1 00:00:20,440 --> 00:00:23,560 Speaker 1: As Travis Scott took the stage at his sold out 2 00:00:23,640 --> 00:00:27,560 Speaker 1: concert in Houston last Friday, the crowd pushed forward towards 3 00:00:27,600 --> 00:00:31,120 Speaker 1: the stage and the crush began. It took only twenty 4 00:00:31,120 --> 00:00:34,560 Speaker 1: minutes for the police to radio about the unfolding tragedy, 5 00:00:34,880 --> 00:00:41,440 Speaker 1: and Scott paused briefly after noticing an ambulance in the crowd. 6 00:00:42,000 --> 00:00:44,440 Speaker 1: Moments later, he asked fans to put up a middle 7 00:00:44,520 --> 00:00:50,680 Speaker 1: finger if they were okay every Scott resumed his performance 8 00:00:50,760 --> 00:00:58,000 Speaker 1: until his set was over, despite please from the crowd. 9 00:00:59,200 --> 00:01:02,760 Speaker 1: Nine people were killed and dozens were injured. Joining me 10 00:01:02,800 --> 00:01:05,960 Speaker 1: is Rachel Phase, a criminal defense attorney with his wy 11 00:01:06,000 --> 00:01:09,160 Speaker 1: back Phez and Coleman Rachel This isn't the first time 12 00:01:09,200 --> 00:01:13,600 Speaker 1: Scott has face legal action over his concerts. Are criminal 13 00:01:13,720 --> 00:01:17,200 Speaker 1: charges possible here? I think there needs to be an 14 00:01:17,240 --> 00:01:24,200 Speaker 1: incredibly massive investigation that encompasses Travis Scott, Light Nation, the venue, 15 00:01:24,440 --> 00:01:28,200 Speaker 1: the security team, and all members of the crowd to 16 00:01:28,319 --> 00:01:32,319 Speaker 1: determine what happened. So what they'll be looking for in 17 00:01:32,440 --> 00:01:37,880 Speaker 1: that investigation, particularly as it relates to Scot's role, is 18 00:01:38,120 --> 00:01:41,480 Speaker 1: if he encouraged the conduct that led to the deaths 19 00:01:41,560 --> 00:01:44,720 Speaker 1: and the injuries, and if he did encourage it in 20 00:01:44,800 --> 00:01:48,960 Speaker 1: some way, if that encouragement rises to a criminal act. 21 00:01:49,080 --> 00:01:53,120 Speaker 1: In Texas, Scott was arrested twice when he encouraged fans 22 00:01:53,160 --> 00:01:58,960 Speaker 1: at concerts in Chicago and and Arkansas in to ignore 23 00:01:59,080 --> 00:02:02,880 Speaker 1: security measure and rush the stage. He pleaded guilty to 24 00:02:02,960 --> 00:02:07,200 Speaker 1: public disorder charges both times. That's a slap on the wrist. 25 00:02:07,840 --> 00:02:10,400 Speaker 1: Is that what's likely to happen here? I think the 26 00:02:10,520 --> 00:02:14,040 Speaker 1: public disorder charges are different than what would rise to 27 00:02:14,120 --> 00:02:16,960 Speaker 1: the level of a felony, which would be that Scott 28 00:02:17,000 --> 00:02:19,760 Speaker 1: acted in a way that he knew he was creating 29 00:02:19,800 --> 00:02:24,200 Speaker 1: an unjustifiable risk given the circumstances, And so if he 30 00:02:24,280 --> 00:02:28,919 Speaker 1: was creating an unjustifiable risk to his crowd, that would 31 00:02:28,919 --> 00:02:33,000 Speaker 1: be a felony in Texas as to disorderly conduct. I 32 00:02:33,080 --> 00:02:35,440 Speaker 1: think that was a plea deal, and so it was 33 00:02:35,680 --> 00:02:39,160 Speaker 1: down from what maybe law enforcements thought they could charge 34 00:02:39,240 --> 00:02:41,840 Speaker 1: him with. How does it play and the fact that 35 00:02:42,240 --> 00:02:45,640 Speaker 1: this seems to be part of what he does fans 36 00:02:45,760 --> 00:02:51,760 Speaker 1: come expecting. I suppose this kind of raucous environment. So 37 00:02:52,120 --> 00:02:55,160 Speaker 1: the way it plays in and the way negligence always works, 38 00:02:55,240 --> 00:02:57,920 Speaker 1: has to do with force, the ability, and so it 39 00:02:57,960 --> 00:03:00,440 Speaker 1: really has to do with his state of mind, and 40 00:03:00,600 --> 00:03:05,000 Speaker 1: that's where his priors come in, because he already knows 41 00:03:05,400 --> 00:03:09,560 Speaker 1: that there's been injuries at task concerts and that he 42 00:03:09,720 --> 00:03:14,800 Speaker 1: has been found responsible for inciting some of those safety breaches. 43 00:03:15,200 --> 00:03:18,720 Speaker 1: So it really puts him on maybe higher alert than 44 00:03:18,919 --> 00:03:22,040 Speaker 1: somebody who has not been charged. So it makes this 45 00:03:22,240 --> 00:03:26,519 Speaker 1: act more foreseeable. And that's really how a negligence determination, 46 00:03:26,680 --> 00:03:31,000 Speaker 1: both for civil liability and for criminal liability plays out. 47 00:03:31,600 --> 00:03:36,240 Speaker 1: Because nothing was intentional. He didn't intentionally kill anyone. It's 48 00:03:36,320 --> 00:03:38,960 Speaker 1: whether he acted in a way where he was putting 49 00:03:39,000 --> 00:03:43,080 Speaker 1: these people at risk. Also, the Houston Police chief said 50 00:03:43,160 --> 00:03:47,120 Speaker 1: he met with Scott and his head of security prior 51 00:03:47,200 --> 00:03:51,720 Speaker 1: to the event to express his concerns about safety. So 52 00:03:52,160 --> 00:03:55,560 Speaker 1: that's putting him on notice, isn't it. Absolutely all of 53 00:03:55,600 --> 00:03:59,440 Speaker 1: these things put him on notice. He's getting sued by 54 00:03:59,600 --> 00:04:03,440 Speaker 1: a or concert goer that was paralyzed at one of 55 00:04:03,480 --> 00:04:06,720 Speaker 1: his shows. It would be hard to say that safety 56 00:04:06,760 --> 00:04:11,560 Speaker 1: concerns for frankly, all parties involved, including the venue, including 57 00:04:11,600 --> 00:04:16,000 Speaker 1: the security team, including the promoter, including everyone, safety concerns 58 00:04:16,320 --> 00:04:18,520 Speaker 1: people were on notice of them. They should have been 59 00:04:18,640 --> 00:04:23,200 Speaker 1: front of mind based on past events, particularly at Travis 60 00:04:23,200 --> 00:04:27,880 Speaker 1: Scott concerts. This should have been foreseeable and so what 61 00:04:28,040 --> 00:04:31,560 Speaker 1: was done to prevent it? Now becomes the questions. Let's 62 00:04:31,560 --> 00:04:34,839 Speaker 1: discuss the civil lawsuits that are piling up. They're being 63 00:04:34,839 --> 00:04:40,040 Speaker 1: filed against Scott, the events promoters and management, including Live Nation, 64 00:04:40,360 --> 00:04:43,720 Speaker 1: basically for negligence. What would have to be proven if 65 00:04:43,720 --> 00:04:46,839 Speaker 1: the cases went to a jury. So these kinds of 66 00:04:46,880 --> 00:04:52,080 Speaker 1: determinations go back to the same analysis. What was foreseeable 67 00:04:52,200 --> 00:04:55,760 Speaker 1: and what was done in advance and during the show 68 00:04:56,160 --> 00:04:59,960 Speaker 1: to take the correct measures for the safety of the 69 00:05:00,040 --> 00:05:04,000 Speaker 1: crowd and as to the venue and the security and 70 00:05:04,040 --> 00:05:07,239 Speaker 1: all the people setting up in advance, were those roots 71 00:05:07,279 --> 00:05:09,960 Speaker 1: in play? Did they have safety measures, do they have 72 00:05:10,040 --> 00:05:13,800 Speaker 1: emergency measures? Did they have the right amount of people 73 00:05:13,880 --> 00:05:17,520 Speaker 1: in the fake What was done in advance to make 74 00:05:17,560 --> 00:05:20,080 Speaker 1: sure the crowd was faked? And there are a lot 75 00:05:20,160 --> 00:05:22,960 Speaker 1: of the sports that even before Travis Dot came on 76 00:05:23,560 --> 00:05:27,479 Speaker 1: that people were passing out and basically the safety of 77 00:05:27,520 --> 00:05:31,839 Speaker 1: the show was already in jeopardy and all of that 78 00:05:31,960 --> 00:05:37,279 Speaker 1: should be foreseeable to those in management. Did they sell 79 00:05:37,320 --> 00:05:39,359 Speaker 1: too many tickets? Did they let too many people in? 80 00:05:39,880 --> 00:05:45,560 Speaker 1: All of this is going to be closely investigated and 81 00:05:45,960 --> 00:05:49,480 Speaker 1: these civil suits will continue to pop up because there 82 00:05:49,480 --> 00:05:54,559 Speaker 1: were so many injuries and so many deaths, and Live 83 00:05:54,720 --> 00:05:58,279 Speaker 1: Nation has already been linked to hundreds of deaths and 84 00:05:58,440 --> 00:06:02,560 Speaker 1: injuries in the past fifty years. According to the Houston Chronicle, 85 00:06:03,040 --> 00:06:05,680 Speaker 1: they've been connected to about two hundred deaths and at 86 00:06:05,720 --> 00:06:09,960 Speaker 1: least seven fifty injuries since two thousand six. Does that 87 00:06:10,040 --> 00:06:13,080 Speaker 1: come in in a trial, It all comes in. I mean, 88 00:06:13,120 --> 00:06:17,080 Speaker 1: of course, it matters what kinds of deaths those were, 89 00:06:17,480 --> 00:06:23,480 Speaker 1: Were they related to crowd management, what kinds of venues 90 00:06:23,800 --> 00:06:28,560 Speaker 1: that those deaths and injuries took place. What is standard 91 00:06:28,600 --> 00:06:32,880 Speaker 1: in the industry is what our Live Nations numbers better 92 00:06:33,080 --> 00:06:38,080 Speaker 1: than other company numbers as it relates to concert injuries 93 00:06:38,240 --> 00:06:41,880 Speaker 1: and deaths. All of that will be closely looked at. 94 00:06:42,040 --> 00:06:46,279 Speaker 1: The concerts are a high risk business in some ways, 95 00:06:46,440 --> 00:06:49,760 Speaker 1: and so there will always be some sort of injury 96 00:06:50,600 --> 00:06:57,000 Speaker 1: or deaths unfortunately associated with live events with large crowds. 