September 26, 2025 • 31 mins
In this week’s Votes and Verdicts podcast, Bloomberg Intelligence’s litigation and policy team examines several key catalysts. Matt Schettenhelm reviews the legality of President Donald Trump’s proclamation on raising H-1B visa fees to $100,000. Tamlin Bason explains the impact of the H-1B visa fee increase on IT-service companies like Cognizant and Infosys, and why a recent $1.5 billion settlement between Anthropic and authors matters. Nathan Dean updates his outlook on the likelihood of a US government shutdown this month, while Holly Froum discusses how Trump’s comments linking Tylenol to autism will affect class-action litigation against Kenvue.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:15):
Hello, and welcome to the Votes and Verdicts podcast, hosted
by the litigation and policy team at Bloomberg Intelligence, the
investment research platform of Bloomberg LP on the Bloomberg Terminal.
Bloomberg Intelligence has five hundred analysts and strategists working across
the globe and focused on all major markets. Our coverage
includes over two thousand equities and credits, and we have
(00:37):
outlooks on more than ninety industries and one hundred market indices,
currencies and commodities. This podcast series examines the intersection of
business policy and law, and today's our weekly look at
the litigation and policy catalysts that we're currently watching and
that we think will impact companies across a number of
different sectors. My name is Elliot Stein. I'm an analyst
(01:00):
Bloomberg Intelligence covering litigation in the financial sector, and I'm
delighted as always to be joined today by several of
my BI colleagues. As always, you can find all of
our research on the Bloomberg terminal at BI go, and
you can find most of our litigation and policy research
on our dashboard, which is available on the terminal at
(01:21):
BI laws go. Just to time stamp this episode because
things always do move quickly. Today is Thursday, September twenty fifth.
We're recording this at about ten oh three am New
York time. So once again, there is a lot going
on in terms of litigation and policy developments coming out
(01:44):
of Washington, DC and elsewhere. First, President Trump proclaimed this
week that H one B visa fees actually I think
it was towards enda last week, that H one B
visa fees would increase to one hundred thousand dollars. He
also held the Press con friends this week to discourage
the use of tail and all by pregnant women due
(02:04):
to what he claims is a potential link to autism.
And of course, the threat of a government shut down
still looms. So to get the conversation go in, let's
start with the H one B visa issue. Let me
bring in my colleagues, Matt Schettenhelm and then Tamlin Basin. Matt,
let's start with you, since you've been looking into the
(02:25):
legal issues around President Trump's proclamation. You wrote this week
that you think there's only a thirty percent chance that
the proclamation survives in court. You want to just tell
us a little bit more about your thinking there.
Speaker 2 (02:38):
Yeah, So this is a case where Trump is using
a statute that Congress passed in the nineteen fifties that
gives him very clear power to control entry into the
United States and using that that historical power to create
a new fee scheme, a novel expansion of what you
(03:03):
typically would think of as the power to control entry.
This is typically the power to create revenue raising programs
or to tax is Congress's authority. And the question will
be when Congress passed this statute in the nineteen fifties
restricting entry, giving president the president the power to restrict entry,
(03:23):
did it also empower him to create a fee you know,
the fee process that is typically Congress is on top
of that, Congress already put guardrails or at least some
structure around what these fees should be. And they are
a fraction of the fees that President Trump actually imposes.
(03:45):
And so what we're headed to here is is a
battle in court about how broadly do we read that
grant to the president to restrict entry in light of
the structure of a program that Congress has already put
in place. The interesting thing on one sort of side
point is, you know President Trump's order on this cast
(04:08):
has a lot of discussion about abuse of the program.
He says that the foreign share of workforce for computer
and math occupations has grown from seventeen point seven percent
to twenty six point one percent, that the share of
IT workers in the program has grown from thirty two
percent to sixty five percent. He casts all of this
as abuse. I'm not sure the court are courts will
(04:31):
see that as abuse as much as use of the
program that Congress put put in place. And so all
of that I think combines to an interesting court fight.
But I think judges, many judges are going to bristle
at the novelty of letting the president craft a revenue
(04:54):
raising scheme of this scale.
Speaker 1 (04:56):
So I mean, I take it. Then you mentioned the no,
I take it. There's really not much precedent here.
Speaker 3 (05:04):
It's limited.
Speaker 2 (05:05):
So so I mean, one thing that Trump has going
for himself that he's going to cite on page one
of any brief is the case about his travel man
that went to the US Supreme Court. This was restricting countries,
restricting entry from certain countries that posed national security risks.
