1 00:00:00,240 --> 00:00:01,960 Speaker 1: This is Bloomberg Law. 2 00:00:02,040 --> 00:00:04,920 Speaker 2: Employers frequently exploit the weaknesses in the law. 3 00:00:05,000 --> 00:00:08,000 Speaker 3: Courts are going to be asking questions about separation of powers. 4 00:00:08,119 --> 00:00:11,000 Speaker 4: One by one, Google settled with all of these other plaintiffs. 5 00:00:11,039 --> 00:00:14,280 Speaker 1: Interviews with prominent attorneys and Bloomberg legal experts. 6 00:00:14,360 --> 00:00:17,759 Speaker 2: Joining me is immigration law expertly on Fresco, First Amendment 7 00:00:17,800 --> 00:00:19,720 Speaker 2: law expert Caroline Malick. 8 00:00:19,480 --> 00:00:22,920 Speaker 1: Corbin, and the analysis of important legal issues, cases and 9 00:00:23,000 --> 00:00:23,599 Speaker 1: headlines that. 10 00:00:23,680 --> 00:00:26,320 Speaker 4: Trial judge, you may well want to hold a hearing. 11 00:00:26,440 --> 00:00:28,240 Speaker 5: They have never said this case. 12 00:00:28,040 --> 00:00:29,960 Speaker 3: Should never have been brought in the first place. 13 00:00:30,080 --> 00:00:34,440 Speaker 1: Bloomberg Law with June Grosso from Bloomberg Radio. 14 00:00:37,680 --> 00:00:40,720 Speaker 4: Welcome to the weekend edition of Bloomberg Law. I'm Amy 15 00:00:40,800 --> 00:00:43,640 Speaker 4: Morris in for June Grosso. June is off this week. 16 00:00:44,080 --> 00:00:47,080 Speaker 4: Coming up this hour, how Amazon is using a special 17 00:00:47,159 --> 00:00:51,000 Speaker 4: program to decide the fate of sellers with very little oversight. 18 00:00:51,320 --> 00:00:53,680 Speaker 4: We'll also take a look at how lawyers and others 19 00:00:53,680 --> 00:00:58,200 Speaker 4: in the legal system are using and sometimes abusing artificial intelligence. 20 00:00:58,560 --> 00:01:01,080 Speaker 4: All of that on the way on Law, But first 21 00:01:01,120 --> 00:01:03,800 Speaker 4: we start with a roundup of the latest headlines in 22 00:01:03,880 --> 00:01:07,400 Speaker 4: immigration law. Earlier this week, a federal judge struck down 23 00:01:07,480 --> 00:01:10,520 Speaker 4: President Trump's one hundred thousand dollars fee for H one 24 00:01:10,640 --> 00:01:13,560 Speaker 4: B visas. They're often used by large tech companies to 25 00:01:13,600 --> 00:01:16,800 Speaker 4: bring in skilled workers from overseas. Joining us now is 26 00:01:16,880 --> 00:01:20,520 Speaker 4: Leon Fresco, a partner at Holland and Knight. Leon, thank 27 00:01:20,520 --> 00:01:22,280 Speaker 4: you for taking the time with us today. We want 28 00:01:22,280 --> 00:01:24,520 Speaker 4: to start with the H one B visas. The Trump 29 00:01:24,560 --> 00:01:27,959 Speaker 4: administration has already said that it will appeal that ruling. 30 00:01:28,160 --> 00:01:29,960 Speaker 4: So what happens now. 31 00:01:30,319 --> 00:01:33,120 Speaker 5: Well, what happens now is that the case will then 32 00:01:33,200 --> 00:01:36,679 Speaker 5: now go to the First Circuit Court of Appeals. There's 33 00:01:36,760 --> 00:01:39,560 Speaker 5: also a case that's happening where we're waiting for a 34 00:01:39,640 --> 00:01:43,759 Speaker 5: decision from the DC Circuit. And this is a decision 35 00:01:43,880 --> 00:01:48,520 Speaker 5: that was entered into in the District Court of Massachusetts 36 00:01:48,680 --> 00:01:50,720 Speaker 5: where there was a lawsuit filed by the state of 37 00:01:50,760 --> 00:01:54,920 Speaker 5: California and twenty other states saying that there was a 38 00:01:54,960 --> 00:01:59,160 Speaker 5: one hundred thousand dollars fee that the Trump administration had 39 00:01:59,200 --> 00:02:03,160 Speaker 5: placed into the H one B visa program. The H 40 00:02:03,200 --> 00:02:07,200 Speaker 5: one B visa program is a program where employers want 41 00:02:07,200 --> 00:02:10,799 Speaker 5: to hire skilled workers from abroad, and there's a two 42 00:02:10,800 --> 00:02:13,480 Speaker 5: pronged test. The test is, first of all, is the 43 00:02:13,560 --> 00:02:19,040 Speaker 5: occupation one that requires a specific university or master's or 44 00:02:19,120 --> 00:02:23,120 Speaker 5: PhD degree in order to perform that job. For instance, 45 00:02:23,200 --> 00:02:26,520 Speaker 5: does you know, for lawyer that requires a law degree 46 00:02:26,760 --> 00:02:29,040 Speaker 5: in order to do that job? And then the second 47 00:02:29,120 --> 00:02:31,680 Speaker 5: prong of the test is does the person have the 48 00:02:31,760 --> 00:02:36,200 Speaker 5: degree that's necessary in order to perform that job. And 49 00:02:36,280 --> 00:02:38,720 Speaker 5: so what the Trump administration did is that they use 50 00:02:39,120 --> 00:02:41,799 Speaker 5: their same authority that they have under the travel ban, 51 00:02:42,240 --> 00:02:45,600 Speaker 5: which is an authority to ban people from entering the 52 00:02:45,680 --> 00:02:49,679 Speaker 5: United States, meaning people from abroad. And what they said was, 53 00:02:49,760 --> 00:02:52,120 Speaker 5: let's see if we can use this not to ban 54 00:02:52,280 --> 00:02:54,720 Speaker 5: people who want to come in from abroad on H 55 00:02:54,760 --> 00:02:57,440 Speaker 5: one B, but instead say they can only come in 56 00:02:57,760 --> 00:03:01,040 Speaker 5: if they pay a one hundred thousand dollars fee. So 57 00:03:01,080 --> 00:03:03,320 Speaker 5: it'd be like a quasi band. So it's a ban 58 00:03:03,840 --> 00:03:06,440 Speaker 5: unless you do something, which is in this case, pay 59 00:03:06,440 --> 00:03:08,960 Speaker 5: a one hundred thousand dollars fee. And so what the 60 00:03:09,000 --> 00:03:13,160 Speaker 5: twenty States did is they used the Supreme Court president 61 00:03:13,240 --> 00:03:16,400 Speaker 5: that happened in the Tiraffs litigation, where they said that 62 00:03:16,440 --> 00:03:20,400 Speaker 5: when the President was imposing these tariffs pursued to the 63 00:03:20,440 --> 00:03:23,440 Speaker 5: statutory authority that the President claimed he had, he was 64 00:03:23,480 --> 00:03:28,200 Speaker 5: actually in fact levying attacks that only the Congress could 65 00:03:28,280 --> 00:03:31,880 Speaker 5: actually levy. The President couldn't actually sort of create a 66 00:03:31,880 --> 00:03:34,560 Speaker 5: new tariff out of nowhere, and so they said that's 67 00:03:34,600 --> 00:03:37,800 Speaker 5: what he was doing here, and the District Court of 68 00:03:37,840 --> 00:03:41,680 Speaker 5: Massachusetts agreed. The District Court said, yes, in fact, this 69 00:03:41,720 --> 00:03:44,320 Speaker 5: one hundred thousand dollars fee isn't a band. The ban 70 00:03:44,520 --> 00:03:47,760 Speaker 5: could be done because the ban has been approved by 71 00:03:47,840 --> 00:03:51,400 Speaker 5: the Supreme Court in the context of the original Night 72 00:03:51,680 --> 00:03:54,920 Speaker 5: twenty seventeen travel band that was in the Trump versus 73 00:03:54,960 --> 00:03:59,280 Speaker 5: Hawaii case. But instead ban is okay. But a one 74 00:03:59,320 --> 00:04:02,680 Speaker 5: hundred dollar fee is not okay because that's actually a tax, 75 00:04:03,160 --> 00:04:07,360 Speaker 5: and so the tax couldn't be done unless Congress passped okay. 76 00:04:07,360 --> 00:04:11,040 Speaker 4: There are a lot of immigration related cases from the 77 00:04:11,080 --> 00:04:15,720 Speaker 4: Trump administration, many policies that the administration is putting forth 78 00:04:15,800 --> 00:04:19,760 Speaker 4: that are facing court time. One judge has blocked a 79 00:04:19,839 --> 00:04:23,120 Speaker 4: series of those policies. They were adopted after the shooting 80 00:04:23,160 --> 00:04:27,000 Speaker 4: of National Guard members in DC last year. Those policies 81 00:04:27,040 --> 00:04:30,159 Speaker 4: were about holds on work permits and asylum grants, keeping 82 00:04:30,200 --> 00:04:33,000 Speaker 4: people from being able to work, or at least those 83 00:04:33,080 --> 00:04:38,919 Speaker 4: permits and grants being stuck in limbo interminably until a 84 00:04:39,000 --> 00:04:42,480 Speaker 4: judge ruled that that would be illegal as well. Are 85 00:04:42,520 --> 00:04:45,560 Speaker 4: you finding that there are so many cases and so 86 00:04:45,640 --> 00:04:48,200 Speaker 4: many things coming up because the Trump administration seems to 87 00:04:48,279 --> 00:04:52,880 Speaker 4: keep pushing stuff forward that keep facing challenges in court. 