Speaker 1: This is Bloomberg Law with June Brusso from Bloomberg Radio.
Speaker 1: The Supreme Court has at least five cases on its
Speaker 1: dock at this term that could potentially reshape the employment
Speaker 1: law landscape. The cases cover a broad range of issues,
Speaker 1: from a failed drug test by a truck driver suing
Speaker 1: CBD makers using the Rico statute to an Ohio public
Speaker 1: employees claim that she was denied promotion and demoted because
Speaker 1: she's a heterosexual. The first case that Justice has heard
Speaker 1: this term on Monday involve workers suing Alabama over unemployment
Speaker 1: benefits who are stuck in a sort of catch twenty two.
Speaker 1: Here's how Justice Sonya Sotomayor put it. See it really
Speaker 1: stuck in a state process with a loop that you
Speaker 1: can't get out of. Joining me is an expert in
Speaker 1: employment law, Anthony Ancidi, a partner scour Tony. The Justices
Speaker 1: kicked off the term with an employment law case tell
Speaker 1: us about it.
Speaker 2: This case involves residents of Alabama who had applied for
Speaker 2: unemployment benefits during the COVID pandemic, and they challenged the
Speaker 2: way that the State of Alabama had handled their claims.
Speaker 2: They sought to bring claims under a federal Statute Section
Speaker 2: nineteen eighty three, and that allows individuals to sue the
Speaker 2: state government and officials of the state government for violating
Speaker 2: the civil rights under federal law. They alleged that the
Speaker 2: state's policies and its practices and its procedures related to
Speaker 2: unemployment compensation applications violated the Social Security Act of nineteen
Speaker 2: thirty five, which is obviously a federal statute. They also
Speaker 2: claimed that they had suffered a violation of their due
Speaker 2: process rights under the Constitution. This case comes to the
Speaker 2: US Supreme Court from the Alabama Supreme Court, which said
Speaker 2: that state law requires that the plaintiffs in the case
Speaker 2: first bring their claims to the state's Department of Labor
Speaker 2: and exhaust all administrative remedies that are available under state law,
Speaker 2: and according to the Alabama Court, that is supported by
Speaker 2: Supreme Court precedents, saying that that requirement does exist with
Speaker 2: respect to these claims. So the issue is whether these
Speaker 2: workers who are seeking unemployment benefits need to exhaust state
Speaker 2: administrative remedies before they can bring a claim under a
Speaker 2: federal civil rights law. The reason why this is going
Speaker 2: to be important, I think probably in these cases is
Speaker 2: because they didn't do that, and if it is determined
Speaker 2: that they were required to exhaust state administrative remedies, that
Speaker 2: that could jeopardize the federal claims that they're seeking to
Speaker 2: make under Section nineteen eighty three in this case.
Speaker 1: And tell us about the Supreme Court's prior rulings in
Speaker 1: this area in the cases of Patsy versus Board of
Speaker 1: Regents and Felder versus Casey, and.
Speaker 2: That's exactly what the Alabama Supreme Court relied upon. And
Speaker 2: the fact that the US Supreme Court then took this
Speaker 2: case up may mean that there has been a shift
Speaker 2: or a change in the Supreme Court's point of view
Speaker 2: with respect to this because the US Supreme Court has,
Speaker 2: of course complete discretion as to what cases it does
Speaker 2: or does not take, and it takes obviously a very
Speaker 2: small handful of cases every year. And the fact that
Speaker 2: they have granted sorcherai that is the Latin word for
Speaker 2: the review that is granted in this case and in
Speaker 2: these cases generally, may suggest that there is a different
Speaker 2: point of view.
Speaker 1: During the oral arguments, Justice Sonia Sotomayor told the plaintiff's
Speaker 1: lawyer that he was really stuck in a state process
Speaker 1: with a loop that you can't.