This went all the way to the Supreme Court, and
(05:26):
I believe it's twenty eighteen, and they the Supreme Court
used this very statute we're talking about, in this nineteen
fifties statute, to say that, look, the president has the
power to restrict entry, and this statute exudes deference to
the president in every clause. That's great language for the president.
(05:47):
So he starts in a really strong place using that statute.
This this is going to test it. You know, how
far does that power go? And what really kind of
stuck in my head. I went to the Supreme Court
this term when and the Court announced its decision in June,
when the FCC had created was challenged for creating a
(06:10):
program that raised billions of dollars its Universal Service program,
and whether that was Congress giving away too much of
its power to the FCC without some intelligible principle, some
sort of limit on the delegation. And the Supreme Court
ultimately said, now we're okay with that that you know
there is some intelligible principle in this statute. We can
(06:31):
read that statute to impose some qualitative limits on how
this fee program can be structured. When you read this
immigration statute, I'm not so sure there's any limit here.
So you know, in terms of how much you know,
this is one hundred thousand dollars per applicant fee, there's
really no limit on the sky's the limit on that
(06:54):
in terms of what Congress did, so, I think that
might guide courts in imposing limits and saying no, you
have the power to restrict entry. I'm not sure you
have the power to create a whole new fee structure.
But it's going to be the tension between those two
doctrines of Okay, there is a broad power to control
trol immigration and to control entry that the President has
(07:15):
and Congress has given that away. How far does that
extend into creating a new fee program?
Speaker 3 (07:21):
Right, So two questions for you.
Speaker 1 (07:24):
Do you think then this becomes the vehicle for the
Supreme Court to finally take up the non delegation doctrine
and actually applying on it in you know, in more detail.
And then second, secondly, you were talking about the fee
structure that's in the statute.
Speaker 3 (07:38):
What exactly is that structure? Yeah?
Speaker 2 (07:41):
So, so you know, the Supreme Court you know, basically
decided in the FCC case that it decided in June
that look, we're going to we're going to keep our
non delegation doctrine, the intelligible principle doctrine. Even though there's
been a push on from from some justices, including Justice
Corsic who dissented in that case, to make to give
(08:05):
that doctrine much more teeth, you know, the Court basically
stuck with it. It's very broad deference. You know, we're we're
not going to be real aggressive in second guess in Congress.
So Trump has that going for him here too. That
that and so so well, we'll see. But the Court
still was was pretty pretty searching in looking for some limits.
(08:29):
You know, this is Congress can't give away everything, and
and and so this might might you know, give the
Court a chance to find at least interpret the statute
to have a limit in it. Even if it doesn't
find that this statute violates the non delegation doctrine, it
guides the court in interpreting limits on what Congress actually
gave the president the power to do. In terms of
(08:51):
what this statute actually does. That you can work through
the precise law that structures the H one B program,
and there are about three or four different provisions that say, okay,
the the administration can create a fee for this the
administration can can create a fee for for that. There's
three or four other things I'm not gonna be able
to pull pull right here, but each of those are
(09:13):
are in the much lower fees, and Congress specifies the fees.
And so I think courts are going to look at
that and say look that you know, look there's no
express limit on on additional fees. But the implication is
that Congress structured this program, and you're not really showing,
you know, an abuse or or a violation of of
(09:35):
the program. You're showing use of that program. And so
it's really a task for Congress.
Speaker 1 (09:41):
Got it, all right, that's good stuff, Camlon. Let's uh,
let's bring you in because you've also written about this
issue more in terms of what the impact is to
companies in the IT services industry. Uh, you know some
of the companies that you cover. Do you want to
just tell us you know what the impact is to
those companies?
Speaker 3 (10:01):
Yeah?
Speaker 4 (10:02):
Absolutely, thanks Elliott. So I think Matt did a really
good job of teeing up how this is a very interesting,
potentially novel You said the statute by the Trump administration,
but really this was nothing short of sort of a
policy shock to the entire H one B program, and
specifically to some of these sectors that have really leveraged
this program really extensively since it was developed in their
(10:23):
early nineteen nineties. As you mentioned, the IP services firms
are first and foremost what people often think about when
they think about H one B program and also potential
it's been claims of sort of abuse, and the reason
is these firms really have built their entire delivery model
based on this structure.
Speaker 3 (10:42):
So what they do is.