97 00:06:57,040 --> 00:06:59,800 Speaker 1: So it just comes into play. What were they doing 98 00:07:01,080 --> 00:07:07,040 Speaker 1: to react to each of these possible safety issues and 99 00:07:07,080 --> 00:07:11,160 Speaker 1: safety management issues for each of their events? What were 100 00:07:11,200 --> 00:07:14,320 Speaker 1: they doing in response to each of the other incidents, 101 00:07:14,480 --> 00:07:17,680 Speaker 1: or do they know things and they're specifically not addressing 102 00:07:17,720 --> 00:07:20,520 Speaker 1: them because it would cost too much money, or they 103 00:07:20,520 --> 00:07:22,960 Speaker 1: couldn't promote the show in the way they wanted. So 104 00:07:23,640 --> 00:07:28,520 Speaker 1: it is a large scale investigation and discovery process as 105 00:07:28,560 --> 00:07:32,000 Speaker 1: it relates to these civil lawsuits. There are allegations that 106 00:07:32,080 --> 00:07:35,400 Speaker 1: people begged the security guards that were hired by Live 107 00:07:35,520 --> 00:07:42,040 Speaker 1: Nation for help, but we're ignored. So it's wondering what 108 00:07:42,520 --> 00:07:47,280 Speaker 1: they could have done, why they weren't doing anything. Perhaps 109 00:07:47,320 --> 00:07:51,640 Speaker 1: the security guard could not help one person because he 110 00:07:51,800 --> 00:07:54,800 Speaker 1: had if he left to help one person to see 111 00:07:54,840 --> 00:07:57,840 Speaker 1: other people would be in jeopardy. All of this will 112 00:07:57,880 --> 00:08:00,680 Speaker 1: come down to a lot of witness that pounds. There 113 00:08:00,680 --> 00:08:06,440 Speaker 1: will be many, many witness accounts. There's video footage, concert goers, 114 00:08:06,880 --> 00:08:10,960 Speaker 1: security guards, the people that put the plans in place. 115 00:08:11,200 --> 00:08:19,040 Speaker 1: This is a very large legal issue and issues this 116 00:08:19,040 --> 00:08:22,000 Speaker 1: This will be going on four years. Do you know 117 00:08:22,080 --> 00:08:27,360 Speaker 1: of any other cases like this? I was able to find. 118 00:08:28,080 --> 00:08:32,840 Speaker 1: Gwen Stefani was sued by a concert goer who was 119 00:08:32,880 --> 00:08:35,360 Speaker 1: injured at one of her concerts and she was sued 120 00:08:35,400 --> 00:08:38,480 Speaker 1: along with Live Nation, and I believe the judge dismissed 121 00:08:38,520 --> 00:08:43,000 Speaker 1: Live Nation from that suit, but said that Gwen Stefani 122 00:08:43,120 --> 00:08:49,040 Speaker 1: could be held liabel. This kind of issue, with this 123 00:08:49,360 --> 00:08:54,760 Speaker 1: mass amount of casualties and injuries is new for our country. 124 00:08:55,000 --> 00:09:01,480 Speaker 1: There's been soccer stampedes in other countries where over a 125 00:09:01,559 --> 00:09:04,880 Speaker 1: hundred members of the crowd have died as a results, 126 00:09:05,360 --> 00:09:08,480 Speaker 1: but those laws are different. Toward laws are different, and 127 00:09:08,520 --> 00:09:11,720 Speaker 1: that's what a lot of this civil liability will absolutely 128 00:09:12,200 --> 00:09:17,160 Speaker 1: hanging on. So there's not full precedent for this kind 129 00:09:17,520 --> 00:09:21,560 Speaker 1: of map. There's been a lot of talk about whether 130 00:09:22,080 --> 00:09:26,320 Speaker 1: there were drugs and it's a concert, so if there 131 00:09:26,360 --> 00:09:32,080 Speaker 1: are drugs involved, could that be used against the plaintiffs? Right, 132 00:09:32,200 --> 00:09:35,319 Speaker 1: So what will happen is if any of these cases 133 00:09:35,400 --> 00:09:39,880 Speaker 1: make it to trial, what will happen is the venue 134 00:09:39,920 --> 00:09:43,880 Speaker 1: will say it was the concert go resplved that there was, 135 00:09:44,120 --> 00:09:47,600 Speaker 1: and these are this is part of the investigations. What 136 00:09:47,720 --> 00:09:51,320 Speaker 1: was the concert go? We're doing him or herself to 137 00:09:51,480 --> 00:09:55,840 Speaker 1: cause the injury? Were they intoxicated, were their drugs? Were 138 00:09:55,880 --> 00:10:02,280 Speaker 1: they inciting violence? Were were by acting in a dangerous way? 139 00:10:02,520 --> 00:10:06,440 Speaker 1: And if they were, how much of the responsibility for 140 00:10:06,559 --> 00:10:11,160 Speaker 1: their own injury should they take. I think the one 141 00:10:11,240 --> 00:10:14,840 Speaker 1: thing that is important here as it relates to possible 142 00:10:14,840 --> 00:10:19,920 Speaker 1: criminal charges and the civil liability is under Texas law 143 00:10:20,800 --> 00:10:25,120 Speaker 1: that if somebody is found to have committed a felony 144 00:10:25,200 --> 00:10:28,880 Speaker 1: and they are one of many defendants, they can be 145 00:10:29,280 --> 00:10:33,280 Speaker 1: on the hook for everything. So I think that what 146 00:10:33,400 --> 00:10:38,840 Speaker 1: will happen is the criminal issues may play out if 147 00:10:38,920 --> 00:10:43,600 Speaker 1: there are any charges made, that may come first before 148 00:10:43,720 --> 00:10:48,960 Speaker 1: the civil issues conclude. Uh if anyone is charged with 149 00:10:49,000 --> 00:10:53,520 Speaker 1: a crime, Thanks so much, Rachel. That's Racial Physe, managing 150 00:10:53,559 --> 00:10:59,199 Speaker 1: partner of Sybeck, Physe and Coleman. Thanksgiving and Christmas may 151 00:10:59,200 --> 00:11:01,559 Speaker 1: look a little dear Frint this year as the supply 152 00:11:01,720 --> 00:11:06,120 Speaker 1: chain crisis threatens our holiday cheer, from toys to books 153 00:11:06,160 --> 00:11:09,960 Speaker 1: to Christmas trees. Disruptions are making things harder to find 154 00:11:10,040 --> 00:11:14,480 Speaker 1: and much more expensive, something President Joe Biden has acknowledged. 155 00:11:14,960 --> 00:11:18,400 Speaker 1: COVID nineteen has stretched global supply chains like never before, 156 00:11:18,480 --> 00:11:20,840 Speaker 1: and suddenly when you go to order a pair of 157 00:11:20,880 --> 00:11:23,720 Speaker 1: sneakers or a bicycle or Christmas presents for the family, 158 00:11:24,200 --> 00:11:26,400 Speaker 1: you're met with higher prices and long delays that they 159 00:11:26,400 --> 00:11:28,800 Speaker 1: said they just don't have any at all. So what's 160 00:11:28,840 --> 00:11:32,480 Speaker 1: the legal fallout here? To answer that question is Brian Gardner, 161 00:11:32,760 --> 00:11:36,640 Speaker 1: a partner at Winston and Strong, describe the different kinds 162 00:11:36,800 --> 00:11:41,240 Speaker 1: of legal fallout we're likely to see from this crunch 163 00:11:41,320 --> 00:11:44,080 Speaker 1: on the supply chain. We've really got a perfect storm 164 00:11:44,120 --> 00:11:47,160 Speaker 1: here in terms of the fragility of the supply chain 165 00:11:47,360 --> 00:11:49,920 Speaker 1: and then the disruption that hit it. In terms of disputes, 166 00:11:49,960 --> 00:11:53,400 Speaker 1: you've got two sort of areas. You could have shippers. 167 00:11:53,520 --> 00:11:56,720 Speaker 1: When I say shippers, I mean consumers of services like Walmartner, 168 00:11:56,960 --> 00:12:01,040 Speaker 1: cost Co, right carriers being notion carriers like Marisker. I 169 00:12:01,080 --> 00:12:04,559 Speaker 1: think you could see service contract breach actions brought by 170 00:12:04,679 --> 00:12:08,319 Speaker 1: shippers against the carriers. And I think also really the 171 00:12:08,320 --> 00:12:10,600 Speaker 1: big question form is going to be the Federal Maritime 172 00:12:10,600 --> 00:12:14,200 Speaker 1: Commission and whether folks really start to ramp up complaints 173 00:12:14,280 --> 00:12:16,760 Speaker 1: being filed with the Federal Maritime Commission for violation and 174 00:12:16,800 --> 00:12:19,160 Speaker 1: the Shipping Act, or whether the Bureau of Enforcement, which 175 00:12:19,160 --> 00:12:21,920 Speaker 1: is sort of like the prosecutorial arm of the Commission, 176 00:12:21,960 --> 00:12:24,320 Speaker 1: whether they begin to take action on their own as 177 00:12:24,360 --> 00:12:27,040 Speaker 1: they've telegraphed they're going to do, separately from those things 178 00:12:27,200 --> 00:12:29,920 Speaker 1: case by case disputes. I think there's a big question 179 00:12:29,960 --> 00:12:32,560 Speaker 1: as to whether legislative action is going to happen, and 180 00:12:32,679 --> 00:12:35,440 Speaker 1: the Ocean Shipping Reform Act is one such piece of legislation. 