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

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Speaker 1: The Supreme Court has at least five cases on its

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Speaker 1: dock at this term that could potentially reshape the employment

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Speaker 1: law landscape. The cases cover a broad range of issues,

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Speaker 1: from a failed drug test by a truck driver suing

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Speaker 1: CBD makers using the Rico statute to an Ohio public

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Speaker 1: employees claim that she was denied promotion and demoted because

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Speaker 1: she's a heterosexual. The first case that Justice has heard

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Speaker 1: this term on Monday involve workers suing Alabama over unemployment

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Speaker 1: benefits who are stuck in a sort of catch twenty two.

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Speaker 1: Here's how Justice Sonya Sotomayor put it. See it really

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Speaker 1: stuck in a state process with a loop that you

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Speaker 1: can't get out of. Joining me is an expert in

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Speaker 1: employment law, Anthony Ancidi, a partner scour Tony. The Justices

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Speaker 1: kicked off the term with an employment law case tell

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Speaker 1: us about it.

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Speaker 2: This case involves residents of Alabama who had applied for

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Speaker 2: unemployment benefits during the COVID pandemic, and they challenged the

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Speaker 2: way that the State of Alabama had handled their claims.

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Speaker 2: They sought to bring claims under a federal Statute Section

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Speaker 2: nineteen eighty three, and that allows individuals to sue the

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Speaker 2: state government and officials of the state government for violating

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Speaker 2: the civil rights under federal law. They alleged that the

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Speaker 2: state's policies and its practices and its procedures related to

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Speaker 2: unemployment compensation applications violated the Social Security Act of nineteen

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Speaker 2: thirty five, which is obviously a federal statute. They also

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Speaker 2: claimed that they had suffered a violation of their due

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Speaker 2: process rights under the Constitution. This case comes to the

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Speaker 2: US Supreme Court from the Alabama Supreme Court, which said

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Speaker 2: that state law requires that the plaintiffs in the case

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Speaker 2: first bring their claims to the state's Department of Labor

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Speaker 2: and exhaust all administrative remedies that are available under state law,

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Speaker 2: and according to the Alabama Court, that is supported by

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Speaker 2: Supreme Court precedents, saying that that requirement does exist with

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Speaker 2: respect to these claims. So the issue is whether these

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Speaker 2: workers who are seeking unemployment benefits need to exhaust state

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Speaker 2: administrative remedies before they can bring a claim under a

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Speaker 2: federal civil rights law. The reason why this is going

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Speaker 2: to be important, I think probably in these cases is

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Speaker 2: because they didn't do that, and if it is determined

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Speaker 2: that they were required to exhaust state administrative remedies, that

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Speaker 2: that could jeopardize the federal claims that they're seeking to

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Speaker 2: make under Section nineteen eighty three in this case.

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Speaker 1: And tell us about the Supreme Court's prior rulings in

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Speaker 1: this area in the cases of Patsy versus Board of

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Speaker 1: Regents and Felder versus Casey, and.

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Speaker 2: That's exactly what the Alabama Supreme Court relied upon. And

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Speaker 2: the fact that the US Supreme Court then took this

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Speaker 2: case up may mean that there has been a shift

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Speaker 2: or a change in the Supreme Court's point of view

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Speaker 2: with respect to this because the US Supreme Court has,

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Speaker 2: of course complete discretion as to what cases it does

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Speaker 2: or does not take, and it takes obviously a very

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Speaker 2: small handful of cases every year. And the fact that

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Speaker 2: they have granted sorcherai that is the Latin word for

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Speaker 2: the review that is granted in this case and in

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Speaker 2: these cases generally, may suggest that there is a different

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Speaker 2: point of view.

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Speaker 1: During the oral arguments, Justice Sonia Sotomayor told the plaintiff's

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Speaker 1: lawyer that he was really stuck in a state process

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Speaker 1: with a loop that you can't.

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Speaker 2: Get out of right. And I think again, this is

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Speaker 2: one of those situations where it may seem like a technicality,

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Speaker 2: but there is a lot of law with respect to

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Speaker 2: these issues in the ployment context and in the administrative

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Speaker 2: context that does exist. We see this all the time,

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Speaker 2: where these administrative filings and processes, although they do sometimes

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Speaker 2: take on somewhat of a pro forma status, meaning that

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Speaker 2: the lawyer representing the claimant simply has to file something

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Speaker 2: and often can do it online. And in California, where

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Speaker 2: I'm most familiar with administrative filings and the employment context,

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Speaker 2: the state administrative agency California Civil Rights Department, will open

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Speaker 2: and close the administrative file the very same day, and

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Speaker 2: in almost every single case, the administrative apparatus is not

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Speaker 2: triggered and they don't get involved. But if the plaintiff

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Speaker 2: has not done that first and proceeds directly to court

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Speaker 2: without having exhausted those remedies, that's a means by which

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Speaker 2: the defense can then say you can't proceed in the

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Speaker 2: case because you should have at least given the administrative

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Speaker 2: apparatus or the agency some opportunity to prosecute this. I

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Speaker 2: think some of this is a result of just the

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Speaker 2: passage of time, because many of these civil rights statutes,

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Speaker 2: for example, when they were first passed, they were not

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Speaker 2: intended to directly lead to litigation or court cases or

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Speaker 2: jury trials or any of this. They were supposed to

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Speaker 2: be and they were often designed to be decided by

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Speaker 2: administrative agencies, which is obviously a somewhat lesser formal proceeding

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Speaker 2: than having a case go to court. In the way

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Speaker 2: in which the laws developed, though, and procedures have developed,

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Speaker 2: and I think really administrative agencies have just been overwhelmed

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Speaker 2: with the number of claims. The administrative apparatus is kind

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Speaker 2: of atrophied in these cases, and so as a result

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Speaker 2: of that, it may seem again like a technicality that

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Speaker 2: that has to be done. But the law has not

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Speaker 2: been changed in most places. And that's I think what

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Speaker 2: is probably at the root of what Justice Sodomayer was

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Speaker 2: talking about.

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Speaker 1: So you think that the court is going to uphold

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Speaker 1: the requirement of exhausting administrative remedies.

