WEBVTT - Metaverse Privacy, Shadow Docket, Musk vs. Twitter

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<v Speaker 1>This is Bloomberg Law. A divided Supreme Court rejects a

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<v Speaker 1>religious challenge. Tell us a little about the facts of

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<v Speaker 1>the case. Interviews with prominent attorneys in Bloomberg Legal experts.

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<v Speaker 1>I guess his former federal prosecutor Jimmy Garula Joining me

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<v Speaker 1>is Bloomberg Law reporter Jordan Ruben. And analysis of important

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<v Speaker 1>legal issues, cases and headlines. The Supreme Court takes on

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<v Speaker 1>state secrets. Multiple lawsuits were filed against the emergency rule?

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<v Speaker 1>Is this lawsuit for real? Bloomberg Law with June Grasso

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<v Speaker 1>from Bloomberg Radio. Welcome to Bloomberg Laws Show. I'm Lydia

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<v Speaker 1>Wheeler and I'm Kimberly Robinson. We're in for June Grosso.

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<v Speaker 1>Coming up on the show, we'll discuss the U. S.

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<v Speaker 1>Supreme Court's latest COVID action and the increasing use of

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<v Speaker 1>the courts so called shadow doctor. The first Bloomberg Law reporter,

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<v Speaker 1>Andrea Vittorio joins us to talk about the new extended

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<v Speaker 1>reality experiences that technology companies are promising in the metaverse

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<v Speaker 1>and the privacy pitfollows that could come with collecting more

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<v Speaker 1>data from users. Andrea, thanks for being here. Can you

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<v Speaker 1>start off by explaining what an extended reality is and

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<v Speaker 1>what types of technology it typically includes. Sure, so I

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<v Speaker 1>asked this question myself in writing this story, because there

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<v Speaker 1>are many different kinds of reality and UM, there's sort

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<v Speaker 1>of regular reality on one side and then virtual reality

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<v Speaker 1>on the other, and that's where UM, there's a whole

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<v Speaker 1>virtual world. You have a virtual version of yourself and

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<v Speaker 1>you can participate in virtual activities like games or events

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<v Speaker 1>like concerts or shopping. So UM, that's sort of what

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<v Speaker 1>we think of when we talk about the metaverse. There

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<v Speaker 1>are also versions in between where you can have holograms

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<v Speaker 1>imposed on real life or UM you can see digital

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<v Speaker 1>characters like Pokemon go um in your everyday activities. So

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<v Speaker 1>the virtual realities that we are talking about can mean

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<v Speaker 1>a lot different things. And so what are the digital

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<v Speaker 1>experiences that extended reality companies are promising users. It doesn't

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<v Speaker 1>seem like we're talking about just games here right right.

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<v Speaker 1>There are a lot of potential applications. UM. Gaming is

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<v Speaker 1>definitely one of them. UM that is learning. There are

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<v Speaker 1>schools that are experimenting with virtual reality for students. There's

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<v Speaker 1>also corporate training that can happen in virtual reality. You

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<v Speaker 1>can help firefighters or doctors learn their craft UM just

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<v Speaker 1>by practicing in additual environment UM. And they're just a

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<v Speaker 1>lot of different UM use cases that we kind of

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<v Speaker 1>are seeing explored. But UM could brawn now like theme parks,

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<v Speaker 1>travel shopping. There's a lot going on there in the metaverse.

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<v Speaker 1>So what kinds of data are our companies collecting from

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<v Speaker 1>people who use these sorts of extended reality devices? And

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<v Speaker 1>is any of its sensitive information? The data collected can

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<v Speaker 1>depend on the device or how you're using it UM,

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<v Speaker 1>but there are a lot of potential collection points, like

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<v Speaker 1>when you wear a headset can gather information about like

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<v Speaker 1>how your head is moving, what you're looking at. UM.

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<v Speaker 1>You can sometimes hold devices in your hands that will

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<v Speaker 1>track your hands are moving or what sides they are

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<v Speaker 1>even So UM these are all considered um pretty personal

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<v Speaker 1>pieces of information because they really varied by person UM

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<v Speaker 1>and can even sort of amount to identifying a person

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<v Speaker 1>if you have enough information about them and how they

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<v Speaker 1>move and what they look like. So, UH, try to

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<v Speaker 1>be advocates or concerned just about the um physical characteristics

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<v Speaker 1>or traits that are being gathered about people as they

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<v Speaker 1>use these devices. Right in your story that you recently wrote,

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<v Speaker 1>you refer to you know, tracking these movements as a

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<v Speaker 1>kind of thumb print of your movements, which I thought

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<v Speaker 1>was really interesting. And I'm wondering do companies have to

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<v Speaker 1>get permission from users before they can collect this kind

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<v Speaker 1>of data? And if so, how do they usually do that? Right? So,

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<v Speaker 1>permission is kind of interesting concepts, like when you're in

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<v Speaker 1>a virtual world and you're interacting with different uh people

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<v Speaker 1>or with places, and there's sort of different touch points

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<v Speaker 1>where you would need permission. So there's sort of like

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<v Speaker 1>the base level of permission of using a device and

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<v Speaker 1>creating accounts, but then um, when you play a game

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<v Speaker 1>or some other sort of activity in the in the

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<v Speaker 1>virtual world, um, you're interacting with another business potentially, and

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<v Speaker 1>so they would have to potentially ask for permission to

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<v Speaker 1>gather information about you. Or if you go and buy

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<v Speaker 1>something in the metaverse, then maybe you have to agree

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<v Speaker 1>to private people healthy of the merchant selling you something.

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<v Speaker 1>So UM, permission to gather information or touse information could

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<v Speaker 1>be many layered in this virtual world. Are there any

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<v Speaker 1>laws in place, either at the state or the federal

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<v Speaker 1>level to protect this kind of digital data? So far,

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<v Speaker 1>we have been thinking about privacy laws UM in virtual

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<v Speaker 1>worlds just sort of as applying existing laws to the

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<v Speaker 1>space and UM. So in Europe there's a rule called

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<v Speaker 1>the General Data Protection Regulation that would um probably apply

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<v Speaker 1>these general privacy rights to UM different platforms regardless of

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<v Speaker 1>where you are, So it would apply um in the

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<v Speaker 1>metaverse as well as just sort of auto website UM.