181 00:12:35,440 --> 00:12:37,480 Speaker 1: That's been introduced in the House and is quickly gathering 182 00:12:37,480 --> 00:12:41,840 Speaker 1: sponsors with something like this COVID, which no one anticipated. 183 00:12:42,600 --> 00:12:46,360 Speaker 1: Where is the blame to be placed, Well, it's going 184 00:12:46,400 --> 00:12:49,960 Speaker 1: to be placed everywhere, right, So, certainly folks are looking 185 00:12:50,000 --> 00:12:53,520 Speaker 1: at carriers and saying the carriers are violating the Shipping 186 00:12:53,520 --> 00:12:56,800 Speaker 1: Act or service contracts. There's a couple of different things 187 00:12:56,880 --> 00:12:59,520 Speaker 1: in play. If you're a shipper, a furniture importer on 188 00:12:59,559 --> 00:13:01,240 Speaker 1: the West coat Post, and you're a small shipper and 189 00:13:01,240 --> 00:13:04,719 Speaker 1: you're not getting the capacity that the box carriers, you know, 190 00:13:04,760 --> 00:13:07,200 Speaker 1: the container carriers promised you, you will blame them for 191 00:13:07,280 --> 00:13:11,160 Speaker 1: violating your contract in terms of delay if goods arrive 192 00:13:11,320 --> 00:13:13,640 Speaker 1: late because they got rolled from one vessel to another. 193 00:13:13,840 --> 00:13:17,200 Speaker 1: And almost all carrier contracts do not promise that the 194 00:13:17,240 --> 00:13:20,280 Speaker 1: goods will arrive at any particular time, for any particular purpose, 195 00:13:20,400 --> 00:13:22,520 Speaker 1: or to meet any deadline under most bills of lading 196 00:13:22,520 --> 00:13:25,720 Speaker 1: in contracts, so there's blame on the carriers for delay 197 00:13:25,840 --> 00:13:28,400 Speaker 1: or for not our in commitments. There's blame on the truckers, 198 00:13:28,440 --> 00:13:31,000 Speaker 1: the drage struckers who moved the boxes from the yard 199 00:13:31,040 --> 00:13:34,280 Speaker 1: to inland points for not responding, not having the capacity 200 00:13:34,360 --> 00:13:37,720 Speaker 1: there's blame for chassis providers, which is the truck chassis 201 00:13:37,720 --> 00:13:39,760 Speaker 1: that goes underneath the box. There's simply not enough to 202 00:13:39,800 --> 00:13:42,240 Speaker 1: go around, or they're in the wrong place. If there's 203 00:13:42,280 --> 00:13:46,640 Speaker 1: no contractual promise that goods will arrive on time, how 204 00:13:46,640 --> 00:13:49,440 Speaker 1: do you sue the carriers if you do eventually get 205 00:13:49,480 --> 00:13:53,080 Speaker 1: the goods. I think anybody bringing a suit, a contractual 206 00:13:53,080 --> 00:13:55,880 Speaker 1: suit against the carrier for having goods that don't arrive 207 00:13:55,920 --> 00:13:57,800 Speaker 1: on time is going to have a difficult time if 208 00:13:57,800 --> 00:14:00,360 Speaker 1: they have the standard contract. I think you could bring 209 00:14:00,679 --> 00:14:03,160 Speaker 1: a Shipping Act cause of action. The Shipping Act makes 210 00:14:03,240 --> 00:14:08,640 Speaker 1: unlawful unreasonable practices and it makes unlawful discrimination against shippers. 211 00:14:08,800 --> 00:14:11,520 Speaker 1: So for example of if a carrier is providing all 212 00:14:11,520 --> 00:14:14,600 Speaker 1: the good service, the speed, the capacity to a large 213 00:14:14,600 --> 00:14:17,880 Speaker 1: shipper and scriminate against small shippers, that could potentially be 214 00:14:17,880 --> 00:14:20,240 Speaker 1: a violation of the Act and the actionable. Where I'm 215 00:14:20,280 --> 00:14:22,440 Speaker 1: seeing a lot of traction in this area is with 216 00:14:22,520 --> 00:14:25,440 Speaker 1: demerging detention charges, and this is a big issue and 217 00:14:25,520 --> 00:14:28,520 Speaker 1: it's a friction point in the community. Demerge is the 218 00:14:28,640 --> 00:14:32,080 Speaker 1: charge that the container carrier, the ocean carrier, charges the shippers, 219 00:14:32,160 --> 00:14:34,920 Speaker 1: say Walmart, for not picking up their container on time 220 00:14:34,920 --> 00:14:36,760 Speaker 1: at the yard. It sits there too long, they get 221 00:14:36,800 --> 00:14:39,040 Speaker 1: to say ten days of free time. And if it 222 00:14:39,080 --> 00:14:41,280 Speaker 1: doesn't get picked up because it's too congested, they just 223 00:14:41,320 --> 00:14:43,880 Speaker 1: can't get there, whatever the reason. They can't find a trucker, 224 00:14:43,920 --> 00:14:45,960 Speaker 1: the truckers are too busy, they can't get in, it's 225 00:14:45,960 --> 00:14:49,200 Speaker 1: too crowded, it's blocked in. They get charged X dollars 226 00:14:49,240 --> 00:14:52,000 Speaker 1: per day, and if they don't return that container back 227 00:14:52,040 --> 00:14:54,400 Speaker 1: to where it's supposed to go, they get charged another 228 00:14:54,400 --> 00:14:56,840 Speaker 1: fee white dollars per day. The first one is demerged 229 00:14:56,920 --> 00:14:59,040 Speaker 1: is the cost of not picking up the container on time, 230 00:14:59,080 --> 00:15:01,400 Speaker 1: and detention is the cau us not returning it on time. 231 00:15:01,760 --> 00:15:04,400 Speaker 1: That mounts into the millions or tens of millions of dollars, 232 00:15:04,600 --> 00:15:07,120 Speaker 1: particularly in this environment where there's so much congestion and problems, 233 00:15:07,120 --> 00:15:10,160 Speaker 1: and the carriers are charging that, and often the yard 234 00:15:10,240 --> 00:15:12,440 Speaker 1: charges the carrier, and the carrier may market up and 235 00:15:12,520 --> 00:15:14,960 Speaker 1: charges the shipper, and so not only are the goods 236 00:15:15,000 --> 00:15:17,000 Speaker 1: not arriving on time, but then the shippers, you know 237 00:15:17,040 --> 00:15:19,000 Speaker 1: you're a Walmarts and so forth, they're being stuck with 238 00:15:19,040 --> 00:15:21,480 Speaker 1: these huge bills for what they view is poor service. 239 00:15:21,560 --> 00:15:24,400 Speaker 1: And then on top of that, the ocean carriers are saying, well, 240 00:15:24,440 --> 00:15:26,480 Speaker 1: if you really wanted it to get to a certain 241 00:15:26,480 --> 00:15:28,880 Speaker 1: place at a particular time, you can buy one of 242 00:15:28,880 --> 00:15:31,040 Speaker 1: our premium end to end products. You know, It's kind 243 00:15:31,080 --> 00:15:33,360 Speaker 1: of like we're all familiar with the airlines, and you know, 244 00:15:33,400 --> 00:15:35,240 Speaker 1: we were buying airline seats and we thought we were 245 00:15:35,240 --> 00:15:37,000 Speaker 1: supposed to get a seat to go from A to 246 00:15:37,040 --> 00:15:39,200 Speaker 1: B at a particular time. And now the airlines are 247 00:15:39,240 --> 00:15:40,680 Speaker 1: telling us, well, you know, if you really want to 248 00:15:40,680 --> 00:15:42,240 Speaker 1: get there on time, you really want to get a seat, 249 00:15:42,280 --> 00:15:43,560 Speaker 1: you really want to have a place to put your 250 00:15:43,560 --> 00:15:46,440 Speaker 1: carry ons, you can pay extra. People don't receive that well, 251 00:15:46,480 --> 00:15:48,840 Speaker 1: and shippers are the same way with these premium products. 252 00:15:48,880 --> 00:15:53,360 Speaker 1: Are shippers suing at this point? So yes, some UM 253 00:15:53,400 --> 00:15:56,400 Speaker 1: there have been some actions filed the Federal Maritime Commission, 254 00:15:56,480 --> 00:15:59,000 Speaker 1: far fewer than we would expect. And the real reason 255 00:15:59,080 --> 00:16:02,920 Speaker 1: that we've seen and that the Commission themselves have identified 256 00:16:03,280 --> 00:16:08,120 Speaker 1: is a fear of retaliation the ocean carriers. It's almost 257 00:16:08,200 --> 00:16:13,440 Speaker 1: all collected in say nine or ten painter carriers, all 258 00:16:13,520 --> 00:16:16,360 Speaker 1: the all the capacity, and then they in turn are 259 00:16:16,760 --> 00:16:22,600 Speaker 1: organized into three UM shipping conferences and you know in 260 00:16:22,640 --> 00:16:25,960 Speaker 1: many ways it's an oligopoli, and you know the antitrust laws. 261 00:16:26,120 --> 00:16:30,200 Speaker 1: They have antitrust immunity in the industry in exchange for 262 00:16:30,320 --> 00:16:33,000 Speaker 1: being monitored by the Commission. So people are just afraid 263 00:16:33,040 --> 00:16:35,240 Speaker 1: to file is what we've seen a lot. I think 264 00:16:35,240 --> 00:16:37,280 Speaker 1: a lot of things you've been settled offline. Some people 265 00:16:37,360 --> 00:16:42,560 Speaker 1: have filed. There was a furniture importer called MCS Industries 266 00:16:42,720 --> 00:16:46,560 Speaker 1: filed a suit against Costco Chin Ocean Shipping with the 267 00:16:46,560 --> 00:16:49,040 Speaker 1: Commission and that just settled recently. I know that there 268 00:16:49,040 --> 00:16:52,920 Speaker 1: are others in the pipeline as well. So in this chain, 269 00:16:53,520 --> 00:16:57,040 Speaker 1: who is likely to get sued if Walmart doesn't get 270 00:16:57,320 --> 00:17:00,880 Speaker 1: the products that it needs, If Mark doesn't get the 271 00:17:00,880 --> 00:17:04,280 Speaker 1: products because they're not getting the capacity that was contractually 272 00:17:04,320 --> 00:17:06,800 Speaker 1: promised to them by the Ocean Carry, the Ocean Carry 273 00:17:06,800 --> 00:17:09,320 Speaker 1: will get suited. If it's because their truckers don't pick 274 00:17:09,400 --> 00:17:11,920 Speaker 1: up the goods, there may be a breach of contract 275 00:17:11,920 --> 00:17:14,760 Speaker 1: action against the trucker. But I think what's really going 276 00:17:14,840 --> 00:17:18,199 Speaker 1: to happen is that the Christmas goods or you know, 277 00:17:18,200 --> 00:17:20,119 Speaker 1: whatever it's it is. It's a issue, right, we're all 278 00:17:20,119 --> 00:17:22,480 Speaker 1: talking about Christmas presents. Now they're just gonna be late. 279 00:17:22,520 --> 00:17:24,840 Speaker 1: There's going to be a fewer of them, and ultimately 280 00:17:24,960 --> 00:17:27,280 Speaker 1: the shipping public and the consumer will pay the price 281 00:17:27,320 --> 00:17:30,080 Speaker 1: in terms of less quality, and people are gonna start rethinking. 