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

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Speaker 2: By four. Ah, there's mister Midnight Jack Devil.

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Speaker 1: Oh, good evening night, owls, and thank you for allowing

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Speaker 1: me into your living rooms.

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Speaker 2: You're meddling the things you don't understand who, ladies.

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Speaker 1: And gentlemen, please stay tuned for a live television first,

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Speaker 1: as we attempt to commune with the Devil.

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Speaker 3: The horror movie Late Night with the Devil is about

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Speaker 3: a seventies talk show host who keeps the cameras rolling

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Speaker 3: during a live satanic incident, unleashing evil into the living

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Speaker 3: rooms of viewers. It sounds scary, right, but what actually

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Speaker 3: scared a lot of viewers more was the film's use

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Speaker 3: of AI to generate artwork used in cutaways linking segments

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Speaker 3: of the show. The social media backlash even included calls

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Speaker 3: to boycott the movie. Of course, the use of AI

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Speaker 3: in films and television has been a hot button topic

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Speaker 3: in Hollywood, witnessed last year's strikes, where it was an

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Speaker 3: obstacle to reaching deals with the writers and actors' unions,

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Speaker 3: And now a federal court has issued the first ruling

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Speaker 3: of its kind on whether works generated by AI. In

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Speaker 3: this case, an artwork can be copyrighted. The DC Circuit

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Speaker 3: Court ruled unanimously that human authorship is required to get

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Speaker 3: copyright protection for a work. Joining me is intellectual property

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Speaker 3: litigator Terence Ross, a partner at Katin Yutchen Rosenman. So

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Speaker 3: Terry tell us about this work created by a computer scientist.

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Speaker 1: Well, Jue, we talked about this in a past show,

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Speaker 1: way back when this whole issue was still percolating in

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Speaker 1: lower courts, and now we have the first appellate court

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Speaker 1: decision on whether or not artificial intelligence can create works

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Speaker 1: that can be copyrighted. And to refresh everyone's memory, this

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Speaker 1: involves a computer scientist by the name of doctor Steven Taller,

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Speaker 1: and he came up with his own generative artificial intelligence,

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Speaker 1: which he has dubbed the Creativity Machine. And just so

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Speaker 1: everybody understands, AI gets used in a lot of misleading

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Speaker 1: contexts and commercials and advertising. Nowadays, real artificial intelligence is

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Speaker 1: called generative AI because it's capable of learning and it

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Speaker 1: improves itself without human interaction. And so doctor Toller came

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Speaker 1: up with this creativity machine, and he asked it to

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Speaker 1: paint a picture for him and rendered a lovely work,

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Speaker 1: multi colored work, what appeared to me to be a

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Speaker 1: garden scene. But doctor Toller gave it the name A

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Speaker 1: Recent Entrance to Paradise, and he printed that off a printer.

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Speaker 1: He took it to the US Copyright Office and filed

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Speaker 1: an application to register that work for copyright registration purposes,

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Speaker 1: and on the form said it was created by this

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Speaker 1: creativity machine. Not surprisingly, the US Copyright Office denied that

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Speaker 1: application for registration. And by way the historical background, this

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Speaker 1: didn't come as a surprise to anybody. Way back in

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Speaker 1: nineteen seventy three, the US Copyright Office, in its internal

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Speaker 1: regulations announced that only humans can obtain copyright registrations. So

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Speaker 1: this is a really longstanding position of the Copyright Office.

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Speaker 1: It's not something unique to this case or unique to

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Speaker 1: artificial intelligence or the current trend in AI. If your

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Speaker 1: application is denied by the Copyright Office, you have a

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Speaker 1: right to appeal that decision to the United States District

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Speaker 1: Court for the District of Columbia, because the Copyright Office

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Speaker 1: is headquartered in DC, and doctor Toller did that. The

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Speaker 1: District Court judge who was assigned that case agreed with

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Speaker 1: the US Copyright Office that only humans get copyrights and

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Speaker 1: affirmed the decision by the US Copyright Office. Doctor Toller

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Speaker 1: appealed from that District Court decision to the Federal Pellet

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Speaker 1: Court for the District Columbia, which is called the United

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Speaker 1: States's Court of Appeals for the District of Columbia Circuit,

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Speaker 1: which coincidentally is the court that I was a law

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Speaker 1: clerk on. And we get a decision in that case

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Speaker 1: finally from the DC Circuit, and the DC Circuit affirmed

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Speaker 1: the District Court, which in turn had affirmed the US

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Speaker 1: Copyright Office. The DC Circuit agreed with everybody else who

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Speaker 1: had looked at this and said that copyright registrations can't

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Speaker 1: be granted to robots.