88 00:04:53,520 --> 00:04:54,320 Speaker 4: That is correct. 89 00:04:54,360 --> 00:04:58,360 Speaker 5: Every week there is a new administrative effort, whether it 90 00:04:58,400 --> 00:05:02,200 Speaker 5: be a regulation or a policy memo, or a proclamation 91 00:05:02,400 --> 00:05:06,800 Speaker 5: under the ISNA Section two twelve f travel ban statute, 92 00:05:06,920 --> 00:05:10,480 Speaker 5: or a pause. So in that case, this was a 93 00:05:10,480 --> 00:05:14,479 Speaker 5: combination of things. So first, after that shooting near the 94 00:05:14,480 --> 00:05:18,080 Speaker 5: White House, there was a ban that was issued for 95 00:05:18,240 --> 00:05:22,240 Speaker 5: over thirty nine countries for their individuals to come into 96 00:05:22,320 --> 00:05:25,680 Speaker 5: the United States. But then what the administration tried to 97 00:05:25,680 --> 00:05:28,760 Speaker 5: do is to say, fine, we know we have the 98 00:05:28,800 --> 00:05:31,840 Speaker 5: authority to ban people from those thirty nine countries from 99 00:05:31,920 --> 00:05:34,440 Speaker 5: entering the United States again for the same reason we 100 00:05:34,520 --> 00:05:38,039 Speaker 5: discussed earlier, which was the original twenty seventeen Trump versus 101 00:05:38,120 --> 00:05:41,760 Speaker 5: a Y travel baned US Supreme Court decision. Let's see 102 00:05:41,800 --> 00:05:45,160 Speaker 5: if what we can also do is to then ban 103 00:05:45,320 --> 00:05:49,360 Speaker 5: the internal processing from inside the United States for people 104 00:05:49,400 --> 00:05:52,120 Speaker 5: with those cases. And so what was happening is or 105 00:05:52,120 --> 00:05:55,279 Speaker 5: it continues to happen because this decision hasn't really yet 106 00:05:55,320 --> 00:05:57,800 Speaker 5: been implemented, so there's going to need to be further 107 00:05:59,279 --> 00:06:02,560 Speaker 5: litigation here. But what ended up happening is you have 108 00:06:02,640 --> 00:06:05,320 Speaker 5: a lot of foreign students who are already here from 109 00:06:05,360 --> 00:06:07,480 Speaker 5: a lot of these countries, and a lot of foreign 110 00:06:07,720 --> 00:06:10,880 Speaker 5: people on other visas like H one B, the work 111 00:06:10,960 --> 00:06:13,200 Speaker 5: visa we talked about, or l visas, which is that 112 00:06:13,240 --> 00:06:17,160 Speaker 5: they were transferred from abroad into the US for specific work. 113 00:06:17,400 --> 00:06:19,560 Speaker 5: They were already here. There was tens of thousands of 114 00:06:19,600 --> 00:06:23,919 Speaker 5: people already here, and they've been trying to renew statuses 115 00:06:23,960 --> 00:06:27,760 Speaker 5: that they have or change from student visa to other workers' 116 00:06:27,800 --> 00:06:31,200 Speaker 5: status applications, and all of those applications have been put 117 00:06:31,279 --> 00:06:34,360 Speaker 5: on hold. They've simply been tucked into a drawer and 118 00:06:34,480 --> 00:06:37,839 Speaker 5: nothing has been done. So people finally sued saying, what 119 00:06:37,920 --> 00:06:40,000 Speaker 5: are you going to do? You can't just take how 120 00:06:40,040 --> 00:06:43,320 Speaker 5: you can't have taken all of these people's fees and 121 00:06:43,400 --> 00:06:45,599 Speaker 5: decided not to do anything with it. 122 00:06:45,920 --> 00:06:49,800 Speaker 4: Well, exactly because even as some cases are in appeal, 123 00:06:50,160 --> 00:06:52,919 Speaker 4: it appears that the administration is finding other ways to 124 00:06:52,960 --> 00:06:55,880 Speaker 4: go around it. For example, the Department of Homeland Security 125 00:06:56,360 --> 00:06:58,840 Speaker 4: just this past week said it would be restricting certain 126 00:06:58,960 --> 00:07:02,880 Speaker 4: immigrants access to permits because they would have to demonstrate 127 00:07:03,000 --> 00:07:07,799 Speaker 4: economic necessity for their employment, putting more restrictions on allowing 128 00:07:08,000 --> 00:07:11,760 Speaker 4: immigrants to work in the US regardless of what their 129 00:07:11,800 --> 00:07:15,640 Speaker 4: status is. It seems almost like whack a mole for 130 00:07:15,680 --> 00:07:17,760 Speaker 4: the court system to try to figure out which case 131 00:07:17,840 --> 00:07:20,040 Speaker 4: is going where and at what time, and who is 132 00:07:20,080 --> 00:07:22,880 Speaker 4: bringing this one, and then which agency is involved with 133 00:07:22,920 --> 00:07:23,440 Speaker 4: that one. 134 00:07:23,800 --> 00:07:27,800 Speaker 5: Yeah. Correct, It's very complicated. And the fact is there 135 00:07:27,800 --> 00:07:30,440 Speaker 5: are many lawsuits having to be filed all throughout the 136 00:07:30,520 --> 00:07:34,320 Speaker 5: United States. Because the Supreme Court ended earlier this year 137 00:07:34,800 --> 00:07:37,360 Speaker 5: the process where you could file one case that would 138 00:07:37,360 --> 00:07:40,800 Speaker 5: sort of have a nationwide injunction and then you could 139 00:07:41,200 --> 00:07:43,840 Speaker 5: then just take that case directly to the Supreme Court. 140 00:07:43,880 --> 00:07:46,880 Speaker 5: The Supreme Court said you had to file different cases 141 00:07:46,920 --> 00:07:50,120 Speaker 5: for different parts of the United States, and then those 142 00:07:50,160 --> 00:07:53,080 Speaker 5: cases would work their way up to the Supreme Court. 143 00:07:53,520 --> 00:07:55,680 Speaker 5: So what ends up happening is you end up having 144 00:07:55,680 --> 00:08:00,320 Speaker 5: a slower and also fragmented area where it perhaps in 145 00:08:00,360 --> 00:08:03,040 Speaker 5: one part of the country something is legal and in 146 00:08:03,080 --> 00:08:06,360 Speaker 5: another part of the country something is illegal. You see 147 00:08:06,360 --> 00:08:10,280 Speaker 5: that now, for instance, with regard to whether the administration 148 00:08:10,440 --> 00:08:13,720 Speaker 5: can detain you and your human body while you are 149 00:08:13,720 --> 00:08:19,200 Speaker 5: in deportation proceedings. In some circuits that's allowed, meaning if 150 00:08:19,240 --> 00:08:21,800 Speaker 5: you are here and you are in a removal proceeding, 151 00:08:22,040 --> 00:08:25,520 Speaker 5: they can keep you detained without any possibility of bond 152 00:08:26,040 --> 00:08:28,240 Speaker 5: at all. And in other parts of the country that's 153 00:08:28,280 --> 00:08:30,920 Speaker 5: not possible because those circuits have said, no, they have 154 00:08:30,960 --> 00:08:33,280 Speaker 5: to give you a bond. And so this is the 155 00:08:33,280 --> 00:08:35,880 Speaker 5: same with the work permit case that you've talked about, 156 00:08:36,160 --> 00:08:39,560 Speaker 5: which is that the administration is now trying to say 157 00:08:39,600 --> 00:08:42,800 Speaker 5: to about a million people who currently have work permits 158 00:08:42,840 --> 00:08:45,960 Speaker 5: that their renewals are going to be taken away unless 159 00:08:45,960 --> 00:08:49,560 Speaker 5: they can show an economic necessity for their work permit. 