Speaker 2: Get out of right. And I think again, this is
Speaker 2: one of those situations where it may seem like a technicality,
Speaker 2: but there is a lot of law with respect to
Speaker 2: these issues in the ployment context and in the administrative
Speaker 2: context that does exist. We see this all the time,
Speaker 2: where these administrative filings and processes, although they do sometimes
Speaker 2: take on somewhat of a pro forma status, meaning that
Speaker 2: the lawyer representing the claimant simply has to file something
Speaker 2: and often can do it online. And in California, where
Speaker 2: I'm most familiar with administrative filings and the employment context,
Speaker 2: the state administrative agency California Civil Rights Department, will open
Speaker 2: and close the administrative file the very same day, and
Speaker 2: in almost every single case, the administrative apparatus is not
Speaker 2: triggered and they don't get involved. But if the plaintiff
Speaker 2: has not done that first and proceeds directly to court
Speaker 2: without having exhausted those remedies, that's a means by which
Speaker 2: the defense can then say you can't proceed in the
Speaker 2: case because you should have at least given the administrative
Speaker 2: apparatus or the agency some opportunity to prosecute this. I
Speaker 2: think some of this is a result of just the
Speaker 2: passage of time, because many of these civil rights statutes,
Speaker 2: for example, when they were first passed, they were not
Speaker 2: intended to directly lead to litigation or court cases or
Speaker 2: jury trials or any of this. They were supposed to
Speaker 2: be and they were often designed to be decided by
Speaker 2: administrative agencies, which is obviously a somewhat lesser formal proceeding
Speaker 2: than having a case go to court. In the way
Speaker 2: in which the laws developed, though, and procedures have developed,
Speaker 2: and I think really administrative agencies have just been overwhelmed
Speaker 2: with the number of claims. The administrative apparatus is kind
Speaker 2: of atrophied in these cases, and so as a result
Speaker 2: of that, it may seem again like a technicality that
Speaker 2: that has to be done. But the law has not
Speaker 2: been changed in most places. And that's I think what
Speaker 2: is probably at the root of what Justice Sodomayer was
Speaker 2: talking about.
Speaker 1: So you think that the court is going to uphold
Speaker 1: the requirement of exhausting administrative remedies.
Speaker 2: It seems like they should probably is something that ultimately
Speaker 2: would have to be decided or probably better decided and
Speaker 2: a remedied. If a remedy is going to be obtained
Speaker 2: from a legislative body that would look at something like
Speaker 2: this and make the determination that, as I said, some
Speaker 2: of these administrative agencies have atrophied, and there's really not
Speaker 2: as much of a reason today as there might have
Speaker 2: been thirty or forty years ago to require those processes.
Speaker 1: Next week, the court is going to hear the case
Speaker 1: of medical marijuana versus Horn. This case intrigues me because
Speaker 1: it involves a truck driver, medical marijuana and the RICO Act.
Speaker 2: Walked into a bar. Yeah, it's a group of unlikely
Speaker 2: entities and parties I suppose that are involved in this case,
Speaker 2: and the set of circumstances is somewhat unique. This was
Speaker 2: a commercial truck driver who was required to pass periodic
Speaker 2: drug screen and he was fired when he tested positive
Speaker 2: for THHC, which of course is the psychoactive compound that
Speaker 2: is part of the cannabis plant and that is triggered
Speaker 2: in the event that one consumes or smokes cannabis. The
Speaker 2: driver claimed that he had not intentionally ingested THHC, but
Speaker 2: that he had used an elixir an interesting word for
Speaker 2: severe pain that was marked as containing only CBD, which
Speaker 2: is another compound that comes from marijuana. But which is
Speaker 2: not psychoactive and is not illegal. It's generally legal to
Speaker 2: consume CBD. So his argument was I essentially consume something
Speaker 2: that was mislabeled and by the way that mislabeling then
Speaker 2: led to his being fired. He has now made this
Speaker 2: claim in the form of a assertion of fraud under
Speaker 2: the RICO the Racketeer Influenced in Corrupt Organizations Act, which
Speaker 2: typically originally was I think intended to reach mafia members
Speaker 2: but often gets thrown around these days in different types
Speaker 2: of cases. But it's known by the acronym RICO riico,
Speaker 2: and he's claiming that the CBD maker slash. I guess
Speaker 2: the thhc CBD maker in this case has conducted itself
Speaker 2: in a way that it has violated. The RICO statute, usually,
Speaker 2: as I say, was typically used for targeting organized crime,
Speaker 2: but it does allow plaintiffs to bring certain civil cases
Speaker 2: for fraud and potentially collect triple damages. So in this case,
Speaker 2: the damages that he'll be seeking presumably will be the
Speaker 2: lost wages and benefits that flowed from his loss of employment.
Speaker 2: I suppose there may be other damages that he's going
Speaker 2: to seek as well. This case found itself to the
Speaker 2: Second Circuit Court of Appeals in New York, and that
Speaker 2: court allowed the driver to proceed with his claim. But
Speaker 2: other appeals courts have tossed similar lawsuits where there was
Speaker 2: an attempt to seek monetary damages under RICO for personal injuries.
Speaker 2: I don't know that it's arisen previously in the context
Speaker 2: of CBD THCHC, but that happens to be the factual
Speaker 2: scenario in this case. And so in this case, the
Speaker 2: CBD manufacturer wants the Supreme Court to dismiss the RICO claim,
Speaker 2: asserting that it's merely a garden variety products liability suit
Speaker 2: and that it should not be able to proceed under
Speaker 2: the Rico statute.