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Speaker 3: And so this was not a surprising decision, right that

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Speaker 3: the Copyright Act requires a human being.

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Speaker 1: It certainly wasn't a surprise to me. I think the

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Speaker 1: consensus was the case would come out this way, and

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Speaker 1: it's really driven by the factual predicate. Doctor Toller was

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Speaker 1: unequivocal in telling the Copyright Office and every step on

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Speaker 1: appeal that he was not the creator of this drawing,

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Speaker 1: that it was the creativity machine, a generative AI that

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Speaker 1: had rendered the drawing. So there was no dispute on

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Speaker 1: the facts. There was no line drawing to be done.

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Speaker 1: There's no gray areas, had a nice, crisp, clear presentation

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Speaker 1: of that central fact. Given that lack of dispute on facts,

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Speaker 1: it was really then driven by the law. And the

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Speaker 1: interesting thing about the DC Circuit's opinion, which differed from

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Speaker 1: the Copyright Office decision in the District Court decision, is

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Speaker 1: a laser like focus by the DC Circuit on the

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Speaker 1: techs of the Copyright Act in nineteen seventy six. And

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Speaker 1: this is sort of the trend in appellate courts and

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Speaker 1: the Supreme Court these days. What is referred to by

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Speaker 1: lawyers as textual analysis. It is no longer some right

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Speaker 1: wing theory propagated by Justice Scalia. It is this concept

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Speaker 1: of textural literalism has just seized the appellate courts. In

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Speaker 1: the Supreme Court, you see both the so called liberal

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Speaker 1: justice of the Supreme Court and the conservative justices on

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Speaker 1: the Supreme Court agreeing that you apply this sort of

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Speaker 1: textual analysis whenever there's a statute of Constitution up. This

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Speaker 1: is a sea change from twenty years ago, and here

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Speaker 1: you see it being done by the DC Circuit in

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Speaker 1: connection with this case and what they do that the

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Speaker 1: DC Circuit marched through the Copyright Act and they said,

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Speaker 1: you know, there's a distinction in the text of the

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Speaker 1: Copyright Act between machines and authors. And they laid out

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Speaker 1: that themes don't own property because under the Act, copyrights

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Speaker 1: are property and authors get to own copyrights, but machines

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Speaker 1: don't own property. Machines don't have a lifetime because copyright

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Speaker 1: registrations are measured in part by the lifetime of the

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Speaker 1: author plus a certain number of years. But machines don't

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Speaker 1: have a lifetime. Machines have no errors. There's nobody who

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Speaker 1: inherits for a machine in part because it doesn't have

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Speaker 1: a death, doesn't have a lifetime. And yet there's a

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Speaker 1: provision in there that says the errors of authors obtain

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Speaker 1: their rights, So how do you account for that? And

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Speaker 1: then there's also provision in the text about the nationality

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Speaker 1: and domicile of authors. Yet machines don't have nationality, machines

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Speaker 1: don't have domicile. Indeed, the court pointed out that in

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Speaker 1: the text of the Copyright Act nineteen seventy six, every

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Speaker 1: time a machine is referenced, it is as a tool

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Speaker 1: being used by human authors, and they thought that was telling.

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Speaker 1: And there's express reference to computer programs. Computer programs don't

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Speaker 1: get to register themselves. They're simply a tool used by

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Speaker 1: human beings to create works. And they thought that this

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Speaker 1: distinction between machines and authors in the text was determintive here.

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Speaker 1: And therefore they came to the conclusion. And if you

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Speaker 1: follow their logic, if you grew with the logic that

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Speaker 1: we followed, the text seems inescapable that an author for

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Speaker 1: purposes of copyright has to be a human being.

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Speaker 3: Coming up, what about works created by input from a

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Speaker 3: human and AI? This is Bloomberg. A unanimous DC Circuit

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Speaker 3: court has ruled that copyright protection requires human authorship, a

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Speaker 3: setback to efforts seeking intellectual property protection for AI generated creations.

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Speaker 3: I've been talking to intellectual property litigator Terrence Fross, a

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Speaker 3: partner at Caton Mutchen Rosenman Terry. What arguments did the

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Speaker 3: computer scientist make to try to get the court to

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Speaker 3: find that there should be a copyright issued for a

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Speaker 3: wholly AI generated work?

