WEBVTT - Dueling Rulings on the Abortion Pill

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<v Speaker 1>You're listening to Bloomberg Law with June Grosso from Bloomberg Radio.

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<v Speaker 1>For the first time. On Friday, a court overrule the

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<v Speaker 1>FDA's decade old approval of a drug. Texas Federal Judge

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<v Speaker 1>Matthew kis Merrick blocked the FDA's approval of the abortion

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<v Speaker 1>drug miffipristone, a medication approved twenty three years ago and

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<v Speaker 1>used in more than half of abortions. Health and Human

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<v Speaker 1>Services Secretary Javier Bassa said the judge's decision turns the

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<v Speaker 1>FDA approval process upside down. One judge in one court

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<v Speaker 1>in one state turned upside down the FDA's approval process

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<v Speaker 1>for safe and effective medications. First and foremost, when you

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<v Speaker 1>turn upside down the entire FDA approval process, you're not

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<v Speaker 1>talking about just miffipristone. You're talking about every kind of drug.

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<v Speaker 1>You're talking about our vaccines, you're talking about insulin, You're

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<v Speaker 1>talking about the new alsheim drugs that may come on.

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<v Speaker 1>If a judge decides to substitute his preference, his personal opinion,

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<v Speaker 1>for that of scientists and medical professionals, what drug is

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<v Speaker 1>it subject to some kind of legal challenge, So we

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<v Speaker 1>have to go to court, and for America's sake and

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<v Speaker 1>for women's sake, we have to we have to prevail

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<v Speaker 1>on this. But in a legal twist, within an hour

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<v Speaker 1>of Cosmeric's decision, a federal judge in Washington State, Thomas Rice,

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<v Speaker 1>issued a contrary decision, ordering the FDA to preserve the

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<v Speaker 1>status quo and retain access to miff apristone in the

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<v Speaker 1>seventeen Blue states and DC that had sued there. Johnny

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<v Speaker 1>Me is an expert in the area of reproductive legal rights.

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<v Speaker 1>Mary Ziegler a professor at UC Davis Law School. So

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<v Speaker 1>why is he second guessing the FDA's decision two decades ago?

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<v Speaker 1>Tell us what his reasoning is. Well, he has two reasons.

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<v Speaker 1>One is the Kumstock Act, which is the federal law

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<v Speaker 1>Passion eighteen of any three that no one's really thought

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<v Speaker 1>about in a long time, actually fars the mailing of

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<v Speaker 1>missa pristone. He's, you know, ignoring the kind of dominant

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<v Speaker 1>interpretation of the Comstock Act and any kind of constitutional

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<v Speaker 1>concerns that reviving it would have and basically saying it's

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<v Speaker 1>a plain text should apply. He's also arguing that the

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<v Speaker 1>FDA lacked the authority to approve mitho pristone. He's sort of,

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<v Speaker 1>I would say, kind of changing the narrative about how

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<v Speaker 1>the approval of missa pristone went. He's suggesting the FDA

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<v Speaker 1>kind of rushed it through under this regulation called Subpart

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<v Speaker 1>H and made what he sees as unforgivable errors, and

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<v Speaker 1>how it viewed miso pristone, for example, by relying on

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<v Speaker 1>the idea that pregnancy was disease, which tess merit doesn't

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<v Speaker 1>think is true. If if that sounds like it's an

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<v Speaker 1>extremely broad opinion, it's because it is. I mean, he's

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<v Speaker 1>reaching a lot of issues and paying a lot of

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<v Speaker 1>things that wouldn't be strictly necessary to resolve the case.

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<v Speaker 1>So this was not someone trying to avoid creating as

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<v Speaker 1>if anything kind of the opposite. How does he deal

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<v Speaker 1>with the fact that How does Judge Kesmer deal with

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<v Speaker 1>the fact that miffopristone has been shown to be safer

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<v Speaker 1>than some common low risk prescription drugs like penicillin. The

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<v Speaker 1>death rate for this drug is point zero zero zero

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<v Speaker 1>five percent. He just doesn't accept that as a fact, right,

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<v Speaker 1>I mean? In his analysis of standing, for example, he

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<v Speaker 1>explains why the Alliance for Hippocratic medicine, which really doesn't

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<v Speaker 1>say much about treating patients who've had these injuries. There

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<v Speaker 1>are a few passages, but not many. He essentially says

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<v Speaker 1>the reasons why women are not there themselves just because

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<v Speaker 1>they've suffered so much regret and depression and suicidal ideation.

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<v Speaker 1>He mentioned towards the end of the opinion people dying

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<v Speaker 1>from having taken Miffo pristone this year, So he's getting

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<v Speaker 1>more or less accepted the facts is presented to him

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<v Speaker 1>by the Alliance for Hyppocratic Medicine, even if those are not,

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<v Speaker 1>you know, the facts that scientists accept the American Medical

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<v Speaker 1>Association accepts, as the American College of Centersins and Gynecologist success.

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<v Speaker 1>He's sort of living in a different universe when it

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<v Speaker 1>comes to how myth of us don't actually work. Is

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<v Speaker 1>he also using the language of anti abortion activists, like

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<v Speaker 1>talking about the fetus as an unborn human. Yeah, he is.

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<v Speaker 1>He cites, I mean the studies I mentioned about post

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<v Speaker 1>abortion regret were done by an anti abortion activist named

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<v Speaker 1>David Reardon. He refers to doctors to perform abortions as abortionist.

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<v Speaker 1>He refers to people who's kind aborships as post abortive.

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<v Speaker 1>He calls fetus's unborn children or unborn humans. He picks

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<v Speaker 1>up on the idea that's the only kind of benefits

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<v Speaker 1>of abortion access are sort of eugenic. He describes, you know,

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<v Speaker 1>the effort to create uber mentioned with his terms. So

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<v Speaker 1>there's a lot of rhetoric that draws directly from anti

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<v Speaker 1>abortion materials. Also, on Friday, within an hour of this decision,

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<v Speaker 1>federal Judge Thomas Rice in Why Shehington, issued a preliminary

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<v Speaker 1>order blocking the FDA from making any changes to the

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<v Speaker 1>current availability of mif A press Stone. I take it

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<v Speaker 1>this wasn't just coincidence. No, no, probably not. I mean,

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<v Speaker 1>obviously I haven't you know, spoken to Judge Rice. But

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<v Speaker 1>I take it that it was not a coincidence, and

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<v Speaker 1>that this was designed to force the appellate courts to

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<v Speaker 1>give some clarity of sooner other than later, to the

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<v Speaker 1>SBA about what it should be doing. Judge Rice's ruling

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<v Speaker 1>applies to the seventeen states that sued. So what's the

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<v Speaker 1>situation in those states with this conflicting ruling? I mean,

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<v Speaker 1>which judges order applies? Well, I mean the answer is,

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<v Speaker 1>you know, arguably both, right, So I mean I think

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<v Speaker 1>that the question really is how through the FBA do

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<v Speaker 1>you try to square that circle? And best answer seems

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<v Speaker 1>to be that the FDA, using its discretion as to

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<v Speaker 1>how to enforce, you know, orders regarding drugs that are unapproved,

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<v Speaker 1>it should just leave the status quo alone until there's

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<v Speaker 1>clarity prominent felt because you know, even if a drug

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<v Speaker 1>is unapproved, the FDA has some discretion about how vigorously

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<v Speaker 1>it pursues people who are dispensing, prescribing it, etc. And

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<v Speaker 1>given that the FDA here is under directly deplipting orders,

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<v Speaker 1>it would be weird for the FBA to take an

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<v Speaker 1>aggressive position in enforcing Judge Chestmeric's order. And I mean,

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<v Speaker 1>obviously just it's worth saying to Judge Chestmeric's order has

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<v Speaker 1>been kind of paused for seven days pending an appeal,

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<v Speaker 1>So at the moment that you even that isn't really

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<v Speaker 1>an issue. But when it becomes on, we'd expect to

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<v Speaker 1>see the FBA argue that the best way it can

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<v Speaker 1>follow both orders is to wait to do anything until

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<v Speaker 1>it gets clarity from the US Supreme Court. So the

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<v Speaker 1>Biden administration is going to ask the Fifth Circuit for

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<v Speaker 1>an emergency stay in your opinion. How likely is it

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<v Speaker 1>that they'll get that? It's hard to stay right. I mean,

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<v Speaker 1>we know that the Fifth Circuit is very conservative, and

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<v Speaker 1>I think the question really is whether there's any bridge

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<v Speaker 1>too far for the Fifth Circuit or the US Supreme Court.