282 00:17:31,359 --> 00:17:34,840 Speaker 1: There's seven thousand miles supply chain. People are gonna start rethinking, 283 00:17:34,840 --> 00:17:37,240 Speaker 1: particularly an era of great power competition, whether they want 284 00:17:37,280 --> 00:17:40,720 Speaker 1: to have a sole source with China seven thousand miles away. 285 00:17:40,920 --> 00:17:43,679 Speaker 1: You add to that just in time inventory, you know, 286 00:17:43,960 --> 00:17:47,960 Speaker 1: which which everybody learned from the Japanese starting in the eighties. 287 00:17:48,920 --> 00:17:51,919 Speaker 1: You've got a really fragile situation and all it takes 288 00:17:52,160 --> 00:17:54,400 Speaker 1: is the beating of a butterfly's wings for the whole 289 00:17:54,400 --> 00:17:58,080 Speaker 1: thing to go to hell or their force masure provisions 290 00:17:58,119 --> 00:18:04,000 Speaker 1: in these contracts that COVID would fall under. So maybe, right, 291 00:18:04,119 --> 00:18:07,080 Speaker 1: I mean, you could try. Um, you know, we maritime 292 00:18:07,160 --> 00:18:10,040 Speaker 1: lawyers have been writing pretty good contracts for ocean carriers 293 00:18:10,080 --> 00:18:12,240 Speaker 1: for a long time, and they're pretty they're pretty solid, 294 00:18:12,880 --> 00:18:15,840 Speaker 1: and you know, I would say that probably somebody trying 295 00:18:15,880 --> 00:18:20,639 Speaker 1: to bring a force masure um claim. We're trying to 296 00:18:20,800 --> 00:18:23,920 Speaker 1: sert first and forced masure here is going to have 297 00:18:24,000 --> 00:18:26,480 Speaker 1: a hard time. Um. You know, first of all, I 298 00:18:26,480 --> 00:18:29,760 Speaker 1: mean the ocean carriers are disclaiming delay right in the contract, 299 00:18:30,600 --> 00:18:34,399 Speaker 1: and to claim force the masure here, it's going to 300 00:18:34,480 --> 00:18:36,400 Speaker 1: be difficult because it's so foreseeable. I mean, the fact 301 00:18:36,400 --> 00:18:38,119 Speaker 1: that you and I are sitting here talking about this 302 00:18:38,160 --> 00:18:41,840 Speaker 1: shows how foreseeable you know, it really is. So I 303 00:18:41,840 --> 00:18:45,000 Speaker 1: don't think a force masure claim is gonna lie. What 304 00:18:45,119 --> 00:18:49,320 Speaker 1: would an action on a service contract look like? So 305 00:18:49,440 --> 00:18:52,359 Speaker 1: there's a contract, right, So you've got a service contract. 306 00:18:52,560 --> 00:18:55,000 Speaker 1: So carriers can operate on a tariff, which is basically 307 00:18:55,040 --> 00:18:57,679 Speaker 1: like a posted bill of prices, and then they have 308 00:18:57,680 --> 00:18:59,919 Speaker 1: a bill of lading, which is their contract of carriacter. 309 00:19:00,400 --> 00:19:02,359 Speaker 1: The tariffs sets out the terms and includes the bill 310 00:19:02,440 --> 00:19:04,720 Speaker 1: and that that's got all the protective language about we 311 00:19:04,720 --> 00:19:06,840 Speaker 1: don't we don't pay for delays and all that kind 312 00:19:06,840 --> 00:19:08,840 Speaker 1: of stuff, right, I mean, that could be a breach 313 00:19:08,880 --> 00:19:11,520 Speaker 1: action for you know, not providing the quality. Most service 314 00:19:11,520 --> 00:19:13,840 Speaker 1: contracts are just that, right, They promised a certain amount 315 00:19:13,840 --> 00:19:16,680 Speaker 1: of quality at a certain rate. They can deviate from 316 00:19:16,680 --> 00:19:19,240 Speaker 1: their posted tariff, right they can. They can charge somebody 317 00:19:19,320 --> 00:19:22,320 Speaker 1: less in exchange, for example, for getting more volume, because 318 00:19:22,359 --> 00:19:25,000 Speaker 1: carriers are typically chasing volume as opposed to running away 319 00:19:25,000 --> 00:19:27,000 Speaker 1: from it like they are now, so there's a potentially 320 00:19:27,040 --> 00:19:29,680 Speaker 1: contract action there, but those contract actions are lying courts. 321 00:19:29,720 --> 00:19:32,720 Speaker 1: They don't lie before the Federal Maritime Commission. As I said, 322 00:19:32,760 --> 00:19:34,879 Speaker 1: I don't I think at least with the perspect of 323 00:19:34,880 --> 00:19:36,560 Speaker 1: the ocean carriers, and we can talk about the truck 324 00:19:36,560 --> 00:19:39,120 Speaker 1: are separately, but at least with respect of the ocean carriers, 325 00:19:39,280 --> 00:19:40,880 Speaker 1: what you can assume for if it's not a breach 326 00:19:40,920 --> 00:19:43,359 Speaker 1: of the commitment, delay is going to be an uphill battle. 327 00:19:43,560 --> 00:19:46,360 Speaker 1: But at the Commission you can sue for unreasonable practices 328 00:19:46,359 --> 00:19:49,480 Speaker 1: and discrimination and emerging attention. I think it's going to 329 00:19:49,520 --> 00:19:51,320 Speaker 1: be a big thing. As I mentioned earlier, you know, 330 00:19:51,400 --> 00:19:53,800 Speaker 1: the Commission is very focused on this. The Ocean Shipping 331 00:19:53,800 --> 00:19:56,560 Speaker 1: Reform Act, the piece of legislation I mentioned, is also 332 00:19:56,600 --> 00:20:00,880 Speaker 1: focused on this. Um. The carriers have these pake many 333 00:20:00,880 --> 00:20:02,320 Speaker 1: of them, not all of them, that have these very 334 00:20:02,359 --> 00:20:05,400 Speaker 1: opaque billing practices with respect to emerging attention. And it's 335 00:20:05,440 --> 00:20:08,000 Speaker 1: not clear you know, to the shippers, to the to 336 00:20:08,040 --> 00:20:10,720 Speaker 1: the walmarts when they're gonna get hit with these charges, 337 00:20:11,440 --> 00:20:14,879 Speaker 1: and so that that is an unreasonable practice if they 338 00:20:14,960 --> 00:20:17,359 Speaker 1: if they're getting whacked with these charges for boxes that 339 00:20:17,400 --> 00:20:20,280 Speaker 1: they couldn't pick up or they couldn't return beyond their control. 340 00:20:20,600 --> 00:20:23,080 Speaker 1: It's an unreasonable practice and they can get sued for that. 341 00:20:23,280 --> 00:20:26,199 Speaker 1: It has to promote freight fluidity because demerge charges. The 342 00:20:26,240 --> 00:20:28,760 Speaker 1: reason they're justified is because they expect the movement of 343 00:20:28,800 --> 00:20:30,119 Speaker 1: the boxes. They get them out of the port, they 344 00:20:30,119 --> 00:20:32,439 Speaker 1: get them back, they keep things moving. If they're not 345 00:20:32,480 --> 00:20:35,240 Speaker 1: doing that because you just can't get there, you can't 346 00:20:35,240 --> 00:20:37,560 Speaker 1: get the container because there's too much congestion, how does 347 00:20:37,560 --> 00:20:41,880 Speaker 1: that promote fre freight fluidity? So you anticipate seeing some 348 00:20:41,920 --> 00:20:46,160 Speaker 1: action there in that area. Yeah, um, and I think 349 00:20:46,240 --> 00:20:48,680 Speaker 1: you'll see some action by the Bureau of Enforcement as well. 350 00:20:49,160 --> 00:20:53,240 Speaker 1: If things don't debate, if we don't see money shifting 351 00:20:53,280 --> 00:20:55,840 Speaker 1: to services and the pressure keeps up on the supply chain, 352 00:20:56,560 --> 00:20:59,320 Speaker 1: I think we're going to see a more muscular and 353 00:20:59,400 --> 00:21:03,360 Speaker 1: more robust Federal Maritime Commission. They've already done a lot. 354 00:21:03,440 --> 00:21:05,879 Speaker 1: I mean they've they've done a lot of inquiries. Commissioner 355 00:21:05,960 --> 00:21:09,640 Speaker 1: dies been focused on fact finding. Twenty nine, they promulgated 356 00:21:09,680 --> 00:21:12,359 Speaker 1: an interpretive rule, we're going to merge in detention. They 357 00:21:12,480 --> 00:21:15,160 Speaker 1: laid down the law about this whole freight fluidity principle. 