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Speaker 1: So Peller makes a couple arguments. The only one that

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Speaker 1: they gave much credence to was dictionary definition. There are

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Speaker 1: dictionary definitions where you look up creator and the definition

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Speaker 1: suggests it could be a machine. But as VC Circuit

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Speaker 1: pointed out, we don't go to a dictionary definition unless

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Speaker 1: there's ambiguity in the statute. And here they said, you know,

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Speaker 1: we're doing a textual analysis. Here, we're looking strictly the text,

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Speaker 1: and the text is clear as can be that there

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Speaker 1: is a distinction drawn between authors who have get copyrights

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Speaker 1: and machines who are merely tools used by authors, and

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Speaker 1: therefore we don't need to look at any dictionary definition. Now,

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Speaker 1: the rest of the arguments made by Polar and the

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Speaker 1: DC CERCUM was clear on this and correct. I think

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Speaker 1: they described as public policy arguments. And again this is telling.

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Speaker 1: They said on all these other public policy are hums.

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Speaker 1: You have you take those to the Congress. And there's

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Speaker 1: a great quote in here they say, our duty as

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Speaker 1: a court is to apply the statute as written. That's

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Speaker 1: a quote, apply the statute is written. I mean, this

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Speaker 1: would make Justice Scalia so happy that this has become

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Speaker 1: the norm now. And you know what, if that's the

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Speaker 1: standard you're going to use for analysis, then there's no

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Speaker 1: question how this case should come out, because in fact,

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Speaker 1: most of the argument made by doctor Tholer, aren't simply

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Speaker 1: public policy arguments as to why Congress should rewrite the

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Speaker 1: Copyright Act.

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Speaker 3: So this work was created wholly by AI. What about

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Speaker 3: works that are created with a mixture of human and

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Speaker 3: AI input? Are they copyrightable?

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Speaker 1: So this is the issue that is really getting all

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Speaker 1: the discussion in the academic circles that I run in.

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Speaker 1: And Poller made argument like that, which the DC Circuit

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Speaker 1: again lumped into the public policy type arguments, and what

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Speaker 1: they said is that we only decide cases that are

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Speaker 1: presented to us. These what they described as line drawing arguments.

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Speaker 1: You know, where do you draw the line between a

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Speaker 1: human author and a machine author? These line drawing arguments

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Speaker 1: aren't presented to us here, and so we're not going

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Speaker 1: to decide those. And they recognize that there and there

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Speaker 1: were in the Amikus briefs disagreements over how much of

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Speaker 1: a contribution by AI makes it a machine generated work

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Speaker 1: as opposed to human generated work, and the DC Certus said,

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Speaker 1: that's not this case. Doctor Toller has never made that argument.

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Speaker 1: He's been crystal clear that the machine, the robot, did

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Speaker 1: all the drawing here, and that's all we have to

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Speaker 1: decide again. This is the sort of decision that would

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Speaker 1: make Justice Skilly a proud. It looks at the text

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Speaker 1: and it does not come to render it opinions or

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Speaker 1: tell Congress how to do its job. It simply plays

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Speaker 1: referee and makes a decision on what is actually presented

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Speaker 1: to it.

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Speaker 3: So I read that the Copyright Office how's allowed the

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Speaker 3: registration of works made by humans who use AI.

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Speaker 1: That is correct. There have been several of those because

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Speaker 1: those were allowed. I'm not sure how we ever get

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Speaker 1: a review in a court of law of that. At

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Speaker 1: some point we will have a case where the Copyright

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Speaker 1: Office is not enough human involvement, too much machine involvement,

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Speaker 1: and then that will get us a review and we

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Speaker 1: might understand this better. But think about it in these terms.

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Speaker 1: Humans use machines all the time to create works. As

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Speaker 1: a newsperson, you're doing that with your typewriter. Authors are

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Speaker 1: doing that with their typewriters laptops. Journalists on the nationwide

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Speaker 1: news networks are doing it with cameras. Radio newscasters are

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Speaker 1: sticking them microphone in front of the sports hero and

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Speaker 1: recording his thoughts. Humans use machines all the time, and

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Speaker 1: there should be no difference with respect to using AI

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Speaker 1: to help. Indeed, a son, Teddy, who is a computer coder,

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Speaker 1: and there are so many different artificial intelligence programs out

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Speaker 1: there right now that help coders source coders to write

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Speaker 1: programs and makes their job more efficient, more effective. Does

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Speaker 1: that mean the human's not involved? I don't think so.

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Speaker 1: So I think that's the answer to that question. It's

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Speaker 1: simply the machine being used by human. It's not the

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Speaker 1: machine getting a copyright registration.

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Speaker 3: Maybe I'll have AI assistance in writing the lead into

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Speaker 3: this segment.

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Speaker 1: Oh god, I'm sure you could.

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Speaker 3: It seems like AI is everywhere and there are so

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Speaker 3: many lawsuits over AI. What are the stakes here?