160 00:08:49,600 --> 00:08:53,120 Speaker 5: And that's going to be completely discretionary decision that the 161 00:08:53,200 --> 00:08:56,280 Speaker 5: agency makes. And so now all of these individuals are 162 00:08:56,280 --> 00:08:59,520 Speaker 5: going to have to file different lawsuits in different parts 163 00:08:59,559 --> 00:09:03,080 Speaker 5: of the country unless and until finally one of the 164 00:09:03,160 --> 00:09:05,400 Speaker 5: cases makes it up to the Supreme Court. 165 00:09:05,600 --> 00:09:09,120 Speaker 4: Is this such a tangled web that this is probably 166 00:09:09,160 --> 00:09:11,080 Speaker 4: something the courts are going to still be dealing with 167 00:09:11,160 --> 00:09:14,320 Speaker 4: even after this Trump administration is done. 168 00:09:14,880 --> 00:09:17,680 Speaker 5: Obviously will depend who the next president is. But let's 169 00:09:17,679 --> 00:09:20,240 Speaker 5: say the next president is from a different party than 170 00:09:20,320 --> 00:09:24,840 Speaker 5: President Trump's party and tries to unwind a lot of 171 00:09:24,880 --> 00:09:28,200 Speaker 5: the Trump administration's efforts. What you will actually end up 172 00:09:28,200 --> 00:09:30,560 Speaker 5: seeing is so, yes, some of them will be more 173 00:09:30,559 --> 00:09:33,880 Speaker 5: easily unwound than others. But then you'll have people from 174 00:09:34,200 --> 00:09:38,680 Speaker 5: the perspective of President Trump who will sue saying that 175 00:09:38,800 --> 00:09:43,240 Speaker 5: the unwinding of the efforts that the Trump administration implemented 176 00:09:43,640 --> 00:09:48,120 Speaker 5: also violate the Administrative Procedure Act. And so all of 177 00:09:48,160 --> 00:09:50,079 Speaker 5: this is going to be so tangled that it won't 178 00:09:50,120 --> 00:09:53,720 Speaker 5: just be so easy for some future president to deactivate 179 00:09:54,040 --> 00:09:55,320 Speaker 5: what President Trump did. 180 00:09:55,760 --> 00:09:57,760 Speaker 4: What is the bottom line for the courts? Then they 181 00:09:57,840 --> 00:09:59,839 Speaker 4: just have to keep on keeping on through this. Is 182 00:10:00,080 --> 00:10:03,559 Speaker 4: any recourse I mean, can they? I don't know. I 183 00:10:03,600 --> 00:10:05,839 Speaker 4: don't think Congress can get involved at this point because 184 00:10:05,840 --> 00:10:09,160 Speaker 4: now this is firmly within the jurisdiction of the courts. 185 00:10:09,200 --> 00:10:12,640 Speaker 4: But the way you described it, it's not just the 186 00:10:12,679 --> 00:10:15,720 Speaker 4: Supreme Court, and it's not just the state supreme courts. 187 00:10:15,720 --> 00:10:18,120 Speaker 4: It is now down to the different district levels. 188 00:10:19,240 --> 00:10:22,400 Speaker 5: Well, absolutely, the courts. I think the best thing that 189 00:10:22,440 --> 00:10:25,040 Speaker 5: the courts can do in these situations is work through 190 00:10:25,080 --> 00:10:27,480 Speaker 5: these cases as quickly as possible to try to get 191 00:10:27,520 --> 00:10:31,280 Speaker 5: people finality on all of these important issues. As quickly 192 00:10:31,280 --> 00:10:34,360 Speaker 5: as possible, even if that turns the court system into, 193 00:10:34,559 --> 00:10:37,800 Speaker 5: you know, an immigration focus system, but that is where 194 00:10:37,800 --> 00:10:41,000 Speaker 5: a lot of the case law and a lot of 195 00:10:41,000 --> 00:10:44,200 Speaker 5: the memos and a lot of the policies are being 196 00:10:44,200 --> 00:10:47,520 Speaker 5: focused on. To other administrations have other focuses, but this 197 00:10:47,600 --> 00:10:50,960 Speaker 5: administration has an immigration as a very very large focus. 198 00:10:51,240 --> 00:10:52,880 Speaker 5: So that means that a lot of the cases that 199 00:10:52,920 --> 00:10:55,000 Speaker 5: the courts are going to need to be doing are 200 00:10:55,040 --> 00:10:57,920 Speaker 5: immigration related. That certainly wasn't what a lot of the 201 00:10:58,040 --> 00:11:00,880 Speaker 5: Supreme Court justices ever came on the bench to do, 202 00:11:01,440 --> 00:11:04,160 Speaker 5: or a lot of these appellate court or district court justices. 203 00:11:04,480 --> 00:11:07,520 Speaker 5: But now that this is the highest area of regulation 204 00:11:07,640 --> 00:11:09,960 Speaker 5: that the government is engaging in, they're going to have 205 00:11:10,000 --> 00:11:11,320 Speaker 5: to move these cases faster. 206 00:11:11,440 --> 00:11:11,600 Speaker 6: Now. 207 00:11:11,600 --> 00:11:16,040 Speaker 5: One thing interesting, Congress can actually get involved in fixing 208 00:11:16,120 --> 00:11:18,600 Speaker 5: a lot of these policies and saying that certain memos 209 00:11:18,640 --> 00:11:22,680 Speaker 5: can or cannot be done. But the problem is they 210 00:11:22,920 --> 00:11:25,640 Speaker 5: refuse to sort of get involved in that as part 211 00:11:25,679 --> 00:11:29,520 Speaker 5: of the appropriations process to say we're going to defund 212 00:11:29,920 --> 00:11:33,559 Speaker 5: a certain memo or say you can't do a certain policy. 213 00:11:34,080 --> 00:11:37,960 Speaker 5: And so it'll be interesting to see if the Congress 214 00:11:38,040 --> 00:11:42,679 Speaker 5: changes hands, will there be more of this attempt for Congress, 215 00:11:43,080 --> 00:11:46,480 Speaker 5: in terms of future appropriations bills, to say that they 216 00:11:46,520 --> 00:11:49,120 Speaker 5: will not fund. Now here's the problem. They can't say 217 00:11:49,120 --> 00:11:51,320 Speaker 5: they're not going to fund the Department of Homeland Security 218 00:11:51,360 --> 00:11:55,120 Speaker 5: because now that's been funded for the remainder of the 219 00:11:55,160 --> 00:11:58,920 Speaker 5: Trump administration. But perhaps they can say that they won't 220 00:11:58,920 --> 00:12:04,319 Speaker 5: fund other parts of the government unless certain appropriations memos 221 00:12:04,400 --> 00:12:08,520 Speaker 5: happen that say, hey, look, you can't just refuse to 222 00:12:08,600 --> 00:12:12,880 Speaker 5: do immigration applications anymore, or you can't refuse people from 223 00:12:12,920 --> 00:12:16,439 Speaker 5: certain countries, or you can't refuse to do work permits, 224 00:12:16,720 --> 00:12:18,840 Speaker 5: that kind of thing. So we'll have to see where 225 00:12:18,880 --> 00:12:20,000 Speaker 5: the Congress wants to go. 226 00:12:22,559 --> 00:12:25,240 Speaker 4: Our thanks to Holland and Knight partner Leon Fresco for 227 00:12:25,440 --> 00:12:28,360 Speaker 4: joining us fascinating discussion. Now up next, we're going to 228 00:12:28,400 --> 00:12:31,200 Speaker 4: turn to Amazon and a special program designed to protect 229 00:12:31,240 --> 00:12:35,319 Speaker 4: sellers against copyright infringers and how it could be overstepping 230 00:12:35,360 --> 00:12:38,120 Speaker 4: a bit. You're listening to Bloomberg Law. I'm Ami Morrison 231 00:12:38,200 --> 00:12:54,319 Speaker 4: for June Grosso. This is Bloomberg. You're listening to Bloomberg 232 00:12:54,440 --> 00:12:58,400 Speaker 4: Law with June GROSSEO from Bloomberg Radio. Thank you for 233 00:12:58,480 --> 00:13:01,360 Speaker 4: listening to the weekend edition of Bloomberg Law. I'm Amy 234 00:13:01,400 --> 00:13:05,040 Speaker 4: Morris and for June Grosso. Amazon has a special program 235 00:13:05,080 --> 00:13:08,400 Speaker 4: that's designed to quickly weed out sellers that violate patent 236 00:13:08,520 --> 00:13:12,400 Speaker 4: law and maybe ripping off other legitimate sellers. But Amazon 237 00:13:12,559 --> 00:13:15,680 Speaker 4: size as the largest online retailer and the lack of 238 00:13:15,720 --> 00:13:18,640 Speaker 4: oversight on the program has some legal experts worried that 239 00:13:18,720 --> 00:13:22,280 Speaker 4: the company may be wielding too much power. Bloomberg Legal 240 00:13:22,360 --> 00:13:25,520 Speaker 4: reporter Annalie's Levy has a story on this. She joins 241 00:13:25,600 --> 00:13:27,800 Speaker 4: us now, Analise, thank you so much for taking the 242 00:13:27,840 --> 00:13:28,480 Speaker 4: time with us. 243 00:13:29,320 --> 00:13:31,440 Speaker 6: Of course, I'm really excited to talk about that story. 