Speaker 1: This is Bloomberg Law with June Grosse from Bloomberg Radio.
Speaker 2: The Trump administration is not following all court orders, and
Speaker 2: that's according to federal judges. The judges are fielding more
Speaker 2: requests to force the administration to comply with their rulings
Speaker 2: against the federal government than in any other administration, including
Speaker 2: the first Trump administration. One of the earliest cases was
Speaker 2: when the Chief DC Judge in March of twenty twenty
Speaker 2: five ordered the administration to turn back planes flying Venezuelan
Speaker 2: migrants to a prison in El Salvador, and the administration
Speaker 2: failed to do so. Now, a study by Bloomberg Lawn
Speaker 2: shows that judges have found the administration has failed to
Speaker 2: comply with their orders in more than half of the
Speaker 2: twenty five cases identified regarding preliminary injunction. Joining me is
Speaker 2: Bloomberg Law reporter Suzanne Monnac, who's done the research and
Speaker 2: crunched the numbers. Normally, a judge issues and order and
Speaker 2: the parties comply with the order. What's been happening in
Speaker 2: several cases with orders issued against the federal government.
Speaker 3: We've seen some recent examples where the Trump administration has
Speaker 3: been at least accused of and in some cases found
Speaker 3: of not fully complying with these court orders. Attract two
Speaker 3: dozen examples at least of times when initial preliminary injunction
Speaker 3: orders issued early in a case were not fully followed,
Speaker 3: or at least the challengers alleged that they were not
Speaker 3: being fully followed by the government.
Speaker 4: Under this administration alone.
Speaker 2: What kind of cases are we talking about?
Speaker 4: All different types of cases against the government.
Speaker 3: We've seen them in big cases of our usaid funding cuts,
Speaker 3: the dismantling of international broadcaster Voice of America, other big
Speaker 3: cases across the country where there were early preliminary injunction
Speaker 3: orders granted against the administration telling them to stop doing something,
Speaker 3: and then we saw the challengers come back into court
Speaker 3: and claim the administration wasn't fully following that order. And
Speaker 3: in about half of those twenty five instances, the judge agreed,
Speaker 3: at least in part.
Speaker 2: There was a scathing opinion by a Reagan appointee in
Speaker 2: the Voice of America case, and in another case, a
Speaker 2: senior DC federal judge said that the Defense Department's actions
Speaker 2: flout the court's explicit directives. So these federal judges are
Speaker 2: not beating around the bush. How upset are the judges
Speaker 2: about this failure to comply with their explicit.
Speaker 3: Orders in some cases pretty upset And obviously when it
Speaker 3: comes to judges, sometimes they're upset and they still write
Speaker 3: a pretty boring opinion, So it's hard to always know.
Speaker 3: But yes, as you mentioned in a couple of examples,
Speaker 3: the judges did in fact let us know that they
Speaker 3: weren't happy with the government's conduct. In that one instance
Speaker 3: you mentioned, Judge Lambert or Reagan appointee in DC, when
Speaker 3: he was handling the Voice of America case, said that
Speaker 3: he thought the government was quote in violation of even
Speaker 3: the most meager reading end quote of his court order.
Speaker 4: So definitely not pleased.
Speaker 3: We've also seen plenty of orders where the judge is
Speaker 3: kind of very matter of factuty as like, I don't
Speaker 3: see the government as having fully complied with this order.
Speaker 4: These are inconsistent.
Speaker 3: You know, you need to do this differently if you
Speaker 3: want to be in compliance with my order.
Speaker 2: A few judges wanted to take things further or did
Speaker 2: take things further. So in Minnesota you had the chief
Speaker 2: judge finding that Ice violated court orders in dozens of
Speaker 2: immigration cases. And then there was a federal judge who
Speaker 2: held a government lawyer in civil contempt, though that didn't
Speaker 2: last long. Tell us about that.
Speaker 3: Yes, in this story, I was tracking motions to enforce
Speaker 3: preliminary injunctions, but there have been a lot of different
Speaker 3: types of motions filed to force compliance with court orders
Speaker 3: against this administration. And in that one example you mentioned,
Speaker 3: we saw a Minnesota federal judge actually held a government
Speaker 3: lawyer briefly in civil contempt of court for not correctly
Speaker 3: facilitating the release of a detained immigrant. He was released
Speaker 3: in the wrong state without his property, and it came
Speaker 3: out that the lawyer hadn't forwarded the court's order to
Speaker 3: ICE on time, so there was just a full breakdown
Speaker 3: in communication. The lawyer actually did apologize and said, I've
Speaker 3: just been really overwhelmed. But the judge had ordered essentially
Speaker 3: a financial penalty for every day that the detained immigrant,
Speaker 3: you know, was not with his property, and the government
Speaker 3: did remedy it very quickly. I don't believe the government lawyer,
Speaker 3: who was acting in the capacity of representing ICE, did
Speaker 3: actually end up having to pay anything personally, but it
Speaker 3: was a pretty significant sanction to see against the government.