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<v Speaker 1>I think, you know, Chessmeric's ruling in several steps beyond

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<v Speaker 1>the decision to reverse Rovway. For example, the Court and

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<v Speaker 1>Doobs said, you know, emphatically over and over again that

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<v Speaker 1>this was about giving the aborshion issue back to the people.

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<v Speaker 1>And of course Judge Chessmeric's ruling is about taking the

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<v Speaker 1>a worshion issue away from the people. So I think

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<v Speaker 1>also there's been some irony and the fact that there's

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<v Speaker 1>so much second guessing of scientific authority by Judge Kasmeric

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<v Speaker 1>when many conservatives just event decades criticizing the Rowe Court

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<v Speaker 1>for converting, you know, judges into medical review boards. So

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<v Speaker 1>there's some chance that the Fifth Circuit or the US

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<v Speaker 1>Supreme Court will see this as different from what's come before,

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<v Speaker 1>or too far too fast. But I think again, when

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<v Speaker 1>you're looking at who's on the Fifth Circuit, who's on

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<v Speaker 1>the US Supreme Court, you certainly can't rule out the

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<v Speaker 1>possibility that they'll sign off on what Chests America is doing,

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<v Speaker 1>or at least significant parts of it. An emergency petition

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<v Speaker 1>from the Fifth Circuit would initially go to Justice Samuel Alito,

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<v Speaker 1>who wrote the decision overturning Roe v. Wade. Is he

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<v Speaker 1>likely to decide that himself will refer to the whole Court?

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<v Speaker 1>I would hope you would refer to the full Court,

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<v Speaker 1>given that you know, you have clashing district court rulings

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<v Speaker 1>on matters of national import Again, you know this Supreme

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<v Speaker 1>Court has not behaved like all the others before it.

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<v Speaker 1>But again, I mean I would hope that this issue

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<v Speaker 1>would be of national enough significance that Justice Alito would

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<v Speaker 1>refer it to the Full Court. The thing about this

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<v Speaker 1>ruling is it's not just a bad abortion, but it

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<v Speaker 1>undermines the authority of the FDA. It puts pharmaceutical companies

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<v Speaker 1>in a bad situation. So is it likely to get

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<v Speaker 1>to the Supreme Court? Well, I mean, we can't live

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<v Speaker 1>in a world where the SBA is told to do

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<v Speaker 1>contradictory things on a drug of national significance in a

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<v Speaker 1>major cultural war issue that is untenable, and so sooner

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<v Speaker 1>or later, the US Supreme Court is going to have

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<v Speaker 1>to intervene to just settle what the FDA is supposed

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<v Speaker 1>to do. We've talked before, and you've mentioned and now

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<v Speaker 1>how conservative this court is. If they follow what they

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<v Speaker 1>said in Dabbs, I'd take it they would reverse Judge

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<v Speaker 1>kiz Americ. But we never know if they're going to

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<v Speaker 1>follow what they say or not anymore rights, And I

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<v Speaker 1>think in some ways that's why the Alliance Defending Freedom

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<v Speaker 1>filed this too, right, because the possibilities that are imaginable

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<v Speaker 1>in the US Supreme Court are unimaginable in democratic politics. Right.

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<v Speaker 1>I mean, if you were asking, could you achieve a

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<v Speaker 1>result like this through a statute passed by Congress, assuming

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<v Speaker 1>he's got a Republican in the White House and Republicans

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<v Speaker 1>controlling Congress, the answer is no. Right that it's not

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<v Speaker 1>inconceivable that the US Supreme Court would sign off on,

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<v Speaker 1>you know, something that wouldn't be possible through majority rules. Mary,

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<v Speaker 1>you spoke about irony before, and I'd like you to

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<v Speaker 1>comment on the irony that in the Dabs decision, which

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<v Speaker 1>overturned the constitutional right to abortion, the majority indicated that

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<v Speaker 1>this would merely rich are on the issue of abortion

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<v Speaker 1>to the people and to the democratic process, and basically

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<v Speaker 1>they wouldn't have to deal with anymore. I mean, obviously

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<v Speaker 1>they actually believe that that was naive, and all the

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<v Speaker 1>more so, profess any student of history would know that

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<v Speaker 1>neither supporters of abortion rights nor opponents of abortion have

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<v Speaker 1>been content with letting voters decide, even if that would

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<v Speaker 1>be the more stable thing to do. The anti abortion

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<v Speaker 1>movements Tatmeric alludes to in his opinion, at one point

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<v Speaker 1>has been fighting for fetal personhood, which will make abortion

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<v Speaker 1>unconstitutional and illegal nationwide. And if they can't achieve that,

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<v Speaker 1>they're going to get as close to it as they can.

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<v Speaker 1>And abortion rights supporters, obviously, as Judge rights is ruling

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<v Speaker 1>makes clearer not going to be content with gods either.

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<v Speaker 1>I think it's even more clear that the anti abortion

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<v Speaker 1>movement is going to rely on the federal courts again

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<v Speaker 1>because they've been losing so much, whether it's invalid initiatives

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<v Speaker 1>or in elections, and so if they don't have the

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<v Speaker 1>hearts and minds of voters, they're going to need to

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<v Speaker 1>rely on the federal courts. So this is a reminder

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<v Speaker 1>that either the court was naive or dishonest and telling

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<v Speaker 1>us that the federal courts should be out of the

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<v Speaker 1>abortion business. After dogs. This is just a preliminary stage.

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<v Speaker 1>So even after this stage, it would go back to

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<v Speaker 1>trial before Kazmeric and Judge Rice, right exactly, and then

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<v Speaker 1>it would kind of go back up through the courts again.

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<v Speaker 1>But I mean, I think part of the reason everyone

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<v Speaker 1>has pained so much attention at this stage is, as

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<v Speaker 1>was obviously the case in both Judge Rice and Judge

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<v Speaker 1>Kasmeric's rulings, we had a pretty good preview of what

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<v Speaker 1>they're going to hold after the trial. I mean, I

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<v Speaker 1>don't expect any major surprises coming after the trial, and

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<v Speaker 1>the same thing will be true in the Supreme Court. Ways.

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<v Speaker 1>In at these early preliminary stages, we should have a

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<v Speaker 1>pretty good sense of where they might be going. I mean,

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<v Speaker 1>it doesn't always work that way, but often we get

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<v Speaker 1>pretty strong signals. Some abortion providers have said that if

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<v Speaker 1>FIfF A press Stone is unavailable, they'd switch to missoprostill

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<v Speaker 1>only regiment. So how is that different from FIfF A

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<v Speaker 1>press Stone. Well, there are a couple of things to

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<v Speaker 1>note their right. So on the hand rate that mister

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<v Speaker 1>prostill only abortion has pretty proven it's not as effective,

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<v Speaker 1>at least at the moment as mister Prestone and mister Prostell,

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<v Speaker 1>which is why together, which is why it's not the

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<v Speaker 1>standard of scare. It's also worth emphasizing even though it's

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<v Speaker 1>safe and relatively effective, there's no guarantee that it'll be

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<v Speaker 1>available in the long term either. Because one of Judge

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<v Speaker 1>Casmeric's rulings centered on the Comstock Act, and as I mentioned,

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<v Speaker 1>if you interpret the Comstock Act as broadly as Kasmeric does,

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<v Speaker 1>it would apply to mister Prosteal too. I mean, that

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<v Speaker 1>wasn't the issue before Judge Kasmeric in this case, but

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<v Speaker 1>it doesn't take a lot to recognize that a subsequent

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<v Speaker 1>challenge before Judge Kasmeric based on mister Crostol or really