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Speaker 1: So, Jude, this is a surprisingly important issue. If you remember,

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Speaker 1: almost two years ago, the Screenwriters Guild the Writer Skilled

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Speaker 1: of America went on strike and stopped all production of

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Speaker 1: film and television shows. Even reality shows got stopped because

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Speaker 1: they have writers. And one of the core issues that

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Speaker 1: was presented was the use by the studios of artificial

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Speaker 1: intelligence to write scripts. The writers viewed this as an

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Speaker 1: existential threat to their business, to their work, that it

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Speaker 1: would put writers out on the street because artificial intelligence

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Speaker 1: would simply take over and do all the script writing,

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Speaker 1: and that was one of the concessions that they obtained

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Speaker 1: when that striker was settled. But the point here is

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Speaker 1: that if artificial intelligence scripts cannot be copyrighted, then that

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Speaker 1: shifts the bargaining power to the writers, because a studio

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Speaker 1: that's producing spending two hundred and fifty million dollars on

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Speaker 1: a big hit score generally a billion dollars in revenues

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Speaker 1: cannot afford to go without a copy. And so this

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Speaker 1: is actually very important in the computer context. And we

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Speaker 1: just talked about how artificial intelligence is being used to

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Speaker 1: help coders write new applications, new software. If again those companies,

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Speaker 1: the Microsofts of the world, can't get copyrights on their

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Speaker 1: new computer programs because of the use of artificial intelligence,

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Speaker 1: that will limit their willingness to employ artificial intelligence in

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Speaker 1: that way, and so again the computer scientists, the coders

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Speaker 1: will keep their jobs. So this is really important. And

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Speaker 1: the problem is people don't understand the extent of which

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Speaker 1: copyright impacts the economy. It is really critical, and the

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Speaker 1: founders saw it this way. The Founders viewed copyright it's

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Speaker 1: one of the most important drivers of the US economy,

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Speaker 1: and that came to fruition, and by stopping robots from

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Speaker 1: getting copyrights, we preserve enormous amounts of cre native positions

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Speaker 1: in the economy across multiple businesses. And that's why this

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Speaker 1: decision is so important, not just in an abstract sense,

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Speaker 1: but as a very real consequence for the United States

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Speaker 1: economy in multiple industries.

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Speaker 3: Teller's lawyer says that they're going to appeal to the

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Speaker 3: full DC Circuit and if that doesn't work, they're going

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Speaker 3: to appeal to the Supreme Court. Do you think the

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Speaker 3: DC Circuit would take this case on bank?

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Speaker 1: Now? And I understand how the DC Circuit works on

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Speaker 1: these It's what's known as a petition for rehearing on bank,

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Speaker 1: so that all the active judges would sit on it.

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Speaker 1: In this case, there were two active judges and one

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Speaker 1: senior judge, so sometimes they use it. Well, look, there

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Speaker 1: was a scene, but it was only one senior judge

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Speaker 1: and the panel was unanimous. But setting that aside, the

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Speaker 1: internal rules used by the DC Circuit to grant a

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Speaker 1: petition for rehearing on bank aren't satisfied by this decision,

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Speaker 1: And if he then takes it to the Supreme Court,

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Speaker 1: the Supreme Court will deny the petition for CERTSCRI because

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Speaker 1: there is no split amongst the circuit courts that needs

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Speaker 1: to be resolved, and this issue is not such a

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Speaker 1: unique issue of law that's liable to come up on

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Speaker 1: a repeated basis. So both those types of heal and

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Speaker 1: appeal to the en bancd DC circuit or a petition

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Speaker 1: for ressearchs ther Supreme Court are going to get denied.

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Speaker 1: Are simply a waste of his time. But apparently that's

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Speaker 1: part of what's going on here, is to generate some

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Speaker 1: sort of publicity surrounding the use of artificial intelligence in

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Speaker 1: the creative process.

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Speaker 3: It seemed like he was trying to make this a

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Speaker 3: test case, no question about it.

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Speaker 1: This was the pest case and it served that purpose,

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Speaker 1: and that respected actually was pretty useful. As I said,

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Speaker 1: copyright impacts a lot of segments of the economy, and

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Speaker 1: it's really really important that we got this resolution on

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Speaker 1: separate track. The Patent Office has also internally ruled that

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Speaker 1: only humans get patents, because you'd take the same logic

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Speaker 1: that doctor Toller uses respect to copyright registration and apply

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Speaker 1: to patent registration against Patents are a critical component of

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Speaker 1: the US economy, a real driver of the economy, and

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Speaker 1: we don't yet have the same clarity, but I'm pretty

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Speaker 1: confident that the Patent Office rules on requiring human to

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Speaker 1: be the applicants for patents will be upheld again. That

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Speaker 1: would be a very important we'd like to see a

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Speaker 1: test case on that.