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<v Speaker 1>But then in the US it might kind of depend

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<v Speaker 1>on different state laws since there's no national privacy law here. UM.

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<v Speaker 1>So there's still a lot of questions around, like how

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<v Speaker 1>do these laws apply? And like especially how do how

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<v Speaker 1>do location base laws apply when like I might be

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<v Speaker 1>in one physical place using a device, but I might

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<v Speaker 1>be going somewhere else in the world in my device,

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<v Speaker 1>So does that change like where the laws of that

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<v Speaker 1>place would apply to me or whether the laws where

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<v Speaker 1>I am physically apply to me. So, um, there's still

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<v Speaker 1>a lot of policy questions around, uh, how existing laws

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<v Speaker 1>might fit or um if we need to have new

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<v Speaker 1>laws written specifically for this space. Well, thanks so much.

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<v Speaker 1>That's Bloomberg Law reporter Andrea Vittorio. You're listening to Bloomberg Law.

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<v Speaker 1>Next up will bring in the University of Texas law

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<v Speaker 1>professor Stephen Bladdock to discuss the U S. Supreme Courts

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<v Speaker 1>COVID rulings. I'm Kimberly Robinson and I'm Lidia Wheeler. This

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<v Speaker 1>is Bloomberg Y. This is Bloomberg Law with June Brasso

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<v Speaker 1>from Bloomberg Radio. I'm Lydia Wheeler and I'm Kimberly Robinson.

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<v Speaker 1>We're in for June Grasso. We turn now from the

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<v Speaker 1>metaverse to the COVID pandemic, which has upended life worldwide,

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<v Speaker 1>including at the U. S. Supreme Court, to discuss how

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<v Speaker 1>the justices have dealt with the health crisis. We bring

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<v Speaker 1>in University of Texas law professor Steven Laddock. Thanks so

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<v Speaker 1>much for being here with us. Oh, thanks for having

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<v Speaker 1>me so. On Tuesday, Justice Sonia Sotomayor refused to block

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<v Speaker 1>New York City's requirement that employees here a New York

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<v Speaker 1>City Police detective, be vaccinated against COVID nineteen. There was

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<v Speaker 1>no explanation from the court, but we've seen the justices

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<v Speaker 1>block other vaccine mandates and allow other requirements to stay

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<v Speaker 1>in place. Do you have an understanding about why the

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<v Speaker 1>Court have might have rejected this particular request. Yeah, I mean,

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<v Speaker 1>I think if you look at the overall body of

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<v Speaker 1>work and there's actually a fairly substantial number of cases

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<v Speaker 1>where the Justices have been asked to block various COVID restrictions. UM.

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<v Speaker 1>The cases that have succeeded, basically with I think one exception,

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<v Speaker 1>invariably fall into one of two categories. Either they are

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<v Speaker 1>religious liberty based challenges to COVID restrictions, whether it's a

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<v Speaker 1>vaccine mandate or a limit on how many people can

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<v Speaker 1>gather in the same place. UM. Or it is a

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<v Speaker 1>challenge to a federal policy on grounds that the federal

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<v Speaker 1>policy exceeds the statutory authority that the relevant agency, the

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<v Speaker 1>Centers for Disease Control and Prevention OSHA right that they had.

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<v Speaker 1>And so with one exception, and the exception is the

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<v Speaker 1>New York State eviction moratorium, every single case where the

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<v Speaker 1>Supreme Court has agreed to block a state or federal

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<v Speaker 1>COVID policy the grounds of been religious liberty or you know,

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<v Speaker 1>federal administrative law. You mentioned those in person gatherings in particular,

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<v Speaker 1>and I was, you know, on religious gatherings, I should say,

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<v Speaker 1>and I was curious, how did the justices analyze those

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<v Speaker 1>specific requests? Yeah, you know, I mean, as you guys know,

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<v Speaker 1>part of the trick here is that very very few

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<v Speaker 1>of these rulings should actually come with opinions for the court. UM.

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<v Speaker 1>But so there were a series of cases, you know,

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<v Speaker 1>starting in the summer of and really culminating in the summer,

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<v Speaker 1>where UM, religious groups others challenged, you know, gathering restrictions,

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<v Speaker 1>especially in New York, UM in California. And you know,

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<v Speaker 1>this is I think one place where we saw the

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<v Speaker 1>confirmation of Justice Barrett have a huge shift. UM. So

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<v Speaker 1>in the summer of the court was actually denying these

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<v Speaker 1>requests to block the gathering restrictions. UM. In one or

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<v Speaker 1>two cases, one from California went from the VATA by

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<v Speaker 1>five to four votes, and it was Chief Justice Roberts

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<v Speaker 1>joining the liberals in those cases. UM. And one of

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<v Speaker 1>those cases, the case called South Bay Unitependent Constal Church UM.

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<v Speaker 1>To Justice Roberts wrote separately to say, you know, I'm

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<v Speaker 1>not unsympathetic to the claims that these planets are making,

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<v Speaker 1>but this is you know, not something we should be

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<v Speaker 1>resolving on an emergency application. UM. You know, the sort

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<v Speaker 1>of things are changing on the ground, the policies are shifting, UM,

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<v Speaker 1>and so we should give at least some latitude right

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<v Speaker 1>to the government decision makers. UM. That shifts quickly when

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<v Speaker 1>Justice Barrett's confirmed, so that you know, within a month

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<v Speaker 1>of her confirmation UM in November. Now it's five to

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<v Speaker 1>four the other way in a pair of cases blocking

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<v Speaker 1>you know, New York's restrictions on religious gatherings, UM. And

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<v Speaker 1>in the first of those cases, the case called Roman

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<v Speaker 1>Catholic Diocese of We've got a very short, unsigned opinion

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<v Speaker 1>for the Court that says, the problem with these restrictions

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<v Speaker 1>is that they are treating you know, religious worship more

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<v Speaker 1>harshly than they're treating other forms of essential secular businesses,

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<v Speaker 1>and that that becomes the dominant problem that the Justice

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<v Speaker 1>is find with whole bunch of these um, you know,

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<v Speaker 1>state gathering restrictions during the pandemic, which I think is

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<v Speaker 1>part of why we saw so much action through these cases,

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<v Speaker 1>only when the claims were about religious liberty as opposed

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<v Speaker 1>to other due process or other constitutional rights. So you

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<v Speaker 1>mentioned that a lot of these cases, most of them

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<v Speaker 1>in fact, came up through these emergency requests. I wanted

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<v Speaker 1>to talk a little bit about the so called shadow doctor.