0:12:40.760 --> 0:12:43.320
<v Speaker 1>any drug intendat or adapted for abortion, could come out

0:12:43.360 --> 0:12:46.520
<v Speaker 1>the same way. So there's no guarantee that if that's

0:12:46.520 --> 0:12:48.920
<v Speaker 1>the way she sees the Comstock Act, and if other

0:12:49.040 --> 0:12:52.560
<v Speaker 1>conservative ports, including the US Supreme Court degree, mister Prosteal

0:12:52.559 --> 0:12:55.480
<v Speaker 1>could be in the crossairs too. So this is going

0:12:55.559 --> 0:12:59.720
<v Speaker 1>forward despite the fact that we've seen in many states

0:12:59.760 --> 0:13:06.040
<v Speaker 1>that voters have not supported anti abortion agendas. Yeah, absolutely,

0:13:06.080 --> 0:13:09.280
<v Speaker 1>I mean, I think there's a clear and ironic conclusion

0:13:09.360 --> 0:13:12.440
<v Speaker 1>that's emerging in the post DODS era, which is that

0:13:13.240 --> 0:13:16.520
<v Speaker 1>essentially anti abortion groups who have spent years railing against

0:13:16.600 --> 0:13:21.800
<v Speaker 1>judicial activism and judicial policymaking are relying on judicial activism

0:13:21.800 --> 0:13:25.199
<v Speaker 1>and judicial policy making because when voters are asked directly

0:13:25.200 --> 0:13:28.600
<v Speaker 1>about these questions, they simply don't want the sweeping abortion

0:13:28.679 --> 0:13:32.000
<v Speaker 1>bands that the anti abortion movement commands. Right, even if

0:13:32.200 --> 0:13:34.880
<v Speaker 1>voters may be okay with abortion restrictions, they're not prepared

0:13:34.880 --> 0:13:37.160
<v Speaker 1>to go nearly as far as the anti worshion movement wants,

0:13:37.200 --> 0:13:39.400
<v Speaker 1>which means the only way you can get to the

0:13:39.480 --> 0:13:42.319
<v Speaker 1>kind of outcome they're looking for to rely on judges

0:13:42.400 --> 0:13:46.200
<v Speaker 1>like as Merit, who you know, are not reflecting where

0:13:46.200 --> 0:13:52.880
<v Speaker 1>American voters are. Would this prevent pharmaceutical companies from making

0:13:53.400 --> 0:13:57.800
<v Speaker 1>the pill? Well, so I would make it unnailable, right,

0:13:57.840 --> 0:14:00.480
<v Speaker 1>it doesn't feel necessarily with it would mean that it's

0:14:00.559 --> 0:14:04.959
<v Speaker 1>unapproved in the United States, And so it would mean

0:14:05.040 --> 0:14:08.480
<v Speaker 1>that in theory, if you're continuing to dispense it or

0:14:08.559 --> 0:14:11.920
<v Speaker 1>distribute it, that you could be in legal jeopardy. But again,

0:14:12.000 --> 0:14:15.480
<v Speaker 1>then how much the FBA actually enforced that issue, right,

0:14:15.520 --> 0:14:18.440
<v Speaker 1>how much the SPA used its discretion to go after

0:14:18.600 --> 0:14:21.160
<v Speaker 1>violators would be up to the f PA, and we

0:14:21.160 --> 0:14:23.480
<v Speaker 1>would expect for the Biden administration that not to be

0:14:23.920 --> 0:14:27.640
<v Speaker 1>a priority. And on the Comstock point, it would make

0:14:27.640 --> 0:14:31.720
<v Speaker 1>it illegal to nail it, which would first affect manufacturers

0:14:31.720 --> 0:14:34.800
<v Speaker 1>and distributors in the sense that any time they actually

0:14:35.560 --> 0:14:38.440
<v Speaker 1>put it in the mail, whether through the US Postal

0:14:38.480 --> 0:14:41.680
<v Speaker 1>Service or FedEx or UPS or whatever, they could be

0:14:41.760 --> 0:14:44.560
<v Speaker 1>violating the federal law. Again, I think what you're likely

0:14:44.600 --> 0:14:46.120
<v Speaker 1>to see if it comes to that as the Biden

0:14:46.120 --> 0:14:49.600
<v Speaker 1>administration essentially signaling, you know, we're not going to use

0:14:49.760 --> 0:14:52.680
<v Speaker 1>whether BOJ or FBA, We're not going to treat this

0:14:52.880 --> 0:14:54.640
<v Speaker 1>as a priority. We're going to kind of look the

0:14:54.680 --> 0:14:58.320
<v Speaker 1>other way. But whether you know, you see drug manufacturers

0:14:58.320 --> 0:15:03.200
<v Speaker 1>and doctors feeling comfortable enough to continue making mitra crestone

0:15:03.200 --> 0:15:07.120
<v Speaker 1>available on the strength of that kind of guarantee, I

0:15:07.120 --> 0:15:10.080
<v Speaker 1>think it's an open question. Yeah, I was just wondering if,

0:15:10.600 --> 0:15:14.080
<v Speaker 1>for example, worst comes to words that there could be

0:15:14.120 --> 0:15:17.280
<v Speaker 1>an underground network and people could get the drug from

0:15:17.320 --> 0:15:20.200
<v Speaker 1>outside the country from Canada. Yeah, I mean we would

0:15:20.200 --> 0:15:23.760
<v Speaker 1>expect to see that. I mean, there's definitely going to

0:15:23.840 --> 0:15:27.200
<v Speaker 1>be some of that. I think because we've already seen,

0:15:27.240 --> 0:15:30.280
<v Speaker 1>for example, women on the Web and aid Access groups

0:15:30.320 --> 0:15:35.000
<v Speaker 1>like that that provide medication access from Europe, and so

0:15:35.040 --> 0:15:38.960
<v Speaker 1>far that would be under the FDA's personal Importation policy.

0:15:39.000 --> 0:15:41.600
<v Speaker 1>And while in theory that's violating that policy, the FDA

0:15:41.640 --> 0:15:45.680
<v Speaker 1>has taken a kind of again non aggressive approach to

0:15:46.400 --> 0:15:49.720
<v Speaker 1>dealing with that. And there's no real realistical way to

0:15:49.800 --> 0:15:53.520
<v Speaker 1>prosecute groups like aid Access simply because they're not going

0:15:53.520 --> 0:15:57.280
<v Speaker 1>to be extradited from countries that approve of abortion as

0:15:57.360 --> 0:16:01.200
<v Speaker 1>you know, protected rights. As there have been a situation before.

0:16:01.240 --> 0:16:06.320
<v Speaker 1>I mean this sort of highlights that one judge in Amarillo,

0:16:06.320 --> 0:16:09.960
<v Speaker 1>Texas can make a ruling that affects the whole country,

0:16:10.200 --> 0:16:13.520
<v Speaker 1>and then another judge now in Washington can make a

0:16:13.600 --> 0:16:17.040
<v Speaker 1>ruling that affects maybe half the country. Has this happened before,

0:16:17.200 --> 0:16:22.080
<v Speaker 1>dueling injunctions like this, I mean, they've definitely seen circuit splits.

