguments. She

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Speaker 1: argued that Trump acted as if the law didn't apply

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Speaker 1: to him, and this trial was to punish him and

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Speaker 1: to get him to stop once and for all. And

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Speaker 1: the jury listened, it came back with an award of

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Speaker 1: sixty five million dollars in punitive damages to punish Trump

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Speaker 1: and deter him from defaming her in the future.

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Speaker 2: No, that's exactly right. From the plaintiff side of the case,

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Speaker 2: This couldn't have played out any better because what the

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Speaker 2: lawyer was arguing is that mister Trump was asserting the

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Speaker 2: rules that apply to everybody else do not apply to him,

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Speaker 2: and rather than sit there stoically in the courtroom when

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Speaker 2: these accusations were being made against them, even though they

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Speaker 2: were extremely distasteful. His conduct suggested very much what the

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Speaker 2: planets were arguing here, which is that he does not

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Speaker 2: believe that the rules did apply to him. So in

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Speaker 2: many ways, you reinforce exactly the scene that the planet

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Speaker 2: floyers were trying to establish throughout the trial.

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Speaker 1: In the New York Attorney General civil fraud trial, you

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Speaker 1: had Judge Arthur and Goron, who seemed to be a

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Speaker 1: little more lass a fair in the courtroom. But in

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Speaker 1: this trial you had Judge Lewis Kaplan, who is known

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Speaker 1: for being very strict about keeping order in decorum in

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Speaker 1: the courtroom, and even he couldn't reign in Trump completely.

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Speaker 1: What does that say about Trump's future behavior at the

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Speaker 1: criminal trials he's facing, and those are trials where he'll

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Speaker 1: have to be in the courtroom every day. Do you

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Speaker 1: think it's even possible for him to sort of behave

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Speaker 1: like a normal defendant.

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Speaker 2: Well, that's a good question, and you make a good

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Speaker 2: point that this is a civil case, and so former

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Speaker 2: President Trump was not required to attend, but in a

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Speaker 2: criminal case he does have to be there for every

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Speaker 2: day and every moment of the preceding and that means

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Speaker 2: as a defense lawyer, you have to instruct your clients

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Speaker 2: to control themselves during the proceedings because you remember that

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Speaker 2: jurors are constantly looking at the defendant throughout the trial.

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Speaker 2: They're not only listening to the testimony coming from the

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Speaker 2: witness stand. They're not only listening to the arguments of

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Speaker 2: the lawyers during the trial, but they are looking at

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Speaker 2: both the plaintiffs and the defendant, or in a criminal case,

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Speaker 2: both the prosecution and the defendant to gauge their reactions

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Speaker 2: to the testimony. So a defendant is always on in

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Speaker 2: that respect, in that jurors are watching them, looking at

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Speaker 2: their reactions, and that ultimately factors into how they make

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Speaker 2: their decision.

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Speaker 1: Trump says, are going to appeal, and I'm wondering what

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Speaker 1: the appellate issues might be. The judge did severely limit

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Speaker 1: his defense and what he could say on the stand.

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Speaker 1: Is that a possible argument on appeal.

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Speaker 2: Well, I certainly think it will be one of the

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Speaker 2: issues raised on appeal because the key ruling in this

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Speaker 2: case that came before the trial started, when Judge Kaplan

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Speaker 2: ordered former President Trump's legal team not to attempt to

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Speaker 2: argue in court that he didn't sexually assault e Gene Carroll.

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Speaker 2: That was really one of the critical arguments that the

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Speaker 2: defense wanted to make in this case, and Judge Chaplin

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Speaker 2: said that would essentially be a do over of the

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Speaker 2: first trial, which he lost in May, when a jury

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Speaker 2: found him libel for sexually abusing Carol more than two

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Speaker 2: decades ago. And in that trial, there was five million

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Speaker 2: dollars that was awarded. So by taking that argument away,

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Speaker 2: it essentially prevented former President Trump from denying the allegations

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Speaker 2: that were at the heart of this case. Trial number two,

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Speaker 2: which is the trial that was just concluded, was simply

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Speaker 2: about the question of damages, and it was very difficult

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Speaker 2: for the defense to control their client because you have

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Speaker 2: there a defendant, former President Trump, who continues to deny

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Speaker 2: that he sexually assaulted Eging Carroll, or that he even

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Speaker 2: knew Eging Carroll, and that was the defense they wanted

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Speaker 2: to argue, but the court said they couldn't. They still

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Speaker 2: got that in. Former President Trump took the stand for

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Speaker 2: about three minutes and denied the underlying sexual assault, but

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Speaker 2: the jury was immediately instructed by the judge to disregard

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Speaker 2: that testimony. And whenever a judge instructs a jury to

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Speaker 2: disregard testimony from a defendant or a witness, or to

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Speaker 2: disregard arguments made by a lawyer that undermines the credibility

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Speaker 2: of that witness or that lawyer with the jury, And

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Speaker 2: that's never a good thing, Bob.