Speaker 2: So in these cases, the government is giving instructions about
Speaker 2: what the court said and what the agency supposed to do.
Speaker 2: Do you know, is it a lot of times that
Speaker 2: the government lawyers are screwing up or that the agency
Speaker 2: is just not complying.
Speaker 4: I think it's a mix.
Speaker 3: In the case I just mentioned in Minnesota, that was
Speaker 3: a case where there was definitely seemed to be an
Speaker 3: overwhelmed lawyer for the government who was dealing with a
Speaker 3: lot of these immigration detention challenges as cases. But certainly
Speaker 3: I think there may be instances where it is, you know,
Speaker 3: the agency, and we've seen the government actually, like in
Speaker 3: that Minnesota case, say like, look, we can't always be
Speaker 3: responsible for what the agency does. The Justice Department, of course,
Speaker 3: represents federal agencies in court, and so you know, that's
Speaker 3: really kind of an interesting question as we see some
Speaker 3: of these compliances issues come up in cases to what
Speaker 3: extent is the Justice Department responsible for a federal agency
Speaker 3: not fully following a court order or interpreting it too
Speaker 3: narrowly and you know, not fully complying in the full
Speaker 3: spirit of the order. I think that's an interesting question
Speaker 3: and one that we've seen come up already.
Speaker 2: One of the first and probably still most famous case
Speaker 2: is is where the chief judge in DC, Judge Boseburg,
Speaker 2: ordered the government when they were sending venezuel and immigrants
Speaker 2: to prisons in El Salvador, to turn the planes around,
Speaker 2: and they didn't, and he wanted to have a criminal
Speaker 2: contempt investigation.
Speaker 3: But what happened the DC Circuit ruled against him on
Speaker 3: that issue and blocked a hearing from being held. Proceedings
Speaker 3: are still pending on that issue. But yes, that was
Speaker 3: probably one of the most famous issues of court compliance
Speaker 3: that have happened in this administration, and happened so early
Speaker 3: kind of set the tone perhaps for some of the
Speaker 3: issues to come. And in that case, we were talking about
Speaker 3: criminal contempt, which is a different form of content than
Speaker 3: we were discussing with the Minnesota lawyer.
Speaker 4: That was civil contempt, so quite a bit more serious.
Speaker 2: I mean, particularly it's noticeable in the immigration cases to me.
Speaker 2: But is it a reflection of the Trump administration sort
Speaker 2: of flexing or trying to flex its executive power or
Speaker 2: is it something else?
Speaker 4: Certainly it depends who you ask.
Speaker 3: I think that it is fair to say that when
Speaker 3: we're seeing this many motions to force compliance of court orders,
Speaker 3: more motions to enforce preliminary orders, but also some of
Speaker 3: the other ones you've talked about, to compel compliance, to
Speaker 3: consider contempt. That does probably show that we're dealing with
Speaker 3: an executive branch that is, you know, maybe interpreting court
Speaker 3: orders in a new way or really you know, drawing
Speaker 3: more this litigation as well. It's also partly, you know,
Speaker 3: a bit of a numbers game. To be clear, the
Speaker 3: majority of cases we're not seeing these compliance orders. It
Speaker 3: is still a small share of them. It's just a
Speaker 3: significantly higher share than we've seen involving the government in
Speaker 3: administrations past. The Department of Justice did respond to our
Speaker 3: reporting and they blamed really more the planeffs, you know,
Speaker 3: they said, this is not a pattern of non compliance
Speaker 3: in our part, like our DOJ lawyers work closely with
Speaker 3: the agencies to make sure they're complying, and said that
Speaker 3: it's actually the plain IFFs, the court challengers who are
Speaker 3: trying to test or expand the scope of injunctions. So
Speaker 3: I think what we're also kind of seeing and not
Speaker 3: only is sort of this flexing of executive power, but
Speaker 3: it's also the tension between executive power and judicial power,
Speaker 3: and the administration saying, you know, what can we do
Speaker 3: with the courts ruling as they are, and plainniffs are saying,
Speaker 3: what can the courts do to keep the administration from
Speaker 3: doing what it's doing?
Speaker 4: So we're kind of seeing a lot of that push
Speaker 4: them fullyly.
Speaker 2: In how many cases did the judges actually find that
Speaker 2: there hadn't been compliance?
Speaker 3: We looked at a small slice of court compliance motions,
Speaker 3: which for motions to enforce preliminary injunctions. But I think
Speaker 3: it's an interesting example to look at because it shows
Speaker 3: a compliance issue really early in a case. A preliminary
Speaker 3: injunction would come down pretty soon after a lawsuit, showing
Speaker 3: that the challenger was likely to win its case, and
Speaker 3: so then we're seeing the government, you know, immediately potentially
Speaker 3: not following that order.
Speaker 4: I think it's an interesting place to look in that case.
