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NBA Facing Video Privacy Suit, Judges & NLRB · Bloomberg Law

0:03
Speaker 1: This is Bloomberg Law with June Brusso from Bloomberg Radio.
0:10
Speaker 2: The NBA will have to face a class action video
0:13
Speaker 2: privacy lawsuit which accuses it of sharing personal data from
0:18
Speaker 2: viewers of videos on its website. The plaintiff, Michael Salazar,
0:23
Speaker 2: signed up for the NBA's online email newsletter and alleges
0:27
Speaker 2: that when he watched videos on NBA dot com, the
0:31
Speaker 2: league shared his video watching history with Meta without his permission.
0:36
Speaker 2: A federal judge dismissed his lawsuit, but the Second Circuit
0:40
Speaker 2: Court of Appeals has reinstated it. Joining me is Ira Steinberg,
0:44
Speaker 2: a partner at Greenberg Glusker, tell us about the case.
0:48
Speaker 1: Sure The plaintiffs in this case alleges that he signed
0:52
Speaker 1: up for a newsletter from the NBA, and that as
0:57
Speaker 1: part of signing up for this newsletter, he gave the
0:59
Speaker 1: NBA's information, and that the NBA's website has video content
1:05
Speaker 1: on it and their newsletter has video content in it,
1:08
Speaker 1: and that by signing up for this newsletter and watching
1:11
Speaker 1: the video content, some of the information about the videos
1:14
Speaker 1: he watched were transmitted to third parties and that was
1:17
Speaker 1: a violation of a law called the Video Privacy Protection
1:21
Speaker 1: Act the VPPA, and the VPPA was passed in nineteen
1:25
Speaker 1: eighty eight after Robert Bork's video rental history was published
1:29
Speaker 1: in a newspaper article and Senator Patrick Leahy, the Democrat
1:34
Speaker 1: from Vermont, became offended by this among others, and they
1:37
Speaker 1: passed this law which makes it illegal to share personal
1:41
Speaker 1: identifying information regarding the video rentals of a renter, purchaser,
1:46
Speaker 1: or subscriber of goods or services from a company. And
1:50
Speaker 1: so the NBA case is really about whether the plaintiffs
1:53
Speaker 1: was signed up for a newsletter, was a subscriber under
1:57
Speaker 1: the VPPA, and whether the news let letter would goods
2:01
Speaker 1: or services that would trigger the VPPA.
2:03
Speaker 2: And what does the NBA say.
2:05
Speaker 1: The NBA's argument is that when he signed up for
2:09
Speaker 1: the newsletter, when Salazar signed up for the newsletter, he
2:11
Speaker 1: didn't sign up for audio visual content. He didn't pay
2:14
Speaker 1: for audio visual content. He signed up to receive a
2:17
Speaker 1: written newsletter with news and updates about the NBA and
2:20
Speaker 1: that letter. His sign up for the newsletter had nothing
2:22
Speaker 1: to do with the audio visual content he received that
2:26
Speaker 1: whatever he was a subscriber to, if he was a
2:28
Speaker 1: subscriber at all, it wasn't a audio visual content.
2:32
Speaker 2: As you mentioned, the VPPA was enacted in nineteen eighty eight,
2:36
Speaker 2: before there were these kinds of websites or you know,
2:40
Speaker 2: tracking people online. The second circuit said, it's no dinosaur statute,
2:45
Speaker 2: But is it a dinosaur statute? It doesn't seem to
2:47
Speaker 2: match what's happening nowadays.
2:50
Speaker 1: This is actually fairly common in a lot of these
2:54
Speaker 1: disputes that are coming up in multiple states. I practice
2:57
Speaker 1: in California, That's what I know best. Than in California,
3:00
Speaker 1: like many other places, there is no data privacy law
3:03
Speaker 1: that you can sue a company under directly, Like for example,
3:06
Speaker 1: in California, we have the California Consumer Privacy Act, the CCPA,
3:10
Speaker 1: and it lets a consumer sue if there's a hack.
3:13
Speaker 1: But if you just think that you know, you're on
3:15
Speaker 1: a website and it's sharing your data, you can't ordinarily
3:18
Speaker 1: sue that business. And so consumers are looking for different
3:22
Speaker 1: laws to borrow from to sue under, and those laws
3:26
Speaker 1: are often older, pre internet laws. So there's a lot
3:29
Speaker 1: of lawsuits under old wire tapping laws and under the VPPA,
3:34
Speaker 1: and so it's actually pretty common. It happens in a
3:37
Speaker 1: lot of areas where courts are trying to wrestle through
3:40
Speaker 1: how do you apply a pre Internet law that wasn't
3:42
Speaker 1: built for the Internet to a data privacy claim. Courts
3:46
Speaker 1: so far have been very open to the idea that
3:49
Speaker 1: just because the law is pre Internet doesn't mean it
3:51
Speaker 1: can't include data privacy claims. But then you have a
3:54
Speaker 1: lot of cases like the sales are case, where there's
3:57
Speaker 1: a little bit of a square peg in a round
3:59
Speaker 1: hole problem, where it's hard to figure out how a
4:02
Speaker 1: law that was written, you know, in a very different
4:04
Speaker 1: context would apply to the Internet. I mean, the VPPA
4:07
Speaker 1: applies to videotape service providers, right, the NBA is obviously
4:12
Speaker 1: not literally a videotape service provider anymore if it ever was.