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Speaker 1: What are some other appellate issues Trump might raise?

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Speaker 2: Judge Kaplin made a number of significant pre trial rulings

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Speaker 2: that really hemmed in the defense here, which will likely

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Speaker 2: form the basis of an appeal. He barred Trump and

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Speaker 2: his lawyers from making arguments the trials concerning Carol's choice

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Speaker 2: of lawyer and the fact that her litigation was financed

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Speaker 2: by somebody with close ties to the Democratic Party. He

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Speaker 2: also barred the defense team from presenting arguments concerning Miss

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Speaker 2: Carroll's path romantic relationships, and really prevented the defense from

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Speaker 2: focusing on Egen Carroll and more focusing on the statements

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Speaker 2: that were made by former President and the Trump. Now,

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Speaker 2: the heart of the defense here at this trial was

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Speaker 2: ultimately that the statements made by former President Trump did

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Speaker 2: not actually damage her reputation but enhanced it. So the

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Speaker 2: defense argued that Egene Carroll was essentially down on her luck,

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Speaker 2: that the money she was making as an advice columnist

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Speaker 2: had essentially dried up, and that she made these claims

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Speaker 2: only to try to restart her career, and that ultimately,

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Speaker 2: by making this statement, she actually became more famous and

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Speaker 2: actually increased her reputation and her earning capacity. Ultimately, the

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Speaker 2: jury did not accept that they were able to hear

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Speaker 2: testimony about threats that were made against her, and obviously

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Speaker 2: the falsity of those statements was something that they took

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Speaker 2: into account in terms of reaching their verdict here. But

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Speaker 2: those will be issues that I expect will be raised

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Speaker 2: on appeal as well, and Trump.

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Speaker 1: Might also raise on appeal the damages calculation that Trump

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Speaker 1: wanted the judge to instruct the jury on, but he refused.

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Speaker 2: One of the other interesting arguments raised by the defense

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Speaker 2: on the question of damages was whether or not the

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Speaker 2: court should adopt a gross versus net view of the damages.

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Speaker 2: In other words, the defense was arguing that even if

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Speaker 2: the statements were defamatory, the court needed to look at

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Speaker 2: the total impact of those statements to determine damages. So,

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Speaker 2: in other words, it's possible. They argued that a defendant

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Speaker 2: could make a defamatory statement that injured someone's reputation in

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Speaker 2: one part of the community but actually enhanced it in another.

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Speaker 1: Bob, what about the disparity in the two Egene Carroll verdicts.

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Speaker 1: I'm wondering if that poses an issue on appeal, because

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Speaker 1: it was another jury, as you say, who made the

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Speaker 1: decision that Trump was liable for sexually abusing Carol. That

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Speaker 1: jury awarded five million dollars. The second jury who didn't

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Speaker 1: hear that evidence, but rather heard the judge who, as

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Speaker 1: you mentioned before, or a figure of authority that the

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Speaker 1: jury usually believes, and he said that Trump did sexually

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Speaker 1: assault Carrol. And he said that more than once in

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Speaker 1: different ways. And then this jury awards Carol eighty three

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Speaker 1: point three million dollars. That's more than sixteen times the

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Speaker 1: award of the first jury. Is there any problem with

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Speaker 1: the contrast in those two verdicts.

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Speaker 2: Well, the appeals court will probably look at these two cases.

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Speaker 2: The difference between case number one and case number two

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Speaker 2: is that case number one that went to trial in

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Speaker 2: twenty nineteen was about the statements that were made by

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Speaker 2: former President Trump after he left office. The reason there

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Speaker 2: were two trials here is because there were statements that

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Speaker 2: were made by former President Trump while he was president.

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Speaker 2: That was tied up in appeals as the former president's

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Speaker 2: legal team argued that he had immunity for those statements.