Speaker 3: Of the twenty five motions we identified in certain types
Speaker 3: of cases against the government, fourteen of them had a
Speaker 3: judge either grant fully or partially that ruling. In a
Speaker 3: few other cases it was either denied, sometimes it was
Speaker 3: resolved otherwise, or even mooted sometimes because the case just
Speaker 3: progressed past that stage. But a fourteen out of twenty
Speaker 3: five was still somewhat of a striking number for comparison.
Speaker 3: Under the Biden administration, there were only two motions to
Speaker 3: enforce preliminary injunctions crouled against the government, and one of
Speaker 3: them was partially grand and a medicaid involved case led
Speaker 3: by Texas. And during the first Trumpet administration, we saw
Speaker 3: eleven motions to enforced preliminary injunctions, about half of those
Speaker 3: partially or fully granted, so somewhat of a similar statistic,
Speaker 3: But I mean, that was eleven over four years. We're
Speaker 3: looking at twenty five and a year and a half.
Speaker 3: So I think we can expect potentially this number to
Speaker 3: grow as the number of court challenges grow and you know,
Speaker 3: as we see the administration kind of see what you know,
Speaker 3: they're able to do with these court orders.
Speaker 2: So I've talked with, you know, many former federal prosecutors
Speaker 2: who talk about how the presumption of regularity is being
Speaker 2: eroded in the Trump administration, in the second Trump administration,
Speaker 2: because the judges are not trusting what the government lawyers
Speaker 2: are saying.
Speaker 3: That's certainly a consequence when we're talking about court compliance issues,
Speaker 3: if we're seeing examples where the government is making I mean,
Speaker 3: in addition to court compliance issues. There have also been
Speaker 3: notable examples where government lawyers have made stakes in court,
Speaker 3: said things that they've had to go back and later correct,
Speaker 3: and even if they are still correcting it, which is
Speaker 3: what you're supposed to do, if you notice an error,
Speaker 3: you're supposed to correct it, that still does work to
Speaker 3: chip away at that presumption of regularity or you know,
Speaker 3: the assumption judges make that the government's acting and good
Speaker 3: faith in court. Some of the lawyers I spoke to,
Speaker 3: you know, one of them told me that she didn't
Speaker 3: see the presumption of regularity as being in full crisis
Speaker 3: at this point yet, but that it's certainly being tested.
Speaker 3: So I think that's another thing that we're going to
Speaker 3: watch and both during this administration and an administrations to
Speaker 3: come to what extent will the government will be able
Speaker 3: to recover from this.
Speaker 2: It's also true that a lot of these lawyers who
Speaker 2: were being thrown into court, particularly in the immigration cases,
Speaker 2: they have people who are not experts in immigration appearing
Speaker 2: in court, and they have a lot of inexperienced prosecutors
Speaker 2: because so many prosecutors left the Justice Department.
Speaker 3: Yes, the brain drain and the Justice Department is certainly
Speaker 3: a significant factor when it comes to these issues. Anytime
Speaker 3: you see a lawyer make a mistake in court who's
Speaker 3: really new to the department, I mean you have to
Speaker 3: wonder if perhaps having had more of those career people
Speaker 3: who had years of experience being there might have helped.
Speaker 3: And certainly again in that Minnesota case we were discussing,
Speaker 3: the attorney who was briefly held in civil contempt was
Speaker 3: a military lawyer who'd been dispatched apparently to help out
Speaker 3: with the surge of immigration cases happening in Minnesota at
Speaker 3: the time, because there wasn't the staffing to handle it.
Speaker 4: So, I mean, those are the things that happen.
Speaker 3: Things do slip through, and you end up with mistakes
Speaker 3: being made even under the best intentions when there isn't
Speaker 3: you know, full staffing or or full level of experience.
Speaker 2: Susanne, you put a lot of research into this. Thanks
Speaker 2: so much for sharing your findings with us. That's Bloomberg
Speaker 2: Law reporter Susanne Monnac. It's the biggest legal fight yet
Speaker 2: over harm to youth from social media and a pivotal
Speaker 2: moment for Meta, which is facing a possibility of a
Speaker 2: one point four trillion dollar DAMAGEES verdict and structural changes
Speaker 2: to its platform. Meta is once again on trial over
Speaker 2: dangers its platforms allegedly posed to children, and it's arguing
Speaker 2: once again that it works hard to make its platform
Speaker 2: safe for children. State attorneys general accuse Meta of contributing
Speaker 2: to the youth mental health crisis by knowingly and deliberately
Speaker 2: designing features that addict children to its platforms and hiding
Speaker 2: these harms from the public. It also argues that Meta
Speaker 2: routinely collects data on children under thirteen without their parents' consent,
Speaker 2: in violation of federal law. Joining me is Bloomberg Legal
Speaker 2: reporter Madeleine Meckelberg, who's covering the trial. Madeline tell us
Speaker 2: about this sort of new strategy the plaintiffs are using
Speaker 2: where they're arguing that it's the products themselves, their design
Speaker 2: and functionality, that have created harms, rather than talk about
Speaker 2: the content.