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Speaker 3: With all the cases percolating over these issues, I'm sure

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Speaker 3: we will. It's been great to have you on again, Terry.

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Speaker 3: Thanks so much. That's Terrence Ross, a partner at Katon

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Speaker 3: Muchen Rosenmann. The latest effort to get the Supreme Court

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Speaker 3: to restrain government regulation has an unlikely opponent, President Donald Trump.

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Speaker 3: In a case that offers a chance to impose new

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Speaker 3: limits on regulatory agencies, the Justice Department defended the FCC's

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Speaker 3: Universal Service Fund. It's an eight billion dollar telecom subsidy

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Speaker 3: program which you use. This is a charge on monthly

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Speaker 3: telephone bills to subsidize phone and broadband service for poor people,

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Speaker 3: rural residents, schools, and libraries. Taking this position even as

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Speaker 3: Trump works to decimate federal agencies with a barrage of

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Speaker 3: job and funding cuts. Some conservative justices voiced concern during

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Speaker 3: the oral arguments on Wednesday that Congress had unconstitutionally handed

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Speaker 3: off its taxing power to the FCC without sufficient limits.

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Speaker 3: Here's Justice Neil Gorstch, who described the program's funding mechanism

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Speaker 3: as unprecedented.

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Speaker 2: We've got a feebody of law, We've got a rate

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Speaker 2: setting body of law. This isn't either one of those.

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Speaker 2: This is this is just a straight up tax without

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Speaker 2: any any numerical limit, any cap, any rate. And we've

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Speaker 2: never approved something like that before.

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Speaker 3: But Justice Elena Kagan pointed to other constraints in the law,

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Speaker 3: including its instruction to the end CC that rural areas

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Speaker 3: should get services that are reasonably comparable to urban areas.

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Speaker 4: I mean, this is all basic stuff. These are not

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Speaker 4: exorbitant things, These are not gratuitous things. This is just

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Speaker 4: like the way the FCC has operated that program is

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Speaker 4: consistent with the standards that have been set in this program,

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Speaker 4: which is, these are providing basic services for people who

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Speaker 4: live in North Dakota and for people who live below

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Speaker 4: the poverty line. And by the way, as mister Clement said,

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Speaker 4: those basic services benefit all of us because we should

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Speaker 4: all be able to talk to people in North Dakota.

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Speaker 3: Joining me is constitutional law expert Harold krant A professor

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Speaker 3: at the Chicago Kent College of Law, Hew tell Us

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Speaker 3: about this FCC program and the issue here.

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Speaker 2: In the nineteen ninety six Congress passed the Toll Communications

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Speaker 2: Act and said is a major part of that act

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Speaker 2: to subsidize service to rural and low income areas. And

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Speaker 2: so they thought was to get into the wired technology world,

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Speaker 2: we have to bring all of the country together. And

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Speaker 2: to do that, there are certain criteria that are set

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Speaker 2: about how the FCC is supposed to determine how much

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Speaker 2: sort of subsidy it gives to rural and low income areas, schools, libraries,

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Speaker 2: and the like the following year. And there's certain kinds

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Speaker 2: of intelligible principles or principles set into the statutes, such as,

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Speaker 2: quote the quality service ship to be available at rates

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Speaker 2: and that access to advanced technology quote should be available

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Speaker 2: in all regions of the country. So that's the basic

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Speaker 2: construct and the first argument in the cases whether that

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Speaker 2: suffers under the non delegation doctrine because it's too open ended,

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Speaker 2: it's too vague, and it gives a lot of discretion

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Speaker 2: to the FCC.

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Speaker 3: Explain the non delegation doctrine.

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Speaker 2: So under the non delegation doctrine the Court in the

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Speaker 2: nineteen thirties and has given lip service since. Has held

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Speaker 2: that if Congress doesn't specify the standards under which executive

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Speaker 2: agencies should act, that they may have given away their

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Speaker 2: own legislative authority and therefore violated Article one of the Constitution.

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Speaker 2: And there are a number of cases in which statutes

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Speaker 2: were struck down in the nineteen thirties and since then

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Speaker 2: the Court has cited to the non delegation doctrine. About

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Speaker 2: five justices argued that it should be come back and

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Speaker 2: be more actively enforced in some way, and they've used

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Speaker 2: it mainly as a way to limit delegations by reading

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Speaker 2: delegations more narrowly to what what they say would otherwise

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Speaker 2: be an excessive delegation issue. So this has been part

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Speaker 2: of the war on administrative agencies, is to suggest that

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Speaker 2: Congress can't give open ended delegations to them, even though

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Speaker 2: there are many open ended delegations in the statute books.