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Speaker 2: So it's possible that the appeals court could say that

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Speaker 2: defamatory statements that were made by somebody while they were

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Speaker 2: president carried even more weight than statements made when they

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Speaker 2: were a former president. But they will be looking at

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Speaker 2: the juxtaposition of those two verdicts and those two awards

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Speaker 2: to determine whether this eighty three million dollar verdict is excessive.

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Speaker 1: By the way, Trump says he's looking for new attorneys

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Speaker 1: to represent him in the appeal, and in order to appeal,

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Speaker 1: he has to put up cash to secure the verdict

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Speaker 1: or get a bond. Explain the process.

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Speaker 2: Sure, so former President Trump is appealing both verdicts, the

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Speaker 2: earlier verdict for five million dollars, now this one for

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Speaker 2: eighty three million dollars, and he has two options. Basically,

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Speaker 2: he can pay the money into the court system, which

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Speaker 2: is what he did for the five million dollar verdict.

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Speaker 2: He simply paid that into the court system and that

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Speaker 2: money is held by the court while the appeal is pending. Alternatively,

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Speaker 2: he can try to secure an appeal bond, which would

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Speaker 2: save him for having to pay the full amount into

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Speaker 2: the court. What that would do would be to essentially

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Speaker 2: assure Miss Carroll that mister Trump has the money to

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Speaker 2: pay if ultimately he's unsuccessful on appeal, but it prevents

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Speaker 2: them from collecting the money while the appeals are being heard.

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Speaker 2: The problem with getting the bond in this circumstance is

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Speaker 2: that former President Trump has to find a company willing

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Speaker 2: to write a bond when he's facing other significant legal jeopardy,

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Speaker 2: and the value of the bond is likely to be

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Speaker 2: about one hundred and ten percent of the verdict, which

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Speaker 2: would mean he would need a ninety two million dollar bond,

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Speaker 2: and he also would have to pay the bonding company

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Speaker 2: a substantial premium. And there's also a question of what

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Speaker 2: collateral he would have to put up. He might not

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Speaker 2: be able, for example, to post properties as collateral. The

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Speaker 2: bonding company might demand that he plays liquid assets, success

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Speaker 2: certificates of deposit or treasury bond. So although the bonding

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Speaker 2: option is certainly available and he may avail himself with that,

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Speaker 2: given the size of this verdict, it's not going to

436
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Speaker 2: be that easy to get a bond in this circumstance,

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Speaker 2: he does.

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Speaker 1: Seem to have the cash to put up. The Bloomberg

439
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Speaker 1: Billionaire's Index places his liquid assets at about six hundred

440
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Speaker 1: million dollars. I'm at a deposition. Last year, Trump described

441
00:24:02,760 --> 00:24:06,960
Speaker 1: his cash as substantially an excess of four hundred million dollars,

442
00:24:07,160 --> 00:24:09,280
Speaker 1: so he has enough to cover it if he wants to,

443
00:24:09,720 --> 00:24:12,520
Speaker 1: although there is also that verdict in New York's three

444
00:24:12,600 --> 00:24:16,160
Speaker 1: hundred and seventy million dollar a civil fraud trial against him,

445
00:24:16,480 --> 00:24:19,840
Speaker 1: and that's now expected by mid February, so we'll see

446
00:24:19,880 --> 00:24:23,280
Speaker 1: what he does. Thanks so much, Bob. That's Robert Mince

447
00:24:23,359 --> 00:24:26,440
Speaker 1: of maccarter and English. Coming up next, a suit over,

448
00:24:26,480 --> 00:24:31,840
Speaker 1: a supposedly AI generated comedy special featuring the late George Carlin.

449
00:24:32,160 --> 00:24:39,040
Speaker 1: I'm June Grosso and you're listening to Bloomberg. Thank you,

450
00:24:39,400 --> 00:24:39,760
Speaker 1: thank you.

451
00:24:40,359 --> 00:24:42,560
Speaker 4: I like to start off with a heartfelt apology.

452
00:24:42,640 --> 00:24:44,520
Speaker 5: I'm sorry it took me so long to come out

453
00:24:44,560 --> 00:24:45,040
Speaker 5: with new.

454
00:24:44,920 --> 00:24:47,120
Speaker 3: Material, but I do have a pretty good excuse.

455
00:24:47,440 --> 00:24:52,520
Speaker 1: I was dead. It may sound like George Carlin, but

456
00:24:52,600 --> 00:24:56,160
Speaker 1: it's not. In fact. When podcasters Will Sasso and Chat

457
00:24:56,280 --> 00:25:00,920
Speaker 1: Colchin released the hour long comedy special called George Carlin,

458
00:25:01,080 --> 00:25:04,080
Speaker 1: I'm Glad, I'm Dead. They billed it as created from

459
00:25:04,240 --> 00:25:09,320
Speaker 1: generative AI technology trained on decades of the late comedian's material.