0:16:22.120 --> 0:16:25.080
<v Speaker 1>I think what the newer wrinkle here is the spread

0:16:25.120 --> 0:16:30.080
<v Speaker 1>of these nationwide injunctions, and I think the polarization of

0:16:30.120 --> 0:16:32.360
<v Speaker 1>the courts. And it's not a coincidence that we have

0:16:32.880 --> 0:16:36.960
<v Speaker 1>an Obama nominee and a Trump nominee here. So the

0:16:37.040 --> 0:16:40.440
<v Speaker 1>spread of nationwide injunctions, together with the kind of widening

0:16:40.480 --> 0:16:44.200
<v Speaker 1>gap between the kinds of ruling judges or ordering has

0:16:44.240 --> 0:16:45.600
<v Speaker 1>made this kind of it. I mean, the fact that

0:16:45.640 --> 0:16:47.920
<v Speaker 1>you have these two rulings coming out at the same

0:16:47.960 --> 0:16:52.160
<v Speaker 1>time on the same day, giving the FDA directly opposing orders,

0:16:52.360 --> 0:16:54.680
<v Speaker 1>as far as I know, was unprecedented, even if we've

0:16:54.720 --> 0:16:58.440
<v Speaker 1>seen you know, splits and divides between supports and circuits

0:16:58.480 --> 0:17:02.200
<v Speaker 1>in the past. The ruling in Washington, I mean, there's

0:17:02.240 --> 0:17:04.919
<v Speaker 1>no group that will appeal that right because it was

0:17:05.000 --> 0:17:09.040
<v Speaker 1>the FDA and the and the Democratic States. Yeah, I

0:17:09.040 --> 0:17:11.359
<v Speaker 1>mean they may see. You know, the only wrinkle there,

0:17:11.680 --> 0:17:17.240
<v Speaker 1>Judge Ice didn't go as far as the Liberal States wanted.

0:17:17.880 --> 0:17:22.639
<v Speaker 1>They had argued that the FDA FA rules actually preemptied

0:17:23.000 --> 0:17:27.399
<v Speaker 1>contradictory state prohibitions on abortionition meditation. So in theory they

0:17:27.480 --> 0:17:30.680
<v Speaker 1>might appeal to the Ninth Circuit Court of Appeals, which

0:17:30.800 --> 0:17:35.159
<v Speaker 1>is quite progressive, and seek more. But yeah, it's not

0:17:35.240 --> 0:17:37.800
<v Speaker 1>as clear who's going to do what in that situation,

0:17:37.960 --> 0:17:41.000
<v Speaker 1>because you know, the FDA is less supposed to what's

0:17:41.040 --> 0:17:44.000
<v Speaker 1>going on thus far in that case obviously than it

0:17:44.000 --> 0:17:46.240
<v Speaker 1>would be in their TuS Meer's case. Thanks, So much

0:17:46.280 --> 0:17:49.800
<v Speaker 1>for letting your expertise on this subject. That's Professor Mary

0:17:49.880 --> 0:17:55.520
<v Speaker 1>Ziegler of UC Davis Law School, California. Federal jury has

0:17:55.560 --> 0:17:59.960
<v Speaker 1>awarded three point two million dollars to former Tesla contractor

0:18:00.080 --> 0:18:03.840
<v Speaker 1>O and Diaz in a long running racial discrimination case.

0:18:04.320 --> 0:18:08.240
<v Speaker 1>But that's ninety eight percent less than the staggering one

0:18:08.280 --> 0:18:12.000
<v Speaker 1>hundred thirty seven million dollars a different jury awarded to

0:18:12.119 --> 0:18:15.040
<v Speaker 1>Daz two years ago. That was one of the highest

0:18:15.160 --> 0:18:19.120
<v Speaker 1>verdicts ever for someone suing over discrimination in the US.

0:18:19.160 --> 0:18:21.960
<v Speaker 1>This sets the stage for a post trial battle over

0:18:22.000 --> 0:18:25.160
<v Speaker 1>the award. Joining me is Anthony on CD, co chair

0:18:25.200 --> 0:18:29.520
<v Speaker 1>of Proscouer Rose's Labor and Employment law department. Tony start

0:18:29.560 --> 0:18:33.440
<v Speaker 1>by telling us about the original trial and original verdict.

0:18:34.119 --> 0:18:38.000
<v Speaker 1>This case ended up going to trial and verdict in

0:18:38.080 --> 0:18:42.000
<v Speaker 1>October of twenty twenty one, and that's when the original

0:18:42.160 --> 0:18:45.280
<v Speaker 1>jury verdict came out, and it was in the rather

0:18:45.440 --> 0:18:48.920
<v Speaker 1>eye popping amount of one hundred and thirty seven million

0:18:48.920 --> 0:18:54.040
<v Speaker 1>dollars composed of six point nine million dollars in emotional

0:18:54.040 --> 0:18:57.359
<v Speaker 1>distress damages and one hundred and thirty million dollars in

0:18:57.480 --> 0:19:01.399
<v Speaker 1>punitive damages. What mister p as alleged and was able

0:19:01.400 --> 0:19:04.840
<v Speaker 1>to prove at trial, was that he was subjected to

0:19:05.720 --> 0:19:08.520
<v Speaker 1>racial harassment in the workplace. He was a very short

0:19:08.600 --> 0:19:10.639
<v Speaker 1>term employee, worked there for less than a year. He

0:19:10.760 --> 0:19:13.640
<v Speaker 1>worked as an elevator operator at Tesla in its Fremont,

0:19:14.080 --> 0:19:17.360
<v Speaker 1>California plant. I'm not sure what an elevator operator even

0:19:17.440 --> 0:19:19.600
<v Speaker 1>is in the twenty first century, especially at a company

0:19:19.640 --> 0:19:21.800
<v Speaker 1>such as Tesla, but apparently that was the job he

0:19:21.840 --> 0:19:25.639
<v Speaker 1>had there, and the jury obviously was very sympathetic to

0:19:25.760 --> 0:19:29.640
<v Speaker 1>his situation and determined that he did suffer emotional distress

0:19:29.840 --> 0:19:34.520
<v Speaker 1>and that punitive damages were in order. Any idea where

0:19:34.520 --> 0:19:39.120
<v Speaker 1>this six point nine million dollars in emotional distress comes from?

0:19:39.600 --> 0:19:42.480
<v Speaker 1>Where they came up with that number? Sure? So the

0:19:42.560 --> 0:19:45.600
<v Speaker 1>answer is that oftentimes what a jury will do, and

0:19:45.640 --> 0:19:48.000
<v Speaker 1>I suspect that's what happened in this case. If they

0:19:48.040 --> 0:19:52.440
<v Speaker 1>are upset enough about the circumstances that occurred in the workplace,

0:19:52.600 --> 0:19:55.320
<v Speaker 1>and for whatever reason they believe that this employee has

0:19:55.359 --> 0:19:59.760
<v Speaker 1>been wrongly treated or obviously in this case, significantly wrongly treated,

0:20:00.080 --> 0:20:04.919
<v Speaker 1>what will creep into the emotional distress damages award is

0:20:05.040 --> 0:20:08.520
<v Speaker 1>a punitive element, meaning that the jury was only asked

0:20:08.520 --> 0:20:10.359
<v Speaker 1>in that phase of the trial because there are different

0:20:10.359 --> 0:20:13.840
<v Speaker 1>phases of the trial compensatory damages versus punitive damages, and

0:20:13.920 --> 0:20:17.439
<v Speaker 1>the compensatory damages phase of the trial. The jury was

0:20:17.680 --> 0:20:22.200
<v Speaker 1>apparently so upset with what had occurred that although they

0:20:22.240 --> 0:20:25.840
<v Speaker 1>were only supposed to be focusing on making mister Diaz

0:20:26.000 --> 0:20:30.080
<v Speaker 1>whole in the form of emotional distress damages, I believe

0:20:30.080 --> 0:20:33.240
<v Speaker 1>what happened is that at that stage of the proceedings,

0:20:33.280 --> 0:20:36.439
<v Speaker 1>when they were only supposed to be focusing on making

0:20:36.480 --> 0:20:41.159
<v Speaker 1>mister Diaz whole in terms of awarding him damages for

0:20:41.200 --> 0:20:46.440
<v Speaker 1>emotional distress, I suspect what crept in was an element

0:20:46.480 --> 0:20:52.320
<v Speaker 1>of punitive reprisal essentially by the jury against Tesla. That's

0:20:52.359 --> 0:20:55.360
<v Speaker 1>not supposed to happen, but it's not unusual for that

0:20:55.440 --> 0:20:57.679
<v Speaker 1>to happen, and I think that's what happened with the

0:20:57.720 --> 0:21:00.680
<v Speaker 1>six point nine million dollar award that acurred with respect

0:21:00.720 --> 0:21:04.240
<v Speaker 1>emotional distress damages. In California, where this jury verdict occurred,