244 00:13:32,160 --> 00:13:35,280 Speaker 4: It's a great story. First, let's get some background on it. 245 00:13:35,280 --> 00:13:39,839 Speaker 4: It's the Amazon Patent Evaluation Express. How does this work? 246 00:13:39,920 --> 00:13:43,000 Speaker 4: You and your story refer to this as a pseudo court. 247 00:13:44,240 --> 00:13:47,040 Speaker 2: Yes. So it starts by a patent owner, and this 248 00:13:47,120 --> 00:13:50,120 Speaker 2: can be a patent owner that does not sell products 249 00:13:50,160 --> 00:13:52,840 Speaker 2: on Amazon. It can be anyone who owns a patent 250 00:13:53,520 --> 00:13:57,720 Speaker 2: files a complaint against a seller, and the seller only 251 00:13:57,760 --> 00:14:01,959 Speaker 2: has three weeks to respond, and their options include opting 252 00:14:02,000 --> 00:14:06,400 Speaker 2: in to Amazon's patent court, which severely limits the defenses 253 00:14:06,440 --> 00:14:10,560 Speaker 2: that they're able to present. They can take it to 254 00:14:10,640 --> 00:14:14,920 Speaker 2: federal district court, which is an extremely expensive process to 255 00:14:15,080 --> 00:14:19,440 Speaker 2: litigate a patent infringement claim, or they don't respond and 256 00:14:19,520 --> 00:14:21,760 Speaker 2: their products are immediately taken down. 257 00:14:22,560 --> 00:14:25,920 Speaker 4: Okay, So is it an actual court with all the 258 00:14:26,000 --> 00:14:29,240 Speaker 4: rights and responsibilities and the legal that goes along with 259 00:14:29,320 --> 00:14:31,200 Speaker 4: it or does it just work like that? 260 00:14:31,280 --> 00:14:31,400 Speaker 5: Like? 261 00:14:31,480 --> 00:14:32,680 Speaker 4: How does this work? 262 00:14:33,520 --> 00:14:37,960 Speaker 2: There is a neutral evaluator is what Amazon calls it, 263 00:14:38,000 --> 00:14:42,280 Speaker 2: who serves as the judge over these proceedings. It's an 264 00:14:42,360 --> 00:14:44,960 Speaker 2: attorney that does not work at Amazon. They work at 265 00:14:45,000 --> 00:14:48,840 Speaker 2: outside firms and Amazon selects them and assigns them to cases. 266 00:14:49,480 --> 00:14:52,120 Speaker 2: And it is very similar to a court. Each party 267 00:14:52,200 --> 00:14:57,600 Speaker 2: files briefs, they do not exchange evidence though, and like 268 00:14:57,640 --> 00:15:00,880 Speaker 2: I said earlier, the defendants are very limited and what 269 00:15:00,960 --> 00:15:05,520 Speaker 2: defenses they can present, So that is different from what 270 00:15:05,560 --> 00:15:09,560 Speaker 2: would happen in a district court case. And it moves 271 00:15:09,640 --> 00:15:13,720 Speaker 2: extremely quickly. These decisions are usually issued within a matter 272 00:15:13,760 --> 00:15:19,760 Speaker 2: of weeks, whereas a case in federal court usually takes 273 00:15:19,880 --> 00:15:22,760 Speaker 2: years for patent infringement allegations. 274 00:15:23,880 --> 00:15:26,880 Speaker 4: Is that why the participants may be more inclined to 275 00:15:27,040 --> 00:15:31,720 Speaker 4: use this evaluation process or quote evaluation express because it's 276 00:15:31,800 --> 00:15:34,280 Speaker 4: faster and maybe doesn't cost as much as a regular 277 00:15:34,320 --> 00:15:34,880 Speaker 4: district court. 278 00:15:35,880 --> 00:15:38,760 Speaker 2: Yes, that's definitely one of the reasons that many parties 279 00:15:38,800 --> 00:15:42,160 Speaker 2: opt in, and Amazon says that that's why they've received 280 00:15:42,200 --> 00:15:47,720 Speaker 2: so much good feedback about the program. Another thing that 281 00:15:47,800 --> 00:15:51,360 Speaker 2: is very big for patent owners is that they can 282 00:15:51,520 --> 00:15:57,080 Speaker 2: essentially receive relief that they don't often receive in federal 283 00:15:57,120 --> 00:16:01,280 Speaker 2: district court. And by that, I mean an injunction by 284 00:16:01,320 --> 00:16:07,400 Speaker 2: having their competitors or this acused infringers' products permanently taken down. 285 00:16:08,320 --> 00:16:13,960 Speaker 2: Federal courts do not issue those. Often patent owners have 286 00:16:14,040 --> 00:16:16,400 Speaker 2: to meet a very high bar to qualify for those. 287 00:16:16,480 --> 00:16:19,640 Speaker 2: They have to show that monetary damages would not be 288 00:16:19,840 --> 00:16:25,560 Speaker 2: enough to compensate them if a defendant is shown to 289 00:16:25,680 --> 00:16:29,840 Speaker 2: have infringed. But Amazon, they can get that relief. 290 00:16:29,560 --> 00:16:30,520 Speaker 6: In a matter of weeks. 291 00:16:30,800 --> 00:16:36,800 Speaker 2: And because so many businesses rely on Amazon as their 292 00:16:36,920 --> 00:16:42,080 Speaker 2: number one sales venue, it essentially serves as an injunction 293 00:16:42,160 --> 00:16:44,360 Speaker 2: that a federal court would issue. 294 00:16:44,800 --> 00:16:47,240 Speaker 4: And you know, that's one of the pieces that you make, 295 00:16:47,600 --> 00:16:48,920 Speaker 4: or one of the points that you make in your 296 00:16:48,920 --> 00:16:51,400 Speaker 4: piece is that Amazon is really big. It has almost 297 00:16:51,440 --> 00:16:54,120 Speaker 4: as much power as a federal judge. Because of the 298 00:16:54,160 --> 00:16:57,560 Speaker 4: relief that it can give patent owners, and where is 299 00:16:57,600 --> 00:17:00,720 Speaker 4: the danger in that? Though in your report, what have 300 00:17:00,760 --> 00:17:01,160 Speaker 4: you found? 301 00:17:02,160 --> 00:17:07,280 Speaker 2: I mean the danger is that they're wielding all of 302 00:17:07,320 --> 00:17:15,000 Speaker 2: this power to essentially destroy sellers without the benefits that 303 00:17:15,040 --> 00:17:18,800 Speaker 2: accused infringers typically have in federal court. And you know, 304 00:17:18,880 --> 00:17:23,479 Speaker 2: there's no public docket for these cases. Amazon is pretty 305 00:17:23,600 --> 00:17:27,400 Speaker 2: secretive about it. They make each party that participates agree 306 00:17:27,680 --> 00:17:30,840 Speaker 2: that they'll keep everything that happens in the process confidential. 307 00:17:31,600 --> 00:17:36,080 Speaker 2: The briefs aren't public, the decisions that their quasi judges 308 00:17:36,160 --> 00:17:40,639 Speaker 2: issue are no public. So, as one law professor I 309 00:17:40,640 --> 00:17:43,720 Speaker 2: spoke to you said, there could be a lot going wrong, 310 00:17:43,840 --> 00:17:45,720 Speaker 2: but we don't know because we can't see it. 311 00:17:46,720 --> 00:17:46,880 Speaker 5: Right. 