460
00:25:09,720 --> 00:25:14,080
Speaker 1: So Carlin's estate sued the duo for infringing his copyright

461
00:25:14,280 --> 00:25:17,879
Speaker 1: and illegally using his name and likeness. But then came

462
00:25:18,119 --> 00:25:21,960
Speaker 1: the twist. The podcasters are now claiming that the special

463
00:25:22,119 --> 00:25:25,480
Speaker 1: was actually written by a human one of the podcasters,

464
00:25:25,880 --> 00:25:28,760
Speaker 1: and that changes up what's at stake in the lawsuit.

465
00:25:29,200 --> 00:25:32,919
Speaker 1: If it sounds confusing, it is, but it's happened before

466
00:25:33,680 --> 00:25:37,359
Speaker 1: joining me is Zien Tang, a professor at UCLA Law School.

467
00:25:37,800 --> 00:25:40,440
Speaker 1: Let's start with the first iteration of this, which was

468
00:25:40,480 --> 00:25:43,359
Speaker 1: supposed to be AI generated. Tell us about that.

469
00:25:43,720 --> 00:25:46,760
Speaker 4: The claim that was at the center of the complaint

470
00:25:47,280 --> 00:25:53,160
Speaker 4: was that the comedians Will Sasso and Had Colston had

471
00:25:53,359 --> 00:25:59,840
Speaker 4: said thousands of hours of copyrighted material from George Carland

472
00:26:00,520 --> 00:26:05,600
Speaker 4: into an AI model, and then once that AI model

473
00:26:05,640 --> 00:26:09,800
Speaker 4: had been trained on all that Carlan material, it was

474
00:26:10,040 --> 00:26:16,000
Speaker 4: able to fit out or generate a entirely new comedy

475
00:26:16,080 --> 00:26:19,080
Speaker 4: routine based off of Carlin's jokes.

476
00:26:19,440 --> 00:26:22,920
Speaker 1: And in the lawsuit by Carlin's estate, they're making two

477
00:26:22,920 --> 00:26:27,080
Speaker 1: different claims. One based on copyright and the other on

478
00:26:27,359 --> 00:26:30,280
Speaker 1: the illegal use of Carlin's name and likeness.

479
00:26:30,800 --> 00:26:33,199
Speaker 4: So it would be a copyright claim in the sense

480
00:26:33,240 --> 00:26:37,280
Speaker 4: that there was a lot of copyrighted content that was

481
00:26:37,440 --> 00:26:42,480
Speaker 4: fed into the Large Language Model the LMS, which resulted

482
00:26:42,520 --> 00:26:45,800
Speaker 4: in a copy of the material being made while the

483
00:26:45,960 --> 00:26:49,479
Speaker 4: LLM was being trained. So that's one claim, and then

484
00:26:49,520 --> 00:26:53,600
Speaker 4: the right of publicity claim is based off of the

485
00:26:53,680 --> 00:26:58,479
Speaker 4: replication of the comedian's voice, which you know, are both

486
00:26:58,640 --> 00:27:03,760
Speaker 4: claims that have been lodged against AI or Generative AI

487
00:27:03,920 --> 00:27:08,960
Speaker 4: companies for the past year, both on the training data,

488
00:27:09,200 --> 00:27:13,919
Speaker 4: which a number of similar lawsuits, many of them class actions,

489
00:27:14,359 --> 00:27:17,560
Speaker 4: have been making the same claims with regard to the

490
00:27:17,640 --> 00:27:22,439
Speaker 4: training of llms based on copyrighted books, for example, or

491
00:27:22,480 --> 00:27:26,960
Speaker 4: copyrighted comedy routines. There's, for example, one currently pending in

492
00:27:27,040 --> 00:27:31,280
Speaker 4: federal court filed by the comedian Sarah Silverman representing herself

493
00:27:31,280 --> 00:27:35,000
Speaker 4: in an entire class of plaintiffs the complaint alleges whose

494
00:27:35,040 --> 00:27:38,960
Speaker 4: material have all been copied into the LM, and then

495
00:27:39,119 --> 00:27:43,400
Speaker 4: on the right of publicity claim. There's been similar allegations

496
00:27:43,440 --> 00:27:48,040
Speaker 4: made against AIS, such as the Drake Weekend mashup that

497
00:27:48,119 --> 00:27:51,520
Speaker 4: went viral a few months ago in which the AI

498
00:27:51,640 --> 00:27:55,439
Speaker 4: basically is trained on a celebrity's voice and then is

499
00:27:55,480 --> 00:27:59,720
Speaker 4: able to generate an entirely new work or new songs

500
00:28:00,160 --> 00:28:01,320
Speaker 4: using that voice.