Speaker 4 (10:42):
They have a lot of offshore delivery of software engineers
that will sit in places where there's much lower cost delivery.
Often that's India, that can be Eastern Europe, that can
be Latin America. But they rely on this H one
B program to really serve thisce on clients and often
these are large financial services companies, healthcare clients, even technology
(11:03):
firms to bring some on shore talent. And they're doing
this because frankly, it's a relatively shallow.
Speaker 3 (11:10):
Talent pool in the US.
Speaker 4 (11:12):
There's not as many software engineers as the supply side demands,
so really you're needing to supplement your work first with
these education programs that are they're hotbeds and Indie again,
so you bring them in. It's potentially a lower cost,
but it really helps you deliver this model. Frankly, at
one hundred thousand dollars per AH one B fee, this
(11:33):
is an untenable operating model going forward. These are slim
margin industries. They simply can't absorb those costs. So really,
over the next few weeks, and even if there's litigation
on this, as that's playing out, they're going to have
to have these difficult conversations with their clients basically saying
we can't afford to front these costs. Either we're going
(11:54):
to move this work offshore, or we're going to need
you to pay that cost. So I think that's where
we're sort of the rubber meats rolled and road in
terms of the industry impacts.
Speaker 1 (12:04):
Here well, and I mean you cover some of the
IT services companies. What are some of the names in
the space, and have they said anything in response to
the president's proclamation.
Speaker 4 (12:14):
Interestingly, they've been very silent I think on this. I
think they're sort of waiting to see it play out.
This is September twenty fifth, and just earlier today, A Center,
which is the largest ID services company in the world.
They did report earnings. They noted that they have a
much smaller usage at based one B than some of
their peers that are based in India, so they said
(12:34):
it's probably not going to be a huge impact for them.
Where there could be more impacts is firms like Infosys,
Taught to Consultancy, and even Cognizant, which although it's US based,
does rely on H one bv's as much more than
some of its peers. I think as of now, these
firms don't see much benefit in sort of going out
(12:55):
and really attacking this policy. I think they're going to
let it play out and really look for clare on
what exactly it does mean, and maybe see if they're lawsuits.
I think the California A.
Speaker 3 (13:07):
Kurry General was talking about they.
Speaker 4 (13:08):
Might potentially seek to suit ondo this just because of
how much this program has been used in California by
the technique industry.
Speaker 1 (13:16):
Yeah, that's interesting. I wonder what the state's standing claim
would be. I don't know if either of you has
thoughts on that, but I'm sort of throwing that into
the ether right now. If you have a thought, great,
If not, Tamlin, I wanted to also ask you about
(13:37):
another issue that you follow because you cover intellectual property
litigation and the tech sector for US, and earlier this month, Anthropic,
one of the leading AI AI companies, settled copyright claims
brought by authors for about one and a half billion dollars.
Can you talk about why that settlement is important and
what it means for other AI companies and for copy
(14:00):
right holders.
Speaker 3 (14:01):
Yeah, of course.
Speaker 4 (14:02):
Yeah. So this has been a very big topic we've
been covering just because there are over fifty lawsuits between
content owners and developers of large language models in the US.
But I should sort of fact check a little bit.
And it's actually a proposed settlement, although by the time
people listening it might have been accepted and finalized. And
that's because this evening I'm in Northern District of California,
(14:24):
Judge als Up is holding a hearing where he's going
to try to decide if he's going to accept this
proposed settlement. Now, when it was announced a few years
weeks ago, he did push back fairly strongly on some
parts of this settlement. So the way it was structured
is this would be for about five thousand on books
that were downloaded, and the fee would be capped at
about three thousand dollars per work. Now this would potentially
(14:47):
be split between the author of the book and the publisher,
and one of his primary concerns was how does that
split breakdown breakdown? And also he's worried about class notification
because although there were five thousand books at issue in
the settlement, there were seven million books that are at
issue in this specific claim for copyright infringement. So he's
(15:09):
worried about getting noticed to all these impacted authors. And
he was also sort of worried that this was a
deal that was mainly agreed upon by the publishers with
not a lot of from the individual authors. So I
think we're going to see how that hearing goes on
September twenty fifth, whether or not he approves it. The
reason that Anthropic really sock to settle is because again
(15:30):
I mentioned there was seven million books at issue. These
were books that it downloaded through pirate libraries to train
its large language model. Judge also had ruled that that
was not fair use. It was fair use to sort
of scrape data generally off the Internet, but the use
of these pirate libraries was not fair use. Anthropic was
paid facing a trial on that in early December damages
(15:54):
in copyright infringement. The low end is seven hundred and
fifty dollars per work. The high end is one hundred
deep thousand dollars per work. So really, if he rejects
the settlement, we could still be looking at a trial
in December.