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<v Speaker 1>Can you first explained to people what that even is? Sure,

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<v Speaker 1>So it's it's sort of it's a catchy term um

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<v Speaker 1>that will Bow the Professor Chicago coined in UM to

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<v Speaker 1>describe basically all of the traditionally boring stuff the Supreme

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<v Speaker 1>Court does. You know, we spend most of our time

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<v Speaker 1>thinking about like the fifty five to sixty big merits

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<v Speaker 1>decisions the Court hands down each year dabbs, you know,

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<v Speaker 1>the gun case, etcetera. And as you guys both know,

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<v Speaker 1>I mean, the reality is that, at least by volume,

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<v Speaker 1>the overwhelming majority of what the Supreme Court does is

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<v Speaker 1>actually not those It's these unsigned and usually unexplained orders UM.

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<v Speaker 1>Most of these or anodyne right. No one really gets

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<v Speaker 1>exercised about extensions of time to file briefs UM, even

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<v Speaker 1>when the court is denying sorceerarity, that is to say,

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<v Speaker 1>refuse them to take up an appeal. You know, that

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<v Speaker 1>doesn't often make headlines. But what we've seen in the

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<v Speaker 1>last couple of years, as we've seen more and more

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<v Speaker 1>of these orders, especially when parties are asking for emergency relief,

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<v Speaker 1>especially when a party is saying, I want to appeal

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<v Speaker 1>a decision from a lower court. While I'm appealing it,

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<v Speaker 1>I want you to block this state policy. UM, We're

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<v Speaker 1>seeing the court not only sort of here and and

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<v Speaker 1>take seriously more of those, but grant more of those requests. Um.

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<v Speaker 1>And that's coming you know, without oral argument in almost

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<v Speaker 1>all cases with limited briefing, um, oftentimes through orders that

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<v Speaker 1>have no explanation, and if they have an explanations, through

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<v Speaker 1>a short explanation. UM. As you guys know, well, these

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<v Speaker 1>orders can come at all times a day or even

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<v Speaker 1>in the middle of the dice. And so I think,

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<v Speaker 1>you know, the COVID pandemic was in some respects a

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<v Speaker 1>flashpoint for how much the court is due through these unfined,

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<v Speaker 1>unexplained orders, um. And really for how those orders can

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<v Speaker 1>have massive real world effects even when we have no

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<v Speaker 1>idea why the court is doing what it's doing. And Steve,

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<v Speaker 1>you know, as you mentioned just you know, just now

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<v Speaker 1>that it seems like you're a big critic of the

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<v Speaker 1>shadow docket. And you know, because these cases are coming

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<v Speaker 1>before the court, we're not getting or argument, we're not

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<v Speaker 1>getting you know, opinions. What's can you put into perspective though?

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<v Speaker 1>What's the harm in the fact that we're not having

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<v Speaker 1>like a fully briefed case and arguments before the court? Yeah,

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<v Speaker 1>I mean, I think there are a couple of harms.

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<v Speaker 1>I mean, as to be sure, I don't think the

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<v Speaker 1>shado adopted is first say a bad thing, UM Like,

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<v Speaker 1>there are going to be emergency and the court has

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<v Speaker 1>to have a way of dealing with them. I know

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<v Speaker 1>that the trouble comes when you have the court basically

0:13:42.760 --> 0:13:46.559
<v Speaker 1>issuing an unsigned, unexplained order, let's say, blocking a California

0:13:46.720 --> 0:13:50.520
<v Speaker 1>COVID policy for example, UM, in a case where first

0:13:50.840 --> 0:13:54.680
<v Speaker 1>the lower courts actually had detailed hurings and took significant

0:13:54.679 --> 0:13:57.040
<v Speaker 1>evidence um and actually you know, did a bunch of

0:13:57.080 --> 0:14:00.760
<v Speaker 1>fact findings to support their their conclusions that what California

0:14:00.800 --> 0:14:03.480
<v Speaker 1>was doing with above board. But second where the court

0:14:03.559 --> 0:14:07.040
<v Speaker 1>then turns around and says, hey, lower courts, you are

0:14:07.120 --> 0:14:11.000
<v Speaker 1>bound to follow our unsigned, unexplained order in this case.

0:14:11.440 --> 0:14:13.960
<v Speaker 1>And so I think the problem the shadow doctor creates

0:14:14.000 --> 0:14:17.520
<v Speaker 1>is not just that it's a compressed opportunity for the

0:14:17.640 --> 0:14:21.520
<v Speaker 1>court to do its job, but that it also deprives

0:14:21.560 --> 0:14:24.440
<v Speaker 1>the court in the typical case of the ability to

0:14:24.480 --> 0:14:28.480
<v Speaker 1>provide the kind of lengthy, principled rationale that you know, guys,

0:14:28.520 --> 0:14:31.320
<v Speaker 1>we may not agree with, but at least we understand

0:14:31.480 --> 0:14:34.600
<v Speaker 1>and that you know, the relevant parties, the local and

0:14:34.640 --> 0:14:37.440
<v Speaker 1>state governments, the lower courts can figure out how to

0:14:37.480 --> 0:14:40.680
<v Speaker 1>apply in future cases with you know, marginally different facts.

0:14:41.040 --> 0:14:42.840
<v Speaker 1>We don't have those in most of these orders, and

0:14:42.840 --> 0:14:46.120
<v Speaker 1>I think that's part of why, you know, the proliferation

0:14:46.200 --> 0:14:50.120
<v Speaker 1>of these decisions, especially in context in which the justices

0:14:50.160 --> 0:14:53.880
<v Speaker 1>are treating them as creating precedents. Um is I think

0:14:53.880 --> 0:14:57.360
<v Speaker 1>hard to defend. Coming up next will continue our conversation

0:14:57.480 --> 0:15:00.720
<v Speaker 1>with the University of Texas law professor Stephen Addic. I'm

0:15:00.800 --> 0:15:10.120
<v Speaker 1>Lidia Wheeler and I'm Kimberly Robinson. This is Bloomberg Y.