Speaker 1: There's a split in the circuits on this. Do you
Speaker 1: think the Supreme Court took the case to overturn the
Speaker 1: Second Circuit?
Speaker 2: It sounds like they might. Again. You never can tell,
Speaker 2: because it certainly is not the case that every time
Speaker 2: the US Supreme Court, or really any appellate court takes
Speaker 2: a case when they have discretion that they are accepting
Speaker 2: review to affirm. I guess the inclination is, why not
Speaker 2: just leave well enough alone? If they're just going to
Speaker 2: affirm the lower court. You typically think that they will
Speaker 2: do something different, but they obviously don't always affirm the
Speaker 2: lower court. And in this situation, as I said, there
Speaker 2: is a conflict among the circuits, and that's typically when
Speaker 2: the US Supreme Court does get involved. So they may
Speaker 2: grant a review in a case in which one of
Speaker 2: seven circuits rules one and the other sixth rule another way.
Speaker 2: It doesn't necessarily mean they're going to affirm or reverse
Speaker 2: that one circuit. It just means they're trying to resolve
Speaker 2: whether the other six were right and this one was wrong,
Speaker 2: or vice versa. And I guess we're not going to
Speaker 2: really know for a time. We should also say these
Speaker 2: are all cases that are in the current term of
Speaker 2: the US Supreme Court, which begins every year on the
Speaker 2: first Monday of October, and the term then usually concludes
Speaker 2: with a great degree of drama and fireworks in late
Speaker 2: June early July. I've often said that the Supreme Court
Speaker 2: has an unerring sense of drama and of entertainment in
Speaker 2: some ways, I suppose because they saved the biggest cases
Speaker 2: for the last as they did the last term when
Speaker 2: they had a number of very significant opinions that came
Speaker 2: out in late June. They're almost all out, I think,
Speaker 2: without exception before the fourth of July holiday.
Speaker 1: Absolutely.
Speaker 2: See.
Speaker 1: My theory is they're not saving the best for a last,
Speaker 1: They're saving the most controversial for last, and then they
Speaker 1: take off on their three month vacation.
Speaker 2: But you know that's perhaps and avoid any demonstrations some
Speaker 2: of their opinions.
Speaker 1: On November fifth, there will be oral arguments in a
Speaker 1: case involving Overton exemptions, of.
Speaker 2: Course, I know, you know, and we should mention that
Speaker 2: November fifth, something else is happening that day, really election
Speaker 2: den Yes, So this this case involves Again it sounds
Speaker 2: like somewhat of a dry issue, but I think it's
Speaker 2: an extremely important one, especially for employers and employees. That's
Speaker 2: the context in which it arises, and it arises under
Speaker 2: a statute known as the Fair Labor Standards Act, which
Speaker 2: is a federal law that protects wage an hour practices
Speaker 2: of employees and employers that governs those situations. And the
Speaker 2: question here has to do with the preponderance of evidence
Speaker 2: standard of proof versus what's called the clear and convincing
Speaker 2: standard of evidence. And I should say that there are
Speaker 2: at least three differing standards of proof that typically arise
Speaker 2: in the case. In most civil cases, you have the
Speaker 2: preponderance of evidence standard. Law students are taught that that
Speaker 2: means that the plaintiff has to prove basically about fifty
Speaker 2: one percent of the evidence in their favorite that's kind
Speaker 2: of a rough way of saying it. But it doesn't
Speaker 2: have to be a huge amount in the favor of
Speaker 2: the plaintiff, meaning that the burden of proof is not
Speaker 2: that particularly burden some but the preponderance means that more
Speaker 2: than not the evidence needs to point in the favor
Speaker 2: of the plaintiff in order for the plaintiff to win.
Speaker 2: The other standard that we're all pretty familiar with just
Speaker 2: from watching TV shows is the beyond the reasonable doubt standard,
Speaker 2: which is a much higher burden of proof. That is
Speaker 2: the criminal standard of evidence that is required to get
Speaker 2: a criminal conviction, So the prosecution needs to prove that
Speaker 2: the defendant in a criminal case violated the law beyond
Speaker 2: the reasonable doubt. Somewhere floating between those two standards is
Speaker 2: the clear and convincing evidence standard, meaning it's got to
Speaker 2: be a little bit more than half, but a lot
Speaker 2: less than what you would need for beyond a reasonable doubt,
Speaker 2: their floats somewhere in between. And that's the very question
Speaker 2: that that issue in this case, as comes out of Richmond, Virginia,
Speaker 2: the Fourth Circuit Court of Appeals, The question is does
Speaker 2: an employer have to prove, because the employee does have
Speaker 2: the burden of proof on these cases, that when an
Speaker 2: employee claims that they've been misclassified, meaning that they didn't
Speaker 2: get overtime and they should have, they were misclassified for
Speaker 2: some reason as exempt from overtime, does the employer have
Speaker 2: to prove that the employee was properly classified by the
Speaker 2: clear and convincing standard, which is that medium proof standard,
Speaker 2: or just the preponderance of the evidence standard, which is
Speaker 2: an easier burden to meet. Obviously, the plaintiffs in a
Speaker 2: case like this are going to be pushing for clear
Speaker 2: and convincing because that would mean it's going to be
Speaker 2: harder for the employer to win, and in this case,
Speaker 2: that's going to be the issue. A number of federal
Speaker 2: circuit Courts of Appeals have already weighed in on this,
Speaker 2: including the Fifth, sixth, seventh, ninth, ten to eleven, and
Speaker 2: they've all applied the lower standard of preponderance of the evidence.