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Speaker 2: It seems like they should probably is something that ultimately

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Speaker 2: would have to be decided or probably better decided and

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Speaker 2: a remedied. If a remedy is going to be obtained

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Speaker 2: from a legislative body that would look at something like

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Speaker 2: this and make the determination that, as I said, some

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Speaker 2: of these administrative agencies have atrophied, and there's really not

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Speaker 2: as much of a reason today as there might have

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Speaker 2: been thirty or forty years ago to require those processes.

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Speaker 1: Next week, the court is going to hear the case

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Speaker 1: of medical marijuana versus Horn. This case intrigues me because

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Speaker 1: it involves a truck driver, medical marijuana and the RICO Act.

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Speaker 2: Walked into a bar. Yeah, it's a group of unlikely

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Speaker 2: entities and parties I suppose that are involved in this case,

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Speaker 2: and the set of circumstances is somewhat unique. This was

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Speaker 2: a commercial truck driver who was required to pass periodic

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Speaker 2: drug screen and he was fired when he tested positive

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Speaker 2: for THHC, which of course is the psychoactive compound that

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Speaker 2: is part of the cannabis plant and that is triggered

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Speaker 2: in the event that one consumes or smokes cannabis. The

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Speaker 2: driver claimed that he had not intentionally ingested THHC, but

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Speaker 2: that he had used an elixir an interesting word for

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Speaker 2: severe pain that was marked as containing only CBD, which

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Speaker 2: is another compound that comes from marijuana. But which is

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Speaker 2: not psychoactive and is not illegal. It's generally legal to

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Speaker 2: consume CBD. So his argument was I essentially consume something

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Speaker 2: that was mislabeled and by the way that mislabeling then

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Speaker 2: led to his being fired. He has now made this

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Speaker 2: claim in the form of a assertion of fraud under

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Speaker 2: the RICO the Racketeer Influenced in Corrupt Organizations Act, which

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Speaker 2: typically originally was I think intended to reach mafia members

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Speaker 2: but often gets thrown around these days in different types

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Speaker 2: of cases. But it's known by the acronym RICO riico,

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Speaker 2: and he's claiming that the CBD maker slash. I guess

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Speaker 2: the thhc CBD maker in this case has conducted itself

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Speaker 2: in a way that it has violated. The RICO statute, usually,

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Speaker 2: as I say, was typically used for targeting organized crime,

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Speaker 2: but it does allow plaintiffs to bring certain civil cases

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Speaker 2: for fraud and potentially collect triple damages. So in this case,

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Speaker 2: the damages that he'll be seeking presumably will be the

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Speaker 2: lost wages and benefits that flowed from his loss of employment.

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Speaker 2: I suppose there may be other damages that he's going

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Speaker 2: to seek as well. This case found itself to the

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Speaker 2: Second Circuit Court of Appeals in New York, and that

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Speaker 2: court allowed the driver to proceed with his claim. But

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Speaker 2: other appeals courts have tossed similar lawsuits where there was

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Speaker 2: an attempt to seek monetary damages under RICO for personal injuries.

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Speaker 2: I don't know that it's arisen previously in the context

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Speaker 2: of CBD THCHC, but that happens to be the factual

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Speaker 2: scenario in this case. And so in this case, the

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Speaker 2: CBD manufacturer wants the Supreme Court to dismiss the RICO claim,

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Speaker 2: asserting that it's merely a garden variety products liability suit

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Speaker 2: and that it should not be able to proceed under

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Speaker 2: the Rico statute.

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Speaker 1: There's a split in the circuits on this. Do you

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Speaker 1: think the Supreme Court took the case to overturn the

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Speaker 1: Second Circuit?

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Speaker 2: It sounds like they might. Again. You never can tell,

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Speaker 2: because it certainly is not the case that every time

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Speaker 2: the US Supreme Court, or really any appellate court takes

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Speaker 2: a case when they have discretion that they are accepting

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Speaker 2: review to affirm. I guess the inclination is, why not

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Speaker 2: just leave well enough alone? If they're just going to

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Speaker 2: affirm the lower court. You typically think that they will

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Speaker 2: do something different, but they obviously don't always affirm the

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Speaker 2: lower court. And in this situation, as I said, there

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Speaker 2: is a conflict among the circuits, and that's typically when

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Speaker 2: the US Supreme Court does get involved. So they may

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Speaker 2: grant a review in a case in which one of

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Speaker 2: seven circuits rules one and the other sixth rule another way.

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Speaker 2: It doesn't necessarily mean they're going to affirm or reverse

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Speaker 2: that one circuit. It just means they're trying to resolve

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Speaker 2: whether the other six were right and this one was wrong,

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Speaker 2: or vice versa. And I guess we're not going to

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Speaker 2: really know for a time. We should also say these

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Speaker 2: are all cases that are in the current term of

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Speaker 2: the US Supreme Court, which begins every year on the

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Speaker 2: first Monday of October, and the term then usually concludes

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Speaker 2: with a great degree of drama and fireworks in late

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Speaker 2: June early July. I've often said that the Supreme Court

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Speaker 2: has an unerring sense of drama and of entertainment in

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Speaker 2: some ways, I suppose because they saved the biggest cases

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Speaker 2: for the last as they did the last term when

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Speaker 2: they had a number of very significant opinions that came

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Speaker 2: out in late June. They're almost all out, I think,

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Speaker 2: without exception before the fourth of July holiday.

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Speaker 1: Absolutely.

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Speaker 2: See.

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Speaker 1: My theory is they're not saving the best for a last,

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Speaker 1: They're saving the most controversial for last, and then they

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Speaker 1: take off on their three month vacation.

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Speaker 2: But you know that's perhaps and avoid any demonstrations some

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Speaker 2: of their opinions.

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Speaker 1: On November fifth, there will be oral arguments in a

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Speaker 1: case involving Overton exemptions, of.