4:17
Speaker 1: But many courts have held that it's actually broader. It
4:19
Speaker 1: can apply to all sorts of businesses that provide audio
4:23
Speaker 1: visual content, even if it's not literally a video tape.
4:26
Speaker 1: And so that's a good example of how the courts
4:28
Speaker 1: are really wrestling through how do you apply these pre
4:32
Speaker 1: Internet statutes to modern data privacy claims.
4:35
Speaker 2: D NBH told the Appeals Court that all kinds of businesses,
4:39
Speaker 2: from news outlets to serial companies have been hit with
4:42
Speaker 2: baseless video privacy class actions by consumers who merely viewed
4:47
Speaker 2: free videos on company websites. Has there been a flood
4:51
Speaker 2: of these video privacy class actions?
4:55
Speaker 1: Absolutely, the NBA is right about that part. I guess
4:57
Speaker 1: baseless as a matter of opinion. But then MBA is
5:01
Speaker 1: correct that there has been a huge increase in data
5:05
Speaker 1: privacy litigation under the VPPA and also, as I mentioned before,
5:09
Speaker 1: under wire capping laws and similar pre Internet laws in
5:12
Speaker 1: a variety of states. They're absolutely right about that.
5:15
Speaker 2: I understand that in the past year there have been
5:18
Speaker 2: a lot of dismissals of these cases. Does the Second
5:21
Speaker 2: Circuit decision stand in contrast to other courts.
5:26
Speaker 1: Yeah, absolutely so. In California. In the Ninth Circuit, which
5:30
Speaker 1: the Federal appeals jurisdiction for most of the West Coast
5:32
Speaker 1: and the Western US, the courts have been a little
5:35
Speaker 1: bit more skeptical than the Second Circuit has about certain
5:39
Speaker 1: aspects of the salas our decisions, in particular the goods
5:42
Speaker 1: and services issue and the subscriber issues. So in the
5:45
Speaker 1: Ninth Circuit there's more cases holding that the goods and
5:49
Speaker 1: services component of the VPPA applies only to audio visual
5:54
Speaker 1: goods and services.
5:55
Speaker 3: Right.
5:56
Speaker 1: So the NBA and their arguments in the salves Our
5:59
Speaker 1: case talk about how if you had gone to a
6:01
Speaker 1: hardware store and bought a hammer and then watched a video,
6:04
Speaker 1: you would in theory be subject to the VPPA because
6:07
Speaker 1: you bought a good and then you watched a video
6:09
Speaker 1: and that was subject to the law. And in California,
6:12
Speaker 1: that kind of a case would probably be less successful
6:16
Speaker 1: than it would be in New York in the second
6:18
Speaker 1: circuit under the salas Our decision. And then again as
6:21
Speaker 1: the salas Our decision points out, there's several different jurisdictions
6:25
Speaker 1: all trying to understand what a subscriber is under the VPPA,
6:29
Speaker 1: and they agree on some baseline points, like, for example,
6:31
Speaker 1: you don't necessarily have to pay to be a subscriber,
6:34
Speaker 1: but you have to give something of value. And where
6:36
Speaker 1: you draw that line of what counts as a subscriber,
6:39
Speaker 1: what's valuable enough to make you a subscriber as opposed
6:42
Speaker 1: to someone who just watched video for free. We're starting
6:44
Speaker 1: to see variation among the judicial district It reminds me
6:48
Speaker 1: a lot of the Americans with Disabilities Act litigation for websites,
6:52
Speaker 1: where there was a big wave of that it's receiving
6:54
Speaker 1: a little bit, but there's still a fair amount of it.
6:55
Speaker 1: Where New York and the Second Circuit were initially very
6:58
Speaker 1: open to those claims. They said that, you know, an
7:01
Speaker 1: Internet based business with no physical location is absolutely subject
7:05
Speaker 1: to Title three of the ADA, and that opened up
7:08
Speaker 1: a flood of ADA litigation against websites, and the Ninth Circuit,
7:12
Speaker 1: the Western US was a little more skeptical of those
7:15
Speaker 1: claims and tended to require a nexus between the website
7:18
Speaker 1: and a physical place of public location and did not
7:21
Speaker 1: open EIGHTYA claims to purely internet businesses. And so I'm
7:25
Speaker 1: seeing a little bit of a parallel where the Second
7:27
Speaker 1: Circuit is opening the doors more widely to consumer cases
7:31
Speaker 1: than in other judicial districts, including the Ninth Circuit.
7:34
Speaker 2: Tell me what exactly you think this decision stands for.