Speaker 1 (16:07):
Right, And so you said they settled for three thousand
dollars per work when the top end would be one
hundred and fifty thousand, So definitely a good deal.
Speaker 4 (16:15):
Yeah, And it's also a bit above the minimum, so
you could see that sort of the anthropic the least,
you know, understood that these were allegations that they were
not likely to convince a jury to sort of reach
that low end of the potential damages. Again, these are
statutory to images, so there's nowhere to go really butt up.
And I think these are issues that I don't think
many LM firms are going to really want to chance
(16:38):
a jury verdict on this. So this would you know,
if the settlement was accepted, it would sort of set
a benchmark of three thousand dollars per work. The other
firms who are facing identical or very similar claims for
god grant benchment are facing.
Speaker 1 (16:52):
Right and you're following those as well, So I guess
are there other trials coming up in those that to
figure sout like we saw here not?
Speaker 4 (17:02):
Yeah, so this was triggered both by that through use
ruling and also Judge also I've had certified this as
a class action. We don't see those both of those
decisions happening in any other case until potentially mid to
late twenty twenty six. I think a case against mattaw
would be the first to potentially get there with a
fair use hearing on these pirate book libraries, and potentially
(17:28):
the scheduled for early Jebruary, all of the parties might
be trying to push that back to the middle of
next year.
Speaker 3 (17:32):
Got it all right?
Speaker 1 (17:33):
Good stuff, Thanks Tammlin. All right, Nathan Dean, let's bring
you back in. Let's uh shift gears back to Washington
and check in on the possibility of a government shut down. Nathan,
was your dishwasher delivered?
Speaker 3 (17:48):
Okay?
Speaker 1 (17:49):
Just for the audience. Nathan missed the start of this,
but he jumped in as he was waiting for his
dishwasher to be delivered.
Speaker 5 (17:56):
You know, it was delivered, and this was the second
time I was supposed to come and So we've been
without a dishwasher for three weeks now, which I will
say to anybody listening out, there is a great way
to get your children to actually start doing chores because
the amount of times are like, oh, can we use
paper plates?
Speaker 3 (18:12):
Anyway?
Speaker 1 (18:13):
I think it sounds like a medieval torture chamber. All right, So, Nathan,
this week, among the many things we saw, President Trump
canceled the meeting with Hakeem Jeffries and Chuck Schumer. Yesterday
it was reported that the Office of Management and Budget
instructed federal agencies to prepare for essentially what would be
permanent mass terminations if there's a shutdown. What does all
(18:37):
this mean for your odds of a shutdown actually happening.
Speaker 5 (18:41):
So, you know, last week when we had this discussion,
I was at a forty percent chance. Today I'm still
at a forty percent chance. And I'm out of consensus
here because if you go to Polymarket and I pulled
it up on you know what, September twenty fifth, at
ten to fifteen in the morning, poly Markets as sixty
two percent chance of a shutdown, and they went above
fifty percent on September nineteenth. So call me a little
(19:03):
bit about of consensus here. But the reason why I
don't think we're going to have a shutdown is because
all this political rhetoric that's going on from both parties
was anticipated. Congress is out this week, the House is gone,
and Speaker Johnson is not bringing them back until after
October first, and the Senate doesn't isn't scheduled to come
back into the office until Monday, and so you have
(19:25):
Monday and Tuesday and then that's it.
Speaker 6 (19:27):
Now.
Speaker 5 (19:27):
The reason why I don't think you're going to have
a shutdown is for a variety of reasons that you know,
the Democrats, even though they need to be seen fighting
President Trump, there are still just a handful of senators,
moderate senators on the Democratic side that don't think shutting
the government down is good politics or good policy. And
(19:48):
I think there's actually a Virginia politics angle here at play,
because even though you know, if you look at the
number of Senators that voted for this deal back in March,
none of the Virginia or Maryland senators were in here.
