Speaker 1: This is Bloomberg Law with June Brusso from Bloomberg Radio.
Speaker 2: The NBA will have to face a class action video
Speaker 2: privacy lawsuit which accuses it of sharing personal data from
Speaker 2: viewers of videos on its website. The plaintiff, Michael Salazar,
Speaker 2: signed up for the NBA's online email newsletter and alleges
Speaker 2: that when he watched videos on NBA dot com, the
Speaker 2: league shared his video watching history with Meta without his permission.
Speaker 2: A federal judge dismissed his lawsuit, but the Second Circuit
Speaker 2: Court of Appeals has reinstated it. Joining me is Ira Steinberg,
Speaker 2: a partner at Greenberg Glusker, tell us about the case.
Speaker 1: Sure The plaintiffs in this case alleges that he signed
Speaker 1: up for a newsletter from the NBA, and that as
Speaker 1: part of signing up for this newsletter, he gave the
Speaker 1: NBA's information, and that the NBA's website has video content
Speaker 1: on it and their newsletter has video content in it,
Speaker 1: and that by signing up for this newsletter and watching
Speaker 1: the video content, some of the information about the videos
Speaker 1: he watched were transmitted to third parties and that was
Speaker 1: a violation of a law called the Video Privacy Protection
Speaker 1: Act the VPPA, and the VPPA was passed in nineteen
Speaker 1: eighty eight after Robert Bork's video rental history was published
Speaker 1: in a newspaper article and Senator Patrick Leahy, the Democrat
Speaker 1: from Vermont, became offended by this among others, and they
Speaker 1: passed this law which makes it illegal to share personal
Speaker 1: identifying information regarding the video rentals of a renter, purchaser,
Speaker 1: or subscriber of goods or services from a company. And
Speaker 1: so the NBA case is really about whether the plaintiffs
Speaker 1: was signed up for a newsletter, was a subscriber under
Speaker 1: the VPPA, and whether the news let letter would goods
Speaker 1: or services that would trigger the VPPA.
Speaker 2: And what does the NBA say.
Speaker 1: The NBA's argument is that when he signed up for
Speaker 1: the newsletter, when Salazar signed up for the newsletter, he
Speaker 1: didn't sign up for audio visual content. He didn't pay
Speaker 1: for audio visual content. He signed up to receive a
Speaker 1: written newsletter with news and updates about the NBA and
Speaker 1: that letter. His sign up for the newsletter had nothing
Speaker 1: to do with the audio visual content he received that
Speaker 1: whatever he was a subscriber to, if he was a
Speaker 1: subscriber at all, it wasn't a audio visual content.
Speaker 2: As you mentioned, the VPPA was enacted in nineteen eighty eight,
Speaker 2: before there were these kinds of websites or you know,
Speaker 2: tracking people online. The second circuit said, it's no dinosaur statute,
Speaker 2: But is it a dinosaur statute? It doesn't seem to
Speaker 2: match what's happening nowadays.
Speaker 1: This is actually fairly common in a lot of these
Speaker 1: disputes that are coming up in multiple states. I practice
Speaker 1: in California, That's what I know best. Than in California,
Speaker 1: like many other places, there is no data privacy law
Speaker 1: that you can sue a company under directly, Like for example,
Speaker 1: in California, we have the California Consumer Privacy Act, the CCPA,
Speaker 1: and it lets a consumer sue if there's a hack.
Speaker 1: But if you just think that you know, you're on
Speaker 1: a website and it's sharing your data, you can't ordinarily
Speaker 1: sue that business. And so consumers are looking for different
Speaker 1: laws to borrow from to sue under, and those laws
Speaker 1: are often older, pre internet laws. So there's a lot
Speaker 1: of lawsuits under old wire tapping laws and under the VPPA,
Speaker 1: and so it's actually pretty common. It happens in a
Speaker 1: lot of areas where courts are trying to wrestle through
Speaker 1: how do you apply a pre Internet law that wasn't
Speaker 1: built for the Internet to a data privacy claim. Courts
Speaker 1: so far have been very open to the idea that
Speaker 1: just because the law is pre Internet doesn't mean it
Speaker 1: can't include data privacy claims. But then you have a
Speaker 1: lot of cases like the sales are case, where there's
Speaker 1: a little bit of a square peg in a round
Speaker 1: hole problem, where it's hard to figure out how a
Speaker 1: law that was written, you know, in a very different
Speaker 1: context would apply to the Internet. I mean, the VPPA
Speaker 1: applies to videotape service providers, right, the NBA is obviously
Speaker 1: not literally a videotape service provider anymore if it ever was.