7:39
Speaker 1: I think it stands for least in the Second Circuit,
7:43
Speaker 1: it's going to be fairly easy for a consumer to
7:46
Speaker 1: come under the VPPA, and the litigated issue in a
7:50
Speaker 1: lot of these cases is going to shift from whether
7:54
Speaker 1: the consumer is even subject to the law to whether
7:58
Speaker 1: the website is improperly shared aring personal identifying information. Now,
8:02
Speaker 1: as a practical matter, and what that means is it's
8:04
Speaker 1: going to be a lot harder for a business to
8:06
Speaker 1: get these cases dismissed very early on. You know, in
8:09
Speaker 1: the sala is Our case, the NBA filed a motion
8:12
Speaker 1: to dismiss, which is a very early motion to get
8:15
Speaker 1: rid of a case, and the second Circuit essentially said
8:18
Speaker 1: that motion should have been denied. And I think now
8:21
Speaker 1: it's going to be a lot harder to get rid
8:22
Speaker 1: of these cases early on because they're going to really
8:25
Speaker 1: be focused much more on the merits of the data
8:27
Speaker 1: practices of the alleged videotape service provider.
8:31
Speaker 2: What can companies do? I mean, there is possibility right
8:34
Speaker 2: of getting consent.
8:36
Speaker 1: Yeah, so compliance with the VPPA is a little bit tricky,
8:40
Speaker 1: and that's because the consent provisions in the statute require
8:43
Speaker 1: that consent be given in a standalone agreement. You can't
8:47
Speaker 1: fold your privacy disclosure and consent into your larger terms
8:51
Speaker 1: of service or privacy policy like you would in other cases.
8:55
Speaker 1: For example, when we you know, will put on a
8:57
Speaker 1: consent defense to a wire tapping case in California, oftentimes
9:00
Speaker 1: the website will have a privacy policy in terms of
9:03
Speaker 1: service and we could rely on the disclosures and the
9:05
Speaker 1: consents in those larger documents. You can't do that for
9:09
Speaker 1: the VPPA, so the consent process is a little bit
9:12
Speaker 1: more tricky under that law. The first layer of defense
9:16
Speaker 1: with these types of consumer claims to me is always
9:18
Speaker 1: your dispute resolution policy, because it's going to be harder
9:22
Speaker 1: and harder to stop people from filing these claims and
9:24
Speaker 1: getting them dismissed early on. So you want to make
9:27
Speaker 1: sure that essentially the forum that you're litigating in the
9:30
Speaker 1: architecture of the dispute is set up so that it's
9:34
Speaker 1: manageable and it's fair from the perspective of both parties,
9:37
Speaker 1: and that it's enforceable. We've seen a lot of companies
9:39
Speaker 1: fall into what's called the arbitration trap in other consumer
9:42
Speaker 1: data privacy claims, where they have an arbitration provision and
9:46
Speaker 1: they have a class action waiver, and so instead of
9:49
Speaker 1: filing a class action, you'll see ten thousand or a
9:51
Speaker 1: few thousand or a few hundred arbitration claimants all come
9:55
Speaker 1: together and then file these mass claims. And since arbitration
9:58
Speaker 1: fees are the filing fees, they're usually assessed on the
10:01
Speaker 1: business on a per claimant basis, it could massively increase
10:04
Speaker 1: the cost of defense, and that's been very problematic for
10:07
Speaker 1: some large companies defending these data privacy claims. So it's
10:10
Speaker 1: really important to get your dispute resolution policy really squared away,
10:14
Speaker 1: top notch, organized and well thought through. Beyond that, you're
10:18
Speaker 1: right if your company is at high risk of a
10:20
Speaker 1: VPPA claim because you are very much in the business
10:23
Speaker 1: of audio visual content and you're sharing data and all
10:26
Speaker 1: those kinds of things, you might want to consider whether
10:29
Speaker 1: you can incorporate into your website or your newsletter or
10:32
Speaker 1: whatever you're doing, some kind of standalone consent that would
10:35
Speaker 1: comply with the VPPA. Otherwise, if you can't get that
10:39
Speaker 1: consent in, you just need to think about what data
10:42
Speaker 1: you're sharing and whether or not you can adjust the
10:46
Speaker 1: process or the way you engage with your consumers to
10:49
Speaker 1: make sure that they are not technically subscribers into the VPPA. Unfortunately,
10:54
Speaker 1: there's not a very easy answer for the VPPA, at
10:57
Speaker 1: least under the second circuit decision still developing, So there's
11:01
Speaker 1: not a lot of bright lines where we could say,
11:03
Speaker 1: if you do this, you'll be safe. There's only things
11:05
Speaker 1: we could do to turn the dials to reduce risk
11:08
Speaker 1: where we can.
11:09
Speaker 2: And do you think that this decision will lead to
11:12
Speaker 2: more lawsuits under the VPPA?
11:15
Speaker 1: Oh, I know it will absolutely.
11:18
Speaker 2: I don't usually get such definitive answers. So what are
11:22
Speaker 2: the damages here? If the NBA.