I do think the threat from the OMB in terms
of mass firings does give the Virginia senators and the
Maryland senators an extra way of saying, hey, we need
(20:09):
to vote for this deal in order to protect our
government employees. And look, there are Democrats out there saying, look,
you fire hundreds of thousands of government workers, you're going
to drive people into the Democratic camp. But we're also
talking about people's lives here. And I would also just
note that, you know, here in Virginia we have a
governor race. I say here in Virginia because I'm coming
to you from the Northern Virginia Bureau today. You know,
(20:31):
in Virginia we have a governor race in November, and
right now Abigail Spanberger is up probably around five to
eight points, depending on the recent polling, and the Democrats
don't want to do anything to potentially dissuade voters from
doing that. And for those of you in New Jersey,
it's the same deal with your governor race that's coming up.
So I think eventually those handful of senators call it
(20:53):
maybe eight or ten, will ultimately sign the deal. And
for what it's worth, Senator Ran Paul just said last
night he thinks ten Democratic senators are going to sign
a deal on Monday night.
Speaker 1 (21:02):
Wow, what's that based on? I guess I think it's.
Speaker 3 (21:06):
Just internal conversations.
Speaker 5 (21:08):
But I would also just say that he's most likely
going to be one of the vote votes voting against
the deal because you know he doesn't like continuing resolutions.
But really, just to play Devil's advocate for a matter
for a second, the Democrats do have a strong case
here to shut the government down. I mean, shutting the
government down is not good politics.
Speaker 3 (21:26):
You get the blame.
Speaker 5 (21:27):
The party that doesn't have a clean CR is.
Speaker 6 (21:30):
The one that has the blame.
Speaker 5 (21:31):
And that's where the Democrats are right now, because the
Republicans have offered a clean CR through November twentieth. Now,
if the Democrats were to reject that, I do believe
the Democrats would most likely take the blame for this initially.
But the Democrats do have a decent case here for
wanting to shut the government down, because you need to
see to prove to your base that you're going to
(21:52):
fight President Trump. We're still a year and change away
from the November twenty twenty six elections, and your approval
rating is around thirty percent, which is the lowest it's
been in many, many, many years. You can't really get
much lower because the Democratic Party, the Progressives are gonna
most likely remain with you no matter what, So what
do you have to lose? So you know, I don't
(22:15):
buy that argument, but I see that argument because ultimately
you will lose momentum and the Democrats need to try
and come up with a message going into twenty twenty six.
And I don't think that message is bolstered if you
get into and when government shutdown fight now again, I
have to say this in every single podcast that we do.
Remember there aren't much market impacts from a government shutdown
(22:37):
back in the thirty one days shutdown. In the first
Trump administration, S ANDP went down a little bit, ultimately
went up. Even defense contractors are paid on a two
year cycle. Yes, there are long term economic impacts. For example,
if seven hundred and fifty thousand government workers aren't paid,
that's gonna, you know, ultimately have some economic impact. But
the biggest thing that we've been talking to our clients
(22:58):
about is the lack of reporting and the lack of
data that comes from the government in a shutdown. For example,
the BLS has a October third employment report. We've had
some folks interested in that that's not going to happen
and So if we do get closer to a shutdown,
maybe this weekend, you'll see additional contingency plans come out
from each individual agency, and most of those contingency plans
(23:21):
will say, we're not going to issue any of this
data or any of these reports. So for the next
few weeks or days, you may have to trade without it.
Speaker 3 (23:29):
Got it, all right? Good stuff?
Speaker 1 (23:31):
So, speaking of market impacts, let's shift gears a little
bit and talk tail and all. Let's bring in Holly
from to discuss President Trump's press conference this week where
he linked Taalan Al to potential autism and babies, and
he discouraged pregnant women in particular from taking talent. All, Holly,
you've been following class action litigation against Kenview for some
(23:54):
time now related to similar claims. I think, can you
tell us these new developments with respect to President Trump's
press conference what that means for the litigation that you followed.
Does it make it harder for ken View to defend
the case. Do they face the prospect of new claims?
Why don't you come in and tell us you're thinking?
Speaker 6 (24:14):
Okay, sure, thanks Elliott.
Speaker 7 (24:16):
Yeah, So, as you said, the Trump administration came out
this week, and they said that the FDA would initiate
a label change to indicate there's a correlation between taile
and all usage and pregnant women in autism in babies. So,
a subsidiary of ken View was sued in a consolidated
(24:37):
proceeding in a multi district litigation proceeding that was formed
back in twenty twenty two in the Federal Court in
the Southern District of New York. That those cases were
actually dismissed by the court because the court in twenty
twenty three December twenty twenty three found that the experts
were unreliable.