501
00:28:01,480 --> 00:28:05,760
Speaker 1: Now have any of these lawsuits progressed to the point

502
00:28:05,760 --> 00:28:10,159
Speaker 1: where there's been a legal opinion about whether this is

503
00:28:10,800 --> 00:28:12,199
Speaker 1: a violation of copyright.

504
00:28:12,840 --> 00:28:13,800
Speaker 2: So no, there have.

505
00:28:13,760 --> 00:28:18,280
Speaker 4: Been some courts that have issued opinions that have basically

506
00:28:18,680 --> 00:28:23,719
Speaker 4: denied or dismissed certain claims filed by the plaintiffs, but

507
00:28:23,920 --> 00:28:28,840
Speaker 4: certainly no opinion issued by a court that has definitively

508
00:28:28,960 --> 00:28:32,280
Speaker 4: answered the question of whether or not the use of

509
00:28:32,359 --> 00:28:36,679
Speaker 4: copyright and material as training data for the AIS constitutes

510
00:28:36,800 --> 00:28:40,800
Speaker 4: copyright infringement or and even if it is technically copyright

511
00:28:40,880 --> 00:28:43,280
Speaker 4: infringement in the sense that there is a copy being

512
00:28:43,400 --> 00:28:48,600
Speaker 4: made when the material is ingested, whether that copying is

513
00:28:48,880 --> 00:28:51,760
Speaker 4: protected by the defense of fair use.

514
00:28:52,200 --> 00:28:55,320
Speaker 1: You study this, you teach this, what's your opinion.

515
00:28:55,880 --> 00:28:59,040
Speaker 4: I think it's a deeply complicated issue. I certainly think

516
00:28:59,120 --> 00:29:01,560
Speaker 4: that there is a lot nine of cases that have

517
00:29:01,720 --> 00:29:05,320
Speaker 4: preceded this, based on, for example, whether or not it

518
00:29:05,480 --> 00:29:09,760
Speaker 4: is fair use or Google to scan massive amounts of

519
00:29:09,840 --> 00:29:13,920
Speaker 4: copyrighted books in order to create their Google Books function,

520
00:29:14,120 --> 00:29:16,480
Speaker 4: which I think a lot of US use, in which

521
00:29:16,520 --> 00:29:19,840
Speaker 4: you can search within books and it'll return snippets of

522
00:29:20,040 --> 00:29:23,520
Speaker 4: in many cases, copyrighted books, and it's helpful for researchers

523
00:29:23,560 --> 00:29:25,720
Speaker 4: to be able to search within books, many of which

524
00:29:25,720 --> 00:29:29,120
Speaker 4: are out of print. Now, those prior decisions have held

525
00:29:29,120 --> 00:29:33,680
Speaker 4: that such uses are fair even if they're technical copyright infringements.

526
00:29:33,880 --> 00:29:37,360
Speaker 4: They're still protected by fair use because they are transformative,

527
00:29:37,640 --> 00:29:43,240
Speaker 4: technologically transformative uses of copyrighted works, because they are using

528
00:29:43,280 --> 00:29:46,600
Speaker 4: the copyrighted works for a wholly different purpose. I think

529
00:29:46,640 --> 00:29:50,080
Speaker 4: in this case, similar arguments could certainly be made, and

530
00:29:50,160 --> 00:29:54,400
Speaker 4: I could see certain judges making that determination based on

531
00:29:54,520 --> 00:29:58,360
Speaker 4: the transformative nature of what AI does and the fact

532
00:29:58,440 --> 00:30:00,960
Speaker 4: that maybe what you would argue is true to the

533
00:30:01,000 --> 00:30:05,240
Speaker 4: name training data. The LM, the Large Language Model, is

534
00:30:05,240 --> 00:30:11,480
Speaker 4: simply learning from the copyrighted material, not to wholly reproduce

535
00:30:11,560 --> 00:30:15,120
Speaker 4: the copyrighted material on the output side, but instead to