11:24
Speaker 1: Loses, it's twenty five hundred dollars per person. It's technically
11:28
Speaker 1: actual damages, but not less than twenty five hundred. And
11:32
Speaker 1: in reality, most planetfs aren't going to have actual damages,
11:34
Speaker 1: so effectively it's twenty five hundred dollars per person. But
11:37
Speaker 1: one of the key issues is attorney sees right, the
11:40
Speaker 1: VPPA allows damages. That's twenty five hundred in all likelihood
11:44
Speaker 1: punitive damages, which I think would be pretty uncommon in
11:47
Speaker 1: the case like this. But three is attorney speed, and
11:51
Speaker 1: that could be substantial. If you have a reputable firm
11:54
Speaker 1: litigating on behalf of a class, that attorney's spies claim
11:57
Speaker 1: could be significant.
11:58
Speaker 2: And what kind of advice would you give companies who
12:01
Speaker 2: might fit under the VPPA.
12:04
Speaker 1: The Thalasar case highlights the fact that there is a
12:07
Speaker 1: large increase in data privacy litigation not just under the VPPA,
12:12
Speaker 1: but under an assortment of state and federal laws and
12:15
Speaker 1: It's really important to get your privacy disclosures right, get
12:19
Speaker 1: your terms of service correct, at your dispute resolution policies
12:22
Speaker 1: shaped up, and to begin to prepare your business for
12:26
Speaker 1: what could be one of these claims. You know, if
12:29
Speaker 1: you haven't talked to your in house counsel or your
12:32
Speaker 1: outside council about what you can do to mitigate your risk.
12:34
Speaker 1: I think that you know now is the time, because
12:37
Speaker 1: this litigation is only accelerating.
12:39
Speaker 2: It's great to have you on the show. Ira, Thanks
12:41
Speaker 2: so much. That's Ara Steinberg of Greenberg Glusker. President Joe
12:46
Speaker 2: Biden is on track to match or even surpass the
12:50
Speaker 2: number of federal judges appointed by former President Donald Trump.
12:55
Speaker 2: Biden has appointed two hundred and thirteen federal judges so
12:59
Speaker 2: far to Trump's total of two hundred and thirty one.
13:03
Speaker 2: But the next president is unlikely to be able to
13:06
Speaker 2: make an impact on the federal bench because the numbers
13:10
Speaker 2: just won't be there. Joining me is federal judiciary expert
13:14
Speaker 2: Carl Tobias, a professor at the University of Richmond School
13:18
Speaker 2: of Law. When Biden leaves office, he and Trump will
13:22
Speaker 2: have in just eight years appointed about half of all
13:26
Speaker 2: the eight hundred and ninety life tenured federal judges across
13:30
Speaker 2: the country. Is that an unusual amount for eight years?
13:35
Speaker 3: It is unusual. And the reason is both administrations and
13:41
Speaker 3: the majority they've had in the Senate in those years
13:46
Speaker 3: have been on the same party and of the same mind,
13:48
Speaker 3: and that is to fill the bench with people they
13:53
Speaker 3: believe will be most effective. And they've been very effective
13:58
Speaker 3: in nominating to affirming people in that situation because the
14:02
Speaker 3: majority rules in the Senate, and so that's what we see.
14:08
Speaker 3: So it shouldn't be too surprising that there aren't a
14:11
Speaker 3: lot of opportunities for the next president, whoever it is
14:14
Speaker 3: in terms of numbers.
14:15
Speaker 2: And also there aren't opportunities because the judges taking senior
14:20
Speaker 2: status are shrinking as well. And is that because both
14:25
Speaker 2: these presidents appointed younger judges.
14:27
Speaker 3: Yes, I think that's clear. I mean, did data show
14:30
Speaker 3: that they intentionally did that? And that goes back I
14:34
Speaker 3: think at least to the time of George W. Bush
14:37
Speaker 3: and maybe even earlier, but it has become much more
14:41
Speaker 3: of a focus an emphasis, and sometimes the senators and
14:45
Speaker 3: the party opposing the president do point out that people
14:51
Speaker 3: are quite young and don't have a lot of experience
14:54
Speaker 3: and so they criticize the nominees for that, but when
14:59
Speaker 3: we Jordy votes, they often then confirmed those types of judges.
15:05
Speaker 3: And so that's what you have I think, and I
15:09
Speaker 3: do think to some extent, we're seeing a number of judges,
15:13
Speaker 3: especially Indian palate courts, only thinking senior status or resigning
15:19
Speaker 3: when the person in the White House is of the
15:21
Speaker 3: same party, which used to be only a Supreme court
15:24
Speaker 3: or principally a Supreme court type of tradition, and even
15:28
Speaker 3: then honored sometimes in the breach. But now it happens
15:33
Speaker 3: quite a bit. And what you saw, I think, for example,
15:37
Speaker 3: as Trump was coming in, was many Republicans assuming senior status,
15:41
Speaker 3: and then when Biden was elected, you saw a number
15:45
Speaker 3: of Democratic appointees then assuming senior status.