Speaker 5: That's right.
Speaker 1: So this case is like thousands of others that have
Speaker 1: been filed in that it's an attempt by litigants to
Speaker 1: get around Section two thirty, which gives pretty broad protections
Speaker 1: to technology companies from liability for content that's posted on
Speaker 1: their website. And so there are different baskets of cases
Speaker 1: that we can talk about, but essentially, all of them
Speaker 1: are seeking to hold companies like Meta, TikTok, Snapchat, Google's YouTube.
Speaker 1: They're trying to hold them accountable for the design of
Speaker 1: their platforms and features that they say are designed to
Speaker 1: be addictive and harmful to kids.
Speaker 2: So it's the public nuisance theory that was used in
Speaker 2: the New Mexico case.
Speaker 1: So the case that's go at trial right now with
Speaker 1: the state attorneys general is not a public nuisance case.
Speaker 1: That's a legal theory that's being put forward in cases
Speaker 1: that have been filed by groups of school districts and
Speaker 1: by some individual attorneys general. There are a ton of cases,
Speaker 1: so it's pretty confusing and it's hard to keep track
Speaker 1: of all of them.
Speaker 5: But the case that's at.
Speaker 1: Trial right now involves twenty nine state ags and they've
Speaker 1: brought their case under two kind of baskets of legal claims.
Speaker 1: The first one is consumer protection laws, and this is
Speaker 1: where it gets slightly more confusing. Only four of the
Speaker 1: twenty nine states have brought consumer protection claims, but they're
Speaker 1: all being tried together at this trial, and those are
Speaker 1: claims about the design of the platform. They say that
Speaker 1: they knowingly designed it to hook kids, and importantly that
Speaker 1: they misled the public and parents about risks that the
Speaker 1: companies should have known about its products.
Speaker 5: And that's one basket.
Speaker 1: And then there's also privacy claims during this lawsuit, and
Speaker 1: so the rest of the states are alleging that Meta
Speaker 1: knew that there were users under thirteen on its platform
Speaker 1: and it was collecting data from those kids in violation
Speaker 1: of federal law. So it's two different kind of baskets,
Speaker 1: but it's being discussed as part of this broader landscape
Speaker 1: of the cases against social media, and they're all kind
Speaker 1: of trying slightly different novel legal theories as different ways
Speaker 1: of getting at these companies. And I want to clarify
Speaker 1: that the case that's happening right now, Meta is.
Speaker 5: The only defendant in this day age case.
Speaker 1: Some of the other cases include other social media companies,
Speaker 1: but this one is just Meta.
Speaker 2: In the opening statement, the plaintiff's attorney said the business
Speaker 2: model is hook the user, hook them for as long
Speaker 2: as you can harvest their data, and then hide the truth.
Speaker 2: Did she say how she was going to prove.
Speaker 5: That that's right?
Speaker 1: She was talking about her four h's and kind of
Speaker 1: giving a jurors a roadmap of what we can expect
Speaker 1: to hear, and I think for folks that were following
Speaker 1: some of the developments in the personal injury case that
Speaker 1: happened earlier this year, we're going to see a lot
Speaker 1: of similar arguments and similar witnesses come forward. They're planning
Speaker 1: to call folks like Mark Zuckerberg and Adam Musserri, who's
Speaker 1: the CEO of Meta and the head of Instagram, respectively.
Speaker 1: They're going to call current and form employees to talk
Speaker 1: about the design and to talk about internal studies at
Speaker 1: Meta that they conducted about teen users and harms that
Speaker 1: they experiencing on the platforms. And they also are going
Speaker 1: to call in folks like Artu Obahar, who was the
Speaker 1: first witness. He's a former employee turned whistleblower who's spoken
Speaker 1: very publicly about his safety concerns with the platform. So
Speaker 1: it's going to be a lot of witness testimony and
Speaker 1: internal documents showing what Meta knew when, and then juxtaposing
Speaker 1: that with what messaging they were putting out to.
Speaker 5: The public, because that's a kind of important component in
Speaker 5: this case.
Speaker 1: Is this idea that they misled or otherwise hit information
Speaker 1: that the attorneys are arguing should have been made available.
Speaker 2: A lot of the witnesses have already testified in other cases,
Speaker 2: and so both sides should pretty much know what they're
Speaker 2: going to say.
Speaker 5: I think that's definitely one way to look at it.
Speaker 1: I don't think at this moment we're expecting any major
Speaker 1: bombs to be revealed about things going on at Meta
Speaker 1: that we didn't know about. And I think that's kind
Speaker 1: of the point of these cases is it's not about
Speaker 1: unearthing previously unknown information, which sometimes is what happens when
Speaker 1: cases go to trial.
Speaker 5: This is an issue that we are well aware of
Speaker 5: as the public.