Speaker 1: But many courts have held that it's actually broader. It
Speaker 1: can apply to all sorts of businesses that provide audio
Speaker 1: visual content, even if it's not literally a video tape.
Speaker 1: And so that's a good example of how the courts
Speaker 1: are really wrestling through how do you apply these pre
Speaker 1: Internet statutes to modern data privacy claims.
Speaker 2: D NBH told the Appeals Court that all kinds of businesses,
Speaker 2: from news outlets to serial companies have been hit with
Speaker 2: baseless video privacy class actions by consumers who merely viewed
Speaker 2: free videos on company websites. Has there been a flood
Speaker 2: of these video privacy class actions?
Speaker 1: Absolutely, the NBA is right about that part. I guess
Speaker 1: baseless as a matter of opinion. But then MBA is
Speaker 1: correct that there has been a huge increase in data
Speaker 1: privacy litigation under the VPPA and also, as I mentioned before,
Speaker 1: under wire capping laws and similar pre Internet laws in
Speaker 1: a variety of states. They're absolutely right about that.
Speaker 2: I understand that in the past year there have been
Speaker 2: a lot of dismissals of these cases. Does the Second
Speaker 2: Circuit decision stand in contrast to other courts.
Speaker 1: Yeah, absolutely so. In California. In the Ninth Circuit, which
Speaker 1: the Federal appeals jurisdiction for most of the West Coast
Speaker 1: and the Western US, the courts have been a little
Speaker 1: bit more skeptical than the Second Circuit has about certain
Speaker 1: aspects of the salas our decisions, in particular the goods
Speaker 1: and services issue and the subscriber issues. So in the
Speaker 1: Ninth Circuit there's more cases holding that the goods and
Speaker 1: services component of the VPPA applies only to audio visual
Speaker 1: goods and services.
Speaker 3: Right.
Speaker 1: So the NBA and their arguments in the salves Our
Speaker 1: case talk about how if you had gone to a
Speaker 1: hardware store and bought a hammer and then watched a video,
Speaker 1: you would in theory be subject to the VPPA because
Speaker 1: you bought a good and then you watched a video
Speaker 1: and that was subject to the law. And in California,
Speaker 1: that kind of a case would probably be less successful
Speaker 1: than it would be in New York in the second
Speaker 1: circuit under the salas Our decision. And then again as
Speaker 1: the salas Our decision points out, there's several different jurisdictions
Speaker 1: all trying to understand what a subscriber is under the VPPA,
Speaker 1: and they agree on some baseline points, like, for example,
Speaker 1: you don't necessarily have to pay to be a subscriber,
Speaker 1: but you have to give something of value. And where
Speaker 1: you draw that line of what counts as a subscriber,
Speaker 1: what's valuable enough to make you a subscriber as opposed
Speaker 1: to someone who just watched video for free. We're starting
Speaker 1: to see variation among the judicial district It reminds me
Speaker 1: a lot of the Americans with Disabilities Act litigation for websites,
Speaker 1: where there was a big wave of that it's receiving
Speaker 1: a little bit, but there's still a fair amount of it.
Speaker 1: Where New York and the Second Circuit were initially very
Speaker 1: open to those claims. They said that, you know, an
Speaker 1: Internet based business with no physical location is absolutely subject
Speaker 1: to Title three of the ADA, and that opened up
Speaker 1: a flood of ADA litigation against websites, and the Ninth Circuit,
Speaker 1: the Western US was a little more skeptical of those
Speaker 1: claims and tended to require a nexus between the website
Speaker 1: and a physical place of public location and did not
Speaker 1: open EIGHTYA claims to purely internet businesses. And so I'm
Speaker 1: seeing a little bit of a parallel where the Second
Speaker 1: Circuit is opening the doors more widely to consumer cases
Speaker 1: than in other judicial districts, including the Ninth Circuit.
Speaker 2: Tell me what exactly you think this decision stands for.