15:49
Speaker 2: There are sixty seven vacancies currently on the federal bench
15:53
Speaker 2: or expected to open up. How many of those could
15:56
Speaker 2: Biden possibly fill before he leaves office.
16:00
Speaker 3: Well, I think on the floor right now are twenty eight,
16:06
Speaker 3: So that would only leave forty or so vacancies working
16:10
Speaker 3: from the present figures, which is very low, especially at
16:14
Speaker 3: the pellate level. I think right now there's six vacancies
16:18
Speaker 3: and four of them and maybe five or even six
16:23
Speaker 3: could be confirmed, and that would leave virtually no vacancy
16:27
Speaker 3: in the appellate system, and that's where both parties concentrate,
16:30
Speaker 3: because appellate judges make more policy. They are the supreme
16:34
Speaker 3: courts in ninety nine percent of cases in the states
16:36
Speaker 3: within the circuit where they sit, and so everyone is
16:40
Speaker 3: focused on that. And I think at one point Trump
16:44
Speaker 3: actually had filled every single appellate vacancy, and that hadn't
16:49
Speaker 3: happened since nineteen eighty four when Reagan was president. So
16:52
Speaker 3: they focused like a laser on that. But so has Biden,
16:55
Speaker 3: and so he may end up with forty eight, forty
16:58
Speaker 3: nine to fifty points at the appellate level, which is
17:00
Speaker 3: very close to the fifty four Trump was able to confirm.
17:05
Speaker 2: So according to the American Constitution Society, which looked into
17:09
Speaker 2: how many judges might be taking senior status over the
17:12
Speaker 2: next four years, it came out to be one hundred
17:16
Speaker 2: and sixteen appointed by Republican presidents and one hundred and
17:19
Speaker 2: seventeen by Democratic presidents, which seemed awfully close to me
17:24
Speaker 2: since I thought that Democratic presidents were behind Republican presidents
17:28
Speaker 2: on appointees.
17:30
Speaker 3: Well, I think it has even doubt during Biden's time.
17:36
Speaker 3: If you think back Bush had eight years, Obama had
17:40
Speaker 3: eight years, Trump had four, Biden had four. So I'm
17:43
Speaker 3: not terribly surprised that that's where we are. But I
17:47
Speaker 3: think it's fair to say Democrats have learned from Republicans
17:52
Speaker 3: how to be more ruthless about nominations in confirmation. It
17:56
Speaker 3: depends on your perspective, but to some extent that's to
17:59
Speaker 3: be expected. I mean, I think that's the norm now,
18:02
Speaker 3: and so the majority rules in the Senate, and as
18:04
Speaker 3: long as the White House is amenable and the President
18:07
Speaker 3: is effective, that's what I think you're going to see
18:10
Speaker 3: going forward.
18:11
Speaker 2: And I've been talking about judges for so long, but
18:14
Speaker 2: yet I didn't know this fact that it was President
18:16
Speaker 2: Jimmy Carter who has the record for the most judicial
18:20
Speaker 2: appointments in a single term two hundred and sixty two.
18:24
Speaker 2: And that was at a time when we didn't know
18:26
Speaker 2: it was as important as it is now.
18:28
Speaker 3: I think that's correct. And there were fewer judges then
18:32
Speaker 3: because there were a couple of judge ship bills after that.
18:35
Speaker 3: But what's most telling is they passed the nineteen seventy
18:39
Speaker 3: eight Judge Ships Act, which created I think thirty five
18:42
Speaker 3: appellate judge ships in sixty or seventy or maybe even
18:46
Speaker 3: more district ones, and so he had an enormous opportunity
18:49
Speaker 3: there and he seed it. That explains it, even though
18:53
Speaker 3: there were other criticisms of his presidency and he wasn't
18:57
Speaker 3: re elected. But he also, as you remember, was instrumental
19:02
Speaker 3: in beginning the diversification of the courts in terms of ethnicity, gender,
19:09
Speaker 3: and experience and appointed many people of color. All the
19:14
Speaker 3: Democratic presidents since then have made diversity important, and some
19:19
Speaker 3: of the Republicans have as well.
19:21
Speaker 2: We have to factor in the fact that if the
19:25
Speaker 2: president the next president has a Senate that the opposing
19:30
Speaker 2: party has a majority in, is it going to be
19:33
Speaker 2: tougher to get judges appointed. The answer is yes, I
19:38
Speaker 2: will that answer, but I thought i'd give you a
19:39
Speaker 2: softball there.
19:40
Speaker 3: Yeah. Right. And the real telling point is twenty fifteen sixteen,
19:47
Speaker 3: after Republicans in twenty fourteen captures the majority because Mitch
19:53
Speaker 3: McConnell as majority leader, only allowed two of President Obama's
19:59
Speaker 3: nominee he's at the appellate level to be confirmed in
20:02
Speaker 3: the last two years, and not very many district nominees
20:07
Speaker 3: that's what led to Trump being able to appoint fifty
20:10
Speaker 3: four because there were so many vacancies held over by McConnell.