Speaker 1: It's something that's been discussed at congressional hearings in other
Speaker 1: cases and by the companies themselves as they've repeatedly rolled
Speaker 1: out their attempts at safety features, and you know, you
Speaker 1: might hear about teen accounts on different platforms, and so
Speaker 1: this is about finding an avenue or accountability for certain
Speaker 1: groups of litigants for this company. And so yeah, I
Speaker 1: think a lot of the testimony is going to be
Speaker 1: familiar to folks that really care about this issue and
Speaker 1: follow it. That doesn't make it any less important, because
Speaker 1: at the end of the day, doesn't.
Speaker 5: Really matter what we know about it.
Speaker 1: What matters is that this is potentially the first time
Speaker 1: that those jurors sitting in the room are hearing about
Speaker 1: some of this stuff, hearing the testimony, seeing the internal emails.
Speaker 2: Let me ask you about the jury because it's an
Speaker 2: advisory jury. This judge has used that kind of advisory
Speaker 2: jury before.
Speaker 1: Yes, Judge von Gonzalez Rogers is probably well known to
Speaker 1: folks following any kind of the social media cases, but
Speaker 1: also just kind of tech and Silicon Valley cases in general.
Speaker 1: She's seated in Oakland, and we saw her do the
Speaker 1: similar strategy at a recent high profile case, which was
Speaker 1: the Elon Musk lawsuit against Sam Altman in Open Ai,
Speaker 1: where she essentially is having a jury seated for the trial.
Speaker 1: They're hearing all the evidence and they're going to issue
Speaker 1: a verdict. They don't know that their opinion is going
Speaker 1: to be advisory. But then at the end of the day,
Speaker 1: Judge Rogers can decide whether she wants to adopt their
Speaker 1: findings or whether she feels like the evidence is pointing
Speaker 1: her in a different direction.
Speaker 2: They'll be disappointed when they find they sad for all
Speaker 2: these weeks and their their verdict is not binding.
Speaker 1: It doesn't mean it's not you know, they're not doing
Speaker 1: a valuable service.
Speaker 5: Like there's a.
Speaker 1: Reason that she's doing that, and it's that these cases
Speaker 1: are incredibly complicated, and while this one is not a bellwether,
Speaker 1: it's still part of this massive multi district litigation.
Speaker 5: And the outcome here, again, it won't.
Speaker 1: Necessarily set a precedent until there's appeals and kind of
Speaker 1: gets decided at the circuit level in some respects. But
Speaker 1: what happens here will have sway in other cases. So
Speaker 1: I think what we're seeing is a judge who's really
Speaker 1: trying to dot all the i's, cross all the t's
Speaker 1: and make sure that she's really giving it fair consideration.
Speaker 2: Do you know if she followed the jury's suggestions in
Speaker 2: the open AI case with Altman and Elon Musk.
Speaker 5: She did.
Speaker 1: She did follow their suggestions there, and that was because
Speaker 1: she kind of said from the outset in that case
Speaker 1: there was a question of timing and whether Musk waited
Speaker 1: too long to file his claims and the statute of limitations,
Speaker 1: and she said that if the jury made a finding
Speaker 1: on the statute of limitations question, she would adopt that
Speaker 1: without question because that's a key. You know, they didn't
Speaker 1: weigh in on the merits of this actually, just whether
Speaker 1: he took too long to file them.
Speaker 2: So you heard from the defense attorney as well opening statements,
Speaker 2: what was his position.
Speaker 5: That's right.
Speaker 1: So Meta has maintained, you know, they deny all of
Speaker 1: the allegations that have been brought forward in this lawsuit,
Speaker 1: and he talked a lot about safety features that Meta
Speaker 1: has rolled out and said that they've made real efforts
Speaker 1: to try to reduce reported harms to teenagers. Another thing
Speaker 1: that we've heard Meta talk about and their legal team
Speaker 1: talk about is this idea of thirteen year olds on
Speaker 1: the platform and kids under the age of thirteen. They've
Speaker 1: talked about how this is an industry wide issue, is
Speaker 1: kids signing up when they're not supposed to have accounts,
Speaker 1: and they feel that this is an industry wide challenge.
Speaker 1: It's not something that they should be singled out for
Speaker 1: in this case. This is something that needs to be
Speaker 1: tackled at a more systemic level and everyone's trying to
Speaker 1: brainstorm solutions on that. And so I think what you
Speaker 1: heard from them is that the AGS are really overstating
Speaker 1: their case.
Speaker 5: That's another thing I think I'm.
Speaker 1: Sure we're going to talk about this big one point
Speaker 1: four trillion dollar penalty number that's been floated. I think
Speaker 1: metas stances that you know, when we're talking about specific
Speaker 1: consumer protection violations. The number that's being floated is totally
Speaker 1: disproportionate to the allegation side issue. And that's another component
Speaker 1: of this is they've said, you're not going to hear
Speaker 1: directly from kids in this case.