0:21:04.280 --> 0:21:07.520
<v Speaker 1>there aren't really any guide posts for a jury to

0:21:07.640 --> 0:21:11.960
<v Speaker 1>determine what are the appropriate amount of emotional distress damages. Indeed,

0:21:12.240 --> 0:21:16.360
<v Speaker 1>oftentimes it's what the plaintiffs lawyer asks for the plaintiff

0:21:16.400 --> 0:21:19.160
<v Speaker 1>lawyer oftentimes will put a number out there and tell

0:21:19.200 --> 0:21:21.600
<v Speaker 1>the jury that he or she thinks that's an appropriate

0:21:21.640 --> 0:21:26.000
<v Speaker 1>amount of emotional distress damages. But the jury instructions in

0:21:26.040 --> 0:21:30.679
<v Speaker 1>California are woefully deficient in telling juries what they should

0:21:30.760 --> 0:21:34.480
<v Speaker 1>evaluate and how they should determine the amount of emotional

0:21:34.480 --> 0:21:37.680
<v Speaker 1>distress damages. This is becoming a bigger and bigger problem

0:21:38.400 --> 0:21:41.199
<v Speaker 1>where the employer basically is at the mercy of the

0:21:41.200 --> 0:21:43.600
<v Speaker 1>plaintiff lawyer in terms of what number he or she

0:21:44.160 --> 0:21:46.840
<v Speaker 1>throws out to the jury or whatever the jury may

0:21:46.840 --> 0:21:49.240
<v Speaker 1>come up with, and there's no real standardized way of

0:21:49.280 --> 0:21:52.480
<v Speaker 1>figuring that out. Another problem with the jury instructions in California,

0:21:52.520 --> 0:21:55.600
<v Speaker 1>by the way, are they asked the jury to assess

0:21:55.720 --> 0:22:00.320
<v Speaker 1>and award past emotional distress damages up through and including

0:22:00.400 --> 0:22:04.280
<v Speaker 1>the time of the trial, and then future emotional distress damages.

0:22:04.480 --> 0:22:07.240
<v Speaker 1>I think that second element, at the very least future

0:22:07.320 --> 0:22:10.840
<v Speaker 1>emotional distress damages is nothing but purely asking the jury

0:22:10.880 --> 0:22:14.280
<v Speaker 1>to speculate about something. And so what often happens is

0:22:14.280 --> 0:22:16.960
<v Speaker 1>the jury comes up with a very large number and

0:22:16.960 --> 0:22:19.919
<v Speaker 1>they give half for the past emotional distress damages, and

0:22:19.960 --> 0:22:22.840
<v Speaker 1>they give half for the future emotional distress damages. And

0:22:23.080 --> 0:22:25.720
<v Speaker 1>all of this is just funny money, made up numbers

0:22:25.760 --> 0:22:29.520
<v Speaker 1>that aren't really targeted or in any way correlated to

0:22:29.560 --> 0:22:33.080
<v Speaker 1>anything in reality. So the trial judge gave the plaintiff

0:22:33.119 --> 0:22:36.320
<v Speaker 1>here a tough choice. Tell us about it. Sure. So

0:22:36.520 --> 0:22:39.280
<v Speaker 1>what happened after the verdict came out in October of

0:22:39.320 --> 0:22:43.320
<v Speaker 1>twenty twenty one, TESLA moved the Proud Court judge to

0:22:43.480 --> 0:22:47.200
<v Speaker 1>reduce the one hundred and thirty seven million dollar verdict,

0:22:47.200 --> 0:22:52.040
<v Speaker 1>which was completely in anticipated that clearly the judge would

0:22:52.160 --> 0:22:55.600
<v Speaker 1>seek to do something with that verdict because we've already

0:22:55.600 --> 0:22:59.280
<v Speaker 1>talked about how large the compenstory damages verdict was, that is,

0:22:59.320 --> 0:23:01.600
<v Speaker 1>the emotional dis dress damages, But on top of that,

0:23:01.640 --> 0:23:03.879
<v Speaker 1>there was a one hundred and thirty million dollars punitive

0:23:03.960 --> 0:23:07.840
<v Speaker 1>damages award. And the problem with that part of the

0:23:07.960 --> 0:23:10.520
<v Speaker 1>verdict from October of twenty twenty one is that the

0:23:10.600 --> 0:23:16.439
<v Speaker 1>punitive damages were approximately nineteen times the amount of the

0:23:16.480 --> 0:23:20.879
<v Speaker 1>compensatory damages. And once that happens, then the verdict is

0:23:20.920 --> 0:23:25.760
<v Speaker 1>imperiled because there are constitutional limits that have been defined

0:23:25.800 --> 0:23:28.440
<v Speaker 1>by the United States Supreme Court and have been accepted

0:23:28.480 --> 0:23:30.720
<v Speaker 1>by courts all around the country. They really don't have

0:23:30.760 --> 0:23:34.600
<v Speaker 1>a choice. That a punitive damage award can only be

0:23:35.240 --> 0:23:39.920
<v Speaker 1>at the very highest amount, perhaps nine times the amount

0:23:40.040 --> 0:23:43.960
<v Speaker 1>of compensatory damages, and so in this case, the original

0:23:44.040 --> 0:23:49.240
<v Speaker 1>verdict was nineteen times the amount of the compensatory damages award,

0:23:49.280 --> 0:23:51.800
<v Speaker 1>so that had to be reduced. What the judge did

0:23:51.880 --> 0:23:56.800
<v Speaker 1>in April of twenty twenty two was to reduce both

0:23:56.880 --> 0:24:00.560
<v Speaker 1>the emotional distress damages and the punitive damage. And what

0:24:00.640 --> 0:24:03.040
<v Speaker 1>the judge did, in an attempt to fix this verdict

0:24:03.600 --> 0:24:06.400
<v Speaker 1>was reduced the emotional distress damages from six point nine

0:24:06.400 --> 0:24:10.359
<v Speaker 1>million dollars to one point five million dollars, and then

0:24:10.680 --> 0:24:13.760
<v Speaker 1>he multiplied that one point five times nine to get

0:24:13.800 --> 0:24:16.719
<v Speaker 1>punitive damages in the amount of thirteen point five million,

0:24:17.200 --> 0:24:20.879
<v Speaker 1>for a total verdict of fifteen million dollars. This was

0:24:21.000 --> 0:24:23.199
<v Speaker 1>the best the judge, I think, thought he could do.

0:24:23.280 --> 0:24:26.800
<v Speaker 1>He was also obviously trying to preserve a significant amount

0:24:26.920 --> 0:24:30.719
<v Speaker 1>of punitive damages, which he did by although still reducing

0:24:30.760 --> 0:24:33.919
<v Speaker 1>it obviously significantly from one hundred and thirty million dollars,

0:24:33.960 --> 0:24:37.919
<v Speaker 1>he kept it within that constitutional boundary, meaning that the

0:24:38.000 --> 0:24:41.000
<v Speaker 1>thirteen point five million dollars was within a single digit

0:24:41.560 --> 0:24:44.880
<v Speaker 1>multiple of the one point five But as you can see,

0:24:44.880 --> 0:24:46.639
<v Speaker 1>when you're dealing with these kinds of numbers, these are

0:24:46.680 --> 0:24:51.000
<v Speaker 1>just literally numbers pulled from nowhere, and these are huge, huge,

0:24:51.080 --> 0:24:54.960
<v Speaker 1>huge amounts of money to be considered to be awarded

0:24:54.960 --> 0:24:58.000
<v Speaker 1>against an employer in a situation like this, not to

0:24:58.000 --> 0:25:01.119
<v Speaker 1>mention the fact that the predictability is completely ridiculous if

0:25:01.160 --> 0:25:03.520
<v Speaker 1>you just look at the difference between the October twenty

0:25:03.520 --> 0:25:06.800
<v Speaker 1>one verdict of one hundred and thirty seven million dollars

0:25:06.920 --> 0:25:10.320
<v Speaker 1>and then the corrected verdict by the judge to fifteen

0:25:10.359 --> 0:25:14.760
<v Speaker 1>million dollars. So that swing itself is absolutely breathtaking and huge.