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Speaker 2: So on this first point, there was an argument about

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Speaker 2: how Congress simply hadn't done this job. It gave too

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Speaker 2: much discretion, in other words, to the agency to determine

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Speaker 2: how much to subsidize to rural areas and to lowing

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Speaker 2: preme areas, and how much then for fees to impose

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Speaker 2: upon the national telecoms. A good example of this is

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Speaker 2: a question that was raised by Justice Gorsuch. He said,

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Speaker 2: what about forcing everybody to have some kind of access

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Speaker 2: to stylink elon Musk's sail life service. And his point

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Speaker 2: was just to show that, you know, maybe that's within

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Speaker 2: the literal terms of the statute, and therefore it's very problematic.

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Speaker 2: And he also said the fact that this is a

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Speaker 2: tax also suggests that the delegation should be more narrowly construed.

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Speaker 2: Justice Kavanaugh asked an interesting question about whether delegations to

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Speaker 2: independent agencies, which we think the FCC is, whether that

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Speaker 2: should be construed more narrowly because of the lack of

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Speaker 2: presidential control. So usually the some of the more interesting

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Speaker 2: questions on the excessive delegation question that was raised. At

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Speaker 2: the end of the day, it seems as if the

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Speaker 2: Supreme Court will reject the excessive delegation argument. And indeed,

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Speaker 2: what's probably interesting that bear's stress here is that President

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Speaker 2: Trump has defended the delegation right, even though he was

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Speaker 2: on a crusade against administrative agencies. Now that he's in

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Speaker 2: a White House, he may be singing a different tune

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Speaker 2: in his administration than defend this under the traditional intelligible

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Speaker 2: principle task, which asked whether Congress has articulated sufficient guidance

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Speaker 2: to restrain the conduct of the administrative agencies, and the

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Speaker 2: principles we discussed earlier in the statute apparently satisfy that

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Speaker 2: in terms of the Trump administration, and many the justices

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Speaker 2: seem to be satisfied with that as well.

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Speaker 3: So does it seem as if there might be three

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Speaker 3: votes Gorsuch, Alito, and Thomas against this program, and that

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Speaker 3: the liberals and the conservatives that are more in the

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Speaker 3: middle of the court would vote to uphold it.

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Speaker 2: That's my best guess. I mean Justice kevinaugh might be

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Speaker 2: on the dissenting side as well. Justice Barrett had some concerns,

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Speaker 2: but I think at the end of the day, the

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Speaker 2: Chief Justice and Justice Barreit will vote to uphold the program.

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Speaker 2: So that's just the first challenge in the case. Then,

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Speaker 2: one year after the statute was passed, the FCC decided

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Speaker 2: to shift responsibility to a private group called the Universal

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00:25:48,960 --> 00:25:54,440
Speaker 2: Services Administrative Company to make the calculations about how much

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Speaker 2: subsidy should be given to these low income communities, and accordingly,

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Speaker 2: after getting that number, how much fees had to be

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Speaker 2: assessed on the telecoms. So they have a very important

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Speaker 2: role under the statute because they actually do the numbers

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Speaker 2: crunching and the forecasting to determine how big the substitt

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Speaker 2: should be, and again what kind of fees then to

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Speaker 2: assess the telecoms. And on this part of the statutory

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Speaker 2: scheme or really the ad ministry of scheme, the challenger

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Speaker 2: said that this is an excessive amount of authority to

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Speaker 2: private individuals, that private individuals cannot have this much authority

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Speaker 2: under the terms of the United States because they're not

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Speaker 2: subject to the appointment of authority of the president or

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Speaker 2: to the president's removal powers. And so that was part

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Speaker 2: of the reason this statue was held on constitutional by

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Speaker 2: the Fifth Circuit. And the court then debated this private

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Speaker 2: delegation aspect of the statutory scheme as well. And again

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Speaker 2: what's interesting is that the up administration defended, it defended

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Speaker 2: the role for private parties, and their argument was that

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Speaker 2: the private parties do make the calculations, they are important,

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Speaker 2: but they're subject to FCC oversight and that oversight is sufficient.

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Speaker 2: And one can wonder if the administration is sensitive to

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Speaker 2: the role of private parties these days because of Doge

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Speaker 2: and Elon Musk. I don't know, but that's certainly one

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Speaker 2: way to read this. But they certainly have had a

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Speaker 2: different tune about the role of private parties once they

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Speaker 2: assume power.

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Speaker 3: So this is another chance for the Court to impose

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Speaker 3: new limits on regulatory agencies, which the Court has already

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Speaker 3: taken a sledgehammer to. Do you think they'll pass up

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Speaker 3: this chance.