536
00:30:15,200 --> 00:30:19,640
Speaker 4: create a wholly new, transformative work. I think that argument

537
00:30:19,720 --> 00:30:23,560
Speaker 4: is somewhat complicated by recent lawsuits, including one that has

538
00:30:23,600 --> 00:30:26,680
Speaker 4: been filed against The New York Times, which alleges that

539
00:30:27,000 --> 00:30:31,640
Speaker 4: even on the output side, apparently through some prompt engineering

540
00:30:31,760 --> 00:30:35,240
Speaker 4: that the lawyers for The Times did. What they were

541
00:30:35,280 --> 00:30:38,520
Speaker 4: able to get the AI to do was to generate

542
00:30:38,920 --> 00:30:43,920
Speaker 4: entire news articles that replicated, word for words New York

543
00:30:43,920 --> 00:30:47,959
Speaker 4: Times articles that have been published. And so if that's true,

544
00:30:48,160 --> 00:30:52,240
Speaker 4: then certainly you would say, well, the work that's generated

545
00:30:52,320 --> 00:30:57,880
Speaker 4: by the AI is a direct infringement, and moreover, maybe

546
00:30:57,920 --> 00:31:02,600
Speaker 4: even the ingestion of the copyrighted work into the language

547
00:31:02,640 --> 00:31:06,720
Speaker 4: model is also an infringement that is not protected by

548
00:31:06,760 --> 00:31:11,040
Speaker 4: fair use because it is ingested for the purpose of

549
00:31:11,400 --> 00:31:15,960
Speaker 4: directly competing with the plaintiffs the author's income streams and

550
00:31:16,120 --> 00:31:19,600
Speaker 4: is likely to harm the market for plaintiff's work.

551
00:31:20,080 --> 00:31:23,400
Speaker 1: Now there's a twist to the Carlin case because after

552
00:31:23,440 --> 00:31:27,440
Speaker 1: the lawsuit was filed, a spokeswoman for the podcasters said,

553
00:31:27,840 --> 00:31:31,480
Speaker 1: this was not actually created by AI. Quote, it's a

554
00:31:31,520 --> 00:31:36,200
Speaker 1: fictional podcast created by two human beings, Will Sasso and

555
00:31:36,320 --> 00:31:40,280
Speaker 1: Chad Culchin. The YouTube video I'm Glad I'm Dead was

556
00:31:40,360 --> 00:31:46,440
Speaker 1: completely written by Chad. So, surprise, surprise, they're saying it's

557
00:31:46,480 --> 00:31:47,000
Speaker 1: not AI.

558
00:31:47,840 --> 00:31:52,880
Speaker 4: So if that's true, then, of course, if the material

559
00:31:53,680 --> 00:31:58,560
Speaker 4: was entirely written by Chad, and if the voice is

560
00:31:58,760 --> 00:32:03,120
Speaker 4: just an imitation, so focusing first on the copyright claims,

561
00:32:03,480 --> 00:32:06,520
Speaker 4: so then the copyright claim is gone because you have

562
00:32:06,600 --> 00:32:10,160
Speaker 4: fully original material that's been written by the comedian himself,

563
00:32:10,480 --> 00:32:13,040
Speaker 4: and then on the right of publicity the voice imitation.

564
00:32:13,480 --> 00:32:16,880
Speaker 4: The thing that has always complicated this right of publicity

565
00:32:16,920 --> 00:32:20,000
Speaker 4: claim is that even if it were an AI that

566
00:32:20,200 --> 00:32:23,320
Speaker 4: was actually fitting out George Carlin's voice and not some

567
00:32:23,440 --> 00:32:27,040
Speaker 4: voice imitations, the right of publicity claim was always complicated

568
00:32:27,440 --> 00:32:29,920
Speaker 4: by the fact that this is a comedy special. This

569
00:32:30,040 --> 00:32:34,240
Speaker 4: is an expressive work, and right of publicity claims typically

570
00:32:34,720 --> 00:32:37,760
Speaker 4: have found that such expressive works are protected by the

571
00:32:37,760 --> 00:32:41,160
Speaker 4: First Amendment. Right publicity is slightly different from copyright, but

572
00:32:41,520 --> 00:32:44,480
Speaker 4: both share this idea right that there are certain uses

573
00:32:44,520 --> 00:32:48,560
Speaker 4: that are defensible, even if we might consider them technical

574
00:32:49,120 --> 00:32:53,640
Speaker 4: uses of a celebrity's image or technically copying of copyrighted content.