0:25:15.200 --> 0:25:19.000
<v Speaker 1>And then we have another trial that takes place on

0:25:19.080 --> 0:25:21.639
<v Speaker 1>the damages. The reason we had another trial on the

0:25:21.720 --> 0:25:26.160
<v Speaker 1>damages is because the judge offered mister Diaz the opportunity

0:25:26.200 --> 0:25:30.119
<v Speaker 1>to accept that reduced verdict of fifteen million dollars that

0:25:30.160 --> 0:25:34.639
<v Speaker 1>the judge had patched together, and mister Diaz declined it.

0:25:34.680 --> 0:25:37.879
<v Speaker 1>He decided not to accept the fifteen million dollars and

0:25:38.000 --> 0:25:42.040
<v Speaker 1>the alternative indoor number two, was to have another trial

0:25:42.560 --> 0:25:45.440
<v Speaker 1>on damages alone. Now it wasn't another trial on the

0:25:45.600 --> 0:25:48.439
<v Speaker 1>underlying case as to whether he was or was not

0:25:48.560 --> 0:25:51.480
<v Speaker 1>harass that was established and the jury was told that

0:25:51.480 --> 0:25:54.960
<v Speaker 1>that was already established. But importantly they didn't therefore hear

0:25:55.080 --> 0:25:59.200
<v Speaker 1>all the evidence. This next jury that just issued it's

0:26:00.000 --> 0:26:03.640
<v Speaker 1>predict on the third of April of this year, only

0:26:03.720 --> 0:26:07.000
<v Speaker 1>heard evidence about damages and did not hear any of

0:26:07.040 --> 0:26:11.359
<v Speaker 1>the evidence concerning the underlying liability. And I think that

0:26:11.480 --> 0:26:14.520
<v Speaker 1>may not be the best outcome for an employee in

0:26:14.560 --> 0:26:17.480
<v Speaker 1>a situation like this, because the jury, obviously, with the

0:26:17.520 --> 0:26:20.119
<v Speaker 1>first verdict for the first trial, was quite riled up,

0:26:20.160 --> 0:26:22.119
<v Speaker 1>and they were I'm sure mostly riled up by what

0:26:22.200 --> 0:26:25.600
<v Speaker 1>they heard in the liability phase of the case. This

0:26:25.720 --> 0:26:28.040
<v Speaker 1>second jury never heard all of that. They were just

0:26:28.240 --> 0:26:31.160
<v Speaker 1>told to assume that there was harassment, and now their

0:26:31.240 --> 0:26:34.680
<v Speaker 1>job was to figure out what was the basis for

0:26:34.920 --> 0:26:38.280
<v Speaker 1>a damages award. And what this new jury did last

0:26:38.320 --> 0:26:44.639
<v Speaker 1>week was further reduced the verdict significantly. From again that

0:26:44.720 --> 0:26:47.720
<v Speaker 1>the original emotional stress damages award was six point nine million,

0:26:48.200 --> 0:26:50.960
<v Speaker 1>the trial court judge reduced that to one point five million,

0:26:51.240 --> 0:26:53.639
<v Speaker 1>and in the retrial, the new jury comes up with

0:26:53.720 --> 0:26:59.200
<v Speaker 1>one hundred and seventy five thousand dollars, another significant reduction

0:27:00.000 --> 0:27:02.560
<v Speaker 1>in the first two numbers, and then they award a

0:27:02.640 --> 0:27:06.440
<v Speaker 1>punitive damages of three million dollars on top of the

0:27:06.440 --> 0:27:09.840
<v Speaker 1>one hundred and seventy five thousand in emotional distress damages.

0:27:10.040 --> 0:27:13.440
<v Speaker 1>So he chose the wrong door, it sounds like he did. Now.

0:27:13.480 --> 0:27:15.560
<v Speaker 1>I think that if he had chosen the fifteen million,

0:27:16.000 --> 0:27:18.720
<v Speaker 1>it's unclear what Tesla would have done. They may have

0:27:18.760 --> 0:27:20.680
<v Speaker 1>still filed an appeal. I don't think they would have

0:27:20.720 --> 0:27:23.159
<v Speaker 1>been bound by that fifteen million. It's not clear that

0:27:23.200 --> 0:27:26.240
<v Speaker 1>they thought that number was a fair amount from their perspective. Now,

0:27:26.280 --> 0:27:30.400
<v Speaker 1>the interesting part about the latest version of this verdict,

0:27:30.880 --> 0:27:33.639
<v Speaker 1>this one hundred and seventy five thousand dollars three million

0:27:33.640 --> 0:27:37.280
<v Speaker 1>dollars in punitive damages, is now once again the punitive

0:27:37.359 --> 0:27:41.080
<v Speaker 1>damages are out of whack with the compensatory damage. As

0:27:41.080 --> 0:27:43.560
<v Speaker 1>they said earlier, the Supreme Court has said that punitive

0:27:43.600 --> 0:27:47.080
<v Speaker 1>damages can't be more than nine times the compensatory damages. Well,

0:27:47.119 --> 0:27:50.879
<v Speaker 1>now it's seventeen times. Three million dollars is seventeen times

0:27:51.160 --> 0:27:54.200
<v Speaker 1>the amount of the emotional distress damages, so that's got

0:27:54.200 --> 0:27:57.480
<v Speaker 1>to be further reduced. The Trial court judge, no doubt,

0:27:57.480 --> 0:28:00.639
<v Speaker 1>will not increase one hundred and seventy five thousand. He

0:28:00.720 --> 0:28:03.080
<v Speaker 1>may reduce it, but I suspect he won't. But what

0:28:03.160 --> 0:28:05.040
<v Speaker 1>he will probably have to do, or will be called

0:28:05.119 --> 0:28:10.119
<v Speaker 1>upon my tesla to do, is to again evaluate the

0:28:10.160 --> 0:28:13.960
<v Speaker 1>overall outcome of this case and reduce that three million

0:28:14.000 --> 0:28:16.679
<v Speaker 1>dollars to a number that is much closer to one

0:28:16.760 --> 0:28:19.280
<v Speaker 1>hundred and seventy five thousand dollars than it is to

0:28:19.359 --> 0:28:21.480
<v Speaker 1>the current three million. In fact, he would probably have

0:28:21.520 --> 0:28:25.320
<v Speaker 1>to cut it in half or more. So. Juries are

0:28:25.400 --> 0:28:29.800
<v Speaker 1>not told anything about how the punitive damages have to

0:28:29.840 --> 0:28:35.520
<v Speaker 1>be in line with the compensatory by a certain amount exactly,

0:28:35.520 --> 0:28:37.920
<v Speaker 1>and I think that is a failing of the system.

0:28:38.600 --> 0:28:41.200
<v Speaker 1>I think both sides have a reason during the trial

0:28:41.320 --> 0:28:45.360
<v Speaker 1>not to talk about those limits. The plaintiff's lawyer obviously

0:28:45.440 --> 0:28:47.240
<v Speaker 1>is not going to want the jury to hear anything

0:28:47.240 --> 0:28:51.080
<v Speaker 1>about outer limits. So how much the punitive damages might be,

0:28:51.640 --> 0:28:55.080
<v Speaker 1>they would love to have nineteen twenty, thirty forty times

0:28:55.080 --> 0:28:58.120
<v Speaker 1>the amount of the compenstory damages, because that just gives

0:28:58.160 --> 0:29:00.840
<v Speaker 1>them more leverage on a retrial. I'll admit it gives

0:29:00.840 --> 0:29:03.200
<v Speaker 1>them more leverage on appeal. It gives them more leverage,

0:29:03.400 --> 0:29:06.520
<v Speaker 1>perhaps trying to settle the case. The defense, on the

0:29:06.560 --> 0:29:09.360
<v Speaker 1>other hand, however, also doesn't really want to talk about

0:29:09.400 --> 0:29:13.560
<v Speaker 1>those limits because it might suggest to the jury numbers

0:29:13.880 --> 0:29:17.040
<v Speaker 1>multiples of the compensed story damages that they haven't thought of.