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Speaker 2: Yeah, There's another case that'spending in the Supreme Court which

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Speaker 2: poses somewhat of analogous question about non delegation and the

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Speaker 2: role of private parties. Neither case is the role of

438
00:28:01,200 --> 00:28:03,480
Speaker 2: the private party's egregious, though I will say in this

439
00:28:03,560 --> 00:28:07,320
Speaker 2: case the subjects come to many billions of dollars, so

440
00:28:07,359 --> 00:28:11,480
Speaker 2: we're not talking about a minor sort of program at all.

441
00:28:11,920 --> 00:28:14,960
Speaker 2: And obviously to the telecoms just makes a huge difference.

442
00:28:15,600 --> 00:28:18,800
Speaker 2: But in both cases it seems that the delegation was

443
00:28:19,520 --> 00:28:24,600
Speaker 2: more circumscribed by Congress than in other cases that we've

444
00:28:24,600 --> 00:28:26,919
Speaker 2: seen in the last fifty years. I mean, you know,

445
00:28:27,000 --> 00:28:32,120
Speaker 2: the original delegation to the Federal Communications Commission was to

446
00:28:32,280 --> 00:28:35,040
Speaker 2: regulate the airwaves in the public interest according to the

447
00:28:35,040 --> 00:28:37,879
Speaker 2: public interest and necessity. That's about as broad of a

448
00:28:37,880 --> 00:28:41,440
Speaker 2: delegation as one could imagine, and yet that has been upheld.

449
00:28:41,440 --> 00:28:44,520
Speaker 2: So in comparison the seeing these two cases, they seem

450
00:28:44,520 --> 00:28:49,280
Speaker 2: to be more cabinet delegations. Obviously, lower courts have taken

451
00:28:49,320 --> 00:28:51,920
Speaker 2: the bit and held some of these statutory schemes to

452
00:28:51,920 --> 00:28:54,840
Speaker 2: be unconstitutional, which is why they're percolating up to the

453
00:28:54,840 --> 00:28:58,240
Speaker 2: Supreme Court. So it will be interesting to see what

454
00:28:58,400 --> 00:29:01,080
Speaker 2: the Court does with it. But again, I think one

455
00:29:01,120 --> 00:29:04,800
Speaker 2: of the first interesting notes is that President's Trump administration

456
00:29:05,040 --> 00:29:09,520
Speaker 2: has basically used the same argumentation as President Bind's administration

457
00:29:09,960 --> 00:29:13,000
Speaker 2: in finding the intelligible principle and suggesting that that's all

458
00:29:13,000 --> 00:29:14,600
Speaker 2: that's needed to uphold a delegation.

459
00:29:15,280 --> 00:29:19,120
Speaker 3: So in Justice Katanji Brown Jackson asked that question about

460
00:29:19,120 --> 00:29:23,320
Speaker 3: the implications of striking down the program. She got a

461
00:29:23,320 --> 00:29:27,040
Speaker 3: big yes from Acting Solicitor General Sarah Harris.

462
00:29:27,400 --> 00:29:30,320
Speaker 5: There are a number of different agencies that have similar

463
00:29:30,440 --> 00:29:33,040
Speaker 5: kinds of revenue generating. I know some people call them

464
00:29:33,040 --> 00:29:35,440
Speaker 5: fees and not taxes. I've already established that in my

465
00:29:35,520 --> 00:29:39,240
Speaker 5: view that doesn't make a difference a number of agencies

466
00:29:39,800 --> 00:29:46,160
Speaker 5: that have these kinds of general statements about raising revenue

467
00:29:46,920 --> 00:29:50,960
Speaker 5: that they determine as necessary or appropriate to carry out responsibilities.

468
00:29:51,000 --> 00:29:53,640
Speaker 5: So let me just say that if we find that

469
00:29:53,760 --> 00:29:57,040
Speaker 5: this one is unconstitutional, are all of these programs in

470
00:29:57,120 --> 00:29:58,360
Speaker 5: jeopardy in your view?

471
00:29:58,640 --> 00:30:02,080
Speaker 3: Yes? Thank you, hell I'll ask you the question that

472
00:30:02,400 --> 00:30:06,920
Speaker 3: Justice Jackson asked, if the justices did strike down the

473
00:30:07,040 --> 00:30:11,600
Speaker 3: part of the law that authorizes the program's funding mechanism,

474
00:30:11,960 --> 00:30:15,600
Speaker 3: would that endanger similar funding setups at the FED and

475
00:30:15,680 --> 00:30:17,360
Speaker 3: the FDIC, for example.