Speaker 1: I think it stands for least in the Second Circuit,
Speaker 1: it's going to be fairly easy for a consumer to
Speaker 1: come under the VPPA, and the litigated issue in a
Speaker 1: lot of these cases is going to shift from whether
Speaker 1: the consumer is even subject to the law to whether
Speaker 1: the website is improperly shared aring personal identifying information. Now,
Speaker 1: as a practical matter, and what that means is it's
Speaker 1: going to be a lot harder for a business to
Speaker 1: get these cases dismissed very early on. You know, in
Speaker 1: the sala is Our case, the NBA filed a motion
Speaker 1: to dismiss, which is a very early motion to get
Speaker 1: rid of a case, and the second Circuit essentially said
Speaker 1: that motion should have been denied. And I think now
Speaker 1: it's going to be a lot harder to get rid
Speaker 1: of these cases early on because they're going to really
Speaker 1: be focused much more on the merits of the data
Speaker 1: practices of the alleged videotape service provider.
Speaker 2: What can companies do? I mean, there is possibility right
Speaker 2: of getting consent.
Speaker 1: Yeah, so compliance with the VPPA is a little bit tricky,
Speaker 1: and that's because the consent provisions in the statute require
Speaker 1: that consent be given in a standalone agreement. You can't
Speaker 1: fold your privacy disclosure and consent into your larger terms
Speaker 1: of service or privacy policy like you would in other cases.
Speaker 1: For example, when we you know, will put on a
Speaker 1: consent defense to a wire tapping case in California, oftentimes
Speaker 1: the website will have a privacy policy in terms of
Speaker 1: service and we could rely on the disclosures and the
Speaker 1: consents in those larger documents. You can't do that for
Speaker 1: the VPPA, so the consent process is a little bit
Speaker 1: more tricky under that law. The first layer of defense
Speaker 1: with these types of consumer claims to me is always
Speaker 1: your dispute resolution policy, because it's going to be harder
Speaker 1: and harder to stop people from filing these claims and
Speaker 1: getting them dismissed early on. So you want to make
Speaker 1: sure that essentially the forum that you're litigating in the
Speaker 1: architecture of the dispute is set up so that it's
Speaker 1: manageable and it's fair from the perspective of both parties,
Speaker 1: and that it's enforceable. We've seen a lot of companies
Speaker 1: fall into what's called the arbitration trap in other consumer
Speaker 1: data privacy claims, where they have an arbitration provision and
Speaker 1: they have a class action waiver, and so instead of
Speaker 1: filing a class action, you'll see ten thousand or a
Speaker 1: few thousand or a few hundred arbitration claimants all come
Speaker 1: together and then file these mass claims. And since arbitration
Speaker 1: fees are the filing fees, they're usually assessed on the
Speaker 1: business on a per claimant basis, it could massively increase
Speaker 1: the cost of defense, and that's been very problematic for
Speaker 1: some large companies defending these data privacy claims. So it's
Speaker 1: really important to get your dispute resolution policy really squared away,
Speaker 1: top notch, organized and well thought through. Beyond that, you're
Speaker 1: right if your company is at high risk of a
Speaker 1: VPPA claim because you are very much in the business
Speaker 1: of audio visual content and you're sharing data and all
Speaker 1: those kinds of things, you might want to consider whether
Speaker 1: you can incorporate into your website or your newsletter or
Speaker 1: whatever you're doing, some kind of standalone consent that would
Speaker 1: comply with the VPPA. Otherwise, if you can't get that
Speaker 1: consent in, you just need to think about what data
Speaker 1: you're sharing and whether or not you can adjust the
Speaker 1: process or the way you engage with your consumers to
Speaker 1: make sure that they are not technically subscribers into the VPPA. Unfortunately,
Speaker 1: there's not a very easy answer for the VPPA, at
Speaker 1: least under the second circuit decision still developing, So there's
Speaker 1: not a lot of bright lines where we could say,
Speaker 1: if you do this, you'll be safe. There's only things
Speaker 1: we could do to turn the dials to reduce risk
Speaker 1: where we can.
Speaker 2: And do you think that this decision will lead to
Speaker 2: more lawsuits under the VPPA?
Speaker 1: Oh, I know it will absolutely.