20:14
Speaker 3: And of course, the classic example everybody remembers is what
20:18
Speaker 3: he did with Merrick Garland and Justice Scalia's vacancy, and
20:22
Speaker 3: that's what led, I think, in part to what we
20:26
Speaker 3: see in terms of the majority on the Supreme Court now.
20:29
Speaker 2: Mike Davis, a Trump ally and founder of the Conservative
20:34
Speaker 2: Judiciary focused advocacy group Article three Project, he said the
20:38
Speaker 2: next president will finish the transformation of the judiciary one
20:43
Speaker 2: way or the other. Do you think he's right about that?
20:47
Speaker 3: Well, to some extent, But remember it's the appellate judges
20:51
Speaker 3: who really make the policy, and they're just not going
20:56
Speaker 3: to be many vacancies there. So some of what he
21:00
Speaker 3: is saying is hyperbolic, but there is a lot at stake.
21:03
Speaker 3: I just don't think the opportunity is there in a
21:06
Speaker 3: way that it has been historically because of the small numbers,
21:11
Speaker 3: and as we've talked about, the unlikelihood of very many
21:15
Speaker 3: turnovers in the next four years, and then the whole
21:19
Speaker 3: question of who's going to have the majority, because it
21:21
Speaker 3: may be that that's which is this time or not,
21:25
Speaker 3: but it's going to be very close no matter what.
21:28
Speaker 3: And there's every chance that even if Democrats lose the
21:31
Speaker 3: majority in this election year, they will recapture it in
21:34
Speaker 3: twenty six and so I just don't think that there's
21:38
Speaker 3: going to be much of an opportunity to do what
21:40
Speaker 3: Davis is talking about. But I've seen what he has said,
21:44
Speaker 3: and they even are critical of some of the fifty
21:46
Speaker 3: four whom Trump appointed as being not sufficiently loyal, if
21:51
Speaker 3: you will, to the former president.
21:54
Speaker 2: There's this theory that some federal judges of tryout for
22:01
Speaker 2: the Supreme Court by writing opinions that they think will
22:06
Speaker 2: get them noticed. Have you seen that happening lately.
22:10
Speaker 3: It's just hard to say, though I think it's fair
22:13
Speaker 3: to say if you look at the fifty four pallat judges,
22:16
Speaker 3: there are a number of them who seem to be
22:18
Speaker 3: trying out and a lot of people have said that
22:21
Speaker 3: for the Supreme Court. And it's a hierarchical institution, but
22:27
Speaker 3: there are not very many seats on the US Supreme Court,
22:30
Speaker 3: so we'll see. But especially in the Fifth Circuit, for example,
22:34
Speaker 3: Trump has a number of appointees, and the Eleventh Circuit
22:39
Speaker 3: and they are people who have made their mark with
22:43
Speaker 3: you know in some ways on certain cases. And even
22:46
Speaker 3: the Supreme Court has found the Fifth Circuit to be
22:50
Speaker 3: too extreme for its taste on certain issues like the
22:53
Speaker 3: abortion pill and some other cases.
22:56
Speaker 2: Yes, the Fifth Circuit often tends to push the legal envelope,
23:02
Speaker 2: so to speak. Thanks so much, Carl. That's Professor Carl
23:05
Speaker 2: Tobias of the University of Richmond Law School. Coming up
23:09
Speaker 2: next on the Bloomberg Law Show. A landmark doctrine of
23:13
Speaker 2: the NLRB is at stake in a Ninth Circuit case.
23:17
Speaker 2: I'm June Grosso and you're listening to Bloomberg. A decision
23:22
Speaker 2: by the Ninth Circuit Appellate Court could have major implications
23:26
Speaker 2: on a game changing NLRB decision on union organizing designed
23:32
Speaker 2: to clean up representation elections and provide a path to
23:36
Speaker 2: unionization without a formal vote. Joining me is Bloomberg Law
23:40
Speaker 2: Senior legal reporter Robert Aafola explain what the semex doctrine is.
23:46
Speaker 4: So this is mainly about the National Labor Relations Board
23:50
Speaker 4: efforts to prevent employers from committeing put for labor practices
23:55
Speaker 4: before an election. Basically, the board looked at how things work,
23:59
Speaker 4: and because the remedy for violations before an election, if
24:05
Speaker 4: the union loses, the remedy is normally a rerun election,
24:09
Speaker 4: and employers tend to do better and rerun elections. The
24:12
Speaker 4: board looked and said, you know, this is not enough
24:15
Speaker 4: of a disincentive. So we're going to rework how this
24:18
Speaker 4: all work. And they've set up a system now where
24:22
Speaker 4: if the union comes to an employer and says, look,
24:25
Speaker 4: we have a majority support, the majority of the workers
24:28
Speaker 4: here want to unionize, the employer has two choices. They
24:32
Speaker 4: can either accept that and recognize the union and start bargaining,
24:37
Speaker 4: or they can file their own petition for an election.