312 00:17:46,920 --> 00:17:48,960 Speaker 4: That was another point that you made in your piece 313 00:17:49,080 --> 00:17:53,520 Speaker 4: is that the secrecy is pretty right. No public documents, 314 00:17:53,800 --> 00:17:56,399 Speaker 4: You don't even know who the judges are when you 315 00:17:56,640 --> 00:18:01,440 Speaker 4: enter this system. It also seems like it automatically favors 316 00:18:01,560 --> 00:18:05,480 Speaker 4: the rights owner without really considering the story behind the 317 00:18:05,560 --> 00:18:10,200 Speaker 4: alleged infringer, because, as you mentioned, there's only so much 318 00:18:10,240 --> 00:18:13,240 Speaker 4: evidence that the defendant can present. Is that correct? 319 00:18:14,280 --> 00:18:18,639 Speaker 2: Yes, the patent owners walk into these proceedings with huge leverage. 320 00:18:18,760 --> 00:18:22,760 Speaker 2: One because they know that the risk for the accused 321 00:18:22,800 --> 00:18:26,239 Speaker 2: infringer is potentially losing their business if all of their 322 00:18:26,280 --> 00:18:30,320 Speaker 2: products are taken down. And two, they know that the 323 00:18:30,359 --> 00:18:34,600 Speaker 2: accused seller can't argue that their patents are invalid, which 324 00:18:35,160 --> 00:18:40,080 Speaker 2: is often a big argument that comes up in federal 325 00:18:40,119 --> 00:18:45,680 Speaker 2: core cases. And the parties do know once a judge 326 00:18:45,840 --> 00:18:48,800 Speaker 2: is assigned to their case, the parties are informed of 327 00:18:48,840 --> 00:18:52,360 Speaker 2: who that is, but Amazon does not disclose who those 328 00:18:52,440 --> 00:18:55,679 Speaker 2: judges are to the public. And the only reason we 329 00:18:55,680 --> 00:18:59,400 Speaker 2: were able to get these documents is because parties that 330 00:18:59,720 --> 00:19:02,880 Speaker 2: ride trying to avoid the Amazon process or we're upset 331 00:19:03,000 --> 00:19:06,480 Speaker 2: with the decision that it handed down, filed these documents 332 00:19:06,520 --> 00:19:09,560 Speaker 2: as exhibits once they moved the fight to federal court. 333 00:19:10,520 --> 00:19:13,119 Speaker 4: Because this is all in the Amazon ecosystem and in 334 00:19:13,160 --> 00:19:16,720 Speaker 4: the Amazon bubble. Is this legal? I mean, they can 335 00:19:16,800 --> 00:19:18,600 Speaker 4: do this because it's their house right. 336 00:19:19,640 --> 00:19:25,879 Speaker 2: Yes, they're policing their own platform. There are other large 337 00:19:25,920 --> 00:19:32,560 Speaker 2: retailers that have IP complaint systems that patent inners can 338 00:19:32,600 --> 00:19:37,199 Speaker 2: also use. Walmart has one, I believe eBay has one, 339 00:19:37,560 --> 00:19:43,400 Speaker 2: but those don't appear to create a court, a mini 340 00:19:43,480 --> 00:19:46,320 Speaker 2: court system, if you want to call it that. They 341 00:19:46,320 --> 00:19:49,920 Speaker 2: don't hire outside attorneys to serve as evaluators. I don't 342 00:19:49,920 --> 00:19:53,080 Speaker 2: believe the parties exchange briefs like they would in court. 343 00:19:54,240 --> 00:19:56,520 Speaker 2: They're much different than why Amazon has created. 344 00:19:56,560 --> 00:19:56,840 Speaker 3: Here. 345 00:19:57,520 --> 00:20:02,000 Speaker 4: You go into a case between Lack and our Vlock, 346 00:20:02,080 --> 00:20:05,840 Speaker 4: and these are folks who make locks for recreational vehicles, 347 00:20:05,960 --> 00:20:11,720 Speaker 4: and our Vlock accused Latchet of infringing on their product, 348 00:20:11,880 --> 00:20:15,040 Speaker 4: and they went to this case. When they went to 349 00:20:15,080 --> 00:20:17,600 Speaker 4: this through this process with Amazon and Latch it lost. 350 00:20:18,960 --> 00:20:22,240 Speaker 4: Is there recourse beyond that? I mean at that point, 351 00:20:22,280 --> 00:20:24,480 Speaker 4: can they take it to a regular court? Is there 352 00:20:24,480 --> 00:20:26,360 Speaker 4: an appeals process within Amazon? 353 00:20:27,280 --> 00:20:30,880 Speaker 2: There is not an appeals process within Amazon. But Amazon 354 00:20:30,920 --> 00:20:34,520 Speaker 2: has made it clear that if a party receives a 355 00:20:34,600 --> 00:20:39,159 Speaker 2: conflicting decision, either from a federal court or from the 356 00:20:39,160 --> 00:20:43,520 Speaker 2: patent office, that they will respect that decision. And I 357 00:20:43,560 --> 00:20:47,400 Speaker 2: believe one of it, one of Amazon's vice presidents has 358 00:20:47,440 --> 00:20:51,239 Speaker 2: testified at a congressional hearing about this and said, you know, 359 00:20:51,320 --> 00:20:56,239 Speaker 2: we are aware that our decisions don't hold up like 360 00:20:56,280 --> 00:21:00,359 Speaker 2: a federal court decision would, so we respect those if 361 00:21:00,400 --> 00:21:02,800 Speaker 2: they conflict with the decision we've issued. 362 00:21:03,800 --> 00:21:06,360 Speaker 4: So then the onus is on the defendant to come 363 00:21:06,440 --> 00:21:08,920 Speaker 4: up with the money and the time and the lawyers 364 00:21:09,000 --> 00:21:12,399 Speaker 4: to go to a regular court and then take all 365 00:21:12,520 --> 00:21:16,479 Speaker 4: the time that may that they may not have then 366 00:21:16,480 --> 00:21:18,639 Speaker 4: they certainly didn't have when they went into the patent 367 00:21:18,680 --> 00:21:22,160 Speaker 4: evaluation express. That's why they went the Amazon route because 368 00:21:22,160 --> 00:21:23,040 Speaker 4: it's cheaper and faster. 369 00:21:24,440 --> 00:21:29,560 Speaker 2: Yes, And they if they even do go to federal 370 00:21:29,600 --> 00:21:32,159 Speaker 2: court and decide to go that route, they know that 371 00:21:32,200 --> 00:21:35,840 Speaker 2: they're losing money every single day that these products are down. 372 00:21:36,240 --> 00:21:38,639 Speaker 2: I mean, one seller who had their products deed listed 373 00:21:38,680 --> 00:21:42,120 Speaker 2: said they were losing upwards of seventy thousand dollars per day. 374 00:21:42,720 --> 00:21:45,640 Speaker 2: So even if a party does want to take this 375 00:21:46,280 --> 00:21:49,000 Speaker 2: bite to federal court, if they're upset with Amazon decision, 376 00:21:49,400 --> 00:21:52,000 Speaker 2: they know that's going to be a huge financial investment 377 00:21:52,119 --> 00:21:55,040 Speaker 2: and they're not receiving the revenue that they're used to 378 00:21:55,119 --> 00:21:59,359 Speaker 2: from Amazon because their products are gone, Which is why 379 00:21:59,760 --> 00:22:04,800 Speaker 2: men many parties appear to just settle these cases. They 380 00:22:04,920 --> 00:22:08,520 Speaker 2: understand the huge threat of their products being delisted and 381 00:22:09,480 --> 00:22:12,560 Speaker 2: come to the decision that it's probably cheaper to pay 382 00:22:12,640 --> 00:22:17,520 Speaker 2: up than maybe bite a patent that they strongly believe 383 00:22:17,560 --> 00:22:18,160 Speaker 2: is invalid. 384 00:22:19,040 --> 00:22:23,159 Speaker 4: So they have the option then of settling, and they 385 00:22:23,160 --> 00:22:24,479 Speaker 4: can still remain listed. 386 00:22:25,440 --> 00:22:28,880 Speaker 2: Yes, that is one of the options that Amazon provides 387 00:22:29,119 --> 00:22:32,639 Speaker 2: if a complaint is filed, if the parties work it 388 00:22:32,760 --> 00:22:38,160 Speaker 2: out amongst themselves, then the patent owner can retract the complaint. 