Speaker 2: I don't usually get such definitive answers. So what are
Speaker 2: the damages here? If the NBA.
Speaker 1: Loses, it's twenty five hundred dollars per person. It's technically
Speaker 1: actual damages, but not less than twenty five hundred. And
Speaker 1: in reality, most planetfs aren't going to have actual damages,
Speaker 1: so effectively it's twenty five hundred dollars per person. But
Speaker 1: one of the key issues is attorney sees right, the
Speaker 1: VPPA allows damages. That's twenty five hundred in all likelihood
Speaker 1: punitive damages, which I think would be pretty uncommon in
Speaker 1: the case like this. But three is attorney speed, and
Speaker 1: that could be substantial. If you have a reputable firm
Speaker 1: litigating on behalf of a class, that attorney's spies claim
Speaker 1: could be significant.
Speaker 2: And what kind of advice would you give companies who
Speaker 2: might fit under the VPPA.
Speaker 1: The Thalasar case highlights the fact that there is a
Speaker 1: large increase in data privacy litigation not just under the VPPA,
Speaker 1: but under an assortment of state and federal laws and
Speaker 1: It's really important to get your privacy disclosures right, get
Speaker 1: your terms of service correct, at your dispute resolution policies
Speaker 1: shaped up, and to begin to prepare your business for
Speaker 1: what could be one of these claims. You know, if
Speaker 1: you haven't talked to your in house counsel or your
Speaker 1: outside council about what you can do to mitigate your risk.
Speaker 1: I think that you know now is the time, because
Speaker 1: this litigation is only accelerating.
Speaker 2: It's great to have you on the show. Ira, Thanks
Speaker 2: so much. That's Ara Steinberg of Greenberg Glusker. President Joe
Speaker 2: Biden is on track to match or even surpass the
Speaker 2: number of federal judges appointed by former President Donald Trump.
Speaker 2: Biden has appointed two hundred and thirteen federal judges so
Speaker 2: far to Trump's total of two hundred and thirty one.
Speaker 2: But the next president is unlikely to be able to
Speaker 2: make an impact on the federal bench because the numbers
Speaker 2: just won't be there. Joining me is federal judiciary expert
Speaker 2: Carl Tobias, a professor at the University of Richmond School
Speaker 2: of Law. When Biden leaves office, he and Trump will
Speaker 2: have in just eight years appointed about half of all
Speaker 2: the eight hundred and ninety life tenured federal judges across
Speaker 2: the country. Is that an unusual amount for eight years?
Speaker 3: It is unusual. And the reason is both administrations and
Speaker 3: the majority they've had in the Senate in those years
Speaker 3: have been on the same party and of the same mind,
Speaker 3: and that is to fill the bench with people they
Speaker 3: believe will be most effective. And they've been very effective
Speaker 3: in nominating to affirming people in that situation because the
Speaker 3: majority rules in the Senate, and so that's what we see.
Speaker 3: So it shouldn't be too surprising that there aren't a
Speaker 3: lot of opportunities for the next president, whoever it is
Speaker 3: in terms of numbers.
Speaker 2: And also there aren't opportunities because the judges taking senior
Speaker 2: status are shrinking as well. And is that because both
Speaker 2: these presidents appointed younger judges.
Speaker 3: Yes, I think that's clear. I mean, did data show
Speaker 3: that they intentionally did that? And that goes back I
Speaker 3: think at least to the time of George W. Bush
Speaker 3: and maybe even earlier, but it has become much more
Speaker 3: of a focus an emphasis, and sometimes the senators and
Speaker 3: the party opposing the president do point out that people
Speaker 3: are quite young and don't have a lot of experience
Speaker 3: and so they criticize the nominees for that, but when
Speaker 3: we Jordy votes, they often then confirmed those types of judges.
Speaker 3: And so that's what you have I think, and I
Speaker 3: do think to some extent, we're seeing a number of judges,
Speaker 3: especially Indian palate courts, only thinking senior status or resigning
Speaker 3: when the person in the White House is of the
Speaker 3: same party, which used to be only a Supreme court
Speaker 3: or principally a Supreme court type of tradition, and even
Speaker 3: then honored sometimes in the breach. But now it happens
Speaker 3: quite a bit. And what you saw, I think, for example,
Speaker 3: as Trump was coming in, was many Republicans assuming senior status,
Speaker 3: and then when Biden was elected, you saw a number
Speaker 3: of Democratic appointees then assuming senior status.