476
00:30:18,080 --> 00:30:20,080
Speaker 2: And indeed it would, and that was part of the

477
00:30:20,160 --> 00:30:23,120
Speaker 2: concern that was expressed during the oral argument, is what

478
00:30:23,160 --> 00:30:25,520
Speaker 2: would be the ripple effect of finding this kind of

479
00:30:26,000 --> 00:30:30,480
Speaker 2: CE assessment scheme to be unconstitutional? Because this is somewhat

480
00:30:30,480 --> 00:30:33,680
Speaker 2: of an unusual scheme, but it does have echoes, as

481
00:30:33,680 --> 00:30:36,560
Speaker 2: you point out, with the FED and in some other

482
00:30:36,600 --> 00:30:40,280
Speaker 2: agencies as well. And so to the extent that there

483
00:30:40,400 --> 00:30:44,440
Speaker 2: is discretion that Congress has vested in these agencies to

484
00:30:44,640 --> 00:30:49,280
Speaker 2: determine assessments and fees, then that would pose a huge

485
00:30:49,720 --> 00:30:54,840
Speaker 2: target for litigation. If the Supreme Court Knoxis went down

486
00:30:55,160 --> 00:30:58,040
Speaker 2: on under delegation grounds, And I want.

487
00:30:57,880 --> 00:30:59,680
Speaker 3: To ask you a question that I've been asking a

488
00:30:59,680 --> 00:31:03,800
Speaker 3: lot of people lately. The Trump administration has taken five

489
00:31:04,080 --> 00:31:07,720
Speaker 3: emergency appeals to the Supreme Court. I mean, the ones

490
00:31:07,760 --> 00:31:12,640
Speaker 3: before the court right now involve birthright citizenship, teacher training grants,

491
00:31:13,160 --> 00:31:17,920
Speaker 3: mass firings of probationary employees, and there are more cases

492
00:31:18,120 --> 00:31:21,720
Speaker 3: in the pipeline that the administration is expected to take

493
00:31:21,760 --> 00:31:25,200
Speaker 3: to the Supreme Court. Do you think the justices are

494
00:31:25,240 --> 00:31:30,600
Speaker 3: going to be receptive to this onslaught of emergency appeals

495
00:31:31,120 --> 00:31:33,440
Speaker 3: or start to get perhaps a little annoyed.

496
00:31:34,360 --> 00:31:36,640
Speaker 2: I think the Court will get I mean, I think

497
00:31:36,920 --> 00:31:40,080
Speaker 2: it's understandable that there's more claims at the beginning of

498
00:31:40,120 --> 00:31:43,760
Speaker 2: the administration, given the whole series of executive orders that

499
00:31:43,880 --> 00:31:48,520
Speaker 2: were administered and articulated. But if that pace continues, I

500
00:31:48,520 --> 00:31:50,240
Speaker 2: think the Court will get annoordered. I think the Court

501
00:31:50,240 --> 00:31:54,560
Speaker 2: will give a second look to the question of nationwide injunctions.

502
00:31:54,560 --> 00:31:57,240
Speaker 2: It hasn't really weighed in on the issue that it

503
00:31:57,360 --> 00:32:00,520
Speaker 2: was so contentious during the Biden administration, and now that

504
00:32:00,560 --> 00:32:03,120
Speaker 2: the shoes on the other foot, maybe they'll say, you know,

505
00:32:03,160 --> 00:32:05,720
Speaker 2: we probably should have stepped in earlier and clarified when

506
00:32:05,720 --> 00:32:09,440
Speaker 2: there can be a nationwide injunction because we're just being

507
00:32:09,560 --> 00:32:13,280
Speaker 2: forced into this position of having to react all the

508
00:32:13,360 --> 00:32:17,920
Speaker 2: time because of the imposition of these nationwide injunctions.

509
00:32:18,040 --> 00:32:20,720
Speaker 3: Well, we'll see whether they decide to take that case

510
00:32:20,840 --> 00:32:23,960
Speaker 3: or not. Thanks so much, Hal. That's Professor Harold Krant

511
00:32:24,040 --> 00:32:27,400
Speaker 3: other Chicago cant College of Law. And that's it for

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00:32:27,440 --> 00:32:30,080
Speaker 3: this edition of The Bloomberg Law Show. Remember you can

513
00:32:30,120 --> 00:32:33,320
Speaker 3: always get the latest legal news on our Bloomberg Law Podcast.

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00:32:33,600 --> 00:32:36,640
Speaker 3: You can find them on Apple Podcasts, Spotify, and at

515
00:32:36,800 --> 00:32:41,840
Speaker 3: www dot bloomberg dot com, slash podcast Slash Law, and

516
00:32:41,920 --> 00:32:44,960
Speaker 3: remember to tune into The Bloomberg Law Show every weeknight

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00:32:45,040 --> 00:32:48,520
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Speaker 3: you're listening to Bloomberg