Speaker 2: In this case, the Fourth Circuit Court said that the
Speaker 2: clear and convincing standard is the one that applies.
Speaker 1: I'm betting on the fifth, sixth, seventh, ninth, tenth, and
Speaker 1: eleventh Circuits in this case.
Speaker 2: Yes, If the number of courts is the deciding factor,
Speaker 2: then I think you're probably right. The Fourth seems to
Speaker 2: be standing alone in connection with its determination on this case.
Speaker 1: Coming up next a case claiming reverse discrimination. I'm June Grosso.
Speaker 1: When you're listening to Bloomberg, the Supreme Court is scheduled
Speaker 1: to hear at least five cases involving employment law and
Speaker 1: a range of issues. I've been talking to Anthony on CD,
Speaker 1: a partner at Prosskauer. Next, we have a case with
Speaker 1: six circuits split on former employees suing under the Americans
Speaker 1: with Disabilities Act.
Speaker 2: This is an interesting case and it could affect obviously
Speaker 2: many many employees, former employees, retired employees, in particular, as
Speaker 2: the population continues to age. I saw statistic the other
Speaker 2: day it said that more people are are reaching their
Speaker 2: sixty fifth birthday this year. Then I guess has ever
Speaker 2: occurred on planet early or certainly in the United States.
Speaker 2: You know, it's sort of the tail end of the
Speaker 2: Baby Boomers have now reached retirement age in many instances,
Speaker 2: and that's really what's that issue. In this particular case,
Speaker 2: this was a plaintiff a former firefighter for the City
Speaker 2: of Sanford, Florida, and she retired due to Parkinson's disease
Speaker 2: in twenty eighteen. She had served as a firefighter for
Speaker 2: about nineteen years when she joined the fire department in
Speaker 2: nineteen ninety nine. The city's policy was that it would
Speaker 2: provide free health insurance until age sixty five from employees
Speaker 2: who were retiring due to a disability. In two thousand
Speaker 2: and three, the city changed its plan and it limited
Speaker 2: the health insurance subsidy that disability retirees would get to
Speaker 2: twenty four months post retirement, meaning it wouldn't go until
Speaker 2: the age of sixty five. It would only go for
Speaker 2: twenty four months. In this case, former firefighter who did
Speaker 2: retire due to a disability out suit before her subsidy
Speaker 2: was set to expire, and she said that this change
Speaker 2: in policy was a violation of the Americans with Disabilities Act,
Speaker 2: the Rehabilitation Act, and then some statutory provisions under Florida law,
Speaker 2: as well as the Equal Protection clause under the Constitution.
Speaker 2: The district court dismissed and granted some re judgment on
Speaker 2: other claims, but otherwise disposed of her case and ruled
Speaker 2: in favor of the city. And the reason they did
Speaker 2: that again sound somewhat like a technicality, but obviously a
Speaker 2: very important one. They ruled that the statutes that she
Speaker 2: was proceeding under only applied to plaintiffs who quote hold
Speaker 2: or desire an employment position with the defendant at the
Speaker 2: time of the defendants allegedly wrongful act, and of course
Speaker 2: she neither held nor did she desire to hold, which
Speaker 2: really is a different word for saying an applicant unemployment
Speaker 2: position at the time of the alleged wrongful act. And
Speaker 2: so the precise question is ken a retiree such as
Speaker 2: the plaintiff in this case, sue for discrimination under the
Speaker 2: Americans with Disabilities Act over post employment fringe benefits that,
Speaker 2: had she said, been taken away on the basis of
Speaker 2: a discriminatory policy.
Speaker 1: Does this come up often, Tony, that a retiree is
Speaker 1: trying to sue over the ADA.
Speaker 2: You know, I don't think so. It's not something that
Speaker 2: I've seen a lot of. But again, since we're having
Speaker 2: a lot more retirees who are moving into that status.