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Speaker 2: Course, I know, you know, and we should mention that

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Speaker 2: November fifth, something else is happening that day, really election

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Speaker 2: den Yes, So this this case involves Again it sounds

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Speaker 2: like somewhat of a dry issue, but I think it's

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Speaker 2: an extremely important one, especially for employers and employees. That's

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Speaker 2: the context in which it arises, and it arises under

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Speaker 2: a statute known as the Fair Labor Standards Act, which

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Speaker 2: is a federal law that protects wage an hour practices

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Speaker 2: of employees and employers that governs those situations. And the

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Speaker 2: question here has to do with the preponderance of evidence

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Speaker 2: standard of proof versus what's called the clear and convincing

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Speaker 2: standard of evidence. And I should say that there are

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Speaker 2: at least three differing standards of proof that typically arise

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Speaker 2: in the case. In most civil cases, you have the

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Speaker 2: preponderance of evidence standard. Law students are taught that that

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Speaker 2: means that the plaintiff has to prove basically about fifty

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Speaker 2: one percent of the evidence in their favorite that's kind

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Speaker 2: of a rough way of saying it. But it doesn't

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Speaker 2: have to be a huge amount in the favor of

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Speaker 2: the plaintiff, meaning that the burden of proof is not

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Speaker 2: that particularly burden some but the preponderance means that more

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Speaker 2: than not the evidence needs to point in the favor

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Speaker 2: of the plaintiff in order for the plaintiff to win.

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Speaker 2: The other standard that we're all pretty familiar with just

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Speaker 2: from watching TV shows is the beyond the reasonable doubt standard,

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Speaker 2: which is a much higher burden of proof. That is

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Speaker 2: the criminal standard of evidence that is required to get

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Speaker 2: a criminal conviction, So the prosecution needs to prove that

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Speaker 2: the defendant in a criminal case violated the law beyond

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Speaker 2: the reasonable doubt. Somewhere floating between those two standards is

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Speaker 2: the clear and convincing evidence standard, meaning it's got to

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Speaker 2: be a little bit more than half, but a lot

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Speaker 2: less than what you would need for beyond a reasonable doubt,

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Speaker 2: their floats somewhere in between. And that's the very question

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Speaker 2: that that issue in this case, as comes out of Richmond, Virginia,

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Speaker 2: the Fourth Circuit Court of Appeals, The question is does

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Speaker 2: an employer have to prove, because the employee does have

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Speaker 2: the burden of proof on these cases, that when an

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Speaker 2: employee claims that they've been misclassified, meaning that they didn't

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Speaker 2: get overtime and they should have, they were misclassified for

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Speaker 2: some reason as exempt from overtime, does the employer have

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Speaker 2: to prove that the employee was properly classified by the

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Speaker 2: clear and convincing standard, which is that medium proof standard,

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Speaker 2: or just the preponderance of the evidence standard, which is

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Speaker 2: an easier burden to meet. Obviously, the plaintiffs in a

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Speaker 2: case like this are going to be pushing for clear

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Speaker 2: and convincing because that would mean it's going to be

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Speaker 2: harder for the employer to win, and in this case,

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Speaker 2: that's going to be the issue. A number of federal

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Speaker 2: circuit Courts of Appeals have already weighed in on this,

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Speaker 2: including the Fifth, sixth, seventh, ninth, ten to eleven, and

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Speaker 2: they've all applied the lower standard of preponderance of the evidence.

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Speaker 2: In this case, the Fourth Circuit Court said that the

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Speaker 2: clear and convincing standard is the one that applies.

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Speaker 1: I'm betting on the fifth, sixth, seventh, ninth, tenth, and

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Speaker 1: eleventh Circuits in this case.

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Speaker 2: Yes, If the number of courts is the deciding factor,

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Speaker 2: then I think you're probably right. The Fourth seems to

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Speaker 2: be standing alone in connection with its determination on this case.

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Speaker 1: Coming up next a case claiming reverse discrimination. I'm June Grosso.

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Speaker 1: When you're listening to Bloomberg, the Supreme Court is scheduled

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Speaker 1: to hear at least five cases involving employment law and

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Speaker 1: a range of issues. I've been talking to Anthony on CD,

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Speaker 1: a partner at Prosskauer. Next, we have a case with

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Speaker 1: six circuits split on former employees suing under the Americans

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Speaker 1: with Disabilities Act.

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Speaker 2: This is an interesting case and it could affect obviously

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Speaker 2: many many employees, former employees, retired employees, in particular, as

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Speaker 2: the population continues to age. I saw statistic the other

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Speaker 2: day it said that more people are are reaching their

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Speaker 2: sixty fifth birthday this year. Then I guess has ever

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Speaker 2: occurred on planet early or certainly in the United States.

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Speaker 2: You know, it's sort of the tail end of the

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Speaker 2: Baby Boomers have now reached retirement age in many instances,

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Speaker 2: and that's really what's that issue. In this particular case,

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Speaker 2: this was a plaintiff a former firefighter for the City

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Speaker 2: of Sanford, Florida, and she retired due to Parkinson's disease

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Speaker 2: in twenty eighteen. She had served as a firefighter for

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Speaker 2: about nineteen years when she joined the fire department in

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Speaker 2: nineteen ninety nine. The city's policy was that it would

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Speaker 2: provide free health insurance until age sixty five from employees

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Speaker 2: who were retiring due to a disability. In two thousand

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Speaker 2: and three, the city changed its plan and it limited

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Speaker 2: the health insurance subsidy that disability retirees would get to

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Speaker 2: twenty four months post retirement, meaning it wouldn't go until

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Speaker 2: the age of sixty five. It would only go for

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Speaker 2: twenty four months. In this case, former firefighter who did

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Speaker 2: retire due to a disability out suit before her subsidy

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Speaker 2: was set to expire, and she said that this change

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Speaker 2: in policy was a violation of the Americans with Disabilities Act,

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Speaker 2: the Rehabilitation Act, and then some statutory provisions under Florida law,

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Speaker 2: as well as the Equal Protection clause under the Constitution.