389 00:22:38,520 --> 00:22:42,119 Speaker 2: But again, they only have three weeks to do that. 390 00:22:43,720 --> 00:22:47,400 Speaker 4: So what's the bottom line here? What is are other 391 00:22:47,560 --> 00:22:50,399 Speaker 4: attorneys kind of getting involved in this and kind of 392 00:22:50,520 --> 00:22:52,840 Speaker 4: and red flagging it and hey, wait a second, let's 393 00:22:52,880 --> 00:22:55,760 Speaker 4: let's see if there's a better way to do the system. 394 00:22:56,840 --> 00:23:01,040 Speaker 2: I mean, many attorneys are definitely concerned that so many 395 00:23:01,320 --> 00:23:06,040 Speaker 2: infringement decisions are being made by a quasi court with 396 00:23:06,200 --> 00:23:11,240 Speaker 2: no oversight whatsoever. A good amount of attorneys I spoke 397 00:23:11,280 --> 00:23:16,240 Speaker 2: to you said that they caution their clients about opting 398 00:23:16,280 --> 00:23:20,720 Speaker 2: into the Amazon court because again, they don't know who 399 00:23:20,760 --> 00:23:24,160 Speaker 2: these judges are until they're assigned. They may not have 400 00:23:24,920 --> 00:23:29,200 Speaker 2: a background in the specific technolical area that their products 401 00:23:29,560 --> 00:23:30,119 Speaker 2: are within. 402 00:23:30,760 --> 00:23:32,480 Speaker 6: There's no appeals process. 403 00:23:32,160 --> 00:23:37,560 Speaker 2: Within Amazon, so they're very wary about it, but they 404 00:23:37,560 --> 00:23:41,760 Speaker 2: do acknowledge the why it's so enticing with the speed 405 00:23:41,800 --> 00:23:42,280 Speaker 2: and price. 406 00:23:43,240 --> 00:23:45,800 Speaker 4: Annalie's LEVI want to thank you so much for your 407 00:23:45,880 --> 00:23:48,919 Speaker 4: time on this matter. This is a fascinating subject and 408 00:23:48,960 --> 00:23:51,560 Speaker 4: it is a great article on the Bloomberg terminal. Thank 409 00:23:51,560 --> 00:23:53,680 Speaker 4: you so much for taking the time with us. Annalise Levy, 410 00:23:53,880 --> 00:23:56,600 Speaker 4: reporter for Bloomberg Law. She joined us and now up 411 00:23:56,600 --> 00:23:58,680 Speaker 4: next we do a deep dive on the pros and 412 00:23:58,720 --> 00:24:02,240 Speaker 4: cons of AI adopt in the legal world. I Amy 413 00:24:02,320 --> 00:24:04,560 Speaker 4: morris in for June Grosso. This is Bloomberg. 414 00:24:12,359 --> 00:24:16,919 Speaker 1: You're listening to Bloomberg Law with June Grosso from Bloomberg Radio. 415 00:24:18,160 --> 00:24:21,000 Speaker 4: You're listening to the weekend edition of Bloomberg Law. I'm 416 00:24:21,000 --> 00:24:23,680 Speaker 4: Amy morris in for June Grosso. June. We'll be back 417 00:24:23,680 --> 00:24:27,960 Speaker 4: next week. The legal world is using artificial intelligence more often, 418 00:24:28,040 --> 00:24:31,760 Speaker 4: but two mixed results so far. Bloomberg recently reported on 419 00:24:31,800 --> 00:24:35,480 Speaker 4: two lawyers sanctioned over using AI in a federal case 420 00:24:35,680 --> 00:24:38,919 Speaker 4: and failing to catch those mistakes. Justin Daniels is a 421 00:24:38,960 --> 00:24:43,560 Speaker 4: shareholder at Baker Donaldson and focuses on technology and artificial intelligence. 422 00:24:43,840 --> 00:24:45,920 Speaker 4: He joins us now for a deep dive on how 423 00:24:46,000 --> 00:24:50,679 Speaker 4: AI is reshaping how lawyers work. Justin, it's a pleasure. 424 00:24:50,760 --> 00:24:53,760 Speaker 4: Thanks for joining us today. You start your piece saying 425 00:24:53,800 --> 00:24:56,679 Speaker 4: that when it comes to AI, the legal profession is 426 00:24:56,760 --> 00:24:57,960 Speaker 4: measuring the wrong thing. 427 00:24:58,080 --> 00:25:02,960 Speaker 3: What do you mean, well, everyone is focused on fewer 428 00:25:03,160 --> 00:25:07,600 Speaker 3: billable hours. Work gets done faster, it's more efficient. And 429 00:25:07,640 --> 00:25:09,720 Speaker 3: I think they're asking the wrong question. 430 00:25:10,560 --> 00:25:12,119 Speaker 4: What's the question they should be asking. 431 00:25:12,720 --> 00:25:16,360 Speaker 3: The question that they should be asking is how do 432 00:25:16,440 --> 00:25:22,440 Speaker 3: I leverage AI tools to enhance judgment. 433 00:25:22,760 --> 00:25:25,160 Speaker 6: To lead to better outcomes. 434 00:25:25,720 --> 00:25:30,000 Speaker 3: I think the key thing is when I do work 435 00:25:31,000 --> 00:25:34,439 Speaker 3: like I had a recent opportunity to help a client 436 00:25:34,920 --> 00:25:41,640 Speaker 3: create a library of AI clauses for their new agentic 437 00:25:41,680 --> 00:25:44,800 Speaker 3: AI offering, and their clients are in a regulated industry, 438 00:25:45,800 --> 00:25:49,720 Speaker 3: I was able to leverage AI to create a better 439 00:25:49,800 --> 00:25:55,280 Speaker 3: work product in less time than if I had no 440 00:25:55,640 --> 00:25:56,359 Speaker 3: AI tool. 441 00:25:56,600 --> 00:25:59,800 Speaker 6: But here's the key. If all the client sees is 442 00:25:59,840 --> 00:26:02,400 Speaker 6: an bill with fewer hours. 443 00:26:02,359 --> 00:26:04,879 Speaker 3: They don't see what they almost didn't get, which was 444 00:26:05,480 --> 00:26:08,320 Speaker 3: a work product that isn't as good quality because I 445 00:26:08,400 --> 00:26:12,920 Speaker 3: leveraged AI to improve my judgment, not substituted. 446 00:26:13,040 --> 00:26:14,640 Speaker 6: And that's a really key distinction. 447 00:26:14,760 --> 00:26:17,680 Speaker 3: When we talk about the two lawyers in this case 448 00:26:17,760 --> 00:26:20,879 Speaker 3: that got sanctioned in a court case. 449 00:26:21,720 --> 00:26:24,600 Speaker 4: I want to get some clarity on that. Of course, 450 00:26:25,200 --> 00:26:28,199 Speaker 4: AI can be used to enhance a judgment and not 451 00:26:28,400 --> 00:26:32,679 Speaker 4: substitute a judgment. That makes perfect sense. Where is the 452 00:26:32,800 --> 00:26:35,960 Speaker 4: risk that those two might become conflated. It seems like 453 00:26:36,000 --> 00:26:38,119 Speaker 4: it would be clear for an attorney to say, this 454 00:26:38,280 --> 00:26:41,040 Speaker 4: is not my brain, this is just helping my brain 455 00:26:41,200 --> 00:26:42,200 Speaker 4: do a better job. 456 00:26:43,440 --> 00:26:46,960 Speaker 3: So I think where this is coming up and in 457 00:26:47,080 --> 00:26:50,399 Speaker 3: litigation is a great example because let's step back and 458 00:26:50,480 --> 00:26:54,919 Speaker 3: look at that process. When you're in litigation and you 459 00:26:54,960 --> 00:26:58,399 Speaker 3: have to file court briefs with a court, the court 460 00:26:58,480 --> 00:27:02,919 Speaker 3: is the umpire, so you necessarily have a human in 461 00:27:02,960 --> 00:27:05,760 Speaker 3: the loop being the court to review all of what's 462 00:27:05,800 --> 00:27:10,960 Speaker 3: filed with it to ensure authenticity, accuracy, and that these 463 00:27:11,119 --> 00:27:16,440 Speaker 3: arguments in these court cases are truthful. So now lawyers 464 00:27:16,480 --> 00:27:18,919 Speaker 3: and law firms have to have processes in place to 465 00:27:19,000 --> 00:27:22,040 Speaker 3: make sure that if you're going to leverage AI, that 466 00:27:22,080 --> 00:27:25,080 Speaker 3: you're going behind the AI to make sure that they 467 00:27:25,119 --> 00:27:32,120 Speaker 3: don't hallucinate court sites or they don't hallucinate rulings, because 468 00:27:32,280 --> 00:27:35,200 Speaker 3: if you don't do that, you have an actual umpire 469 00:27:35,640 --> 00:27:36,800 Speaker 3: the court who. 470 00:27:36,640 --> 00:27:39,920 Speaker 6: Is going to fact check because it's the role that 471 00:27:39,960 --> 00:27:40,520 Speaker 6: they play. 472 00:27:40,760 --> 00:27:43,199 