358 00:21:15,640 --> 00:21:18,479 Speaker 1: And so they've they put down the markers, they've been 359 00:21:18,600 --> 00:21:23,439 Speaker 1: conducting investigations, submitting information requests, you know, basically subpoenas to 360 00:21:23,480 --> 00:21:26,960 Speaker 1: the carriers. So they're watching, they're waiting, and they're getting ready. 361 00:21:27,119 --> 00:21:29,520 Speaker 1: There hasn't been a lot of activity yet in the docket, 362 00:21:29,600 --> 00:21:32,040 Speaker 1: but you know, I think that they will because as 363 00:21:32,040 --> 00:21:34,640 Speaker 1: I mentioned, there's a lot of shipper you know, Walmart, 364 00:21:34,840 --> 00:21:39,199 Speaker 1: you know, Ocean, Ocean Service consumer fear of that they 365 00:21:39,200 --> 00:21:41,679 Speaker 1: will be discriminated against, which of course would be a 366 00:21:41,760 --> 00:21:44,800 Speaker 1: violation of the Shipping Act. But nevertheless, they they're afraid 367 00:21:44,840 --> 00:21:47,119 Speaker 1: that if they come out against the ocean carriers, they 368 00:21:47,160 --> 00:21:49,880 Speaker 1: won't get any any service at all, you know. So 369 00:21:50,000 --> 00:21:53,159 Speaker 1: and also you know, it's very diffuse. The shippers are 370 00:21:53,240 --> 00:21:55,640 Speaker 1: very diffused, right, I mean, they've got there's so many 371 00:21:55,680 --> 00:21:57,840 Speaker 1: of them compared to the nine or ten carriers and 372 00:21:57,880 --> 00:22:02,480 Speaker 1: three conferences, and it's factually very challenging, you know, because 373 00:22:02,760 --> 00:22:05,600 Speaker 1: they might have one one container here, one container there, 374 00:22:06,119 --> 00:22:08,560 Speaker 1: and there's so you know, each container is a different 375 00:22:08,640 --> 00:22:11,120 Speaker 1: delay period, each one is a different move and so 376 00:22:11,680 --> 00:22:14,560 Speaker 1: you know, unless you take a consolidated entity like to 377 00:22:14,600 --> 00:22:16,600 Speaker 1: grow of enforcement, that's going to sort of stand up 378 00:22:16,640 --> 00:22:19,960 Speaker 1: for everybody. There's a lower incentive to bring a cause 379 00:22:19,960 --> 00:22:23,280 Speaker 1: of action for a shipper. And if if BOE doesn't, 380 00:22:23,280 --> 00:22:26,200 Speaker 1: then and then Congress will, Congressman John Garamendi and Congressman 381 00:22:26,280 --> 00:22:28,400 Speaker 1: Johnson will through their act, which has got sixty six 382 00:22:28,440 --> 00:22:33,240 Speaker 1: co sponsors. What is their act do just broadly imposes 383 00:22:33,280 --> 00:22:36,280 Speaker 1: new requirements to certify and explain and make more transparent 384 00:22:36,400 --> 00:22:40,720 Speaker 1: these emerging detention charges and invoices. Another thing that it does, 385 00:22:40,760 --> 00:22:44,560 Speaker 1: which is which is really interesting, it imposes new obligations 386 00:22:44,720 --> 00:22:48,119 Speaker 1: for the carriers to furnish the facilities and instrumentalities to 387 00:22:48,200 --> 00:22:52,680 Speaker 1: perform their services, including containers. So you know, as a consumer, 388 00:22:52,760 --> 00:22:55,520 Speaker 1: you think they're going to get your stuff to you 389 00:22:55,880 --> 00:23:00,480 Speaker 1: in say Peory, Illinois from l A Long Beach. But 390 00:23:00,720 --> 00:23:02,800 Speaker 1: so the carrier, you know, they've kind of spun off 391 00:23:02,880 --> 00:23:05,040 Speaker 1: everything after the port except for these end to end 392 00:23:05,080 --> 00:23:07,679 Speaker 1: products which I was talking about earlier. So as I mentioned, 393 00:23:07,760 --> 00:23:09,800 Speaker 1: it's like a huge problem is that the containers are 394 00:23:09,840 --> 00:23:12,800 Speaker 1: just all in the wrong places and the chassis are 395 00:23:12,840 --> 00:23:14,560 Speaker 1: in the wrong places or there aren't enough of them, 396 00:23:15,000 --> 00:23:16,840 Speaker 1: and the carriers are saying, well, it's not my fault, 397 00:23:17,200 --> 00:23:20,240 Speaker 1: you know, sorry, you know, you know, there's been reports 398 00:23:20,320 --> 00:23:24,800 Speaker 1: that the carriers are sending back empty containers westbound to 399 00:23:24,960 --> 00:23:28,200 Speaker 1: China because they can make ten or twenty or or 400 00:23:28,280 --> 00:23:35,000 Speaker 1: more dollars to box on that eastbound import. Whereas before 401 00:23:35,080 --> 00:23:37,360 Speaker 1: they were sending it westbound to make a little extra money. 402 00:23:37,400 --> 00:23:40,080 Speaker 1: They were sending westbound with the farmers agricultural products. Now 403 00:23:40,119 --> 00:23:42,680 Speaker 1: it's just not going to the inland at all, and 404 00:23:42,880 --> 00:23:46,360 Speaker 1: so um, you know, there's a lot of anger there. 405 00:23:47,160 --> 00:23:50,640 Speaker 1: But you know, they can disclaim the obligation to provide 406 00:23:50,640 --> 00:23:53,560 Speaker 1: the container and the chassis if the Act goes through. 407 00:23:53,960 --> 00:23:55,880 Speaker 1: You know, that language to me looks like it puts 408 00:23:55,960 --> 00:23:57,800 Speaker 1: the onus back on the ocean carry to make sure 409 00:23:57,880 --> 00:24:00,160 Speaker 1: that box is available, make sure that chassis availab ball 410 00:24:00,200 --> 00:24:03,159 Speaker 1: and that that's a huge change and transparency emerge as 411 00:24:03,200 --> 00:24:05,600 Speaker 1: a huge change. And it also has other things that 412 00:24:05,680 --> 00:24:08,200 Speaker 1: it does that provides new weapons to the Commission to 413 00:24:08,240 --> 00:24:12,080 Speaker 1: make them more robust. You know, for example, you know, 414 00:24:12,200 --> 00:24:16,800 Speaker 1: has new compensation rules that allows the Commission to prosecute 415 00:24:16,920 --> 00:24:19,879 Speaker 1: or pursue refunds on behalf of shippers who may not 416 00:24:19,960 --> 00:24:23,360 Speaker 1: be willing to bring the causes of action. What about truckers, 417 00:24:23,480 --> 00:24:26,200 Speaker 1: is it easier. Is that an easier cause of action 418 00:24:26,200 --> 00:24:29,520 Speaker 1: because you're not involved with the Maritime Commission? Well, you know, 419 00:24:29,720 --> 00:24:31,960 Speaker 1: it kind of depends on what your contract looks like 420 00:24:32,320 --> 00:24:34,320 Speaker 1: with your trucker. Again, a lot, I think a lot 421 00:24:34,359 --> 00:24:37,960 Speaker 1: of shippers there's a scarcity of truckers as well, you know, 422 00:24:38,400 --> 00:24:40,280 Speaker 1: particularly you know in the drage segment, which is what 423 00:24:40,359 --> 00:24:44,320 Speaker 1: we're really talking about. And so again they're disinclined to 424 00:24:44,880 --> 00:24:47,200 Speaker 1: drag their trucker into court. Who can just say, you know, 425 00:24:47,280 --> 00:24:48,840 Speaker 1: I'm not going to deal with you anymore, and where 426 00:24:48,840 --> 00:24:50,399 Speaker 1: are they going to go? But you know, they can 427 00:24:50,520 --> 00:24:53,120 Speaker 1: bring cause of action against them. But what I've seen 428 00:24:53,160 --> 00:24:55,720 Speaker 1: a lot is that, you know, the the trucking contracts 429 00:24:55,800 --> 00:25:00,560 Speaker 1: typically say um, here's the conditions of service, and then 430 00:25:00,760 --> 00:25:03,960 Speaker 1: underneath that there for each move there's like an offering acceptance. 431 00:25:04,000 --> 00:25:06,280 Speaker 1: There's a task order, you know, and often they will 432 00:25:06,280 --> 00:25:08,439 Speaker 1: have two or three dradge providers and so the shipper 433 00:25:09,000 --> 00:25:12,960 Speaker 1: wah wah right, they will say, um, okay, you know, 434 00:25:13,000 --> 00:25:14,520 Speaker 1: I have a boxing needs to go from me to 435 00:25:14,600 --> 00:25:17,000 Speaker 1: be and then the trucker can accept it or not. 436 00:25:17,600 --> 00:25:19,240 Speaker 1: And so what the truckers are saying now is, you know, 437 00:25:19,280 --> 00:25:21,480 Speaker 1: we just don't have the capacity. So if you've got 438 00:25:21,560 --> 00:25:23,879 Speaker 1: two or three and both of them are rolling, you know, 439 00:25:23,960 --> 00:25:26,200 Speaker 1: saying I can't take that load, how do you really go? 440 00:25:26,560 --> 00:25:29,280 Speaker 1: How do you proceed against them for breach? Unless you 441 00:25:29,359 --> 00:25:31,520 Speaker 1: know you have a particular commitment that they're not meeting, 442 00:25:32,080 --> 00:25:33,880 Speaker 1: then you can go after them. You know, in terms 443 00:25:33,920 --> 00:25:35,760 Speaker 1: of volume. My guess is that that the truckers are 444 00:25:35,880 --> 00:25:38,480 Speaker 1: meeting that volume because nobody foresaw what the volume would be. 445 00:25:38,800 --> 00:25:40,680 Speaker 1: So it's not that they aren't meeting their commitments, it's 446 00:25:40,720 --> 00:25:42,520 Speaker 1: just that the demand is higher than it used to be. 447 00:25:42,920 --> 00:25:44,800 Speaker 1: One of the things that's really interesting that I've seen 448 00:25:44,960 --> 00:25:47,520 Speaker 1: is that, you know, say as a shipper, you know, 449 00:25:47,680 --> 00:25:49,520 Speaker 1: like a big box store with a lot of power, 450 00:25:49,800 --> 00:25:52,320 Speaker 1: they have capacity commitments from the ocean carriers that say 451 00:25:52,440 --> 00:25:54,480 Speaker 1: you have to give me however many boxes I need 452 00:25:54,760 --> 00:25:57,320 Speaker 1: on a rolling, say eight week basis. So those guys 453 00:25:57,400 --> 00:26:00,520 Speaker 1: have that. But then you know you're small four hundred 454 00:26:00,520 --> 00:26:03,320 Speaker 1: boxes forty boxes a year importer and say like this 455 00:26:03,480 --> 00:26:06,240 Speaker 1: West Coast furniture importer, that guy doesn't have that. You know, 456 00:26:06,359 --> 00:26:09,239 Speaker 1: he's got something that says you get your whatever you want. 457 00:26:09,280 --> 00:26:10,879 Speaker 1: You were going to pay for your four D boxes. 