Speaker 5: You're not going to hear from people who've been harmed.
Speaker 1: You're supposed to just take the attorney's general word for this,
Speaker 1: and that's not good enough.
Speaker 2: They're not going to call any children or young adults.
Speaker 1: I don't believe that there's any individuals on the witness list,
Speaker 1: and that's because this case is different than you know,
Speaker 1: the personal injury cases is a whole other category, and
Speaker 1: that's where an individual or their family member assuming these
Speaker 1: social media companies, saying that they personally experienced harm due
Speaker 1: to the defective, dangerous design of these platforms. This case
Speaker 1: is a little different with AG's they're obviously like trying
Speaker 1: to enforce their state laws, and yeah, I don't as
Speaker 1: far as I know, there's not a plan to call
Speaker 1: individual users within their states.
Speaker 2: Stay with me, Madeline. Coming up next on the Bloomberg
Speaker 2: Lost Show, I'll continue this conversation with Madeline Meckelberg, who's
Speaker 2: covering the Meta trial. What about that possible one point
Speaker 2: four trillion dollars in damages? Where does it come from?
Speaker 2: And is it inflated? I'm June Grosso and you're listening
Speaker 2: to Bloomberg. It's the very definition of a high stakes trial.
Speaker 2: Dozens of state Attorneys General are suing Meta, claiming it
Speaker 2: uses unprecedented technology to entice, engage, and ensnare children and
Speaker 2: teenagers harming their mental health. The potential financial penalty is
Speaker 2: a shocking one point four trillion dollars. That for a
Speaker 2: company that has a one point five trillion dollar or
Speaker 2: market value and more than monetary damages. The state ags
Speaker 2: are asking the judge to order Meta to make structural
Speaker 2: changes to its platform. Meta has denied wrongdoing, saying it's
Speaker 2: continuously improved its tools to protect kids. I've been talking
Speaker 2: to Bloomberg Legal reporter Madeleine Meckelberg, who's covering the trial. So,
Speaker 2: Madeline about this one point four trillion dollar number. That
Speaker 2: number came from Meta, didn't it? The State ags haven't
Speaker 2: specified a number.
Speaker 6: So nobody wants to take credit at this point for
Speaker 6: the one point four trillion dollar number, but it's out
Speaker 6: there and so we have to talk about it. And
Speaker 6: that's because the way that penalties are calculated under consumer
Speaker 6: protection laws is.
Speaker 1: Basically these four states they have a fine structure built
Speaker 1: into the laws. So for every violation of a consumer
Speaker 1: protection law, I think Colorado had the highest, it's a
Speaker 1: twenty thousand dollars fine, And the question becomes, if the
Speaker 1: jury and judge decide to.
Speaker 5: Rule against meta and in the AG's.
Speaker 1: Favor, now we have to do some mouth calculations and
Speaker 1: determine what equals a violation, like what should we count
Speaker 1: for that, And that's why we're seeing such a wide
Speaker 1: discrepancy in the amount of penalties that's being discussed, because
Speaker 1: if your bar for what counts as a violation is
Speaker 1: lower for all these states, there is a world where
Speaker 1: you get to a one point four trillion dollar number.
Speaker 1: But we've heard the state AG's attorneys say that they've
Speaker 1: done their own kind of calculating and they think that
Speaker 1: it's probably closer to the two hundred billion dollar mark,
Speaker 1: which you know that's still a ton of money, like
Speaker 1: next to one point four trillion dollars. It sounds, you know, oh,
Speaker 1: maybe that's not so bad. That's still a ton of money.
Speaker 1: And I think the other thing in this case is that.
Speaker 5: The penalties are just one part of it.
Speaker 1: Like the high stakes here that are different than in
Speaker 1: the personal injury cases is that the attorneys are seeking
Speaker 1: court orders requiring Meta to change its business and change
Speaker 1: how it's designing its platforms. They want orders that I
Speaker 1: really enforced the age limit in a way that they
Speaker 1: haven't previously. They want them to do away with the
Speaker 1: design features that are at issue, like the way they
Speaker 1: send notifications and features about their algorithm, and the way
Speaker 1: that you can open Instagram and scroll, scroll, scroll.
Speaker 5: And never hit the end of the feed.
Speaker 1: And so there's a lot at stake here, even if
Speaker 1: the dollar amount does not ultimately, at the end of
Speaker 1: the day reach that trillion dollar benchmark.
Speaker 2: The accusation that Meta collected data from users under thirteen
Speaker 2: in violation of the Children's Online Privacy Protection Act? Has
Speaker 2: that been litigated before?
Speaker 5: I don't have an answer to that.
Speaker 1: Actually, I think that it's I feel like there's been
Speaker 1: there's like individual cases about that, but it's certainly nothing
Speaker 1: on this scale.
Speaker 5: But I don't have a concrete answer for you on that.
Speaker 2: Tell us about the first witness the State Ags called.