24:42
Speaker 4: If they go the election route, if they commit any
24:46
Speaker 4: labor law violations leading up to the election, then the
24:50
Speaker 4: board will issue what's now known as a systemics bargaining order,
24:55
Speaker 4: just basically saying you have to recognize and bargain with
24:58
Speaker 4: this union. Sort of how the doctrine works, Well.
25:01
Speaker 2: What's the issue in the case. What is CEMEX saying.
25:04
Speaker 4: So there was an oral argument at the Ninth Circuit
25:08
Speaker 4: about the SEMX doctrine. The company Sex which the case
25:12
Speaker 4: is named after the doctrine is named after, is challenging
25:16
Speaker 4: the NLRB's basically legal authority to issue this rule to
25:22
Speaker 4: create this framework, this SEMX doctrine. Basically, there was a
25:28
Speaker 4: Supreme Court decision from the late sixties called NLRB versus
25:31
Speaker 4: Ghissel that set up the format for when the board
25:36
Speaker 4: would issue these sort of bargaining orders. Under Ghissel, they
25:40
Speaker 4: would only issue these bargaining orders when there was severe
25:43
Speaker 4: and pervasive labor law violations such that there was no
25:48
Speaker 4: chance of holding a fair election. Just the lawbreaking was
25:52
Speaker 4: so intense that it destroyed that opportunity. And the company
25:56
Speaker 4: is saying, that's the rule. The NLRB can't go in
26:01
Speaker 4: and change how they issue bargaining orders, you know, in
26:05
Speaker 4: this new semax doctrine, And that was the argument they
26:10
Speaker 4: presented at the Circuit Court yesterday.
26:13
Speaker 2: Did the judges talk about the presidential value of Gissele.
26:18
Speaker 1: Yeah, yeah.
26:19
Speaker 4: There was some debate over whether what the Supreme Court
26:24
Speaker 4: said in its pres Gisole ruling, whether what they were
26:28
Speaker 4: saying was this is a permissible way for the board
26:32
Speaker 4: to issue bargaining orders, or this is the only way
26:36
Speaker 4: that the board can issue the bargaining orders. The democratic
26:39
Speaker 4: point of judges in the judicial panel that was hearing
26:43
Speaker 4: the case, they seemed to signal that they felt that
26:48
Speaker 4: Gissole was about what the Board could do, not what
26:52
Speaker 4: the Board must do, which suggests that at least at
26:56
Speaker 4: this stage, the NLRB may prevail.
26:59
Speaker 2: What's the NLRB's argument at the Ninth Circuit.
27:03
Speaker 4: Yeah, the board's argument of the Ninth Circuit is this
27:06
Speaker 4: is within their authority, and this is basically how the
27:10
Speaker 4: NLRB sets labor law policy for the country. They decide
27:14
Speaker 4: individual cases and from those cases they create general frameworks
27:22
Speaker 4: that sort of govern different areas of labor management relations.
27:27
Speaker 4: So they're saying, hey, we've had different standards through our
27:30
Speaker 4: history about what it takes to issue a bargaining order.
27:36
Speaker 4: There was a time before Gissel. It was what's known
27:40
Speaker 4: as the Joy Silks doctrine, in which if a union
27:45
Speaker 4: came to an employer and said we have a majority support,
27:50
Speaker 4: unless that employer had a good faith reason to doubt
27:53
Speaker 4: that majority support, they were required to bargain. So it
27:57
Speaker 4: was a much more union friendly standard, and that was allowed,
28:02
Speaker 4: you know, in the fifties and sixties before Gissel happened.
28:05
Speaker 4: So the NLRB is saying, look, we've changed our standards before,
28:10
Speaker 4: and this is what we've changed to. Now, this is
28:12
Speaker 4: what we think the best way to do it is,
28:15
Speaker 4: and you know we have that power.
28:17
Speaker 2: So you write that the semex lawyer raised lowper Bright,
28:22
Speaker 2: which was the decision by the Supreme Court at the
28:26
Speaker 2: end of less term that ended Chevron difference or judicial
28:31
Speaker 2: deference to agencies interpretations where the laws are ambiguous. What
28:36
Speaker 2: happened when that was raised?
28:38
Speaker 4: So one of the Democratic appointed judges spoke about part
28:43
Speaker 4: of the Locoerbright decision in which there are times when
28:49
Speaker 4: Congress has basically handed down some power to the agencies
28:53
Speaker 4: to kind of fill in the blanks and do this
28:56
Speaker 4: sort of doctrine setting for lack of a better term,
28:59
Speaker 4: and the judge pointed out that, you know, some of
29:02
Speaker 4: the cases that the Court and Loperbright referred to was,
29:06
Speaker 4: you know, cases about the National Libor Relations Act, which
29:09
Speaker 4: is what empowers the NLRB. So I think she was
29:12
Speaker 4: basically saying Locribrid doesn't affect anything in this case.