Speaker 2: There are sixty seven vacancies currently on the federal bench
Speaker 2: or expected to open up. How many of those could
Speaker 2: Biden possibly fill before he leaves office.
Speaker 3: Well, I think on the floor right now are twenty eight,
Speaker 3: So that would only leave forty or so vacancies working
Speaker 3: from the present figures, which is very low, especially at
Speaker 3: the pellate level. I think right now there's six vacancies
Speaker 3: and four of them and maybe five or even six
Speaker 3: could be confirmed, and that would leave virtually no vacancy
Speaker 3: in the appellate system, and that's where both parties concentrate,
Speaker 3: because appellate judges make more policy. They are the supreme
Speaker 3: courts in ninety nine percent of cases in the states
Speaker 3: within the circuit where they sit, and so everyone is
Speaker 3: focused on that. And I think at one point Trump
Speaker 3: actually had filled every single appellate vacancy, and that hadn't
Speaker 3: happened since nineteen eighty four when Reagan was president. So
Speaker 3: they focused like a laser on that. But so has Biden,
Speaker 3: and so he may end up with forty eight, forty
Speaker 3: nine to fifty points at the appellate level, which is
Speaker 3: very close to the fifty four Trump was able to confirm.
Speaker 2: So according to the American Constitution Society, which looked into
Speaker 2: how many judges might be taking senior status over the
Speaker 2: next four years, it came out to be one hundred
Speaker 2: and sixteen appointed by Republican presidents and one hundred and
Speaker 2: seventeen by Democratic presidents, which seemed awfully close to me
Speaker 2: since I thought that Democratic presidents were behind Republican presidents
Speaker 2: on appointees.
Speaker 3: Well, I think it has even doubt during Biden's time.
Speaker 3: If you think back Bush had eight years, Obama had
Speaker 3: eight years, Trump had four, Biden had four. So I'm
Speaker 3: not terribly surprised that that's where we are. But I
Speaker 3: think it's fair to say Democrats have learned from Republicans
Speaker 3: how to be more ruthless about nominations in confirmation. It
Speaker 3: depends on your perspective, but to some extent that's to
Speaker 3: be expected. I mean, I think that's the norm now,
Speaker 3: and so the majority rules in the Senate, and as
Speaker 3: long as the White House is amenable and the President
Speaker 3: is effective, that's what I think you're going to see
Speaker 3: going forward.
Speaker 2: And I've been talking about judges for so long, but
Speaker 2: yet I didn't know this fact that it was President
Speaker 2: Jimmy Carter who has the record for the most judicial
Speaker 2: appointments in a single term two hundred and sixty two.
Speaker 2: And that was at a time when we didn't know
Speaker 2: it was as important as it is now.
Speaker 3: I think that's correct. And there were fewer judges then
Speaker 3: because there were a couple of judge ship bills after that.
Speaker 3: But what's most telling is they passed the nineteen seventy
Speaker 3: eight Judge Ships Act, which created I think thirty five
Speaker 3: appellate judge ships in sixty or seventy or maybe even
Speaker 3: more district ones, and so he had an enormous opportunity
Speaker 3: there and he seed it. That explains it, even though
Speaker 3: there were other criticisms of his presidency and he wasn't
Speaker 3: re elected. But he also, as you remember, was instrumental
Speaker 3: in beginning the diversification of the courts in terms of ethnicity, gender,
Speaker 3: and experience and appointed many people of color. All the
Speaker 3: Democratic presidents since then have made diversity important, and some
Speaker 3: of the Republicans have as well.
Speaker 2: We have to factor in the fact that if the
Speaker 2: president the next president has a Senate that the opposing
Speaker 2: party has a majority in, is it going to be
Speaker 2: tougher to get judges appointed. The answer is yes, I
Speaker 2: will that answer, but I thought i'd give you a
Speaker 2: softball there.
Speaker 3: Yeah. Right. And the real telling point is twenty fifteen sixteen,
Speaker 3: after Republicans in twenty fourteen captures the majority because Mitch
Speaker 3: McConnell as majority leader, only allowed two of President Obama's
Speaker 3: nominee he's at the appellate level to be confirmed in
Speaker 3: the last two years, and not very many district nominees
Speaker 3: that's what led to Trump being able to appoint fifty
Speaker 3: four because there were so many vacancies held over by McConnell.