Speaker 2: He's testified several times before, but you must be very
Speaker 2: important because they chose him as their first witness.
Speaker 1: Right And there was a lot of back and forth
Speaker 1: fighting before he even took the stand between Meta and
Speaker 1: the State Ags about whether he should be allowed to testify.
Speaker 5: And that's Arturo Behart.
Speaker 1: He is a former researcher and manager at Meta who
Speaker 1: kind of separate stints at the company. This first one
Speaker 1: was when they were still Facebook, before they were Meta,
Speaker 1: he was on an engineering team that was looking at
Speaker 1: safety features on the platforms, all of them Facebook, Instagram,
Speaker 1: and WhatsApp. And then he left Meta to spend time
Speaker 1: with his family. He said on the stand he was
Speaker 1: going through a divorce and he wanted to be.
Speaker 5: Home with his teenage kids.
Speaker 1: And after a few years he decided to return to
Speaker 1: Meta as an independent contractor working on Instagram's well Being team,
Speaker 1: which is focused on similar issues of safety and how
Speaker 1: to improve the user experience. But he's an interesting witness
Speaker 1: because he no longer works at Meta.
Speaker 5: He left in twenty twenty one, and.
Speaker 1: His story is one where he said he repeatedly tried
Speaker 1: to raise concerns to leaders at the company, including the
Speaker 1: highest levels Mark Zuckerberg. He was in kind of a
Speaker 1: position where he was regularly interacting with the very top
Speaker 1: folks at Meta, and he said he repeatedly tried to
Speaker 1: raise concerns about safety and concerns about the way that
Speaker 1: Meta measures safety in its internal studies, and that he
Speaker 1: was routinely dismissed. I think some of his most powerful
Speaker 1: testimony is about his personal experience, which is during this
Speaker 1: time that he was not working at Meta, his teenage
Speaker 1: daughter was fourteen and she wanted to sign up for
Speaker 1: an Instagram account, and he said he saw firsthand some
Speaker 1: of the harassment that she was experiencing from people online
Speaker 1: sending her in appropriate messages, soliciting sex and images, and
Speaker 1: he said he found it shocking, even as someone who
Speaker 1: had a six year career at Meta working in safety,
Speaker 1: and so that inspired him to go back to the company.
Speaker 5: And he felt like when he tried to tell.
Speaker 1: His daughter's story there as an anecdote and as evidence
Speaker 1: that they really need to do something about this issue.
Speaker 5: He said he was overlooked.
Speaker 2: Metas said face two trials. They've lost in both, but
Speaker 2: it seems as if from hearing what the defense attorney
Speaker 2: said and from hearing the witnesses, that their strategy appears
Speaker 2: to be the same. We work to implement changes that
Speaker 2: would help mitigate this problem. It sounds pretty much the same.
Speaker 5: I think it's very similar.
Speaker 1: I think it's a little early to tell for sure
Speaker 1: how this case is going to play out, but I
Speaker 1: think it's it's definitely similar. I mean, I think a
Speaker 1: lot of the real litigating and legal nitpicking about the
Speaker 1: arguments is going to happen on appeal. There's no way
Speaker 1: that whoever loses here doesn't seek an appeal in the
Speaker 1: Ninth Circuit.
Speaker 5: And that's I think when we're really going to.
Speaker 1: Get to the meat and potatoes of this case and
Speaker 1: the legal arguments, and I think that's where a lot
Speaker 1: of focus is on. Frankly and kind of revisiting this
Speaker 1: Section two thirty issue.
Speaker 5: I mean, there was a ruling from the Ninth Circuit
Speaker 5: on that allowing.
Speaker 1: This trial to proceed, but it's not a done deal
Speaker 1: by any means, and I think there's already been in
Speaker 1: the first few days. The judges had to remind the
Speaker 1: ags like, Okay, we're not veering into content, remember, like,
Speaker 1: let's focus on this. And that was something we heard
Speaker 1: in the previous trials too, So I definitely think Meta
Speaker 1: has a similar stance going into this trial, but the
Speaker 1: claims are slightly different, and so I'm sure we're going
Speaker 1: to see a little bit of different legal maneuvering, but
Speaker 1: it's kind of early to tell at this point.
Speaker 2: So what's happening with the what thousands of other cases,
Speaker 2: school districts and individuals, what's happening with those.
Speaker 5: And that's the big question. So, yeah, there's thousands.
Speaker 1: I think there's we're up to three thousand cases that
Speaker 1: have been filed against these companies and they've all been
Speaker 1: consolidated into separate, multi district litigation proceedings where they're kind
Speaker 1: of trying to navigate the just huge scope of cases,
Speaker 1: and so they've picked a handful of cases to serve
Speaker 1: as bell weathers and so are selected not for any
Speaker 1: particular reason. It's not the best case, it's not the
Speaker 1: worst case. There meant to be a few cases that
Speaker 1: are representative of the whole and those cases.