0:15:12.800 --> 0:15:17.600
<v Speaker 1>This is Bloomberg Law with June Grasso from Bloomberg Radio.

0:15:18.120 --> 0:15:21.040
<v Speaker 1>I'm Lidia Wheeler and I'm Kimberly Robinson. We're in for

0:15:21.120 --> 0:15:24.160
<v Speaker 1>June Grasso. We're back with Professor Stephen Bladdock of the

0:15:24.240 --> 0:15:27.560
<v Speaker 1>University of Texas. When we left, we were talking about

0:15:27.600 --> 0:15:30.520
<v Speaker 1>the courts shadow docket and how most of the COVID

0:15:30.600 --> 0:15:34.360
<v Speaker 1>cases came up through uh that procedure. Of course, there

0:15:34.360 --> 0:15:38.160
<v Speaker 1>were two major exceptions that was on the on two

0:15:38.200 --> 0:15:41.960
<v Speaker 1>federal vaccine mandates, one that the Supreme Court upheld and

0:15:42.000 --> 0:15:45.400
<v Speaker 1>another more broader mandate that the Supreme Court struck down.

0:15:45.800 --> 0:15:48.680
<v Speaker 1>Can you tell us Uh. These cases started on the

0:15:48.680 --> 0:15:51.840
<v Speaker 1>shadow docket themselves, though, right, Yeah, and actually I think

0:15:51.880 --> 0:15:54.200
<v Speaker 1>we could even probably debate whether they were even exception

0:15:54.320 --> 0:15:57.240
<v Speaker 1>so the right. There were two sets of really high

0:15:57.280 --> 0:16:01.360
<v Speaker 1>profile challenges to vaccine mandate from the Biden administration. One

0:16:01.440 --> 0:16:05.360
<v Speaker 1>was the Osha um proposed emergency rule that would have

0:16:05.360 --> 0:16:09.800
<v Speaker 1>required every large employer to impose a vaccination or testing

0:16:10.000 --> 0:16:12.880
<v Speaker 1>requirement on their employees UM. And the other was a

0:16:12.960 --> 0:16:16.520
<v Speaker 1>rule promulgated by the Center for Medicare and Medicaid Services

0:16:16.680 --> 0:16:21.120
<v Speaker 1>that basically required all health care facilities that received federal

0:16:21.320 --> 0:16:24.120
<v Speaker 1>Medicare or Medicaid funds to a whole lot of them

0:16:24.440 --> 0:16:28.480
<v Speaker 1>UM to require their healthcare workers to be vaccinated. So

0:16:28.800 --> 0:16:31.720
<v Speaker 1>they both came to the Supreme Court through the shadow docket.

0:16:31.800 --> 0:16:36.640
<v Speaker 1>The the Osha mandate UM was not blocked by the

0:16:36.680 --> 0:16:39.440
<v Speaker 1>Sixth Circuit UM, and then a whole bunch of parties

0:16:39.480 --> 0:16:42.840
<v Speaker 1>fifteen different sets of applicants asked the Supreme Court to

0:16:42.920 --> 0:16:45.840
<v Speaker 1>issue an emergency stay of the ocean Man date Um.

0:16:45.920 --> 0:16:49.520
<v Speaker 1>The CMS mandate was blocked by two different district courts

0:16:49.520 --> 0:16:52.680
<v Speaker 1>on a nationwide basis, and the Biden administration came to

0:16:52.760 --> 0:16:55.920
<v Speaker 1>the Supreme Court um asking for emergency relief in the

0:16:56.000 --> 0:16:59.280
<v Speaker 1>form of stays of those injunctions. And so what the

0:16:59.320 --> 0:17:01.280
<v Speaker 1>court did, I think made it look like it was

0:17:01.360 --> 0:17:04.640
<v Speaker 1>less shadowy is for the first time nearest we can tell,

0:17:04.640 --> 0:17:08.880
<v Speaker 1>since like um, the full Court decided to hear oral

0:17:08.960 --> 0:17:12.119
<v Speaker 1>argument on the vaccine mandates, and they did, you know,

0:17:12.160 --> 0:17:14.520
<v Speaker 1>in early January, UM. And they turned around about a

0:17:14.600 --> 0:17:18.720
<v Speaker 1>week later and handed down these you know, unsigned procureum

0:17:18.840 --> 0:17:22.400
<v Speaker 1>for the court opinions UM, where they blocked the Ocean

0:17:22.480 --> 0:17:26.520
<v Speaker 1>rule and unblocked the CMS rule. And you know, I guess, guys,

0:17:26.560 --> 0:17:31.280
<v Speaker 1>to me, those cases are a remarkable bell weather because first,

0:17:31.480 --> 0:17:33.399
<v Speaker 1>you know, the fact that the justices saw fit the

0:17:33.440 --> 0:17:35.480
<v Speaker 1>whole argument I think was a bit of a concession

0:17:36.080 --> 0:17:39.119
<v Speaker 1>that they realized that, like you know, the normal shadow

0:17:39.119 --> 0:17:43.400
<v Speaker 1>doctor process was insufficient for cases of the of that magnitude.

0:17:43.840 --> 0:17:46.680
<v Speaker 1>But second, you know, there's a line in the majority

0:17:46.680 --> 0:17:49.960
<v Speaker 1>opinion in the Ocean case where the you know whoever

0:17:49.960 --> 0:17:52.960
<v Speaker 1>wrote it, we don't know who did, um talks about

0:17:53.080 --> 0:17:56.360
<v Speaker 1>the equities and how you know, the federal government said

0:17:56.400 --> 0:17:58.720
<v Speaker 1>if you block the Ocean mandate, all these bath rooms

0:17:58.720 --> 0:18:01.920
<v Speaker 1>will happen. The Balingers, including a bunch of Red State said,

0:18:01.960 --> 0:18:04.920
<v Speaker 1>if you don't block the mandate, these bad dems will happen.