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Speaker 2: The district court dismissed and granted some re judgment on

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Speaker 2: other claims, but otherwise disposed of her case and ruled

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Speaker 2: in favor of the city. And the reason they did

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Speaker 2: that again sound somewhat like a technicality, but obviously a

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Speaker 2: very important one. They ruled that the statutes that she

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Speaker 2: was proceeding under only applied to plaintiffs who quote hold

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Speaker 2: or desire an employment position with the defendant at the

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Speaker 2: time of the defendants allegedly wrongful act, and of course

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Speaker 2: she neither held nor did she desire to hold, which

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Speaker 2: really is a different word for saying an applicant unemployment

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Speaker 2: position at the time of the alleged wrongful act. And

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Speaker 2: so the precise question is ken a retiree such as

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Speaker 2: the plaintiff in this case, sue for discrimination under the

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Speaker 2: Americans with Disabilities Act over post employment fringe benefits that,

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Speaker 2: had she said, been taken away on the basis of

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Speaker 2: a discriminatory policy.

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Speaker 1: Does this come up often, Tony, that a retiree is

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Speaker 1: trying to sue over the ADA.

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Speaker 2: You know, I don't think so. It's not something that

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Speaker 2: I've seen a lot of. But again, since we're having

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Speaker 2: a lot more retirees who are moving into that status.

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Speaker 2: I would not be surprised if there are not other

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Speaker 2: cases like this in the very near future where policies

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Speaker 2: have been changed, because what is common, I can tell you,

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Speaker 2: is the pairing down and in some cases eliminating the

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Speaker 2: actual benefits that employees have received. There was a period

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Speaker 2: of time when retirees, you know of the our companies

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Speaker 2: and many other industries in the United States, would receive

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Speaker 2: what's called a defined benefit plan, meaning they knew that

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Speaker 2: when they retired they would get x hundred or thousand

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Speaker 2: dollars a month as part of their retirement. Because those

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Speaker 2: policies became so expensive due to inflation and and just

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Speaker 2: any number of other factors, most employers have long since

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Speaker 2: shifted away from what are called defined benefit plans like

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Speaker 2: that to what's called a defined contribution plan, which is

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Speaker 2: more like a four toh one K, which is there's

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Speaker 2: a certain maximum amount you can contribute to those plans,

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Speaker 2: or that the employer will contribute on your behalf, but

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Speaker 2: there's no guarantee you're going to get x amount at

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Speaker 2: the time that you retire. If you invest in the

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Speaker 2: stock market, which of course the stock market over the

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Speaker 2: last seventy or eighty years has had a fairly good

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Speaker 2: track record ten percent plus. I think the returns on

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Speaker 2: average over that period of time. You may very well

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Speaker 2: be able to sort of ballpark what your retirement benefits are,

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Speaker 2: but that's not exactly the same thing as knowing for

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Speaker 2: sure what you're going to have plopped into your bank

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Speaker 2: account every month. And that's what a defined benefit plan is,

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Speaker 2: and those are few and far between these days.

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Speaker 1: Just last Friday, the Court agreed to take a case

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Speaker 1: challenging a rule by an Ohio public employee who claim

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Speaker 1: she's a victim of reverse discrimination.

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Speaker 2: Yes, you saved perhaps the most controversial case so far

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Speaker 2: this term for last June. As I know, you have

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Speaker 2: that unerring sense of drama like the Supreme Court.

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Speaker 1: So you've been accused of worse though.

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Speaker 2: So as you say, the review petition was granted just

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Speaker 2: last Friday. There's no oral argument yet schedule, but it

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Speaker 2: will be heard and decided before the fourth of July

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Speaker 2: twenty twenty five. And in this case, the employee sues

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Speaker 2: the Ohio Department of Youth Services, where she had worked

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Speaker 2: for I believe several decades of public service. She had

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Speaker 2: been earlier in her employment assigned to a new supervisor

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Speaker 2: who was gay. She I should say, is a white, heterosexual,

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Speaker 2: female former employee. She was assigned to a new supervisor

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Speaker 2: who was gay. In twenty nineteen. She applied to be

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Speaker 2: the department's bureau chief of quality, so she was seeking

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Speaker 2: a promotion. She did not receive that position. In a

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Speaker 2: few days later, she learned that she was being removed

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Speaker 2: from her administrator position, the lower position that she had.

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Speaker 2: The decision to remove her from the administrator position was

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Speaker 2: made by not the gay supervisor, who was the first

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Speaker 2: level supervisor above her position, but the second level supervisor

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Speaker 2: and the department's director, both of whom were straight. So

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Speaker 2: this becomes a somewhat problem issue for her in this

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Speaker 2: case because the fact that she's being supervised by a

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Speaker 2: gay employee seemingly had no effect at least as the

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Speaker 2: case is currently framed upon. The demotion and the failure

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Speaker 2: to give her the promotion. The department then awarded her

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Speaker 2: former administrator position to a twenty five year old gay

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Speaker 2: mad The department then selected a gay woman to serve

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Speaker 2: as its bureau chief of quality. She then filed claims

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Speaker 2: of discrimination the straight white female employee. She filed claims

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Speaker 2: a discrimination based on her sexual orientation and gender against

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Speaker 2: the department. She said that she was discriminated against on

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Speaker 2: the base of being a heterosexual female. What happens next,

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Speaker 2: The district Court, which is the trial court in the

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Speaker 2: southern District of Ohio, grants some rey judgment to the

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Speaker 2: employer and dismisses the case, and the Sixth Circuit in

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Speaker 2: this case, which is based in Cincinnati, Ohio, affirms that dismissal.

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Speaker 2: The basis for the dismissal and the affirming of the

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Speaker 2: dismissal is as follows. They say that this plaintiff did

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Speaker 2: not establish the necessary quote background circumstances close quote to

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Speaker 2: sustain her claim of sexual orientation. So what's going on

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Speaker 2: in this case? Why is the Supreme Court interested in it?