Speaker 2: I would not be surprised if there are not other
Speaker 2: cases like this in the very near future where policies
Speaker 2: have been changed, because what is common, I can tell you,
Speaker 2: is the pairing down and in some cases eliminating the
Speaker 2: actual benefits that employees have received. There was a period
Speaker 2: of time when retirees, you know of the our companies
Speaker 2: and many other industries in the United States, would receive
Speaker 2: what's called a defined benefit plan, meaning they knew that
Speaker 2: when they retired they would get x hundred or thousand
Speaker 2: dollars a month as part of their retirement. Because those
Speaker 2: policies became so expensive due to inflation and and just
Speaker 2: any number of other factors, most employers have long since
Speaker 2: shifted away from what are called defined benefit plans like
Speaker 2: that to what's called a defined contribution plan, which is
Speaker 2: more like a four toh one K, which is there's
Speaker 2: a certain maximum amount you can contribute to those plans,
Speaker 2: or that the employer will contribute on your behalf, but
Speaker 2: there's no guarantee you're going to get x amount at
Speaker 2: the time that you retire. If you invest in the
Speaker 2: stock market, which of course the stock market over the
Speaker 2: last seventy or eighty years has had a fairly good
Speaker 2: track record ten percent plus. I think the returns on
Speaker 2: average over that period of time. You may very well
Speaker 2: be able to sort of ballpark what your retirement benefits are,
Speaker 2: but that's not exactly the same thing as knowing for
Speaker 2: sure what you're going to have plopped into your bank
Speaker 2: account every month. And that's what a defined benefit plan is,
Speaker 2: and those are few and far between these days.
Speaker 1: Just last Friday, the Court agreed to take a case
Speaker 1: challenging a rule by an Ohio public employee who claim
Speaker 1: she's a victim of reverse discrimination.
Speaker 2: Yes, you saved perhaps the most controversial case so far
Speaker 2: this term for last June. As I know, you have
Speaker 2: that unerring sense of drama like the Supreme Court.
Speaker 1: So you've been accused of worse though.
Speaker 2: So as you say, the review petition was granted just
Speaker 2: last Friday. There's no oral argument yet schedule, but it
Speaker 2: will be heard and decided before the fourth of July
Speaker 2: twenty twenty five. And in this case, the employee sues
Speaker 2: the Ohio Department of Youth Services, where she had worked
Speaker 2: for I believe several decades of public service. She had
Speaker 2: been earlier in her employment assigned to a new supervisor
Speaker 2: who was gay. She I should say, is a white, heterosexual,
Speaker 2: female former employee. She was assigned to a new supervisor
Speaker 2: who was gay. In twenty nineteen. She applied to be
Speaker 2: the department's bureau chief of quality, so she was seeking
Speaker 2: a promotion. She did not receive that position. In a
Speaker 2: few days later, she learned that she was being removed
Speaker 2: from her administrator position, the lower position that she had.
Speaker 2: The decision to remove her from the administrator position was
Speaker 2: made by not the gay supervisor, who was the first
Speaker 2: level supervisor above her position, but the second level supervisor
Speaker 2: and the department's director, both of whom were straight. So
Speaker 2: this becomes a somewhat problem issue for her in this
Speaker 2: case because the fact that she's being supervised by a
Speaker 2: gay employee seemingly had no effect at least as the
Speaker 2: case is currently framed upon. The demotion and the failure
Speaker 2: to give her the promotion. The department then awarded her
Speaker 2: former administrator position to a twenty five year old gay
Speaker 2: mad The department then selected a gay woman to serve
Speaker 2: as its bureau chief of quality. She then filed claims
Speaker 2: of discrimination the straight white female employee. She filed claims
Speaker 2: a discrimination based on her sexual orientation and gender against
Speaker 2: the department. She said that she was discriminated against on
Speaker 2: the base of being a heterosexual female. What happens next,
Speaker 2: The district Court, which is the trial court in the
Speaker 2: southern District of Ohio, grants some rey judgment to the
Speaker 2: employer and dismisses the case, and the Sixth Circuit in
Speaker 2: this case, which is based in Cincinnati, Ohio, affirms that dismissal.
Speaker 2: The basis for the dismissal and the affirming of the
Speaker 2: dismissal is as follows. They say that this plaintiff did
Speaker 2: not establish the necessary quote background circumstances close quote to
Speaker 2: sustain her claim of sexual orientation. So what's going on
Speaker 2: in this case? Why is the Supreme Court interested in it?