0:29:17.280 --> 0:29:19.880
<v Speaker 1>In other words, if the defense says, yes, nine times

0:29:20.000 --> 0:29:21.800
<v Speaker 1>is the maximum, but maybe you should do one or

0:29:21.840 --> 0:29:24.400
<v Speaker 1>two or three times again, that might be something that

0:29:24.480 --> 0:29:26.520
<v Speaker 1>a defense lawyer doesn't want to put out there because

0:29:26.520 --> 0:29:30.040
<v Speaker 1>they're hoping that the jury comes back with a smaller number,

0:29:30.040 --> 0:29:33.240
<v Speaker 1>perhaps even than one times the amount of compensed story damages.

0:29:33.440 --> 0:29:35.400
<v Speaker 1>So they don't want to plant a number usually with

0:29:35.480 --> 0:29:39.120
<v Speaker 1>the jury either. And so there's this bizarre conspiracy of

0:29:39.160 --> 0:29:42.160
<v Speaker 1>silent the way I've put it, and everyone in the courtroom,

0:29:42.640 --> 0:29:47.400
<v Speaker 1>the judge, the lawyers, all know that there's this constitutional

0:29:47.440 --> 0:29:50.440
<v Speaker 1>limit to how much the punitive damages can be, and

0:29:50.520 --> 0:29:53.240
<v Speaker 1>yet nobody tells the most important group of people in

0:29:53.280 --> 0:29:56.760
<v Speaker 1>the courtroom what those limits are, which is the jury.

0:29:56.920 --> 0:30:00.440
<v Speaker 1>The jury is never told about those constitutional limits. And

0:30:00.480 --> 0:30:04.400
<v Speaker 1>I think that going forward, there should be some reform

0:30:04.480 --> 0:30:07.320
<v Speaker 1>here and that there should be a specific jury instruction

0:30:07.760 --> 0:30:11.080
<v Speaker 1>from the judge and admonition from the judge about what

0:30:11.200 --> 0:30:15.400
<v Speaker 1>the scope of those punitive damages can and should be.

0:30:15.400 --> 0:30:18.520
<v Speaker 1>Because when that aspect of the case gets to the jury,

0:30:19.000 --> 0:30:21.480
<v Speaker 1>the plantiff lawyer, they all say the exact same thing.

0:30:21.520 --> 0:30:25.480
<v Speaker 1>They say, this defendant, this employer is a very very

0:30:25.520 --> 0:30:28.760
<v Speaker 1>wealthy company. It makes X amounts of money every single

0:30:28.840 --> 0:30:31.600
<v Speaker 1>day in revenue, it makes why amounts of money every

0:30:31.600 --> 0:30:35.040
<v Speaker 1>single day in profits. There's one thing, there's only one

0:30:35.080 --> 0:30:37.040
<v Speaker 1>thing that they understand, and that is money. And you

0:30:37.120 --> 0:30:40.120
<v Speaker 1>need to send them a message. And the only message

0:30:40.120 --> 0:30:44.280
<v Speaker 1>this company understands is money. And so, ladies and gentlemen,

0:30:44.320 --> 0:30:45.960
<v Speaker 1>the jury, you're going to need to hit them with

0:30:46.040 --> 0:30:49.040
<v Speaker 1>some significant amounts that they will learn their lesson. Every

0:30:49.040 --> 0:30:51.400
<v Speaker 1>single plantiff lawyer in the state of California, and I

0:30:51.480 --> 0:30:54.800
<v Speaker 1>suspect around the country says the exact same thing to juries.

0:30:54.840 --> 0:30:56.960
<v Speaker 1>They don't realize that they're being called the same thing

0:30:56.960 --> 0:30:59.240
<v Speaker 1>that every jury in the country is being told under

0:30:59.280 --> 0:31:02.320
<v Speaker 1>the circumstance, and they're invited to do what they need

0:31:02.360 --> 0:31:05.040
<v Speaker 1>to do to punish the employer. And the numbers that

0:31:05.080 --> 0:31:08.600
<v Speaker 1>they do here, by the way, are revenue numbers and

0:31:08.760 --> 0:31:12.520
<v Speaker 1>profitability numbers. And so the jury is going to be

0:31:12.560 --> 0:31:15.200
<v Speaker 1>told gee, if you only award a million dollars Elon

0:31:15.280 --> 0:31:18.800
<v Speaker 1>Musk makes that in twenty five minutes, that's that's not

0:31:18.840 --> 0:31:21.520
<v Speaker 1>going to stop him. You've got to really do something,

0:31:21.680 --> 0:31:24.160
<v Speaker 1>you know, to send a message. And so that's what

0:31:24.320 --> 0:31:27.400
<v Speaker 1>happens to get the jury riled up. And then no

0:31:27.440 --> 0:31:29.440
<v Speaker 1>one ever comes in and throws any cold water on

0:31:29.480 --> 0:31:32.120
<v Speaker 1>it and says, by the way, don't come back with

0:31:32.160 --> 0:31:34.200
<v Speaker 1>a number that's more than nine times, and maybe you

0:31:34.200 --> 0:31:36.080
<v Speaker 1>should be thinking about a number that's not more than

0:31:36.360 --> 0:31:40.280
<v Speaker 1>two or three times. The compense story damages. Nobody says

0:31:40.320 --> 0:31:42.720
<v Speaker 1>that to the jury, so it's not surprising that they

0:31:42.760 --> 0:31:46.160
<v Speaker 1>come out with these outlandish verdicts. Is the judge able

0:31:46.240 --> 0:31:48.640
<v Speaker 1>to give that kind of instruction orders? They have to

0:31:48.680 --> 0:31:52.680
<v Speaker 1>be in the jury instructions. Typically in a trial such

0:31:52.680 --> 0:31:55.080
<v Speaker 1>as this, the judge gives what are referred to as

0:31:55.080 --> 0:31:59.160
<v Speaker 1>pattern jury instructions, that is, those that have been approved

0:31:59.600 --> 0:32:03.240
<v Speaker 1>by our committees and plaintiest lawyers, defense lawyers who've all

0:32:03.320 --> 0:32:05.560
<v Speaker 1>sort of worked on these and negotiated them. But there

0:32:05.560 --> 0:32:09.720
<v Speaker 1>are also special jury instructions that each side can propose

0:32:10.400 --> 0:32:14.000
<v Speaker 1>to the judge that the judge, within his or her discretion,

0:32:14.080 --> 0:32:17.160
<v Speaker 1>can either read to the jury or not, and some

0:32:17.240 --> 0:32:19.760
<v Speaker 1>judges have their own instructions that they think are appropriate

0:32:19.840 --> 0:32:23.440
<v Speaker 1>for administrative purposes. I just don't know the answer to

0:32:23.480 --> 0:32:26.080
<v Speaker 1>whether anyone's ever suggested this to a judge or whether

0:32:26.160 --> 0:32:29.640
<v Speaker 1>any judges have ever suggested the parties. But I think

0:32:29.640 --> 0:32:32.240
<v Speaker 1>it's high time that somebody started thinking about this, because

0:32:32.280 --> 0:32:35.040
<v Speaker 1>you know, you have the same case and the verdict

0:32:35.080 --> 0:32:39.200
<v Speaker 1>has ranged now from three point one seven five million

0:32:39.280 --> 0:32:42.240
<v Speaker 1>to one hundred and thirty seven million dollars over the

0:32:42.320 --> 0:32:45.280
<v Speaker 1>last year and a half. That is preposterous and it

0:32:45.360 --> 0:32:49.560
<v Speaker 1>breeds disrespect and contempt for our legal system where you

0:32:49.600 --> 0:32:52.680
<v Speaker 1>could have reasonable people, supposedly both in the form of

0:32:52.680 --> 0:32:55.920
<v Speaker 1>the judge and the jury, coming to a conclusion as

0:32:55.960 --> 0:33:00.000
<v Speaker 1>to how much an employee should be recovering under circumstances

0:33:00.040 --> 0:33:02.320
<v Speaker 1>such as this. It is completely ridiculous and it needs

0:33:02.360 --> 0:33:05.680
<v Speaker 1>to be fixed. So this decision, this verdict can be

0:33:05.720 --> 0:33:09.440
<v Speaker 1>appealed by the plaintiff, absolutely, I'm sure it will be appealed.