575
00:32:53,840 --> 00:32:57,000
Speaker 4: So in the right of publicity context, it's clear that

576
00:32:57,240 --> 00:32:59,480
Speaker 4: the use of a celebrity's image or the use of

577
00:32:59,480 --> 00:33:02,800
Speaker 4: a celebrity's voice in a commercial is a violation of

578
00:33:02,800 --> 00:33:05,440
Speaker 4: a celebrities right of publicity. But when we're talking about

579
00:33:05,440 --> 00:33:08,280
Speaker 4: something that's an expressive work, like a comedy of routine,

580
00:33:08,360 --> 00:33:11,400
Speaker 4: for example, then most courts have help. But that is

581
00:33:11,760 --> 00:33:15,080
Speaker 4: expression that is protected by the First Amendment, that comedians

582
00:33:15,080 --> 00:33:18,640
Speaker 4: should be able to, for example, make some commentary about

583
00:33:18,720 --> 00:33:24,000
Speaker 4: celebrities by imitating them, by maybe even exactly reproducing their voice,

584
00:33:24,480 --> 00:33:29,560
Speaker 4: by exactly reproducing their image on some type of parities

585
00:33:29,600 --> 00:33:33,960
Speaker 4: such as a newspaper paroity that uses a celebrity's image.

586
00:33:34,080 --> 00:33:37,120
Speaker 4: So expressive works get really broadly way under a rite

587
00:33:37,120 --> 00:33:40,080
Speaker 4: of publicity law, and that's why the right of publicity

588
00:33:40,120 --> 00:33:42,280
Speaker 4: claim is always going to be much harder to vindicate

589
00:33:42,560 --> 00:33:43,680
Speaker 4: than the copyright claim.

590
00:33:44,080 --> 00:33:47,600
Speaker 1: Would you explain sort of how close a comedian can

591
00:33:47,680 --> 00:33:50,760
Speaker 1: get to George Carlin's work in a new.

592
00:33:50,680 --> 00:33:54,600
Speaker 4: Work, so, of course, assuming that the comedian himself wrote

593
00:33:54,720 --> 00:33:57,719
Speaker 4: the skits, then even if it's in the style of

594
00:33:57,880 --> 00:34:00,720
Speaker 4: or the same manner of jokes, how long is the

595
00:34:00,840 --> 00:34:04,960
Speaker 4: expression is wholly different, so long as the comedic routine

596
00:34:05,120 --> 00:34:09,120
Speaker 4: is not an exact duplication word for word, or very

597
00:34:09,120 --> 00:34:13,720
Speaker 4: close paraphrasing even of a George Carlin routine, but instead

598
00:34:13,760 --> 00:34:16,279
Speaker 4: maybe takes the idea of a George Carlin joke and

599
00:34:16,360 --> 00:34:19,799
Speaker 4: expands upon it, takes the style of his comedic humor

600
00:34:19,840 --> 00:34:22,560
Speaker 4: and expands upon it. That is all fair game under

601
00:34:22,600 --> 00:34:24,919
Speaker 4: a copyright law, and you wouldn't even need to bring

602
00:34:24,960 --> 00:34:27,600
Speaker 4: in the fair use doctrine at all. You would just say,

603
00:34:27,960 --> 00:34:31,880
Speaker 4: I'm only taking the unprotectable ideas. I'm not copying the

604
00:34:31,960 --> 00:34:35,800
Speaker 4: protectable expression of George Carlin's comedy routines.

605
00:34:36,360 --> 00:34:39,480
Speaker 1: A lawyer for Carlin's estate says, the lawsuit is going

606
00:34:39,520 --> 00:34:44,319
Speaker 1: ahead despite this new claim by the defendants. Quote, we

607
00:34:44,360 --> 00:34:46,759
Speaker 1: don't know what they're saying to be true. What we

608
00:34:46,840 --> 00:34:49,759
Speaker 1: will know is that they'll be deposed, they'll produce documents,

609
00:34:49,760 --> 00:34:52,360
Speaker 1: and there'll be evidence that shows, one way or another

610
00:34:52,680 --> 00:34:56,320
Speaker 1: how the show was created. So we'll speed ahead.