Speaker 2: The reason the Supreme Court's interested in it is because
Speaker 2: this element that both the district court, the trial court,
Speaker 2: and the appellate court applied, that is, requiring the employee
Speaker 2: to prove these background circumstances only exists if the plaintiff
Speaker 2: happens to be in the majority, meaning if it's a
Speaker 2: white employee, heterosexual employee, or in this case, I guess
Speaker 2: for gender reasons female. I guess there may be more
Speaker 2: females than males. I'm not sure how that's going to
Speaker 2: work out. But the real question is whether or not
Speaker 2: there is an additional burden placed upon a so called
Speaker 2: majority plaintiff that does not exist for a minority plaintiff
Speaker 2: or a plaintiff that is a member of a protected
Speaker 2: class that is a minority. Typically, in a discrimination case
Speaker 2: under Title seven, which is the federal anti discrimination law,
Speaker 2: an employee must show first of all, they belonged to
Speaker 2: a protected class. Two, they did well in their position,
Speaker 2: but were terminated, or they were demoted, or they didn't
Speaker 2: get a promotion, some other adverse action happened, and then
Speaker 2: they were third replaced by or treated worse than someone
Speaker 2: outside of the protected class. But if the person who's
Speaker 2: challenging the adverse action, as this plaintiff is, is a
Speaker 2: member of the traditional majority, for example, a white employee
Speaker 2: bringing a race discrimination claim or a male employee bringing
Speaker 2: a sex discrimination claim, that does not apply. We've seen
Speaker 2: in this case that plaintiff must prove an additional element,
Speaker 2: and that is they must demonstrate background circumstances which proves
Speaker 2: that their employer is the unusual one. That's the language
Speaker 2: of the court, unusual one who discriminates against the majority
Speaker 2: to sustain their claims. And this is another example, as
Speaker 2: you mentioned earlier, of all kinds of courts at the
Speaker 2: appellate level ruling in different ways. There again, is there
Speaker 2: very much a circuit split on this question of whether
Speaker 2: there really needs to be this additional factor proven by
Speaker 2: the plaintiff if they are a member of a majority group.
Speaker 1: How do you think the Supreme Court, without hearing the
Speaker 1: oral arguments, are seeing the briefing, do you have a feel.
Speaker 2: For how they Yeah, My feel is that this is
Speaker 2: the next shoe. I don't think it's going to be
Speaker 2: the last shoe, but this is the next shoe falling
Speaker 2: in the affirmative action changes that have begun already at
Speaker 2: the Supreme Court level, which we saw last year in
Speaker 2: twenty twenty three with respect to college admissions. Everybody who
Speaker 2: does represent employers and employees in the employment bar throughout
Speaker 2: the United States is waiting for the US Supreme Court
Speaker 2: to take further action with respect to both affirmative action
Speaker 2: in the workplace and now in this case, discrimination claims
Speaker 2: in the workplace. And my suspicion is that there will
Speaker 2: be a split in the Supreme Court, and I suspect
Speaker 2: it will be probably either a six y three or
Speaker 2: a five to four, depending on the Chief Justice rules
Speaker 2: in favor of abandoning the background circumstances test and saying,
Speaker 2: as some circuits have said, and indeed, as one of
Speaker 2: the concurring judges said in this case, that discrimination is discrimination,
Speaker 2: and if a white employee, or a male employee, or
Speaker 2: anybody who's member of a quote majority group is discriminated
Speaker 2: against on the basis of their being a part of
Speaker 2: that group, they have a right to proceed with an
Speaker 2: anti discrimination claim irrespective of whether they have these so
Speaker 2: called background circumstances, in addition to the other things that
Speaker 2: a member of a minority group would have to show.
Speaker 1: I agree with you one hundred percent, and I am
Speaker 1: going to play this when we get the decision, we'll
Speaker 1: see if it's six.
Speaker 2: To three, I mean, if past is prologue, I suppose
Speaker 2: then we have a pretty good idea of what's going
Speaker 2: to happen.
Speaker 1: We really do. Thanks so much, Tony for giving us
Speaker 1: this preview of the term. That's Anthony Oncidi of Proskauer
Speaker 1: coming up next, TikTok gets sued again. This is Bloomberg.
Speaker 1: More than a dozen states and the District of Columbia
Speaker 1: sued TikTok this week, saying the popular short term video
Speaker 1: app is designed to be addictive to kids and harms
Speaker 1: their mental health. The lawsuits stem from a national investigation
Speaker 1: into TikTok launched in March of twenty twenty two by
Speaker 1: a bipartisan coalition of attorneys general. The lawsuits claim that
Speaker 1: TikTok design features that addict children to the platform, such
Speaker 1: as the ability to scroll endlessly through content, push notifications
Speaker 1: that come with built in buzzes, and face filters that
Speaker 1: create unattainable appearances for users. A TikTok spokesman said they
Speaker 1: strongly disagree with the claims, many of which they believed
Speaker 1: to be inaccurate and misleading. Joining me is Eric Goldman,
Speaker 1: a professor at Santa Clara University Law School and co
Speaker 1: director of the school's High Tech Law Institute. What are
Speaker 1: the claims here against TikTok?