0:18:05.440 --> 0:18:07.720
<v Speaker 1>And then the Court says, it's not our job to

0:18:07.880 --> 0:18:11.240
<v Speaker 1>balance those trade offs. Um. And I have to say,

0:18:11.280 --> 0:18:13.560
<v Speaker 1>guys like that, that line, as someone who studies this

0:18:13.720 --> 0:18:17.600
<v Speaker 1>like kind of set me spinning, because it's actually exactly

0:18:17.640 --> 0:18:20.280
<v Speaker 1>the Court's job in the context of these kinds of

0:18:20.320 --> 0:18:22.840
<v Speaker 1>emergency application to balance those trade offs. And so I

0:18:22.880 --> 0:18:25.439
<v Speaker 1>think you know, in that respect, these cases were actually

0:18:25.440 --> 0:18:29.920
<v Speaker 1>this perfect encapsulation of how the shadow doctor has evolved,

0:18:30.040 --> 0:18:34.040
<v Speaker 1>of how more and more high profile disputes are being

0:18:34.080 --> 0:18:39.000
<v Speaker 1>resolved through these expedited processes, and how in that context

0:18:39.000 --> 0:18:42.720
<v Speaker 1>where the Court is supposed to be balancing the harms

0:18:42.720 --> 0:18:46.159
<v Speaker 1>to each side, UM, the Court is really increasingly just

0:18:46.359 --> 0:18:48.879
<v Speaker 1>deciding what it thinks the right answer is on the merits.

0:18:49.080 --> 0:18:51.280
<v Speaker 1>I want to talk with you more about how the

0:18:51.359 --> 0:18:54.679
<v Speaker 1>shadow docket has evolved, UM, because I know you've been

0:18:54.720 --> 0:18:58.080
<v Speaker 1>following a change in how parties and the justices use

0:18:58.160 --> 0:19:00.600
<v Speaker 1>the shadow jacket. So can you talk talk about those

0:19:00.680 --> 0:19:04.560
<v Speaker 1>changes in particularly those changes under the Trump administration. Yeah,

0:19:04.600 --> 0:19:06.800
<v Speaker 1>I mean, so you know it used to be, as

0:19:06.880 --> 0:19:09.440
<v Speaker 1>I said, we've had the shadow docket forever um and

0:19:09.520 --> 0:19:13.840
<v Speaker 1>the historically the body of cases that were the source

0:19:13.920 --> 0:19:16.880
<v Speaker 1>of the most shadowed doctor activity involved the death penalty,

0:19:17.000 --> 0:19:20.840
<v Speaker 1>where you know, you'd oftentimes have last minute applications from

0:19:21.240 --> 0:19:23.800
<v Speaker 1>death row inmates for stage of execution or if a

0:19:23.920 --> 0:19:26.440
<v Speaker 1>lower court had blocks and execution, and lasting application from

0:19:26.440 --> 0:19:29.480
<v Speaker 1>a state to unblock the execution and real these guys

0:19:29.520 --> 0:19:33.640
<v Speaker 1>into the tens. Like that was the majority of what

0:19:33.760 --> 0:19:37.439
<v Speaker 1>was interesting about emergency applications in the Supreme Court. The

0:19:37.480 --> 0:19:40.560
<v Speaker 1>shift in the Trump administration is a shift in just

0:19:40.720 --> 0:19:42.840
<v Speaker 1>the kinds of cases that are ending up on the

0:19:42.840 --> 0:19:46.520
<v Speaker 1>shadow dockets, and cases with not just massive implications for

0:19:46.600 --> 0:19:50.560
<v Speaker 1>one death row prisoner, but for state or federal policies. So,

0:19:50.640 --> 0:19:53.560
<v Speaker 1>just to take one data point, um, during the Bush

0:19:53.560 --> 0:19:57.720
<v Speaker 1>and Obama administrations from two thousand one seventeen, two pretty

0:19:57.760 --> 0:20:01.600
<v Speaker 1>different administrations, the federal government fils a total of eight

0:20:01.760 --> 0:20:05.600
<v Speaker 1>emergency applications in the Supreme Court, so one every other

0:20:05.760 --> 0:20:09.320
<v Speaker 1>year on average. During the Trump administration, so four years,

0:20:09.359 --> 0:20:12.520
<v Speaker 1>the Justice Department files forty one application and I think,

0:20:12.520 --> 0:20:15.160
<v Speaker 1>you know, the there's a longer conversation to to sort

0:20:15.160 --> 0:20:16.840
<v Speaker 1>of be had about, you know, the sort of what

0:20:17.119 --> 0:20:21.080
<v Speaker 1>caused that uptick, whatever caused it. Right, what it means

0:20:21.200 --> 0:20:26.000
<v Speaker 1>is that there was a lot more UM nationwide policy

0:20:26.240 --> 0:20:29.320
<v Speaker 1>challenging going on on the shadow docket, where you know,

0:20:29.359 --> 0:20:31.720
<v Speaker 1>it started as like the travel band, that it turned

0:20:31.720 --> 0:20:34.800
<v Speaker 1>into a case about the transgender band, you know, immigration,

0:20:35.400 --> 0:20:40.600
<v Speaker 1>environmental law. All of a sudden, right, every major contentious

0:20:40.760 --> 0:20:43.720
<v Speaker 1>UM challenge to staateard federal policies is coming to the

0:20:43.720 --> 0:20:47.080
<v Speaker 1>shadow docket. And I think that's the shift that has

0:20:47.160 --> 0:20:48.600
<v Speaker 1>led to why this has had so much more of

0:20:48.600 --> 0:20:50.679
<v Speaker 1>an impact on all of us. Well, thank you so

0:20:50.760 --> 0:20:53.840
<v Speaker 1>much for that. That's University of Texas Law professor Steven Bladdock.

0:20:54.200 --> 0:20:56.919
<v Speaker 1>You're listening to Bloomberg Radio. Up next, we'll talk with

0:20:56.920 --> 0:21:00.400
<v Speaker 1>Bloomberg News reporter Jeff Feey about Elon Musk his fight

0:21:00.440 --> 0:21:02.800
<v Speaker 1>to get out of his forty four billion dollar Twitter deal.

0:21:03.040 --> 0:21:07.160
<v Speaker 1>I'm Kimberly Robinson and I'm Lydia Wheeler. This is Bloomberg.

0:21:15.720 --> 0:21:20.520
<v Speaker 1>This is Bloomberg Law with June Grasso from Bloomberg Radio.