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Speaker 2: The reason the Supreme Court's interested in it is because

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Speaker 2: this element that both the district court, the trial court,

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Speaker 2: and the appellate court applied, that is, requiring the employee

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Speaker 2: to prove these background circumstances only exists if the plaintiff

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Speaker 2: happens to be in the majority, meaning if it's a

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Speaker 2: white employee, heterosexual employee, or in this case, I guess

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Speaker 2: for gender reasons female. I guess there may be more

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Speaker 2: females than males. I'm not sure how that's going to

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Speaker 2: work out. But the real question is whether or not

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Speaker 2: there is an additional burden placed upon a so called

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Speaker 2: majority plaintiff that does not exist for a minority plaintiff

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Speaker 2: or a plaintiff that is a member of a protected

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Speaker 2: class that is a minority. Typically, in a discrimination case

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Speaker 2: under Title seven, which is the federal anti discrimination law,

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Speaker 2: an employee must show first of all, they belonged to

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Speaker 2: a protected class. Two, they did well in their position,

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Speaker 2: but were terminated, or they were demoted, or they didn't

398
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Speaker 2: get a promotion, some other adverse action happened, and then

399
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Speaker 2: they were third replaced by or treated worse than someone

400
00:22:43,800 --> 00:22:47,320
Speaker 2: outside of the protected class. But if the person who's

401
00:22:47,640 --> 00:22:51,879
Speaker 2: challenging the adverse action, as this plaintiff is, is a

402
00:22:51,920 --> 00:22:55,400
Speaker 2: member of the traditional majority, for example, a white employee

403
00:22:55,400 --> 00:22:58,720
Speaker 2: bringing a race discrimination claim or a male employee bringing

404
00:22:58,720 --> 00:23:01,640
Speaker 2: a sex discrimination claim, that does not apply. We've seen

405
00:23:01,640 --> 00:23:05,240
Speaker 2: in this case that plaintiff must prove an additional element,

406
00:23:05,280 --> 00:23:09,280
Speaker 2: and that is they must demonstrate background circumstances which proves

407
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Speaker 2: that their employer is the unusual one. That's the language

408
00:23:13,160 --> 00:23:17,199
Speaker 2: of the court, unusual one who discriminates against the majority

409
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Speaker 2: to sustain their claims. And this is another example, as

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Speaker 2: you mentioned earlier, of all kinds of courts at the

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Speaker 2: appellate level ruling in different ways. There again, is there

412
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Speaker 2: very much a circuit split on this question of whether

413
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Speaker 2: there really needs to be this additional factor proven by

414
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Speaker 2: the plaintiff if they are a member of a majority group.

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Speaker 1: How do you think the Supreme Court, without hearing the

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Speaker 1: oral arguments, are seeing the briefing, do you have a feel.

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Speaker 2: For how they Yeah, My feel is that this is

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Speaker 2: the next shoe. I don't think it's going to be

419
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Speaker 2: the last shoe, but this is the next shoe falling

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Speaker 2: in the affirmative action changes that have begun already at

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Speaker 2: the Supreme Court level, which we saw last year in

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00:24:01,840 --> 00:24:06,399
Speaker 2: twenty twenty three with respect to college admissions. Everybody who

423
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Speaker 2: does represent employers and employees in the employment bar throughout

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Speaker 2: the United States is waiting for the US Supreme Court

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Speaker 2: to take further action with respect to both affirmative action

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Speaker 2: in the workplace and now in this case, discrimination claims

427
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Speaker 2: in the workplace. And my suspicion is that there will

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Speaker 2: be a split in the Supreme Court, and I suspect

429
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Speaker 2: it will be probably either a six y three or

430
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Speaker 2: a five to four, depending on the Chief Justice rules

431
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Speaker 2: in favor of abandoning the background circumstances test and saying,

432
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Speaker 2: as some circuits have said, and indeed, as one of

433
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Speaker 2: the concurring judges said in this case, that discrimination is discrimination,

434
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Speaker 2: and if a white employee, or a male employee, or

435
00:24:48,280 --> 00:24:51,720
Speaker 2: anybody who's member of a quote majority group is discriminated

436
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Speaker 2: against on the basis of their being a part of

437
00:24:54,520 --> 00:24:58,119
Speaker 2: that group, they have a right to proceed with an

438
00:24:58,119 --> 00:25:02,240
Speaker 2: anti discrimination claim irrespective of whether they have these so

439
00:25:02,320 --> 00:25:06,320
Speaker 2: called background circumstances, in addition to the other things that

440
00:25:06,359 --> 00:25:09,160
Speaker 2: a member of a minority group would have to show.

441
00:25:09,760 --> 00:25:12,280
Speaker 1: I agree with you one hundred percent, and I am

442
00:25:12,320 --> 00:25:15,320
Speaker 1: going to play this when we get the decision, we'll

443
00:25:15,320 --> 00:25:16,159
Speaker 1: see if it's six.

444
00:25:16,080 --> 00:25:19,280
Speaker 2: To three, I mean, if past is prologue, I suppose

445
00:25:19,359 --> 00:25:21,920
Speaker 2: then we have a pretty good idea of what's going

446
00:25:21,960 --> 00:25:22,320
Speaker 2: to happen.

447
00:25:22,600 --> 00:25:25,040
Speaker 1: We really do. Thanks so much, Tony for giving us

448
00:25:25,119 --> 00:25:29,400
Speaker 1: this preview of the term. That's Anthony Oncidi of Proskauer

449
00:25:29,640 --> 00:25:33,840
Speaker 1: coming up next, TikTok gets sued again. This is Bloomberg.