Speaker 3: And so I think what's happening here is when you 473 00:27:43,240 --> 00:27:46,920 Speaker 3: hear about these sanctions in these court cases, the real 474 00:27:47,000 --> 00:27:51,520 Speaker 3: issue is the governance over the process to produce the 475 00:27:51,560 --> 00:27:54,119 Speaker 3: briefs or whatever it is that's getting filed with this 476 00:27:54,240 --> 00:27:57,000 Speaker 3: neutral umpire. I have a different set of issues as 477 00:27:57,040 --> 00:28:00,760 Speaker 3: a corporate m and a in tech practice, So when 478 00:28:00,800 --> 00:28:05,840 Speaker 3: I use this, I don't necessarily have that court as 479 00:28:05,840 --> 00:28:08,760 Speaker 3: an umpire. I really need to be doing that myself 480 00:28:08,840 --> 00:28:11,760 Speaker 3: because the client may not know enough to be able 481 00:28:11,800 --> 00:28:13,480 Speaker 3: to check, and candidly they're relying on. 482 00:28:13,600 --> 00:28:16,000 Speaker 6: Me to do it. So I'm dealing with a different 483 00:28:16,040 --> 00:28:18,560 Speaker 6: set of circumstances. But the reason you see it come 484 00:28:18,640 --> 00:28:21,840 Speaker 6: up in the context of these court cases is because 485 00:28:21,840 --> 00:28:24,320 Speaker 6: you're in a system where the court is playing the 486 00:28:24,440 --> 00:28:29,080 Speaker 6: role of this neutral umpire ensuring veracity and authenticity of 487 00:28:29,119 --> 00:28:30,239 Speaker 6: what's put before it. 488 00:28:31,160 --> 00:28:34,000 Speaker 4: Do attorneys have to disclose to either the court or 489 00:28:34,040 --> 00:28:35,760 Speaker 4: their client that they're using AI. 490 00:28:36,640 --> 00:28:39,920 Speaker 3: So I think the answer to that is a lot 491 00:28:39,960 --> 00:28:46,360 Speaker 3: of particularly enterprise organizations may have outside council guidelines that 492 00:28:46,480 --> 00:28:49,560 Speaker 3: require it. But I also have other clients of mine 493 00:28:49,600 --> 00:28:53,080 Speaker 3: who say, whether you use AI or not, my expectation 494 00:28:53,280 --> 00:28:58,440 Speaker 3: is you're giving me accurate thought through work product, because 495 00:28:58,520 --> 00:29:03,600 Speaker 3: ultimately it's the lawyer's job to be providing competent representation, 496 00:29:04,480 --> 00:29:06,920 Speaker 3: and with our ethics rules, you know we're supposed to 497 00:29:06,920 --> 00:29:09,479 Speaker 3: be leveraging technology, but we're supposed to be doing it 498 00:29:09,520 --> 00:29:13,160 Speaker 3: in a way that conforms to our ethical obligations of competence. 499 00:29:13,600 --> 00:29:17,200 Speaker 3: So the answer to your question is yes, some organizations 500 00:29:17,240 --> 00:29:19,920 Speaker 3: have guidelines where they want it disclosed, but I've seen 501 00:29:19,960 --> 00:29:23,400 Speaker 3: plenty of instances where they're like, hey, you have ethical obligations, 502 00:29:23,440 --> 00:29:25,640 Speaker 3: whether you use AI or not, I expect the work 503 00:29:25,640 --> 00:29:30,600 Speaker 3: product to be consistent with your ethical requirements under state law. 504 00:29:31,280 --> 00:29:34,080 Speaker 4: So it sounds like the concern is that AI might 505 00:29:34,200 --> 00:29:39,400 Speaker 4: make some attorneys I don't want to use the word lazy, 506 00:29:39,600 --> 00:29:42,680 Speaker 4: but not quite as diligent as if they were doing 507 00:29:42,760 --> 00:29:43,560 Speaker 4: the work themselves. 508 00:29:44,480 --> 00:29:48,200 Speaker 3: I think that's a fair characterization because the opportunity with 509 00:29:48,280 --> 00:29:53,480 Speaker 3: AI is it's so confidently wrong sometimes and if you're 510 00:29:53,520 --> 00:29:57,160 Speaker 3: under time pressure, people might rely on it. To me, 511 00:29:57,280 --> 00:30:00,480 Speaker 3: it's no different than when I'm doing a deal and 512 00:30:00,640 --> 00:30:03,280 Speaker 3: we're going to wire, and I'm like, we are not 513 00:30:03,400 --> 00:30:07,880 Speaker 3: wiring until we confirm the wire instructions. We call somebody. 514 00:30:08,080 --> 00:30:10,120 Speaker 3: But when you're under the pressure of a deal or 515 00:30:10,120 --> 00:30:13,840 Speaker 3: maybe litigation, maybe people don't go through that next step 516 00:30:13,960 --> 00:30:16,960 Speaker 3: and then they end up filing something and you get 517 00:30:18,320 --> 00:30:21,920 Speaker 3: hallucinations and you get courts who are now sanctioning lawyers. 518 00:30:21,520 --> 00:30:24,360 Speaker 4: For it, explain to hallucinations when you use it in 519 00:30:24,360 --> 00:30:25,080 Speaker 4: that context. 520 00:30:25,640 --> 00:30:30,080 Speaker 3: So here's what I think people need to know. The 521 00:30:30,120 --> 00:30:36,720 Speaker 3: best way to describe artificial intelligence at a understandable level 522 00:30:36,920 --> 00:30:41,560 Speaker 3: is it is insanely good at pattern matching. It is 523 00:30:41,640 --> 00:30:49,000 Speaker 3: great at predicting connections between words, paragraphs, documents. But you 524 00:30:49,040 --> 00:30:54,600 Speaker 3: don't want to confuse probabilities with certainties. So AI is 525 00:30:54,640 --> 00:30:57,120 Speaker 3: designed to try to be helpful. So I've had instances 526 00:30:57,120 --> 00:31:01,320 Speaker 3: where AI will tell me, hey, in this negotiation, negligence 527 00:31:01,640 --> 00:31:02,120 Speaker 3: is fine. 528 00:31:02,400 --> 00:31:04,640 Speaker 6: That's a good standard. But I know in my. 529 00:31:04,640 --> 00:31:08,560 Speaker 3: Experience as a lawyer, in most commercial transactions it is not. 530 00:31:10,080 --> 00:31:13,760 Speaker 3: And so because of the way that AI is built 531 00:31:14,520 --> 00:31:18,560 Speaker 3: and they're trying to do better, hallucinations are inherent in 532 00:31:18,640 --> 00:31:23,280 Speaker 3: its design because it's ultimately based on probabilities, which are 533 00:31:23,320 --> 00:31:27,480 Speaker 3: never certainties. So you're always going to have that kind 534 00:31:27,480 --> 00:31:31,800 Speaker 3: of area of uncertainty, which is where the lawyer's judgment 535 00:31:31,920 --> 00:31:33,080 Speaker 3: becomes so important. 536 00:31:34,000 --> 00:31:37,000 Speaker 4: It sounds almost as though if you use AI, you 537 00:31:37,120 --> 00:31:39,320 Speaker 4: got to be even more on your toes than if 538 00:31:39,320 --> 00:31:42,160 Speaker 4: you were just doing all of the work yourself without 539 00:31:42,200 --> 00:31:42,840 Speaker 4: the AI. 540 00:31:43,560 --> 00:31:46,760 Speaker 3: I look at it as how can I use AI 541 00:31:47,440 --> 00:31:52,240 Speaker 3: as a decision support tool to enhance my judgment, because ultimately, 542 00:31:52,280 --> 00:31:55,200 Speaker 3: I think that's what clients are paying for. So what 543 00:31:55,200 --> 00:31:57,400 Speaker 3: that means is I have to have the ability to 544 00:31:58,160 --> 00:32:01,479 Speaker 3: ingest all the information that the AA is providing and 545 00:32:01,520 --> 00:32:05,200 Speaker 3: be able to honestly evaluate it and push back where necessary. 546 00:32:06,240 --> 00:32:10,400 Speaker 6: And I think that's the area where we. 547 00:32:10,240 --> 00:32:14,120 Speaker 3: As a profession, law firms, lawyers, in house counsel and others. 548 00:32:14,440 --> 00:32:15,320 Speaker 6: It's a real struggle. 549 00:32:15,440 --> 00:32:18,000 Speaker 3: In my view, we're in like a Steve Jobs moment 550 00:32:18,080 --> 00:32:19,320 Speaker 3: when it comes to clients. 