0:21:21.200 --> 0:21:24.840
<v Speaker 1>I'm Kimberly Robinson and I'm Lydia Wheeler. We're in for

0:21:24.960 --> 0:21:27.639
<v Speaker 1>June grass Ow. Elon Musk has been engulfed in a

0:21:27.720 --> 0:21:30.600
<v Speaker 1>legal battle over his failed forty four billion dollar deal

0:21:30.680 --> 0:21:33.720
<v Speaker 1>to buy Twitter. He's now claiming a whistle blower's allegations

0:21:33.760 --> 0:21:35.760
<v Speaker 1>against the company should let him walk away from that

0:21:35.800 --> 0:21:38.760
<v Speaker 1>purchase agreement. Joining us now to talk about this litigation,

0:21:38.760 --> 0:21:41.720
<v Speaker 1>as Bloomberg News reporter Jeff Feely, Jeff, thanks for being here,

0:21:41.960 --> 0:21:44.840
<v Speaker 1>no problem. Can you start off by telling us a

0:21:44.880 --> 0:21:50.600
<v Speaker 1>bit of background about this litigation and how it came about? Yes, Uh,

0:21:51.080 --> 0:21:55.240
<v Speaker 1>it came about because Mr Musk, the world's richest man,

0:21:55.920 --> 0:21:59.600
<v Speaker 1>decided he had agend own Twitter, which he is a

0:21:59.720 --> 0:22:03.960
<v Speaker 1>very frequent user of that platform to tweet out the

0:22:04.080 --> 0:22:07.360
<v Speaker 1>various things that come to his mind, and he decided

0:22:07.440 --> 0:22:09.720
<v Speaker 1>that maybe it would be good for him to buy Twitter.

0:22:09.880 --> 0:22:14.199
<v Speaker 1>So he back in April, offered fifty four dollars and

0:22:14.240 --> 0:22:18.600
<v Speaker 1>twenty cents a share of the social media platform, waived

0:22:18.680 --> 0:22:24.800
<v Speaker 1>his due diligence on the deal, and signed well. When

0:22:24.800 --> 0:22:29.040
<v Speaker 1>the market turned a bit and Twitter's stock value fell,

0:22:29.520 --> 0:22:34.800
<v Speaker 1>Mr Musk was not happy and he decided that maybe

0:22:34.840 --> 0:22:37.200
<v Speaker 1>he didn't want Twitter as much as he thought he did,

0:22:37.880 --> 0:22:43.000
<v Speaker 1>so he decided to cancel or walk away from the

0:22:43.720 --> 0:22:47.720
<v Speaker 1>billion dollar deal. Well, the fox at Twitter, understandably weren't

0:22:47.720 --> 0:22:51.960
<v Speaker 1>happy about that, and so they filed suit in Delaware

0:22:52.040 --> 0:22:54.840
<v Speaker 1>chancery court to force him to consummate the deal. The

0:22:54.880 --> 0:22:58.920
<v Speaker 1>reason they came to the first state is because under

0:22:58.960 --> 0:23:03.399
<v Speaker 1>the merger agreement, that was where all legal disputes had

0:23:03.440 --> 0:23:06.760
<v Speaker 1>to be litigated. Delaware has a long tradition of its

0:23:06.800 --> 0:23:12.680
<v Speaker 1>business courts handling merger and acquisition disputes. So that sort

0:23:12.680 --> 0:23:15.480
<v Speaker 1>of gets us to where we are. And so we've

0:23:15.480 --> 0:23:19.840
<v Speaker 1>discussed before on this UH show about the whistle blower

0:23:19.880 --> 0:23:23.240
<v Speaker 1>who recently came forward with allegations against Twitter. Can you

0:23:23.280 --> 0:23:25.120
<v Speaker 1>tell us a little bit more about that and what

0:23:25.160 --> 0:23:28.399
<v Speaker 1>it is that they're alleging is happening at the company. Sure.

0:23:28.520 --> 0:23:34.240
<v Speaker 1>The whistleblower's name is Peter Zako. He's a well known hacker,

0:23:34.840 --> 0:23:40.480
<v Speaker 1>um and pardon me, computer security expert, and he was

0:23:40.520 --> 0:23:45.800
<v Speaker 1>Twitter's ahead of computer security for a while. While at Twitter,

0:23:46.119 --> 0:23:50.560
<v Speaker 1>Mr Zako says that he raised issues about the number

0:23:50.600 --> 0:23:53.880
<v Speaker 1>of spam and robot accounts that are embedded in the

0:23:53.880 --> 0:23:59.280
<v Speaker 1>company's customer base. Uh. These accounts are not basically ones

0:23:59.320 --> 0:24:03.000
<v Speaker 1>with humans hid them, but they are you know, uh,

0:24:03.520 --> 0:24:07.800
<v Speaker 1>put on there to increase people's audience, if you will,

0:24:08.600 --> 0:24:13.840
<v Speaker 1>and um, he claims that the folks of Twitter had

0:24:13.920 --> 0:24:17.000
<v Speaker 1>no idea how many of these accounts were, you know,

0:24:17.359 --> 0:24:20.640
<v Speaker 1>part of their customers, and really didn't seem to care

0:24:20.880 --> 0:24:24.399
<v Speaker 1>to delve too deeply into it, because you know, the

0:24:24.440 --> 0:24:27.840
<v Speaker 1>more customers they have, the more they can charge advertisers.

0:24:27.920 --> 0:24:32.680
<v Speaker 1>So if they if they you know, I didn't want

0:24:32.680 --> 0:24:34.919
<v Speaker 1>to dig into it, it's because they didn't want to

0:24:34.960 --> 0:24:40.000
<v Speaker 1>reduce their advertiser numbers. So Mr zach Coo got fired

0:24:40.080 --> 0:24:43.520
<v Speaker 1>for performance issues a couple of months ago, and he

0:24:43.600 --> 0:24:48.000
<v Speaker 1>has now come forward and lodged a so called whistleblower's

0:24:48.040 --> 0:24:55.000
<v Speaker 1>complaint with regulators and UH congresspeople. And those complaints include

0:24:55.920 --> 0:25:01.440
<v Speaker 1>laxity of computer security, a district art for privacy issues,

0:25:01.680 --> 0:25:06.800
<v Speaker 1>and this whole issue about the spam and robot accounts.