458 00:26:11,560 --> 00:26:13,760 Speaker 1: So you see what happens is that the big box 459 00:26:13,840 --> 00:26:17,320 Speaker 1: stores they keep eating more and more commitment. And I 460 00:26:17,480 --> 00:26:18,879 Speaker 1: mean to put it on the big box stores. They 461 00:26:18,920 --> 00:26:20,359 Speaker 1: just mean, you know, anybody who has that kind of 462 00:26:20,400 --> 00:26:22,560 Speaker 1: market power with the ocean carriers, because there's a fixed 463 00:26:22,600 --> 00:26:26,359 Speaker 1: supply of wrestle space, they keep eating more and it 464 00:26:26,480 --> 00:26:28,919 Speaker 1: rolls downhill and a lot of and I've seen carriers 465 00:26:29,000 --> 00:26:31,000 Speaker 1: just walk out on contracts, just say I'm not going 466 00:26:31,040 --> 00:26:33,080 Speaker 1: to give you your minimum quantity commitment or they call 467 00:26:33,240 --> 00:26:35,120 Speaker 1: m QC. I'm not gonna give your boxes the little 468 00:26:35,160 --> 00:26:38,680 Speaker 1: guy because they don't have to. And those guys bring actions, 469 00:26:38,800 --> 00:26:40,679 Speaker 1: and you know, typically, you know, the ocean carriers are 470 00:26:40,720 --> 00:26:42,680 Speaker 1: making so much money that they just stepped them. It's 471 00:26:42,760 --> 00:26:45,639 Speaker 1: cheaper to walk out on that than then disappoint the 472 00:26:45,640 --> 00:26:47,240 Speaker 1: big box store or that, you know, the big the 473 00:26:47,280 --> 00:26:51,040 Speaker 1: big customer. Thanks Briant. That's Brian Gardner, a partner at 474 00:26:51,080 --> 00:26:56,600 Speaker 1: Winston and Strawn Unicolors, was before the Supreme Court arguing 475 00:26:56,680 --> 00:27:00,399 Speaker 1: that the Ninth Circuit wrongly next to copyright and rangement 476 00:27:00,440 --> 00:27:04,040 Speaker 1: win against designer H and M, and several Supreme Court 477 00:27:04,160 --> 00:27:08,280 Speaker 1: joices appeared skeptical of the Ninth circuits interpretation of when 478 00:27:08,359 --> 00:27:13,080 Speaker 1: a copyright registration should be invalidated for errors. Joining me 479 00:27:13,200 --> 00:27:16,840 Speaker 1: is an expert in intellectual property law. Sham balgan Ish, 480 00:27:17,200 --> 00:27:21,920 Speaker 1: a professor at Columbia Law School. Unicolors sued H and 481 00:27:22,160 --> 00:27:25,920 Speaker 1: M in federal court. Explain what the lawsuit was about 482 00:27:26,000 --> 00:27:30,640 Speaker 1: and what happened so so the lawsuit itself was fairly straightforward. 483 00:27:30,800 --> 00:27:35,680 Speaker 1: Unicolors is obviously a company that manufactures and selves designs 484 00:27:35,720 --> 00:27:39,119 Speaker 1: of fabrics, and it had registered a whole bunch of 485 00:27:39,160 --> 00:27:42,040 Speaker 1: different designs, and its sued H and M for copying 486 00:27:42,600 --> 00:27:47,440 Speaker 1: one of its designs in federal court and um in 487 00:27:47,720 --> 00:27:50,280 Speaker 1: the actual At the actual trial, the jury concluded that 488 00:27:50,359 --> 00:27:54,840 Speaker 1: there was in fact infringement and awarded Unicolors a significant 489 00:27:55,320 --> 00:27:58,800 Speaker 1: award of damages. And then what happened at the end 490 00:27:58,840 --> 00:28:04,000 Speaker 1: of the trial, Each and M discovered that Unicolors, when 491 00:28:04,160 --> 00:28:08,280 Speaker 1: hit it had applied for its copyright registration, had made 492 00:28:08,359 --> 00:28:12,200 Speaker 1: an error, had submitted inaccurate information to the Copyright Office, 493 00:28:12,960 --> 00:28:16,639 Speaker 1: and under a provision known as Section four and eleven 494 00:28:16,880 --> 00:28:21,119 Speaker 1: of the Copyright Statute, it allows the certificate of registration 495 00:28:21,240 --> 00:28:23,520 Speaker 1: to be invalidated. And that's what the whole litigation is 496 00:28:23,560 --> 00:28:27,840 Speaker 1: about if there was inaccurate information that was included on 497 00:28:27,920 --> 00:28:33,439 Speaker 1: the application for registration with the knowledge that it was inaccurate, okay. 498 00:28:33,760 --> 00:28:36,960 Speaker 1: And so the district courts found, however, that there was 499 00:28:37,200 --> 00:28:41,360 Speaker 1: no knowledge of this inaccuracy, and it continues to find, 500 00:28:41,440 --> 00:28:44,040 Speaker 1: and it found for Unicolors and affirmed the jury award, 501 00:28:44,080 --> 00:28:46,280 Speaker 1: and I think there was a reduction in the jury award, 502 00:28:46,320 --> 00:28:49,720 Speaker 1: but it awards the damages the Unicolor and also awards 503 00:28:49,760 --> 00:28:53,960 Speaker 1: attorneys fees reasonable costs. Then what happens The matter gets 504 00:28:54,000 --> 00:28:58,280 Speaker 1: appealed to the Ninth Circuit, and the Ninth Circuit interprets 505 00:28:58,360 --> 00:29:02,640 Speaker 1: that requirement of inaccurate in formation and knowledge to conclude that, 506 00:29:03,000 --> 00:29:05,959 Speaker 1: based on the on the lower court's factual record itself 507 00:29:06,080 --> 00:29:09,720 Speaker 1: and its own interpretation of the inaccuracy, that all that 508 00:29:09,960 --> 00:29:14,120 Speaker 1: was needed for the invalidation of the copyright registration was 509 00:29:14,280 --> 00:29:18,760 Speaker 1: that Unicolors should have known about a factual inaccuracy on 510 00:29:19,040 --> 00:29:23,280 Speaker 1: the registration information that was submitted, and since that was 511 00:29:23,480 --> 00:29:27,240 Speaker 1: unambiguously shown on the trial record, its registration was invalidated 512 00:29:27,320 --> 00:29:30,640 Speaker 1: and it would not succeed. And that's the narrow question 513 00:29:30,800 --> 00:29:33,560 Speaker 1: on which the Supreme Court took this petition took this 514 00:29:33,680 --> 00:29:38,120 Speaker 1: case was to determine what kind of knowledge there needed 515 00:29:38,200 --> 00:29:42,200 Speaker 1: to be in order to invalidate a copyright registration or 516 00:29:42,440 --> 00:29:49,080 Speaker 1: inaccurate information. So whether Unicolor committed fraud in filing the application, 517 00:29:50,160 --> 00:29:53,440 Speaker 1: well so um in technical terms yes, but not fraud. 518 00:29:53,480 --> 00:29:56,320 Speaker 1: That's not the legal term that's used. They did use 519 00:29:56,360 --> 00:29:59,960 Speaker 1: it occasionally. It basically a little bit of background into 520 00:30:00,000 --> 00:30:02,160 Speaker 1: it was in an eighth Congress makes a change the 521 00:30:02,240 --> 00:30:06,640 Speaker 1: Copyright Statute to introduce this standard for invalidating a copyright 522 00:30:07,040 --> 00:30:11,080 Speaker 1: registration for inaccuracy, and it's it codifies this age old 523 00:30:11,240 --> 00:30:14,280 Speaker 1: doctrine that is known as fraud on the Copyright Office, 524 00:30:15,240 --> 00:30:19,600 Speaker 1: which is about giving the Copyright Office UH improper information 525 00:30:19,720 --> 00:30:22,760 Speaker 1: inaccurate information in order to get a copyright registration. But 526 00:30:22,960 --> 00:30:26,280 Speaker 1: the statute itself doesn't talk about fraud. And so the 527 00:30:26,600 --> 00:30:30,760 Speaker 1: whole question technically was about what kind of knowledge Unicolors 528 00:30:31,200 --> 00:30:34,720 Speaker 1: needed to have had for this invalidation to happen. And 529 00:30:34,840 --> 00:30:38,840 Speaker 1: Unicolors makes the argument that you know, while we did 530 00:30:39,360 --> 00:30:43,800 Speaker 1: present inaccuracy UM on on the underlying facts, namely on 531 00:30:43,960 --> 00:30:46,240 Speaker 1: whether all of the registrations and if you want to 532 00:30:46,480 --> 00:30:50,240 Speaker 1: talk about the group registration, which