611
00:34:56,880 --> 00:34:59,640
Speaker 4: Yeah, I mean, and you know, of course lawyers say

612
00:34:59,640 --> 00:35:03,080
Speaker 4: these say this stunt generated a lot of publicity. It's

613
00:35:03,200 --> 00:35:07,000
Speaker 4: unclear how much money was actually generated from this. And

614
00:35:07,200 --> 00:35:10,360
Speaker 4: even if some amount of evidence is willingly produced that

615
00:35:10,480 --> 00:35:13,719
Speaker 4: shows that there was actually no copyrighted works that were

616
00:35:13,880 --> 00:35:19,560
Speaker 4: ingusted into any kind of LM, then the potential damages

617
00:35:19,640 --> 00:35:24,400
Speaker 4: that the plaintiff can receive just basically evaporate. So in

618
00:35:24,440 --> 00:35:28,360
Speaker 4: that case, the parties will probably settle or the plaintiff

619
00:35:28,360 --> 00:35:32,279
Speaker 4: will voluntarily dismiss the lawsuit to bring a lawsuit like this,

620
00:35:32,560 --> 00:35:36,000
Speaker 4: all the way to the trial or fact finding stage,

621
00:35:36,040 --> 00:35:40,440
Speaker 4: where there are depositions and there's discovery, is an incredibly

622
00:35:40,520 --> 00:35:44,880
Speaker 4: costly endeavor, and if what the comedians are saying is true,

623
00:35:45,080 --> 00:35:48,360
Speaker 4: it would behoove them to, or would do them well

624
00:35:48,560 --> 00:35:53,200
Speaker 4: to immediately try to ward off that expensive factfinding by

625
00:35:53,239 --> 00:35:56,560
Speaker 4: producing some amount of evidence to show that in fact,

626
00:35:56,920 --> 00:36:00,799
Speaker 4: there was no AI training involved. Certainly, I think that's

627
00:36:00,840 --> 00:36:03,840
Speaker 4: been the complaint against a lot of this training data

628
00:36:03,880 --> 00:36:07,319
Speaker 4: that's been fed into the LMS is the very opacity

629
00:36:07,360 --> 00:36:10,799
Speaker 4: of the system, and that it's never clear. Then the

630
00:36:10,800 --> 00:36:14,080
Speaker 4: plaintiff has no visibility into what the defendant is doing,

631
00:36:14,560 --> 00:36:18,759
Speaker 4: what their process was, what materials were actually fed into

632
00:36:18,800 --> 00:36:21,759
Speaker 4: the LM. This is true not just of the comedians,

633
00:36:21,800 --> 00:36:25,439
Speaker 4: but of course of large companies like open Ai. How

634
00:36:25,440 --> 00:36:28,680
Speaker 4: are you to figure out what open Ai was training

635
00:36:28,719 --> 00:36:32,640
Speaker 4: their LLMS on. It's all proprietary. That's been always one

636
00:36:32,680 --> 00:36:34,880
Speaker 4: of the big complaints from the plaintiffs, and so in

637
00:36:34,920 --> 00:36:38,640
Speaker 4: those cases you want discovery to force the company to

638
00:36:38,760 --> 00:36:42,440
Speaker 4: produce evidence. But in this case, these are two individual comedians,

639
00:36:42,719 --> 00:36:44,680
Speaker 4: you know, I think the amount of money at stake

640
00:36:44,800 --> 00:36:48,239
Speaker 4: is vanishingly small. If they are able to produce some

641
00:36:48,840 --> 00:36:52,960
Speaker 4: evidence that this material was wholly original written content.

642
00:36:53,440 --> 00:36:56,640
Speaker 1: Now that the initial feure is over and the AI

643
00:36:56,840 --> 00:36:59,520
Speaker 1: claims have been taken back, we'll see if the lawsuit

644
00:36:59,560 --> 00:37:02,520
Speaker 1: gets tossed. Thanks for joining me on the show. That's

645
00:37:02,520 --> 00:37:06,080
Speaker 1: Professor Zen Tang of UCLA Law School, and that's it

646
00:37:06,160 --> 00:37:09,120
Speaker 1: for this edition of the Bloomberg Law Podcast. Remember you

647
00:37:09,120 --> 00:37:11,840
Speaker 1: can always get the latest legal news by subscribing and

648
00:37:11,920 --> 00:37:15,400
Speaker 1: listening to the show on Apple Podcasts, Spotify, and at

649
00:37:15,480 --> 00:37:19,800
Speaker 1: Bloomberg dot com, slash podcast, slash Law. I'm June Grosso

650
00:37:20,000 --> 00:37:21,480
Speaker 1: and this is Bloomberg