551 00:32:20,440 --> 00:32:22,960 Speaker 4: What sort of safeguards, though are in place? You talked 552 00:32:22,960 --> 00:32:25,760 Speaker 4: about the ethics, you talked about the client expectation, you 553 00:32:25,840 --> 00:32:29,640 Speaker 4: talked about the court's role, But what sort of hardcore 554 00:32:29,800 --> 00:32:32,960 Speaker 4: safeguards are in place, guardrails that are there to protect 555 00:32:33,000 --> 00:32:36,640 Speaker 4: the legal profession and the clients where AI may be involved. 556 00:32:37,680 --> 00:32:41,400 Speaker 3: So when we talk about those guardrails, I think what 557 00:32:41,440 --> 00:32:46,840 Speaker 3: you're really talking about is what is your AI governance program. 558 00:32:46,960 --> 00:32:50,320 Speaker 3: One of the things I've seen consistently amongst the different 559 00:32:50,360 --> 00:32:52,840 Speaker 3: clients that I work with and I'm out talking to 560 00:32:52,960 --> 00:32:56,880 Speaker 3: a conferences, is there have been such a pressure to 561 00:32:56,920 --> 00:33:02,440 Speaker 3: deploy AI systems that this entire around AI governance. Where's 562 00:33:02,480 --> 00:33:09,480 Speaker 3: the IP, where's the data privacy security? That conversation didn't 563 00:33:09,520 --> 00:33:12,400 Speaker 3: really happen. So now you've got all this stuff going on, 564 00:33:12,520 --> 00:33:15,160 Speaker 3: and now you're trying to build your AI governance while 565 00:33:15,200 --> 00:33:18,320 Speaker 3: the AI plane is in flight. But those are your 566 00:33:18,320 --> 00:33:23,959 Speaker 3: guardrails because let's talk about my process or a litigator's process. Sure, 567 00:33:24,040 --> 00:33:26,680 Speaker 3: you have to build into that process, how am I 568 00:33:27,720 --> 00:33:30,720 Speaker 3: fact checking the information? How am I making sure these 569 00:33:30,760 --> 00:33:32,400 Speaker 3: court cases are legitimate? 570 00:33:32,800 --> 00:33:33,640 Speaker 6: It may be they. 571 00:33:33,520 --> 00:33:36,680 Speaker 3: Create AI tools that will do that, but where we're 572 00:33:36,680 --> 00:33:38,920 Speaker 3: at now, that's where the human has to be in 573 00:33:38,960 --> 00:33:40,680 Speaker 3: the loop. To me, that is the key part of 574 00:33:40,720 --> 00:33:44,440 Speaker 3: the AI governance. So everything that AI helps create in 575 00:33:44,520 --> 00:33:48,560 Speaker 3: support of my practice, I'm reading it. I'm using it 576 00:33:48,600 --> 00:33:51,520 Speaker 3: in areas where I already have a good level of expertise, 577 00:33:51,640 --> 00:33:54,120 Speaker 3: Like nobody wants to hire me to do depositions, so 578 00:33:54,160 --> 00:33:56,360 Speaker 3: I would never think to use AI for that purpose. 579 00:33:56,440 --> 00:33:59,600 Speaker 6: I try to keep to things that I have an. 580 00:33:59,520 --> 00:34:01,800 Speaker 3: Level of that expertise, so that I'm the human in 581 00:34:01,840 --> 00:34:04,040 Speaker 3: the loop who can evaluate that output. 582 00:34:04,600 --> 00:34:07,000 Speaker 4: Where would it be appropriate then to use the AI. 583 00:34:08,080 --> 00:34:12,040 Speaker 3: So in my practice, I negotiate for a living and 584 00:34:12,120 --> 00:34:16,360 Speaker 3: so what I ended up doing and we use Harvey, 585 00:34:16,640 --> 00:34:19,920 Speaker 3: So that's our approved AI tool. I've built my own 586 00:34:19,960 --> 00:34:23,640 Speaker 3: AI negotiation agent, and so what that does is is 587 00:34:23,719 --> 00:34:26,560 Speaker 3: I stress test before I ever step into the room 588 00:34:26,600 --> 00:34:31,240 Speaker 3: to negotiate the issue, the expected arguments of the other side, 589 00:34:32,360 --> 00:34:36,680 Speaker 3: surfacing motivation that might be seen or unseen, and then 590 00:34:37,200 --> 00:34:41,839 Speaker 3: tailoring the negotiation framing mind going to use to the 591 00:34:41,840 --> 00:34:44,760 Speaker 3: personality of my counterparty. You know, everyone has a different 592 00:34:44,800 --> 00:34:46,920 Speaker 3: kind of way they like to negotiate, and so it 593 00:34:46,960 --> 00:34:49,560 Speaker 3: allows me to stress test that. So, as I said before, 594 00:34:49,719 --> 00:34:54,400 Speaker 3: AI is enhancing my judgments so that I can negotiate 595 00:34:54,480 --> 00:34:56,680 Speaker 3: better and get a better outcome than had I not 596 00:34:56,880 --> 00:34:59,560 Speaker 3: been able to stress test and have this tool to 597 00:34:59,600 --> 00:35:01,440 Speaker 3: help me be so much better prepared. 598 00:35:02,719 --> 00:35:05,279 Speaker 4: Is this an example of the legal industry or the 599 00:35:05,320 --> 00:35:08,839 Speaker 4: legal profession now in a position trying to catch up 600 00:35:08,840 --> 00:35:11,200 Speaker 4: with the technology? You sort of use the analogy of 601 00:35:11,200 --> 00:35:13,400 Speaker 4: building the plane in the air while you're flying it. 602 00:35:14,680 --> 00:35:18,640 Speaker 6: I think what's happened is Chat came out in November. 603 00:35:18,280 --> 00:35:21,040 Speaker 3: Of twenty twenty two, and now we're talking here in 604 00:35:21,120 --> 00:35:22,279 Speaker 3: June of twenty twenty six. 605 00:35:22,360 --> 00:35:25,320 Speaker 6: It's just four years. I mean, it's like going to college. 606 00:35:26,040 --> 00:35:29,960 Speaker 3: And in my mind, where the technology is becoming so 607 00:35:30,080 --> 00:35:34,399 Speaker 3: disruptive is it's taking tasks like doing legal research or 608 00:35:34,480 --> 00:35:38,080 Speaker 3: drafting a memo that used to take hours and days 609 00:35:38,280 --> 00:35:41,520 Speaker 3: and now it's minutes and hours. So to me, it's 610 00:35:41,640 --> 00:35:45,839 Speaker 3: kind of making the legal profession reflect How do we 611 00:35:45,880 --> 00:35:46,520 Speaker 3: add value? 612 00:35:46,600 --> 00:35:48,160 Speaker 6: How do clients perceive that? 613 00:35:48,880 --> 00:35:52,520 Speaker 3: And that's the real issue that we're really struggling with 614 00:35:52,600 --> 00:35:56,680 Speaker 3: because in private practice, you know you have the billable hour, 615 00:35:56,680 --> 00:35:59,359 Speaker 3: and what does that really measure? It measures how long 616 00:35:59,400 --> 00:36:03,280 Speaker 3: it took you to do something. It doesn't necessarily measure 617 00:36:03,360 --> 00:36:05,720 Speaker 3: the quality of the output. And if you've got AI 618 00:36:05,840 --> 00:36:08,600 Speaker 3: that now helps you do a better work product in 619 00:36:08,680 --> 00:36:12,359 Speaker 3: less time, that measurement doesn't really apply anymore. So then 620 00:36:12,400 --> 00:36:15,439 Speaker 3: how are you going to show clients the Steve Jobs moment, 621 00:36:15,640 --> 00:36:19,440 Speaker 3: show them the value that you are creating by making 622 00:36:19,680 --> 00:36:25,000 Speaker 3: better decisions because you've been enabled by AI tools that 623 00:36:25,200 --> 00:36:28,560 Speaker 3: enhance judgment, not substitute for it. That to me, is 624 00:36:28,600 --> 00:36:29,520 Speaker 3: the key distinction. 625 00:36:30,520 --> 00:36:33,040 Speaker 4: Our thanks to Justin Daniels for joining us. He is 626 00:36:33,080 --> 00:36:36,640 Speaker 4: a shareholder at Baker Donaldson. You can read Justin's piece 627 00:36:36,719 --> 00:36:39,719 Speaker 4: on the Bloomberg terminal that does it for this edition 628 00:36:39,760 --> 00:36:42,640 Speaker 4: of Bloomberg Law, I'm Amy Morris and for June Grosso. 629 00:36:42,960 --> 00:36:46,080 Speaker 4: Stay with us. Today's top stories and global business headlines 630 00:36:46,080 --> 00:36:47,520 Speaker 4: are coming up right now