Speaker 3: And of course, the classic example everybody remembers is what
Speaker 3: he did with Merrick Garland and Justice Scalia's vacancy, and
Speaker 3: that's what led, I think, in part to what we
Speaker 3: see in terms of the majority on the Supreme Court now.
Speaker 2: Mike Davis, a Trump ally and founder of the Conservative
Speaker 2: Judiciary focused advocacy group Article three Project, he said the
Speaker 2: next president will finish the transformation of the judiciary one
Speaker 2: way or the other. Do you think he's right about that?
Speaker 3: Well, to some extent, But remember it's the appellate judges
Speaker 3: who really make the policy, and they're just not going
Speaker 3: to be many vacancies there. So some of what he
Speaker 3: is saying is hyperbolic, but there is a lot at stake.
Speaker 3: I just don't think the opportunity is there in a
Speaker 3: way that it has been historically because of the small numbers,
Speaker 3: and as we've talked about, the unlikelihood of very many
Speaker 3: turnovers in the next four years, and then the whole
Speaker 3: question of who's going to have the majority, because it
Speaker 3: may be that that's which is this time or not,
Speaker 3: but it's going to be very close no matter what.
Speaker 3: And there's every chance that even if Democrats lose the
Speaker 3: majority in this election year, they will recapture it in
Speaker 3: twenty six and so I just don't think that there's
Speaker 3: going to be much of an opportunity to do what
Speaker 3: Davis is talking about. But I've seen what he has said,
Speaker 3: and they even are critical of some of the fifty
Speaker 3: four whom Trump appointed as being not sufficiently loyal, if
Speaker 3: you will, to the former president.
Speaker 2: There's this theory that some federal judges of tryout for
Speaker 2: the Supreme Court by writing opinions that they think will
Speaker 2: get them noticed. Have you seen that happening lately.
Speaker 3: It's just hard to say, though I think it's fair
Speaker 3: to say if you look at the fifty four pallat judges,
Speaker 3: there are a number of them who seem to be
Speaker 3: trying out and a lot of people have said that
Speaker 3: for the Supreme Court. And it's a hierarchical institution, but
Speaker 3: there are not very many seats on the US Supreme Court,
Speaker 3: so we'll see. But especially in the Fifth Circuit, for example,
Speaker 3: Trump has a number of appointees, and the Eleventh Circuit
Speaker 3: and they are people who have made their mark with
Speaker 3: you know in some ways on certain cases. And even
Speaker 3: the Supreme Court has found the Fifth Circuit to be
Speaker 3: too extreme for its taste on certain issues like the
Speaker 3: abortion pill and some other cases.
Speaker 2: Yes, the Fifth Circuit often tends to push the legal envelope,
Speaker 2: so to speak. Thanks so much, Carl. That's Professor Carl
Speaker 2: Tobias of the University of Richmond Law School. Coming up
Speaker 2: next on the Bloomberg Law Show. A landmark doctrine of
Speaker 2: the NLRB is at stake in a Ninth Circuit case.
Speaker 2: I'm June Grosso and you're listening to Bloomberg. A decision
Speaker 2: by the Ninth Circuit Appellate Court could have major implications
Speaker 2: on a game changing NLRB decision on union organizing designed
Speaker 2: to clean up representation elections and provide a path to
Speaker 2: unionization without a formal vote. Joining me is Bloomberg Law
Speaker 2: Senior legal reporter Robert Aafola explain what the semex doctrine is.
Speaker 4: So this is mainly about the National Labor Relations Board
Speaker 4: efforts to prevent employers from committeing put for labor practices
Speaker 4: before an election. Basically, the board looked at how things work,
Speaker 4: and because the remedy for violations before an election, if
Speaker 4: the union loses, the remedy is normally a rerun election,
Speaker 4: and employers tend to do better and rerun elections. The
Speaker 4: board looked and said, you know, this is not enough
Speaker 4: of a disincentive. So we're going to rework how this
Speaker 4: all work. And they've set up a system now where
Speaker 4: if the union comes to an employer and says, look,
Speaker 4: we have a majority support, the majority of the workers
Speaker 4: here want to unionize, the employer has two choices. They
Speaker 4: can either accept that and recognize the union and start bargaining,
Speaker 4: or they can file their own petition for an election.