was another wrinkle and complexity, 533 00:30:50,280 --> 00:30:53,120 Speaker 1: making this even more technical. But Unicolor said there was 534 00:30:53,160 --> 00:30:56,400 Speaker 1: an inaccuracy, yes, in the facts. However, the legal standard 535 00:30:57,360 --> 00:31:00,920 Speaker 1: that applies to those facts is what rendered inaccurate. In 536 00:31:01,000 --> 00:31:05,680 Speaker 1: other words, the inaccuracy emanates not just from the underlying facts, 537 00:31:05,760 --> 00:31:10,920 Speaker 1: but from the standard for registrability, which has remained ambiguous, 538 00:31:11,160 --> 00:31:13,920 Speaker 1: and we don't have any clear interpretation until the Ninth 539 00:31:14,000 --> 00:31:17,560 Speaker 1: Circuit took a particular position on it, and so we 540 00:31:17,680 --> 00:31:21,600 Speaker 1: did not know when we submitted the registration that we 541 00:31:21,680 --> 00:31:24,360 Speaker 1: were inaccurate as a matter of law. And you should 542 00:31:24,440 --> 00:31:28,040 Speaker 1: apply the standard to mean an inaccuracy on the legal 543 00:31:28,120 --> 00:31:32,120 Speaker 1: application of the standard to the facts, and therefore you 544 00:31:32,160 --> 00:31:35,720 Speaker 1: should not invalidate our registration. What was the main topic 545 00:31:35,880 --> 00:31:39,040 Speaker 1: or what was the concern of the justices during oral arguments? 546 00:31:39,640 --> 00:31:42,160 Speaker 1: So I think a couple of things. First, trying to 547 00:31:42,280 --> 00:31:46,880 Speaker 1: figure out what exactly the party's dispute and disagreement was 548 00:31:46,920 --> 00:31:50,200 Speaker 1: in terms of their standard of knowledge. What exactly each 549 00:31:50,320 --> 00:31:52,800 Speaker 1: party meant by its sense of knowledge, was it going 550 00:31:52,880 --> 00:31:56,200 Speaker 1: to be actual knowledge? Was its subjective knowledge? And really 551 00:31:56,280 --> 00:31:59,600 Speaker 1: a focus on the difference between knowledge of the underlying 552 00:31:59,680 --> 00:32:02,800 Speaker 1: fact and knowledge of the legal standard. Is applied to 553 00:32:02,880 --> 00:32:06,959 Speaker 1: that fact, which renders it an inaccuracy and application right. 554 00:32:07,000 --> 00:32:09,360 Speaker 1: I think that was the principal concern of the justices, 555 00:32:09,480 --> 00:32:12,440 Speaker 1: and in some sense most of the questions really turned 556 00:32:12,480 --> 00:32:15,880 Speaker 1: on statutory interpretation. I think one of the unambiguous things 557 00:32:15,960 --> 00:32:17,880 Speaker 1: coming out of today's oral argument was that this is 558 00:32:17,920 --> 00:32:21,440 Speaker 1: going to be a case about statutory interpretation, where there's 559 00:32:21,480 --> 00:32:23,840 Speaker 1: going to be agreement that there is a knowledge requirement 560 00:32:24,080 --> 00:32:26,480 Speaker 1: in the statute based on the plain meaning. But the 561 00:32:26,560 --> 00:32:29,000 Speaker 1: second question is going to be what is that knowledge 562 00:32:29,040 --> 00:32:31,560 Speaker 1: relating to? Is it just knowledge of the underlying facts, 563 00:32:31,760 --> 00:32:34,520 Speaker 1: like the Ninth Circuit said, or is it knowledge of 564 00:32:34,720 --> 00:32:37,200 Speaker 1: the legal standard as applied to the facts, namely, knowledge 565 00:32:37,280 --> 00:32:41,320 Speaker 1: of the legal interpretation to render something an inaccuracy along 566 00:32:41,360 --> 00:32:43,720 Speaker 1: the lines of what Unicolor is asking for. And I 567 00:32:43,800 --> 00:32:46,480 Speaker 1: think that's that was one of the main takeaways. The 568 00:32:46,600 --> 00:32:50,200 Speaker 1: second one was a sense in which how to approach 569 00:32:50,400 --> 00:32:53,800 Speaker 1: the question of knowledge. Whether you should look exclusively at 570 00:32:53,960 --> 00:32:56,440 Speaker 1: the other parts of the copyright Statute which used the 571 00:32:56,480 --> 00:32:59,680 Speaker 1: word knowledge and have other kinds of c inter requirements, 572 00:32:59,760 --> 00:33:02,320 Speaker 1: or that you should look at other statutes that have 573 00:33:02,400 --> 00:33:05,680 Speaker 1: similar usages of the word knowledge. I think, especially when 574 00:33:05,800 --> 00:33:07,560 Speaker 1: h and M's lawyer argued there was a lot of 575 00:33:07,960 --> 00:33:10,560 Speaker 1: back and forth and trying to compare the knowledge requirement 576 00:33:10,680 --> 00:33:13,720 Speaker 1: under this section to some of the courts prior jurisprisons 577 00:33:13,800 --> 00:33:16,800 Speaker 1: on knowledge to life and dife how there may be 578 00:33:17,280 --> 00:33:20,920 Speaker 1: some differences. Another question that came up, not quite as 579 00:33:21,040 --> 00:33:24,560 Speaker 1: central as one might have initially predicted, was this issue 580 00:33:24,600 --> 00:33:28,000 Speaker 1: with copyright troll, which H and M had made an 581 00:33:28,040 --> 00:33:32,400 Speaker 1: issue of in its brief, basically accusing Unicolors of being 582 00:33:32,440 --> 00:33:35,800 Speaker 1: a copyright troll. So tell us what a copyright troll is. 583 00:33:36,600 --> 00:33:39,960 Speaker 1: Copyright troll at least as not a technical legal term, 584 00:33:40,040 --> 00:33:43,880 Speaker 1: but it's used pejoratively, no doubt, to refer to a 585 00:33:44,000 --> 00:33:48,400 Speaker 1: copyright plaintiff who doesn't have a real interest in the 586 00:33:48,560 --> 00:33:51,960 Speaker 1: underlying creativity that copyright is meant to promote, but whose 587 00:33:52,000 --> 00:33:55,800 Speaker 1: business model is really built around copyright litigation and and 588 00:33:55,920 --> 00:34:00,800 Speaker 1: sort of generating licensing fees after threats to litigate right 589 00:34:00,920 --> 00:34:03,040 Speaker 1: and so H and M was trying to make the 590 00:34:03,160 --> 00:34:07,880 Speaker 1: argument that you want a lower standard of knowledge so 591 00:34:08,080 --> 00:34:12,480 Speaker 1: as to not encourage copyright trolls to file frivolous lawsuits. 592 00:34:13,719 --> 00:34:16,400 Speaker 1: I think a couple of justices asked that question Justice 593 00:34:16,400 --> 00:34:19,600 Speaker 1: to Mayor began with that question, and then Justice brier 594 00:34:20,320 --> 00:34:22,920 Speaker 1: really pushed on it in oral argument, and I think 595 00:34:22,960 --> 00:34:25,680 Speaker 1: one of the revelations was the justices didn't really see 596 00:34:26,080 --> 00:34:30,080 Speaker 1: the copyright troll issue to be a major issue because 597 00:34:30,160 --> 00:34:35,240 Speaker 1: under Unicolor's argument about inaccuracy needing to be inaccuracy relating 598 00:34:35,280 --> 00:34:38,200 Speaker 1: to the legal standard, at least, Justice Briar's argument was, well, 599 00:34:38,360 --> 00:34:41,640 Speaker 1: copyright trolls tend to be pretty legally sophisticated, so they 600 00:34:41,680 --> 00:34:43,680 Speaker 1: wouldn't be able to satisfy that burden. So having a 601 00:34:43,760 --> 00:34:47,400 Speaker 1: higher threshold is really not going to feed into copyright trolls. 602 00:34:47,880 --> 00:34:49,440 Speaker 1: So I guess if I were to just summarize that 603 00:34:49,560 --> 00:34:52,440 Speaker 1: that the core takeaway from the argument argument today was 604 00:34:52,719 --> 00:34:55,799 Speaker 1: that it was going to be about statutory interpretation, trying 605 00:34:55,840 --> 00:34:58,640 Speaker 1: to figure out what knowledge means in this particular domain, 606 00:34:59,560 --> 00:35:02,400 Speaker 1: and and really trying to figure out whether that knowledge 607 00:35:02,880 --> 00:35:06,040 Speaker 1: word and meaning is something specific to the copyright statute 608 00:35:06,080 --> 00:35:08,480 Speaker 1: or whether it can draw parallels to other statutes that 609 00:35:08,680 --> 00:35:13,840 Speaker 1: use the similar terminology in different contexts. There are several 610 00:35:14,000 --> 00:35:17,399 Speaker 1: justices who are textualists on the Court. Did you see 611 00:35:17,440 --> 00:35:20,879 Speaker 1: any division between the textualists and the other justices as 612 00:35:20,960 --> 00:35:23,400 Speaker 1: to how they look at the statute. I actually did not, 613 00:35:24,000 --> 00:35:25,960 Speaker 1: and I'm not surprised by that, to be honest, I 614 00:35:26,239 --> 00:35:30,400 Speaker 1: think all of the justices agreed at the text says something, 615 00:35:30,520 --> 00:35:32,920 Speaker 1: but that the text is not clear, right. I think 616 00:35:33,000 --> 00:35:35,719 Speaker 1: where you would see this kind of disagreement would be 617 00:35:35,760 --> 00:35:38,080 Speaker 1: in a case like Star Athletica, which I had to 618 00:35:38,120 --> 00:35:41,480 Speaker 1: do with the cheerleader uniforms and definition of design of 619 00:35:41,520 --> 00:35:44,279 Speaker 1: a useful article. I think what you you had here 620 00:35:44,480 --> 00:35:47,680 Speaker 1: was a recognition that the text uses the word knowledge. 