0:33:09.440 --> 0:33:11.719
<v Speaker 1>That probably will be appealed on both sides. I think

0:33:11.760 --> 0:33:14.880
<v Speaker 1>the plaintiffs lawyer has already said that he believes that

0:33:14.960 --> 0:33:18.000
<v Speaker 1>there was error that occurred during the trial because there

0:33:18.120 --> 0:33:20.640
<v Speaker 1>was a different tack I believe taken. I don't know

0:33:20.680 --> 0:33:22.600
<v Speaker 1>all the details about this, but I believe that there

0:33:22.640 --> 0:33:25.400
<v Speaker 1>was a different tack taken by the defense counsel in

0:33:25.400 --> 0:33:28.920
<v Speaker 1>this case, and they were extremely aggressive in terms of

0:33:29.160 --> 0:33:33.160
<v Speaker 1>challenging the credibility of mister Diaz. I'm sure the original

0:33:33.240 --> 0:33:35.320
<v Speaker 1>lawyers did the same thing, but for perhaps some of

0:33:35.320 --> 0:33:37.680
<v Speaker 1>the reasons I mentioned earlier, which is the jury didn't

0:33:37.720 --> 0:33:40.240
<v Speaker 1>hear all the other evidence about liability. I think it

0:33:40.360 --> 0:33:43.440
<v Speaker 1>landed more solidly with this jury than perhaps in the

0:33:43.480 --> 0:33:47.040
<v Speaker 1>original trial, and they attacked his credibility, and they brought

0:33:47.120 --> 0:33:50.240
<v Speaker 1>up back such as he had recommended each of his

0:33:50.320 --> 0:33:53.600
<v Speaker 1>adult children to apply for jobs at Tesla. The obvious

0:33:53.680 --> 0:33:57.480
<v Speaker 1>question is somebody who is being subjected to this form

0:33:57.520 --> 0:34:00.520
<v Speaker 1>of harassment, such as he had testified about, you wouldn't

0:34:00.520 --> 0:34:03.240
<v Speaker 1>expect that that person would then turn around and recommend

0:34:03.240 --> 0:34:05.960
<v Speaker 1>to family members, close family members with whom he lived.

0:34:06.280 --> 0:34:09.200
<v Speaker 1>I believe that they should also apply for jobs at

0:34:09.200 --> 0:34:11.400
<v Speaker 1>Tesla didn't make a lot of sense. I'm sure the

0:34:11.440 --> 0:34:14.040
<v Speaker 1>planet had explanations for that, and again I don't know

0:34:14.080 --> 0:34:17.360
<v Speaker 1>all the details, but my tacit understanding is the defense

0:34:17.440 --> 0:34:21.000
<v Speaker 1>layers were extremely aggressive in terms of attacking the credibility

0:34:21.000 --> 0:34:24.000
<v Speaker 1>of mister Diaz under these circumstances, which I'm sure tamps

0:34:24.080 --> 0:34:29.040
<v Speaker 1>down significantly the emotional distress component of this verdict. Now,

0:34:29.040 --> 0:34:32.640
<v Speaker 1>there was an arbitration in a similar case what happened there.

0:34:33.239 --> 0:34:35.480
<v Speaker 1>The other thing is really interesting about this case, and

0:34:35.800 --> 0:34:37.520
<v Speaker 1>I think you and I've talked about it before June,

0:34:37.520 --> 0:34:40.880
<v Speaker 1>and that is that this is almost the laboratory condition

0:34:41.080 --> 0:34:46.680
<v Speaker 1>experiment in terms of the arbitration process as compared to

0:34:46.719 --> 0:34:50.200
<v Speaker 1>the jury process in the state of California before the

0:34:50.239 --> 0:34:52.839
<v Speaker 1>original verdict, before one hundred and thirty seven million dollar

0:34:52.960 --> 0:34:57.880
<v Speaker 1>verdict came out in this case, another black employee sued Tesla.

0:34:58.000 --> 0:35:02.000
<v Speaker 1>He was an employee at the exact same location in Fremont, California,

0:35:02.120 --> 0:35:07.120
<v Speaker 1>testified about almost identical circumstances of alleged racial harassment that

0:35:07.120 --> 0:35:09.799
<v Speaker 1>occurred in the workplace. He in fact, was represented by

0:35:09.840 --> 0:35:14.120
<v Speaker 1>the exact same lawyer who prosecuted mister Diaz's. The tale

0:35:14.120 --> 0:35:17.160
<v Speaker 1>of two cities here is that first employee who sued

0:35:17.360 --> 0:35:20.640
<v Speaker 1>and actually got an award had an arbitration agreement. He

0:35:20.680 --> 0:35:23.840
<v Speaker 1>had signed an arbitration agreement, and the arbitrator in that

0:35:23.920 --> 0:35:27.479
<v Speaker 1>case in August of twenty twenty one granted him one

0:35:27.560 --> 0:35:30.680
<v Speaker 1>million dollars, an award no more than one million dollars,

0:35:30.680 --> 0:35:33.600
<v Speaker 1>which at that time was a significantly high amount for

0:35:33.680 --> 0:35:36.839
<v Speaker 1>an arbitrator, because arbitrators are usually fairly careful in terms

0:35:36.840 --> 0:35:38.880
<v Speaker 1>of the amounts of money that they award in these cases.

0:35:39.239 --> 0:35:42.000
<v Speaker 1>That then was followed two months later by again a

0:35:42.080 --> 0:35:47.640
<v Speaker 1>laboratory condition experiment, almost same lawyer, same plant, same allegations,

0:35:47.680 --> 0:35:50.560
<v Speaker 1>just a different employee, and that employee got one hundred

0:35:50.560 --> 0:35:53.120
<v Speaker 1>and thirty seven million dollars. So this is one of

0:35:53.120 --> 0:35:56.040
<v Speaker 1>the reasons why, for example, I think plaintive lawyers would say,

0:35:56.160 --> 0:35:59.000
<v Speaker 1>we hate arbitration, we don't ever want it. It obviously

0:35:59.080 --> 0:36:02.360
<v Speaker 1>is going to result in lower verdicts for our clients

0:36:02.400 --> 0:36:06.359
<v Speaker 1>and less of a participatory element for the plaintiffs lawyer,

0:36:06.360 --> 0:36:08.479
<v Speaker 1>because they usually get forty or fifty percent of whatever

0:36:08.520 --> 0:36:11.359
<v Speaker 1>the underlying verdict is. Defense lawyers, on the other hand,

0:36:11.360 --> 0:36:14.680
<v Speaker 1>are saying arbitration is a perfectly good way of resolving

0:36:14.719 --> 0:36:17.759
<v Speaker 1>these disputes, and that's a much more reasonable outcome that

0:36:17.880 --> 0:36:22.680
<v Speaker 1>can be predicted. Plaintiffs lawyers absolutely don't like arbitration, thanks

0:36:22.680 --> 0:36:26.239
<v Speaker 1>so much, Tony. That's Anthony on CD of Proskauer Rose.

0:36:26.640 --> 0:36:29.000
<v Speaker 1>And that's it for this edition of The Bloomberg Law Show.

0:36:29.320 --> 0:36:31.799
<v Speaker 1>Remember you can always get the latest legal news honor

0:36:31.840 --> 0:36:35.960
<v Speaker 1>Bloomberg Law Podcast. You can find them on Apple Podcasts, Spotify,

0:36:36.160 --> 0:36:41.200
<v Speaker 1>and at www dot Bloomberg dot com, slash podcast Slash Law,

0:36:41.600 --> 0:36:44.240
<v Speaker 1>and remember to tune into The Bloomberg Law Show every

0:36:44.280 --> 0:36:48.200
<v Speaker 1>week night at ten pm Wall Street Time. I'm June Grossow,

0:36:48.280 --> 0:36:49.920
<v Speaker 1>and you're listening to Bloomberg