450
00:25:35,440 --> 00:25:38,639
Speaker 1: More than a dozen states and the District of Columbia

451
00:25:38,800 --> 00:25:43,119
Speaker 1: sued TikTok this week, saying the popular short term video

452
00:25:43,200 --> 00:25:46,919
Speaker 1: app is designed to be addictive to kids and harms

453
00:25:46,960 --> 00:25:50,760
Speaker 1: their mental health. The lawsuits stem from a national investigation

454
00:25:50,880 --> 00:25:54,360
Speaker 1: into TikTok launched in March of twenty twenty two by

455
00:25:54,400 --> 00:25:58,919
Speaker 1: a bipartisan coalition of attorneys general. The lawsuits claim that

456
00:25:59,080 --> 00:26:04,120
Speaker 1: TikTok design features that addict children to the platform, such

457
00:26:04,119 --> 00:26:08,880
Speaker 1: as the ability to scroll endlessly through content, push notifications

458
00:26:08,880 --> 00:26:12,359
Speaker 1: that come with built in buzzes, and face filters that

459
00:26:12,440 --> 00:26:17,560
Speaker 1: create unattainable appearances for users. A TikTok spokesman said they

460
00:26:17,600 --> 00:26:21,360
Speaker 1: strongly disagree with the claims, many of which they believed

461
00:26:21,400 --> 00:26:25,240
Speaker 1: to be inaccurate and misleading. Joining me is Eric Goldman,

462
00:26:25,320 --> 00:26:28,960
Speaker 1: a professor at Santa Clara University Law School and co

463
00:26:29,040 --> 00:26:32,640
Speaker 1: director of the school's High Tech Law Institute. What are

464
00:26:32,640 --> 00:26:34,440
Speaker 1: the claims here against TikTok?

465
00:26:34,920 --> 00:26:37,960
Speaker 3: State's trains General are taking a position that TikTok has

466
00:26:38,280 --> 00:26:41,840
Speaker 3: designed its service in a way that hurts its users,

467
00:26:42,119 --> 00:26:46,040
Speaker 3: and that its design is both legally problematic, as well

468
00:26:46,080 --> 00:26:49,800
Speaker 3: as its failure to disclose some of the information it

469
00:26:49,920 --> 00:26:51,639
Speaker 3: had was also problematic.

470
00:26:52,119 --> 00:26:58,159
Speaker 1: The California Attorney General Rob Bonta said that California's investigation

471
00:26:58,520 --> 00:27:02,600
Speaker 1: found that TikTok offers unique safety features for users in

472
00:27:02,720 --> 00:27:06,640
Speaker 1: China that are not available to users in the US,

473
00:27:06,680 --> 00:27:10,720
Speaker 1: including usage time limits. But I thought there were default

474
00:27:10,760 --> 00:27:15,680
Speaker 1: screen time limits and other different safeguards that they've introduced.

475
00:27:15,240 --> 00:27:20,200
Speaker 3: To mean that observation is frankly irrelevant. Every service customizes

476
00:27:20,520 --> 00:27:24,159
Speaker 3: for local conditions, whether that's because the users have different

477
00:27:24,160 --> 00:27:28,119
Speaker 3: needs or because the law is different. For example, in

478
00:27:28,240 --> 00:27:30,880
Speaker 3: other countries they don't have the First Amendment, and so

479
00:27:31,200 --> 00:27:34,080
Speaker 3: service in the US just routinely look different than they

480
00:27:34,080 --> 00:27:35,399
Speaker 3: do in other parts of the world.

481
00:27:35,920 --> 00:27:42,120
Speaker 1: Washington's lawsuit accused TikTok of facilitating sexual exploitation of underage users,

482
00:27:42,240 --> 00:27:46,159
Speaker 1: saying TikTok's live streaming and virtual currency operate like a

483
00:27:46,240 --> 00:27:51,119
Speaker 1: virtual strip club with no age restrictions. Is that the

484
00:27:51,240 --> 00:27:55,879
Speaker 1: use of exaggeration to show a point or can they

485
00:27:55,960 --> 00:27:56,399
Speaker 1: prove that?

486
00:27:57,000 --> 00:28:01,040
Speaker 3: Certainly, any efforts to engage in sexual predation on any

487
00:28:01,119 --> 00:28:04,159
Speaker 3: site is troubling, and I wish that didn't occur. I

488
00:28:04,200 --> 00:28:07,359
Speaker 3: wish that wasn't part of the human condition. However, it's

489
00:28:07,600 --> 00:28:12,040
Speaker 3: easy enough for the regulators to point to specific actions

490
00:28:12,040 --> 00:28:14,639
Speaker 3: that they don't like, but it's harder to talk about

491
00:28:14,640 --> 00:28:18,760
Speaker 3: how TikTok might design a service that would prevent those

492
00:28:18,880 --> 00:28:22,639
Speaker 3: actions from ever taking place, and some of the solutions

493
00:28:22,800 --> 00:28:25,919
Speaker 3: that might prevent it would have other collateral damage that

494
00:28:25,960 --> 00:28:29,880
Speaker 3: could to materially degrade the service for everybody, or make

495
00:28:29,920 --> 00:28:32,560
Speaker 3: it impossible for anyone to talk to each other, And

496
00:28:32,640 --> 00:28:37,160
Speaker 3: so it's not really super insightful to talk about the

497
00:28:37,440 --> 00:28:41,840
Speaker 3: virtual crime scene without contemplating the overall ecosystem.

498
00:28:42,120 --> 00:28:46,880
Speaker 1: Are these suits under different states consumer protection laws?

499
00:28:47,160 --> 00:28:50,320
Speaker 3: That's my understanding. So each s they filed its own complaint,

500
00:28:50,440 --> 00:28:54,120
Speaker 3: and each complaint that would have referenced its local statutes

501
00:28:54,160 --> 00:28:57,040
Speaker 3: as part of the allegations, so it's.

502
00:28:56,880 --> 00:28:59,200
Speaker 1: Not one class action lawsuit.

503
00:28:59,440 --> 00:29:01,400
Speaker 3: Well have to be a class action lawsuit for it

504
00:29:01,480 --> 00:29:05,320
Speaker 3: to be consolidated. So over forty state attorney generals are

505
00:29:05,440 --> 00:29:09,600
Speaker 3: coordinating their efforts in a single challenge against Facebook, But

506
00:29:10,000 --> 00:29:12,880
Speaker 3: in this case, for reasons that are unclear to me,

507
00:29:13,680 --> 00:29:16,360
Speaker 3: each state is doing their own thing, but obviously they're

508
00:29:16,400 --> 00:29:20,280
Speaker 3: coordinated as well. But each state is incurring significantly higher

509
00:29:20,640 --> 00:29:23,520
Speaker 3: enforcement costs than if they were to combine their resources.

510
00:29:23,600 --> 00:29:25,880
Speaker 1: Do you think that this is a strong lawsuit?