0:25:06.840 --> 0:25:09.960
<v Speaker 1>Those accounts are important because Mr Musk has made them

0:25:10.000 --> 0:25:14.080
<v Speaker 1>the centerpiece of his legal arguments, saying that he's justified

0:25:14.119 --> 0:25:18.360
<v Speaker 1>and walking away from the deal. Isn't elon Musk here

0:25:18.600 --> 0:25:22.320
<v Speaker 1>um asking the court to kind of amend his argument um,

0:25:22.440 --> 0:25:25.320
<v Speaker 1>and is the judge in this case likely to allow

0:25:25.359 --> 0:25:30.040
<v Speaker 1>him to do that. He is asking to amend his counterclaims.

0:25:30.040 --> 0:25:33.280
<v Speaker 1>So Twitter has filed the actual suit. Mr Musk has

0:25:33.280 --> 0:25:38.240
<v Speaker 1>filed his defenses and counterclaims to those, and those counterclaims

0:25:38.240 --> 0:25:41.720
<v Speaker 1>focused solely on the bot issue at first. Well, now

0:25:41.760 --> 0:25:46.439
<v Speaker 1>that this gentleman has come forward talking about security issues

0:25:46.480 --> 0:25:50.800
<v Speaker 1>and privacy concerns, he wants to amend his counterclaims to

0:25:50.920 --> 0:25:55.800
<v Speaker 1>say that these are other legitimate bases for uh POEMA

0:25:55.880 --> 0:26:00.479
<v Speaker 1>rug out from the deal. Under Delaware law, UH judges

0:26:00.600 --> 0:26:06.240
<v Speaker 1>have wide authority to amend and it's basically granted as

0:26:06.240 --> 0:26:08.760
<v Speaker 1>long as it does not prejudice the other side in

0:26:08.840 --> 0:26:12.400
<v Speaker 1>some way. So most people think that Judge McCormick will

0:26:12.440 --> 0:26:16.240
<v Speaker 1>allow some amendment to add these other issues to the case.

0:26:16.960 --> 0:26:19.320
<v Speaker 1>And do you think that these whistable or allegations are

0:26:19.400 --> 0:26:23.800
<v Speaker 1>ultimately going to help must break the deal with Twitter. Well,

0:26:23.840 --> 0:26:25.960
<v Speaker 1>we really don't know at this point. It's too early

0:26:26.000 --> 0:26:31.040
<v Speaker 1>to tell whether Mr Zako's allegations have so called meat

0:26:31.160 --> 0:26:35.760
<v Speaker 1>on the bones or sour grapes by fired employee. UH

0:26:36.240 --> 0:26:39.120
<v Speaker 1>people really need to dig into them to find out

0:26:39.160 --> 0:26:43.399
<v Speaker 1>whether there's substance or not. What is Twitter said in

0:26:43.520 --> 0:26:48.040
<v Speaker 1>response to Musk, you know, using the whistleblower complaints in

0:26:48.080 --> 0:26:51.959
<v Speaker 1>his defense. Well, they have said that Mrs obviously they

0:26:51.960 --> 0:26:54.560
<v Speaker 1>are the ones who who notice, who let people know

0:26:54.640 --> 0:26:57.920
<v Speaker 1>that Mr Zako was fired for performance issues. They also

0:26:57.960 --> 0:27:00.480
<v Speaker 1>have said that his complaint is quote it old with

0:27:00.560 --> 0:27:06.199
<v Speaker 1>inaccuracies closed quote. So um, again, we're going to have

0:27:06.320 --> 0:27:11.120
<v Speaker 1>to wait and see whether the rubber meets the road

0:27:11.480 --> 0:27:15.320
<v Speaker 1>on these issues that he's raised about Twitter's operations. And

0:27:15.400 --> 0:27:18.440
<v Speaker 1>do we have any sense about how many Twitter users

0:27:18.640 --> 0:27:21.520
<v Speaker 1>are really body accounts or are really real or is

0:27:21.560 --> 0:27:25.560
<v Speaker 1>that just an unknown at this point? Apparently in the industry,

0:27:25.600 --> 0:27:28.159
<v Speaker 1>the social media industry, this is a problem. It's a

0:27:28.200 --> 0:27:33.320
<v Speaker 1>problem trying to figure out robots from humans. Um. Twitter

0:27:33.400 --> 0:27:36.679
<v Speaker 1>has more than two d and thirty million customers, it

0:27:36.760 --> 0:27:41.399
<v Speaker 1>has said in its regulatory or securities filings with the SEC.

0:27:42.200 --> 0:27:46.159
<v Speaker 1>But it believes the bot and scam accounts are somewhere

0:27:46.200 --> 0:27:50.560
<v Speaker 1>about five round five of their customer base. Mr Musk

0:27:50.680 --> 0:27:54.520
<v Speaker 1>and his experts have done some preliminary analysis and they

0:27:54.680 --> 0:27:57.600
<v Speaker 1>postulate that it could be as much as a third

0:27:57.600 --> 0:28:03.560
<v Speaker 1>of the thirty million plus customers who are not humans.

0:28:03.600 --> 0:28:08.000
<v Speaker 1>The reason that is important again is that you can

0:28:08.040 --> 0:28:14.240
<v Speaker 1>only really make money with advertising from humans with eyeballs

0:28:14.320 --> 0:28:18.520
<v Speaker 1>watching the ads. And you know, if the Twitter folks

0:28:19.280 --> 0:28:23.040
<v Speaker 1>you know, have written their sec disclosures in a masterful

0:28:23.080 --> 0:28:26.000
<v Speaker 1>way to headge them. But if there turns out to

0:28:26.040 --> 0:28:29.880
<v Speaker 1>be a major discrepancy, you know, and there's many more

0:28:29.920 --> 0:28:33.000
<v Speaker 1>bots than five percent, that could be a problem for

0:28:33.080 --> 0:28:36.880
<v Speaker 1>the deal. So has this dispute hurt Twitter in any way?