Speaker 5: Are going to trial first. So we saw one of
Speaker 5: those trials earlier this year in LA and the personal
Speaker 5: injury case. It is a.
Speaker 1: Teenage girl named Kaylee, and she won. She received a
Speaker 1: verdict from the jury against Meta and against YouTube, and
Speaker 1: there were confidential settlement agreements she reached with TikTok and
Speaker 1: Snap ahead of trial. And there was another bell Weather
Speaker 1: that was set to have a trial this summer, and
Speaker 1: that individual also reached settlements with the parties and then
Speaker 1: ultimately dismissed his claims against Meta.
Speaker 5: So we're still very early days.
Speaker 1: In moving through all of those cases as well, but
Speaker 1: I think there's a few more scheduled before the end
Speaker 1: of the year in school district cases and the personal
Speaker 1: injury cases. And the idea is once these bell Weather
Speaker 1: cases have been heard, then there's going to have to
Speaker 1: be some conversations about how to resolve the rest of them.
Speaker 1: Do these companies want to go to trial over and
Speaker 1: over and over against all these claims. Do these parties
Speaker 1: feel like they have.
Speaker 5: Enough evidence to continue going to trial with the social
Speaker 5: media companies or do they want to dismiss it. It's
Speaker 5: expensive to pursue litigation, and so these bow weathers are
Speaker 5: really informative for both sides of whether it's worth it
Speaker 5: to kind of stick it out and keep fighting, but
Speaker 5: there's still a long road ahead for everybody.
Speaker 2: Are the state ags also suing other social media this coalition,
Speaker 2: are they suing other social media companies?
Speaker 5: That's a good question.
Speaker 1: I don't think this coalition specifically is pursuing claims against
Speaker 1: other companies, but there are other ags and other coalitions
Speaker 1: of ags.
Speaker 5: That are pursuing claims against other companies.
Speaker 1: It's a wild web, and I do not envy the
Speaker 1: judges and the lawyers that are responsible.
Speaker 5: For keeping track of it. For the reporters, yeah, let's
Speaker 5: talk about the reporters.
Speaker 2: So madline, what's been happening in Europe and Australia as
Speaker 2: opposed to what's been happening in ungris here, which is
Speaker 2: basically that's right.
Speaker 1: So Australia and Europe, the authorities there have been able
Speaker 1: to pursue those kinds of regulations and here we're seeing
Speaker 1: some of that at the state level. Different states have
Speaker 1: tried to put down at least crackdowns or limitations or
Speaker 1: specifically dealing with this age requirement age verification requirement.
Speaker 5: We're seeing a lot of that, but they've had a
Speaker 5: lot of trouble.
Speaker 1: They've hit roadblocks in the courts, and these companies are
Speaker 1: not you know, accepting regulations silently.
Speaker 5: And they're pushing back.
Speaker 1: And I think that makes this case and the others
Speaker 1: like it so significant is because I think for a
Speaker 1: lot of folks who are on this side of wanting
Speaker 1: to rein in the companies, wanting to kind of push
Speaker 1: back a bit on this what they see as this
Speaker 1: like widespread crisis of addiction and harm, they see the
Speaker 1: courts as kind of their their last stand or a
Speaker 1: really important battleground for this issue, because you know, there's
Speaker 1: attempts at it, but it's so far not been successful
Speaker 1: legislative level.
Speaker 2: Mediceo. Mark Zuckerberg will be called to testify in this trial?
Speaker 2: What about some of the other cases? Will he be
Speaker 2: called in all these cases?
Speaker 1: He's a high profile witness, And it's an interesting, you know,
Speaker 1: always interesting when the heads of these companies come to
Speaker 1: court and have to testify in front of a jury
Speaker 1: of regular people who are seeing this person and kind
Speaker 1: of seeing them out of their element. It always it
Speaker 1: brings out a really interesting side of them. But I
Speaker 1: do think that while they're trying to get him to
Speaker 1: testify in every case. I think it's very unlikely that
Speaker 1: he'll be called back to speak in everything. I think
Speaker 1: in one of the personal injury bell Weather's coming up,
Speaker 1: they're working out agreements to film some of his depositions
Speaker 1: so that they can replay that in court versus calling
Speaker 1: him as a live witness, because not only is it
Speaker 1: you know, he has a very demanding schedule, as as
Speaker 1: so many of us do, but it can be hard
Speaker 1: to coordinate those appearances. But it's also a lot up,
Speaker 1: you know, for the courts too, to have to manage
Speaker 1: having a high profile person there and security needs and
Speaker 1: the life.
Speaker 2: There was no trial today because one of the jurors
Speaker 2: called in sick, but I know you will be back
Speaker 2: at work on Monday reporting for us. Thanks so much, Madeline.
Speaker 2: That's Bloomberg Legal reporter Madelin Mecklberg. And that's it for
Speaker 2: this edition of The Bloomberg Law Show. Remember you can
Speaker 2: always get the latest legal news on our Bloomberg Law Podcast.
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