511
00:29:26,240 --> 00:29:29,480
Speaker 3: The short answers, we don't know how strong these lawsuits

512
00:29:29,520 --> 00:29:33,840
Speaker 3: are because none of the similar lawsuits have reached a

513
00:29:34,040 --> 00:29:38,480
Speaker 3: final resolution that answers the key legal questions. There have

514
00:29:38,480 --> 00:29:43,160
Speaker 3: been many challenges in many different venues against social media

515
00:29:43,200 --> 00:29:47,520
Speaker 3: services for a variety of alleged misdeeds, and many of

516
00:29:47,600 --> 00:29:50,200
Speaker 3: us are still working through the court system waiting appeal

517
00:29:50,600 --> 00:29:54,880
Speaker 3: or additional review by higher courts. And until we hear

518
00:29:54,880 --> 00:29:58,240
Speaker 3: from the higher courts, the data is noisy. We can't

519
00:29:58,360 --> 00:30:01,280
Speaker 3: really tell where the line is today legally, and so

520
00:30:01,840 --> 00:30:04,640
Speaker 3: it's hard to judge the efficacy of these particular suits

521
00:30:04,800 --> 00:30:07,480
Speaker 3: until we get additional data from the appellate courts.

522
00:30:07,880 --> 00:30:11,880
Speaker 1: I feel like another day, another lawsuit against TikTok. Is

523
00:30:11,920 --> 00:30:14,560
Speaker 1: there a point in this sort of piling on? It

524
00:30:14,600 --> 00:30:18,160
Speaker 1: seems like there are many many lawsuits against TikTok already.

525
00:30:18,360 --> 00:30:19,880
Speaker 3: It's a great point, and I would take it one

526
00:30:19,920 --> 00:30:23,480
Speaker 3: step further. California recently passed the law that was designed

527
00:30:23,520 --> 00:30:27,440
Speaker 3: to target alleged addiction of users by the social media

528
00:30:27,600 --> 00:30:30,280
Speaker 3: that won't go into effect for a few years. California's

529
00:30:30,320 --> 00:30:33,360
Speaker 3: involvement in this particular enforced action is basically trying to

530
00:30:33,480 --> 00:30:36,280
Speaker 3: move up the time period of that law before when

531
00:30:36,320 --> 00:30:38,600
Speaker 3: the legislature thinks that the community is ready for it.

532
00:30:38,760 --> 00:30:42,640
Speaker 3: So basically Bonta is jumping the gun on a statute

533
00:30:42,680 --> 00:30:45,520
Speaker 3: that's designed to accomplish the exact same goals, which is

534
00:30:45,560 --> 00:30:51,080
Speaker 3: an unusual and somewhat troubling allocation of prosecutorial resources. Why

535
00:30:51,120 --> 00:30:53,600
Speaker 3: not wait until the statue comes in ef fact that

536
00:30:53,680 --> 00:30:57,120
Speaker 3: the legislature is carefully crafted and it believes requires some

537
00:30:57,200 --> 00:31:00,600
Speaker 3: compliance time to go into effect. Having said that, you know,

538
00:31:00,800 --> 00:31:03,720
Speaker 3: I think that all of the lawsuits and the statutes

539
00:31:03,720 --> 00:31:06,320
Speaker 3: are going to be sort of substantial criticism when they

540
00:31:06,360 --> 00:31:09,720
Speaker 3: go up on appeal, and so nobody really knows the laws,

541
00:31:09,760 --> 00:31:13,920
Speaker 3: and I'm the investment in new lawsuits without uncertainty is

542
00:31:14,040 --> 00:31:15,440
Speaker 3: just in a sense, piling on.

543
00:31:15,720 --> 00:31:19,240
Speaker 1: As TikTok spokesperson pointed to the safeguards that were introduced

544
00:31:19,280 --> 00:31:23,520
Speaker 1: by the company, including default screen time limits, family pairing,

545
00:31:23,560 --> 00:31:27,120
Speaker 1: and privacy defaults for minors under sixteen, Do you see

546
00:31:27,120 --> 00:31:29,720
Speaker 1: that as their defense or might they have another defense?

547
00:31:30,240 --> 00:31:33,520
Speaker 3: It's impossible to talk about a defense until we understand

548
00:31:33,560 --> 00:31:38,200
Speaker 3: precisely what problem the state ages are concerned about, and

549
00:31:38,800 --> 00:31:42,720
Speaker 3: for all of the negativity they introduce, it's not entirely

550
00:31:42,800 --> 00:31:46,040
Speaker 3: clear that we can precisely identify the problem and the

551
00:31:46,080 --> 00:31:50,200
Speaker 3: solution that would ameliorate that problem. So, for example, when

552
00:31:50,240 --> 00:31:53,960
Speaker 3: we talk about this concept of addiction that's not necessarily

553
00:31:53,960 --> 00:31:56,560
Speaker 3: in a clinical sense, that might be more of a

554
00:31:56,800 --> 00:32:01,480
Speaker 3: lay term, and so we don't really have a scientifically

555
00:32:01,560 --> 00:32:06,000
Speaker 3: authorized protocol for how to deal with the clinical condition

556
00:32:06,080 --> 00:32:09,600
Speaker 3: of social media addiction. So in that sense, everyone's kind

557
00:32:09,640 --> 00:32:14,200
Speaker 3: of guessing at what actually will help and what troubles

558
00:32:14,240 --> 00:32:17,200
Speaker 3: means when the state decides to put its finger on

559
00:32:17,240 --> 00:32:20,000
Speaker 3: the scale of those guesses and say we're going to

560
00:32:20,080 --> 00:32:22,920
Speaker 3: side for you, with no clinical evidence to back us up,

561
00:32:23,000 --> 00:32:27,280
Speaker 3: and then no consideration for how the solution might actually

562
00:32:27,280 --> 00:32:29,520
Speaker 3: not solve the problem or actually might make things worse.

563
00:32:30,080 --> 00:32:34,680
Speaker 1: So the FTC sued TikTok in August for violating the

564
00:32:34,720 --> 00:32:39,360
Speaker 1: federal Children's Privacy Law. Is that a different kind of

565
00:32:39,440 --> 00:32:41,840
Speaker 1: suit than this or are they all based on the

566
00:32:41,880 --> 00:32:44,440
Speaker 1: same sort of allegations?