0:28:36.920 --> 0:28:40.240
<v Speaker 1>I mean, our market shares down. Shares are down. Shares

0:28:40.240 --> 0:28:43.240
<v Speaker 1>are down as part of an overall drop in the

0:28:43.320 --> 0:28:48.400
<v Speaker 1>technical sector as well, but shares are down. And I

0:28:48.440 --> 0:28:51.480
<v Speaker 1>do believe this whole fight has certainly had an effect

0:28:51.520 --> 0:28:55.240
<v Speaker 1>on Twitter. They have said that the uncertainty has cast

0:28:55.240 --> 0:28:59.560
<v Speaker 1>a cloud over the shares. It's caused unrest among the

0:28:59.640 --> 0:29:04.720
<v Speaker 1>employe ease, there's been you know, a significant brain drain,

0:29:05.640 --> 0:29:09.320
<v Speaker 1>and you know, it's just it's just not it's not

0:29:09.360 --> 0:29:13.000
<v Speaker 1>a pretty it's not pretty optics either about the way

0:29:13.040 --> 0:29:15.920
<v Speaker 1>Twitter operates and how it handles things, and this whole

0:29:15.920 --> 0:29:20.080
<v Speaker 1>stuff about the box. It's just not pretty. Well, you

0:29:20.080 --> 0:29:22.880
<v Speaker 1>can understand why Twitter would want to get this trial over.

0:29:22.920 --> 0:29:25.800
<v Speaker 1>Then when is it slated for? And also I read

0:29:25.800 --> 0:29:28.640
<v Speaker 1>that Musk is trying to delay it. What's the strategy there?

0:29:29.720 --> 0:29:32.680
<v Speaker 1>So the trial right now is set for October seventeenth

0:29:33.040 --> 0:29:37.640
<v Speaker 1>in beautiful Wilmington, Delaware, and it is. Of course, chancery

0:29:37.640 --> 0:29:41.160
<v Speaker 1>court is a business court, is a non jury court.

0:29:41.840 --> 0:29:46.040
<v Speaker 1>So Judge McCormick will hear it by herself and then

0:29:46.080 --> 0:29:51.959
<v Speaker 1>render a decision some months afterwards. Uh. Mr Musk originally

0:29:52.040 --> 0:29:54.400
<v Speaker 1>wanted to have the trial in February. He wanted to

0:29:54.440 --> 0:29:57.360
<v Speaker 1>have a nice long time for discovery and everything. But

0:29:57.440 --> 0:29:59.920
<v Speaker 1>the Twitter folks wanted to fast track it. They wanted,

0:30:00.160 --> 0:30:02.480
<v Speaker 1>you know, they said the uncertainty was hurting the company,

0:30:02.920 --> 0:30:05.160
<v Speaker 1>so a quicker decision would be better for them. So

0:30:06.000 --> 0:30:09.800
<v Speaker 1>Judge McCormick sort of split the baby. Twitter asked for September,

0:30:11.080 --> 0:30:14.200
<v Speaker 1>Musk asked for February. She said it for mid October.

0:30:14.720 --> 0:30:17.840
<v Speaker 1>Now Mr Musk is saying, with the emergence of Mr Zacho,

0:30:17.920 --> 0:30:20.560
<v Speaker 1>the whistleblower, there's going to be some more time needed

0:30:20.800 --> 0:30:24.760
<v Speaker 1>to dig into his claims, analyze them, and figure out

0:30:24.760 --> 0:30:30.040
<v Speaker 1>the implications for the case. So they had originally asked

0:30:30.040 --> 0:30:34.040
<v Speaker 1>for November, and some court filings yesterday today our sources

0:30:34.080 --> 0:30:39.080
<v Speaker 1>are saying they're even thinking about asking for early December

0:30:39.160 --> 0:30:43.080
<v Speaker 1>for a trial date. Interesting, Um, can you tell us

0:30:43.080 --> 0:30:46.400
<v Speaker 1>who's been subpoena in this case and if those people

0:30:46.400 --> 0:30:50.440
<v Speaker 1>could end up as witnesses. Well, it would take a

0:30:50.480 --> 0:30:52.880
<v Speaker 1>couple hours to tell you all the subpoenas because there's

0:30:52.880 --> 0:30:56.200
<v Speaker 1>been over a hundred of them. But we've we've had

0:30:56.240 --> 0:31:01.720
<v Speaker 1>some big names. Jack Dorsey, the former CEO Twitter, he's likely,

0:31:01.760 --> 0:31:05.520
<v Speaker 1>I suspect he's likely to testify. We've had Larry Ellison,

0:31:05.640 --> 0:31:09.560
<v Speaker 1>the head of Oracle, he's an investor in the case. Um,

0:31:09.600 --> 0:31:13.120
<v Speaker 1>there have been investment vehicles tied to Mark Andres and

0:31:13.240 --> 0:31:16.720
<v Speaker 1>the very famous tech investor. That's that's a pretty good start.

0:31:17.120 --> 0:31:19.480
<v Speaker 1>And so a judge ordered Musk to disclose all of

0:31:19.560 --> 0:31:23.880
<v Speaker 1>his potential investors. How calm and could those people end

0:31:23.960 --> 0:31:31.200
<v Speaker 1>up being witnesses too? Well, I think the judge was

0:31:31.280 --> 0:31:36.880
<v Speaker 1>trying to get a sense of the universe of investors

0:31:36.880 --> 0:31:40.840
<v Speaker 1>and advisers to Mr Musk, and to get an idea

0:31:41.120 --> 0:31:44.320
<v Speaker 1>of whether or not there might be a second equity race,

0:31:44.640 --> 0:31:48.760
<v Speaker 1>which is possible. Um. You know, there's a bunch of

0:31:48.800 --> 0:31:53.920
<v Speaker 1>funds who have um invested in the deal. I mean

0:31:53.960 --> 0:31:56.239
<v Speaker 1>he raised he did a first equity raise of over

0:31:56.320 --> 0:32:01.400
<v Speaker 1>seven billion dollars for the deal, and you know there

0:32:01.520 --> 0:32:04.560
<v Speaker 1>I think there continues to be some conversations among folks.

0:32:04.720 --> 0:32:08.320
<v Speaker 1>So Twitter is entitled to know who they're talking to.

0:32:08.920 --> 0:32:11.920
<v Speaker 1>So that's why McCormick ordered them to give up both

0:32:12.120 --> 0:32:15.640
<v Speaker 1>the names of the investors and the potential investors. And

0:32:15.680 --> 0:32:18.080
<v Speaker 1>that does it for this episode of Bloomberg Law. I'm

0:32:18.160 --> 0:32:21.840
<v Speaker 1>Lydia Wheeler and I'm Kimberly Robinson. This is Bloomberg