Speaker 4: If they go the election route, if they commit any
Speaker 4: labor law violations leading up to the election, then the
Speaker 4: board will issue what's now known as a systemics bargaining order,
Speaker 4: just basically saying you have to recognize and bargain with
Speaker 4: this union. Sort of how the doctrine works, Well.
Speaker 2: What's the issue in the case. What is CEMEX saying.
Speaker 4: So there was an oral argument at the Ninth Circuit
Speaker 4: about the SEMX doctrine. The company Sex which the case
Speaker 4: is named after the doctrine is named after, is challenging
Speaker 4: the NLRB's basically legal authority to issue this rule to
Speaker 4: create this framework, this SEMX doctrine. Basically, there was a
Speaker 4: Supreme Court decision from the late sixties called NLRB versus
Speaker 4: Ghissel that set up the format for when the board
Speaker 4: would issue these sort of bargaining orders. Under Ghissel, they
Speaker 4: would only issue these bargaining orders when there was severe
Speaker 4: and pervasive labor law violations such that there was no
Speaker 4: chance of holding a fair election. Just the lawbreaking was
Speaker 4: so intense that it destroyed that opportunity. And the company
Speaker 4: is saying, that's the rule. The NLRB can't go in
Speaker 4: and change how they issue bargaining orders, you know, in
Speaker 4: this new semax doctrine, And that was the argument they
Speaker 4: presented at the Circuit Court yesterday.
Speaker 2: Did the judges talk about the presidential value of Gissele.
Speaker 1: Yeah, yeah.
Speaker 4: There was some debate over whether what the Supreme Court
Speaker 4: said in its pres Gisole ruling, whether what they were
Speaker 4: saying was this is a permissible way for the board
Speaker 4: to issue bargaining orders, or this is the only way
Speaker 4: that the board can issue the bargaining orders. The democratic
Speaker 4: point of judges in the judicial panel that was hearing
Speaker 4: the case, they seemed to signal that they felt that
Speaker 4: Gissole was about what the Board could do, not what
Speaker 4: the Board must do, which suggests that at least at
Speaker 4: this stage, the NLRB may prevail.
Speaker 2: What's the NLRB's argument at the Ninth Circuit.
Speaker 4: Yeah, the board's argument of the Ninth Circuit is this
Speaker 4: is within their authority, and this is basically how the
Speaker 4: NLRB sets labor law policy for the country. They decide
Speaker 4: individual cases and from those cases they create general frameworks
Speaker 4: that sort of govern different areas of labor management relations.
Speaker 4: So they're saying, hey, we've had different standards through our
Speaker 4: history about what it takes to issue a bargaining order.
Speaker 4: There was a time before Gissel. It was what's known
Speaker 4: as the Joy Silks doctrine, in which if a union
Speaker 4: came to an employer and said we have a majority support,
Speaker 4: unless that employer had a good faith reason to doubt
Speaker 4: that majority support, they were required to bargain. So it
Speaker 4: was a much more union friendly standard, and that was allowed,
Speaker 4: you know, in the fifties and sixties before Gissel happened.
Speaker 4: So the NLRB is saying, look, we've changed our standards before,
Speaker 4: and this is what we've changed to. Now, this is
Speaker 4: what we think the best way to do it is,
Speaker 4: and you know we have that power.
Speaker 2: So you write that the semex lawyer raised lowper Bright,
Speaker 2: which was the decision by the Supreme Court at the
Speaker 2: end of less term that ended Chevron difference or judicial
Speaker 2: deference to agencies interpretations where the laws are ambiguous. What
Speaker 2: happened when that was raised?
Speaker 4: So one of the Democratic appointed judges spoke about part
Speaker 4: of the Locoerbright decision in which there are times when
Speaker 4: Congress has basically handed down some power to the agencies
Speaker 4: to kind of fill in the blanks and do this
Speaker 4: sort of doctrine setting for lack of a better term,
Speaker 4: and the judge pointed out that, you know, some of
Speaker 4: the cases that the Court and Loperbright referred to was,
Speaker 4: you know, cases about the National Libor Relations Act, which
Speaker 4: is what empowers the NLRB. So I think she was
Speaker 4: basically saying Locribrid doesn't affect anything in this case.