Speaker 3: State's trains General are taking a position that TikTok has
Speaker 3: designed its service in a way that hurts its users,
Speaker 3: and that its design is both legally problematic, as well
Speaker 3: as its failure to disclose some of the information it
Speaker 3: had was also problematic.
Speaker 1: The California Attorney General Rob Bonta said that California's investigation
Speaker 1: found that TikTok offers unique safety features for users in
Speaker 1: China that are not available to users in the US,
Speaker 1: including usage time limits. But I thought there were default
Speaker 1: screen time limits and other different safeguards that they've introduced.
Speaker 3: To mean that observation is frankly irrelevant. Every service customizes
Speaker 3: for local conditions, whether that's because the users have different
Speaker 3: needs or because the law is different. For example, in
Speaker 3: other countries they don't have the First Amendment, and so
Speaker 3: service in the US just routinely look different than they
Speaker 3: do in other parts of the world.
Speaker 1: Washington's lawsuit accused TikTok of facilitating sexual exploitation of underage users,
Speaker 1: saying TikTok's live streaming and virtual currency operate like a
Speaker 1: virtual strip club with no age restrictions. Is that the
Speaker 1: use of exaggeration to show a point or can they
Speaker 1: prove that?
Speaker 3: Certainly, any efforts to engage in sexual predation on any
Speaker 3: site is troubling, and I wish that didn't occur. I
Speaker 3: wish that wasn't part of the human condition. However, it's
Speaker 3: easy enough for the regulators to point to specific actions
Speaker 3: that they don't like, but it's harder to talk about
Speaker 3: how TikTok might design a service that would prevent those
Speaker 3: actions from ever taking place, and some of the solutions
Speaker 3: that might prevent it would have other collateral damage that
Speaker 3: could to materially degrade the service for everybody, or make
Speaker 3: it impossible for anyone to talk to each other, And
Speaker 3: so it's not really super insightful to talk about the
Speaker 3: virtual crime scene without contemplating the overall ecosystem.
Speaker 1: Are these suits under different states consumer protection laws?
Speaker 3: That's my understanding. So each s they filed its own complaint,
Speaker 3: and each complaint that would have referenced its local statutes
Speaker 3: as part of the allegations, so it's.
Speaker 1: Not one class action lawsuit.
Speaker 3: Well have to be a class action lawsuit for it
Speaker 3: to be consolidated. So over forty state attorney generals are
Speaker 3: coordinating their efforts in a single challenge against Facebook, But
Speaker 3: in this case, for reasons that are unclear to me,
Speaker 3: each state is doing their own thing, but obviously they're
Speaker 3: coordinated as well. But each state is incurring significantly higher
Speaker 3: enforcement costs than if they were to combine their resources.
Speaker 1: Do you think that this is a strong lawsuit?
Speaker 3: The short answers, we don't know how strong these lawsuits
Speaker 3: are because none of the similar lawsuits have reached a
Speaker 3: final resolution that answers the key legal questions. There have
Speaker 3: been many challenges in many different venues against social media
Speaker 3: services for a variety of alleged misdeeds, and many of
Speaker 3: us are still working through the court system waiting appeal
Speaker 3: or additional review by higher courts. And until we hear
Speaker 3: from the higher courts, the data is noisy. We can't
Speaker 3: really tell where the line is today legally, and so
Speaker 3: it's hard to judge the efficacy of these particular suits
Speaker 3: until we get additional data from the appellate courts.
Speaker 1: I feel like another day, another lawsuit against TikTok. Is
Speaker 1: there a point in this sort of piling on? It
Speaker 1: seems like there are many many lawsuits against TikTok already.
Speaker 3: It's a great point, and I would take it one
Speaker 3: step further. California recently passed the law that was designed
Speaker 3: to target alleged addiction of users by the social media
Speaker 3: that won't go into effect for a few years. California's
Speaker 3: involvement in this particular enforced action is basically trying to
Speaker 3: move up the time period of that law before when
Speaker 3: the legislature thinks that the community is ready for it.
Speaker 3: So basically Bonta is jumping the gun on a statute
Speaker 3: that's designed to accomplish the exact same goals, which is
Speaker 3: an unusual and somewhat troubling allocation of prosecutorial resources. Why
Speaker 3: not wait until the statue comes in ef fact that
Speaker 3: the legislature is carefully crafted and it believes requires some
Speaker 3: compliance time to go into effect. Having said that, you know,
Speaker 3: I think that all of the lawsuits and the statutes
Speaker 3: are going to be sort of substantial criticism when they
Speaker 3: go up on appeal, and so nobody really knows the laws,
Speaker 3: and I'm the investment in new lawsuits without uncertainty is
Speaker 3: just in a sense, piling on.