621 00:35:47,760 --> 00:35:50,160 Speaker 1: No one was denying that. Then the second order question 622 00:35:50,280 --> 00:35:53,440 Speaker 1: was simply how you interpret the word knowledge that is 623 00:35:53,560 --> 00:35:56,399 Speaker 1: embedded in the text. And there I think there wasn't 624 00:35:56,440 --> 00:35:59,680 Speaker 1: the sense that the language is plain and unambiguously clear, 625 00:35:59,840 --> 00:36:02,120 Speaker 1: that you needed to go beyond the text itself to 626 00:36:02,160 --> 00:36:05,400 Speaker 1: try and understand the context in which Congress use this 627 00:36:05,480 --> 00:36:08,440 Speaker 1: word in two thousand and eight, and the context against 628 00:36:08,560 --> 00:36:11,279 Speaker 1: which you know other statutes that Congress had enacted this. 629 00:36:11,640 --> 00:36:15,280 Speaker 1: So I did not see that textualist non textualist division, 630 00:36:15,680 --> 00:36:17,200 Speaker 1: And to be very honest, and I think part of 631 00:36:17,239 --> 00:36:20,239 Speaker 1: it is even the justices who are not self identified 632 00:36:20,600 --> 00:36:23,400 Speaker 1: textualists recognize that they have to begin a question of 633 00:36:23,400 --> 00:36:27,120 Speaker 1: statutory interpretation with the text of the statute, right, So 634 00:36:27,239 --> 00:36:29,800 Speaker 1: it's not as though the non textualists don't pay attention 635 00:36:29,840 --> 00:36:32,480 Speaker 1: to the statute. So everyone agrees that you begin with 636 00:36:32,560 --> 00:36:35,360 Speaker 1: the statute. Here, the question is what additional components do 637 00:36:35,440 --> 00:36:38,480 Speaker 1: you use to add meaning to the statute? And I 638 00:36:38,560 --> 00:36:41,680 Speaker 1: think that's where, to the extent we see some potential disagreement. 639 00:36:41,760 --> 00:36:44,400 Speaker 1: It may come in in terms of the sources for 640 00:36:44,640 --> 00:36:47,839 Speaker 1: interpreting that that second order question of what knowledge means. 641 00:36:48,320 --> 00:36:49,880 Speaker 1: But I also wanted to add I don't think I'm 642 00:36:49,920 --> 00:36:53,200 Speaker 1: surprised by this because one of the things we started 643 00:36:53,239 --> 00:36:56,440 Speaker 1: seeing in the Roberts Court where there's a lot of 644 00:36:56,520 --> 00:37:01,520 Speaker 1: disagreement around substantive major core copyright issues. So for example, 645 00:37:01,600 --> 00:37:04,799 Speaker 1: Oracle versus Google a split decision, or even the one 646 00:37:04,880 --> 00:37:07,600 Speaker 1: before that p r OH State of Georgia versus Public 647 00:37:07,640 --> 00:37:11,480 Speaker 1: Dot Resource Org, we saw splinter decision. In contrast to that, 648 00:37:12,000 --> 00:37:15,719 Speaker 1: on copyright decisions that deal with the administrative, the remedial, 649 00:37:16,160 --> 00:37:18,680 Speaker 1: or the procedural side of the system, there's been a 650 00:37:18,760 --> 00:37:21,960 Speaker 1: significant amount of unanimity in the on the court. Granted, 651 00:37:22,040 --> 00:37:24,120 Speaker 1: this is sort of a first for the court because 652 00:37:24,120 --> 00:37:27,200 Speaker 1: it's the first time Justice Barrett has been participating in 653 00:37:27,239 --> 00:37:29,719 Speaker 1: a copyright decision, So it remains to be seen what 654 00:37:30,000 --> 00:37:32,640 Speaker 1: role she plays in it, because remember she was not 655 00:37:32,800 --> 00:37:36,440 Speaker 1: part of the decision in Oracle versus Google, and with 656 00:37:36,520 --> 00:37:38,880 Speaker 1: the replacement of Justice Ginsburg, it will be interesting to 657 00:37:38,920 --> 00:37:42,160 Speaker 1: see what the dynamic is. But before that, the unambiguous 658 00:37:42,239 --> 00:37:46,160 Speaker 1: reality was that the Court's procedural and remedial and administrative 659 00:37:46,200 --> 00:37:49,719 Speaker 1: opinions and copyright generated a significant amount of unanimity, and 660 00:37:49,840 --> 00:37:51,680 Speaker 1: that would be in keeping with the trend that we 661 00:37:51,719 --> 00:37:54,960 Speaker 1: saw today's oral argument, how do you think that justices 662 00:37:55,000 --> 00:37:58,640 Speaker 1: will rule here? So there was very favorably predisposed based 663 00:37:58,680 --> 00:38:01,200 Speaker 1: on the oral argument to the listener General's argument. The 664 00:38:01,280 --> 00:38:04,759 Speaker 1: Government intervened basically on the side of unicolors, saying that 665 00:38:04,960 --> 00:38:08,160 Speaker 1: the Ninth Circuits approach saying that all you needed was 666 00:38:08,320 --> 00:38:12,040 Speaker 1: knowledge of the underlying fact, and even if you misinterpreted 667 00:38:12,080 --> 00:38:15,279 Speaker 1: the law because the law was unclear, that does not 668 00:38:15,480 --> 00:38:17,800 Speaker 1: protect you. That is, they basically said that that was 669 00:38:17,920 --> 00:38:21,560 Speaker 1: a path breaking, unprecedented opinion that needed to be changed. 670 00:38:21,600 --> 00:38:25,160 Speaker 1: And I think the justices who were quizzing government's lawyer 671 00:38:25,520 --> 00:38:28,880 Speaker 1: seemed favorably predisposed towards that argument. So I think that 672 00:38:28,960 --> 00:38:32,320 Speaker 1: the Court will come out saying that Unicolor's position is 673 00:38:32,400 --> 00:38:35,360 Speaker 1: a more preferable one. It does not feed into the 674 00:38:35,400 --> 00:38:40,880 Speaker 1: phenomenon of copyright trolls. The standard for invalidating a copyright 675 00:38:40,960 --> 00:38:44,160 Speaker 1: registration is that the inaccuracy must have been included with 676 00:38:44,400 --> 00:38:47,680 Speaker 1: the knowledge that the legal standard as applied to the 677 00:38:47,800 --> 00:38:50,400 Speaker 1: fact was in fact inaccurate. In other words, it's not 678 00:38:50,520 --> 00:38:52,840 Speaker 1: just enough if you know of the underlying facts. You 679 00:38:52,960 --> 00:38:57,000 Speaker 1: have to know that as you interpreted the underlying facts, 680 00:38:57,080 --> 00:39:01,000 Speaker 1: you were representing an inaccuracy who copyright office. That's the 681 00:39:01,040 --> 00:39:02,600 Speaker 1: way in which I think the Court is gonna come 682 00:39:02,640 --> 00:39:05,400 Speaker 1: out rather than on the other side. I think principally 683 00:39:05,480 --> 00:39:09,520 Speaker 1: because there's there's also an underlying policy concern here, which 684 00:39:09,640 --> 00:39:12,920 Speaker 1: is um Congress and the Court a couple of justices 685 00:39:12,960 --> 00:39:15,359 Speaker 1: did voice this. You don't want a standard that makes 686 00:39:15,400 --> 00:39:19,600 Speaker 1: it very easy to have a copyright registration invalidated. The 687 00:39:19,719 --> 00:39:23,520 Speaker 1: flip side of the copyright troll situation would be where 688 00:39:23,600 --> 00:39:27,120 Speaker 1: every defendant who is sued for copyright infringement basically goes 689 00:39:27,160 --> 00:39:30,680 Speaker 1: and digs around to find some minor inaccuracy in the 690 00:39:30,760 --> 00:39:33,920 Speaker 1: copyright registration. And then goes back to court saying, hey, look, 691 00:39:33,960 --> 00:39:36,600 Speaker 1: I found an inaccuracy. As long as we were able 692 00:39:36,640 --> 00:39:39,320 Speaker 1: to show some level of knowledge connected to that factually 693 00:39:39,320 --> 00:39:42,680 Speaker 1: inaccuracy left invalidate the registration and not allow the lawsuit 694 00:39:42,760 --> 00:39:45,480 Speaker 1: to go for I think that's also a concern because 695 00:39:45,600 --> 00:39:48,600 Speaker 1: the idea behind the registration is to to not have 696 00:39:48,719 --> 00:39:52,399 Speaker 1: it be an impediment to having creators go into court 697 00:39:52,440 --> 00:39:54,840 Speaker 1: to sue for copyright infringement. It shouldn't be an easy 698 00:39:55,239 --> 00:39:56,920 Speaker 1: get out of jail free pass, and I think the 699 00:39:57,040 --> 00:39:59,960 Speaker 1: justices were, in my view, seemingly convinced by that concern. 700 00:40:00,320 --> 00:40:04,000 Speaker 1: That's Professor sham Balganes of Columbia Law School. And that's 701 00:40:04,080 --> 00:40:06,640 Speaker 1: it for this edition of The Bloomberg Law Show. Remember 702 00:40:06,719 --> 00:40:08,759 Speaker 1: you can always get the latest legal news on our 703 00:40:08,800 --> 00:40:12,920 Speaker 1: Bloomberg Law Podcast. You can find them on Apple Podcasts, Spotify, 704 00:40:13,160 --> 00:40:18,120 Speaker 1: and at www dot Bloomberg dot com, slash podcast Slash Law, 705 00:40:18,600 --> 00:40:21,160 Speaker 1: And remember to tune into The Bloomberg Law Show every 706 00:40:21,239 --> 00:40:25,120 Speaker 1: week night at ten pm Wall Street Time. I'm June Grosso, 707 00:40:25,280 --> 00:40:26,880 Speaker 1: and you're listening to Bloomberg