29:15
Speaker 2: Because if you look at the Supreme Court decisions in
29:19
Speaker 2: recent years on unions, it's almost always against the union.
29:25
Speaker 2: So I wonder if this came up to the Supreme Court.
29:29
Speaker 2: I don't know if it will, but whether they would
29:31
Speaker 2: sort of not endorse it the sex doctrine.
29:35
Speaker 4: Yeah, it's certainly a pretty high degree of likelihood that
29:39
Speaker 4: different employers will challenge when they're hit with the SEMX doctrine,
29:42
Speaker 4: they'll challenge that in court. Just yesterday, a n LRB
29:47
Speaker 4: judge issued a SEMs order against Starbucks. So you can
29:51
Speaker 4: imagine that there will be what's known as a circuit split,
29:54
Speaker 4: where two different circuit courts disagree on an issue, and
29:59
Speaker 4: that's when the Supreme Court is supposed to come in
30:01
Speaker 4: and they're supposed to resolve that circuit split. So you
30:04
Speaker 4: could definitely see a situation in which the Court was
30:08
Speaker 4: called upon to settle this issue. And as you point out,
30:11
Speaker 4: given the leanings of the current Supreme Court majority, you
30:15
Speaker 4: could imagine that the board might have an uphill battle.
30:18
Speaker 2: How big a blow would it be to union organizing
30:21
Speaker 2: if there's a decision rejecting the sex doctrine.
30:25
Speaker 4: It's kind of hard to answer that with a lot
30:26
Speaker 4: of specificity, but we have seen in the Board just
30:32
Speaker 4: released some statistics recently about an increase in the amount
30:36
Speaker 4: of election petitions that are being filed, and I was
30:40
Speaker 4: speaking to some labor law experts recently about that, and
30:44
Speaker 4: an argument was made that, hey, that shows that the
30:47
Speaker 4: sex doctrine is working. That shows that unions and workers
30:51
Speaker 4: see that sex is providing sort of a stick to
30:55
Speaker 4: hold employers accountable so they won't violate the law right
30:58
Speaker 4: before an election to intend that eight workers not to
31:01
Speaker 4: vote for unions, and we have seen an upsurge in
31:05
Speaker 4: unionization over the past few years. There's a lot of
31:07
Speaker 4: different reasons for that. It's not just the SEMEX doctrine,
31:10
Speaker 4: but it seems reasonable to say that that's part of it.
31:13
Speaker 4: So the board was to lose the SEMX doctrine, Yeah,
31:17
Speaker 4: that would be not so great for unions.
31:19
Speaker 2: Does SEMEX actually contradict Gissle because it sets a whole
31:25
Speaker 2: different way of handling things?
31:27
Speaker 4: Right, Yeah, I don't know that it contradicts Ghistle, but
31:31
Speaker 4: it does represent a different framework. And as I mentioned before,
31:37
Speaker 4: the board has argued, Look, we've had different frameworks before,
31:40
Speaker 4: some more permissive, you know, some more union friendly than CEMX.
31:45
Speaker 4: Ghisle was more employer friendly than CEMX. But it may
31:48
Speaker 4: come down to a technical question about what exactly did
31:53
Speaker 4: the Supreme court say in that I think it was
31:56
Speaker 4: nineteen sixty nine, was the Ghissele ruling. Did they create
31:59
Speaker 4: a situation where they said this is the only way
32:01
Speaker 4: you can do it? Or did they rule that yes,
32:04
Speaker 4: is the permissible way to do it. But implicitly they're saying, board,
32:09
Speaker 4: you you could set up another way.
32:11
Speaker 2: So how do you think this Ninth Circuit panel is
32:13
Speaker 2: going to come out?
32:14
Speaker 4: Courts? Thelitization, you know, it seems to be there where
32:19
Speaker 4: you can't decide the outcome just based on the composition
32:22
Speaker 4: of the panel. But here we had two Biden appointees
32:25
Speaker 4: and one George W. Bush appointee, and watching the arguments,
32:30
Speaker 4: it did seem that the two Biden appointees were a
32:32
Speaker 4: lot more supportive of the board's position, and that the
32:36
Speaker 4: George W. Bush appointee was more skeptical of the board's position.
32:40
Speaker 4: So they seem to signal that they would end up
32:43
Speaker 4: approving the stomach's doctrine. But we'll have to see.
32:46
Speaker 2: An important labor case no matter which way you look
32:49
Speaker 2: at it. Thanks so much, Robert. That's Robert aya Follet,
32:52
Speaker 2: senior legal reporter for Bloomberg Law. And that's it for
32:55
Speaker 2: this edition of the Bloomberg Law Podcast. Remember you can
32:58
Speaker 2: always get the latest legal new by subscribing and listening
33:01
Speaker 2: to the show on Apple Podcasts, Spotify, and at Bloomberg
33:05
Speaker 2: dot com slash podcast slash Law. I'm June Grosso and
33:09
Speaker 2: this is Bloomberg