Speaker 1: As TikTok spokesperson pointed to the safeguards that were introduced
Speaker 1: by the company, including default screen time limits, family pairing,
Speaker 1: and privacy defaults for minors under sixteen, Do you see
Speaker 1: that as their defense or might they have another defense?
Speaker 3: It's impossible to talk about a defense until we understand
Speaker 3: precisely what problem the state ages are concerned about, and
Speaker 3: for all of the negativity they introduce, it's not entirely
Speaker 3: clear that we can precisely identify the problem and the
Speaker 3: solution that would ameliorate that problem. So, for example, when
Speaker 3: we talk about this concept of addiction that's not necessarily
Speaker 3: in a clinical sense, that might be more of a
Speaker 3: lay term, and so we don't really have a scientifically
Speaker 3: authorized protocol for how to deal with the clinical condition
Speaker 3: of social media addiction. So in that sense, everyone's kind
Speaker 3: of guessing at what actually will help and what troubles
Speaker 3: means when the state decides to put its finger on
Speaker 3: the scale of those guesses and say we're going to
Speaker 3: side for you, with no clinical evidence to back us up,
Speaker 3: and then no consideration for how the solution might actually
Speaker 3: not solve the problem or actually might make things worse.
Speaker 1: So the FTC sued TikTok in August for violating the
Speaker 1: federal Children's Privacy Law. Is that a different kind of
Speaker 1: suit than this or are they all based on the
Speaker 1: same sort of allegations?
Speaker 3: All of them derived from a core impulse, which is
Speaker 3: that the governments decided that it wants to determine how
Speaker 3: social services should operate. It's tired of letting services negotiate
Speaker 3: that directly with their audience. So whether it's framed as
Speaker 3: a privacy lawsuit or an addiction targeting lawsuit, or a
Speaker 3: statute that designed to hard code specific operational practices, they're
Speaker 3: all reflecting this basic underlying impulse that the government's taking
Speaker 3: over here, and they're going to decide for everyone.
Speaker 1: I mean, they might have waited to see if TikTok
Speaker 1: is even in existence in a few years. What's happening
Speaker 1: with TikTok battling the US law that could ban.
Speaker 3: The app Congress enacted the law earlier this year that
Speaker 3: forces TikTok to change its ownership structure and failing that,
Speaker 3: to be kicked out of the US market entirely. And
Speaker 3: I still find people who have no idea that Congress
Speaker 3: has literally banned TikTok. It's really a shocking development when
Speaker 3: people think about it. Everyone, including Congress, contemplated that the
Speaker 3: law would be subject to a legal challenge. That legal
Speaker 3: challenge is currently pending with the DC Circuit Court of Appeals,
Speaker 3: But the real action is going to come from the
Speaker 3: Supreme Court. Whatever the DC Circuit says is going to
Speaker 3: go to the Supreme Court and then we're going to
Speaker 3: get more of our answer. So until we hear for
Speaker 3: the Supreme Court, everything is pretty speculative.
Speaker 1: The oral arguments at the DC Circuit didn't seem to
Speaker 1: be leaning in TikTok's favor.
Speaker 3: Whatever the DC Circuit opinion says will be of interest,
Speaker 3: but it's going to be subject to review by the
Speaker 3: Supreme Court. So I've not invested a lot of emotional
Speaker 3: energy and the possibility that they're going to do something weird,
Speaker 3: because it really doesn't matter. They're just warming up act
Speaker 3: before the Supreme Court, you know, they're like the opening
Speaker 3: knack to the main scene.
Speaker 1: And what about the lawsuits by private plaintiffs in California
Speaker 1: federal and state court, So.
Speaker 3: That battle is well ahead of this battle, and so
Speaker 3: it's entirely likely that we're going to get answers from
Speaker 3: that court case that will influence this one. And again
Speaker 3: raises the consideration that maybe the AGS pulled the trigger
Speaker 3: a little bit early. They didn't wait to see what
Speaker 3: happened with those cases and didn't then iterate based on
Speaker 3: the less from those cases. They're basically replicating the same
Speaker 3: claims that have been made elsewhere. So there's an enormous
Speaker 3: sense of deja vous about this particular stive enforcement actions.
Speaker 1: There certainly is. Thanks so much, Eric. That's Professor Eric
Speaker 1: Goleman of Santa Clara University School of Law. And that's
Speaker 1: it for this edition of the Bloomberg Law Podcast. Remember
Speaker 1: you can always get the latest legal news by subscribing
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Speaker 1: at Bloomberg dot com, slash podcast, Slash Law. I'm June
Speaker 1: Grosso and this is Bloomberg