567
00:32:45,440 --> 00:32:48,720
Speaker 3: All of them derived from a core impulse, which is

568
00:32:48,800 --> 00:32:52,360
Speaker 3: that the governments decided that it wants to determine how

569
00:32:52,520 --> 00:32:57,040
Speaker 3: social services should operate. It's tired of letting services negotiate

570
00:32:57,040 --> 00:33:00,479
Speaker 3: that directly with their audience. So whether it's framed as

571
00:33:00,480 --> 00:33:04,120
Speaker 3: a privacy lawsuit or an addiction targeting lawsuit, or a

572
00:33:04,200 --> 00:33:09,720
Speaker 3: statute that designed to hard code specific operational practices, they're

573
00:33:09,800 --> 00:33:14,560
Speaker 3: all reflecting this basic underlying impulse that the government's taking

574
00:33:14,600 --> 00:33:17,040
Speaker 3: over here, and they're going to decide for everyone.

575
00:33:17,160 --> 00:33:19,440
Speaker 1: I mean, they might have waited to see if TikTok

576
00:33:19,520 --> 00:33:22,760
Speaker 1: is even in existence in a few years. What's happening

577
00:33:22,800 --> 00:33:26,680
Speaker 1: with TikTok battling the US law that could ban.

578
00:33:26,640 --> 00:33:29,720
Speaker 3: The app Congress enacted the law earlier this year that

579
00:33:29,960 --> 00:33:33,680
Speaker 3: forces TikTok to change its ownership structure and failing that,

580
00:33:34,320 --> 00:33:36,760
Speaker 3: to be kicked out of the US market entirely. And

581
00:33:37,120 --> 00:33:39,920
Speaker 3: I still find people who have no idea that Congress

582
00:33:39,960 --> 00:33:44,040
Speaker 3: has literally banned TikTok. It's really a shocking development when

583
00:33:44,040 --> 00:33:47,520
Speaker 3: people think about it. Everyone, including Congress, contemplated that the

584
00:33:47,600 --> 00:33:50,320
Speaker 3: law would be subject to a legal challenge. That legal

585
00:33:50,400 --> 00:33:54,480
Speaker 3: challenge is currently pending with the DC Circuit Court of Appeals,

586
00:33:54,520 --> 00:33:55,960
Speaker 3: But the real action is going to come from the

587
00:33:55,960 --> 00:33:58,560
Speaker 3: Supreme Court. Whatever the DC Circuit says is going to

588
00:33:58,600 --> 00:34:00,760
Speaker 3: go to the Supreme Court and then we're going to

589
00:34:00,840 --> 00:34:03,560
Speaker 3: get more of our answer. So until we hear for

590
00:34:03,640 --> 00:34:05,800
Speaker 3: the Supreme Court, everything is pretty speculative.

591
00:34:05,920 --> 00:34:09,359
Speaker 1: The oral arguments at the DC Circuit didn't seem to

592
00:34:09,400 --> 00:34:11,840
Speaker 1: be leaning in TikTok's favor.

593
00:34:12,160 --> 00:34:16,880
Speaker 3: Whatever the DC Circuit opinion says will be of interest,

594
00:34:17,080 --> 00:34:19,520
Speaker 3: but it's going to be subject to review by the

595
00:34:19,560 --> 00:34:22,440
Speaker 3: Supreme Court. So I've not invested a lot of emotional

596
00:34:22,520 --> 00:34:25,520
Speaker 3: energy and the possibility that they're going to do something weird,

597
00:34:26,000 --> 00:34:30,120
Speaker 3: because it really doesn't matter. They're just warming up act

598
00:34:30,200 --> 00:34:32,280
Speaker 3: before the Supreme Court, you know, they're like the opening

599
00:34:32,320 --> 00:34:33,840
Speaker 3: knack to the main scene.

600
00:34:34,120 --> 00:34:39,040
Speaker 1: And what about the lawsuits by private plaintiffs in California

601
00:34:39,160 --> 00:34:41,000
Speaker 1: federal and state court, So.

602
00:34:41,000 --> 00:34:43,880
Speaker 3: That battle is well ahead of this battle, and so

603
00:34:44,440 --> 00:34:47,399
Speaker 3: it's entirely likely that we're going to get answers from

604
00:34:47,440 --> 00:34:50,280
Speaker 3: that court case that will influence this one. And again

605
00:34:50,480 --> 00:34:53,879
Speaker 3: raises the consideration that maybe the AGS pulled the trigger

606
00:34:53,880 --> 00:34:55,880
Speaker 3: a little bit early. They didn't wait to see what

607
00:34:56,000 --> 00:34:59,480
Speaker 3: happened with those cases and didn't then iterate based on

608
00:34:59,600 --> 00:35:02,719
Speaker 3: the less from those cases. They're basically replicating the same

609
00:35:02,719 --> 00:35:06,360
Speaker 3: claims that have been made elsewhere. So there's an enormous

610
00:35:06,360 --> 00:35:09,560
Speaker 3: sense of deja vous about this particular stive enforcement actions.

611
00:35:09,640 --> 00:35:12,680
Speaker 1: There certainly is. Thanks so much, Eric. That's Professor Eric

612
00:35:12,719 --> 00:35:16,520
Speaker 1: Goleman of Santa Clara University School of Law. And that's

613
00:35:16,520 --> 00:35:19,520
Speaker 1: it for this edition of the Bloomberg Law Podcast. Remember

614
00:35:19,560 --> 00:35:22,239
Speaker 1: you can always get the latest legal news by subscribing

615
00:35:22,280 --> 00:35:25,759
Speaker 1: and listening to the show on Apple Podcasts, Spotify, and

616
00:35:25,840 --> 00:35:29,799
Speaker 1: at Bloomberg dot com, slash podcast, Slash Law. I'm June

617
00:35:29,840 --> 00:35:32,000
Speaker 1: Grosso and this is Bloomberg