Speaker 2: Because if you look at the Supreme Court decisions in
Speaker 2: recent years on unions, it's almost always against the union.
Speaker 2: So I wonder if this came up to the Supreme Court.
Speaker 2: I don't know if it will, but whether they would
Speaker 2: sort of not endorse it the sex doctrine.
Speaker 4: Yeah, it's certainly a pretty high degree of likelihood that
Speaker 4: different employers will challenge when they're hit with the SEMX doctrine,
Speaker 4: they'll challenge that in court. Just yesterday, a n LRB
Speaker 4: judge issued a SEMs order against Starbucks. So you can
Speaker 4: imagine that there will be what's known as a circuit split,
Speaker 4: where two different circuit courts disagree on an issue, and
Speaker 4: that's when the Supreme Court is supposed to come in
Speaker 4: and they're supposed to resolve that circuit split. So you
Speaker 4: could definitely see a situation in which the Court was
Speaker 4: called upon to settle this issue. And as you point out,
Speaker 4: given the leanings of the current Supreme Court majority, you
Speaker 4: could imagine that the board might have an uphill battle.
Speaker 2: How big a blow would it be to union organizing
Speaker 2: if there's a decision rejecting the sex doctrine.
Speaker 4: It's kind of hard to answer that with a lot
Speaker 4: of specificity, but we have seen in the Board just
Speaker 4: released some statistics recently about an increase in the amount
Speaker 4: of election petitions that are being filed, and I was
Speaker 4: speaking to some labor law experts recently about that, and
Speaker 4: an argument was made that, hey, that shows that the
Speaker 4: sex doctrine is working. That shows that unions and workers
Speaker 4: see that sex is providing sort of a stick to
Speaker 4: hold employers accountable so they won't violate the law right
Speaker 4: before an election to intend that eight workers not to
Speaker 4: vote for unions, and we have seen an upsurge in
Speaker 4: unionization over the past few years. There's a lot of
Speaker 4: different reasons for that. It's not just the SEMEX doctrine,
Speaker 4: but it seems reasonable to say that that's part of it.
Speaker 4: So the board was to lose the SEMX doctrine, Yeah,
Speaker 4: that would be not so great for unions.
Speaker 2: Does SEMEX actually contradict Gissle because it sets a whole
Speaker 2: different way of handling things?
Speaker 4: Right, Yeah, I don't know that it contradicts Ghistle, but
Speaker 4: it does represent a different framework. And as I mentioned before,
Speaker 4: the board has argued, Look, we've had different frameworks before,
Speaker 4: some more permissive, you know, some more union friendly than CEMX.
Speaker 4: Ghisle was more employer friendly than CEMX. But it may
Speaker 4: come down to a technical question about what exactly did
Speaker 4: the Supreme court say in that I think it was
Speaker 4: nineteen sixty nine, was the Ghissele ruling. Did they create
Speaker 4: a situation where they said this is the only way
Speaker 4: you can do it? Or did they rule that yes,
Speaker 4: is the permissible way to do it. But implicitly they're saying, board,
Speaker 4: you you could set up another way.
Speaker 2: So how do you think this Ninth Circuit panel is
Speaker 2: going to come out?
Speaker 4: Courts? Thelitization, you know, it seems to be there where
Speaker 4: you can't decide the outcome just based on the composition
Speaker 4: of the panel. But here we had two Biden appointees
Speaker 4: and one George W. Bush appointee, and watching the arguments,
Speaker 4: it did seem that the two Biden appointees were a
Speaker 4: lot more supportive of the board's position, and that the
Speaker 4: George W. Bush appointee was more skeptical of the board's position.
Speaker 4: So they seem to signal that they would end up
Speaker 4: approving the stomach's doctrine. But we'll have to see.
Speaker 2: An important labor case no matter which way you look
Speaker 2: at it. Thanks so much, Robert. That's Robert aya Follet,
Speaker 2: senior legal reporter for Bloomberg Law. And that's it for
Speaker 2: this edition of the Bloomberg Law Podcast. Remember you can
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