Speaker 6 (24:57):
In that case.
Speaker 7 (24:58):
The court had also asked the FDA, which was under
the Biden administration at the time, if they would recommend
the label change, and the FDA referred them to a
March twenty twenty three I believe it was March twenty
twenty three report where the FDA said that no definitive
causal link between the two And so what that means is,
(25:21):
I don't think that the Federal court will reopen these
cases because what they have to do is the plaintiffs
would have to file a motion to reopen these cases,
and that motion would likely be time barred because it
has to be filed under federal court rules within a
year of decision, even if it's based on new evidence.
(25:41):
And so this has been you know, the decision was
in December twenty twenty three. Other experts were barred more
than a year ago, so I think it would most
likely be time barred.
Speaker 6 (25:53):
But even if the court considers it.
Speaker 7 (25:58):
A correlation or an associate, is not enough to get
past motions to bar experts.
Speaker 6 (26:04):
You need to have a causal association.
Speaker 7 (26:06):
And the FBA has come out and said they don't
have a causal association, it's just an association. In fact,
they warned that quote. It's important to note that while
in association has been described in many studies, a causal relationship
has not been established, and there are contrary studies in
the scientific literature, and that to me means it's going
(26:26):
to be a problem for the planis So there's an
appellate hearing in four Q on the appeal of the
Southern District Court's decision barring experts, and I don't think
that the court is going to reverse. So the real
battle I think will be in state courts. We saw
this happen with the Zantac litigation, where the planeiffs weren't
(26:51):
happy with the way the federal court litigation was going,
so they wound up suing in state court in Delaware.
They filed I think around seventy thousand cases in Delaware,
and they're able to do that and get out of
federal court jurisdiction because there's something called the home base rule,
which says that plaintiffs or a defendant can't remove a
case to federal court if they're in their home court.
And so for the companies in the Zantac case, they
(27:13):
were in Delaware, they were headquartered in Delaware, and here
the subsidiary is headquartered in New Jersey. So I think
the bulk of these cases would have to be filed
in state court in New Jersey to get out of
federal court jurisdiction. There is another way that they could
try to plead around what's called diversity jurisdiction, which means
(27:33):
like diversity is every planeff has to be from every
a different state from every defendant.
Speaker 6 (27:40):
Otherwise it remains in state court.
Speaker 7 (27:43):
If there's diversity and it's above a certain monetary threshold,
it could go to federal Most of the time you know,
in these cases, when you sue a manufacturer, you're not
going to be from the same state, so you're going
to go to federal but you can avoid diversity jurisdiction
by pleading another defendant who's from your same state. So
here they may try to sue the retailers like Walgreens
(28:04):
and CBS is where they bought the tile and all,
but you know, there's a there's other issues that may
make that attempt fail because the retailers can't change the label,
they can't change the products, so there's preemption issues, federal
preemption issues that naming that they can't sue the retailers.
(28:25):
And if that's the case, I think most of these
cases go to state court in New Jersey. So we'll
have to see what happens in the state court in
New Jersey and how receptive they are to this new information.
But again, New Jersey has not totally adopted, but has
largely adopted the Federal Court Dalbert standard. So even though
the federal Court's Dalbert decision is not binding on the
(28:47):
state court in New Jersey, I think that it would
be probably persuasive persuasive decision. Then the court will look to.
Speaker 1 (28:55):
And for those who don't know that, the ruling is
the Iceport ruling you were talking about, right, So we
haven't seen any These cases haven't been filed in state
court yet. The only case is this one in a
that's on appeal in federal court.
Speaker 6 (29:10):
No, there have been state cases, but there haven't.
Speaker 7 (29:13):
There hasn't been like seventy thousand as far as I know,
I don't think there's any information on how many state court.
Speaker 6 (29:19):
Cases there are at this time, got it?
Speaker 7 (29:22):
But I think that this has, you know, may have
breathed new life into at least the state court actions
for the plant to see a possibility that they can
pursue their claims in state court. So you may see
a lot of cases being filed, and I think you
likely will see a lot of state state cases being filed,
much more than you know they would have if they
just had this like federal court ruling saying that the
(29:44):
cases are dismissed.
Speaker 1 (29:45):
Right, And just a couple final questions to round out
the discussion. Have the parties said anything about the proclamation
in court yet? And then just remind us again what
the timing is on the appeal And the second.
Speaker 6 (29:59):
S I haven't seen the parties say anything in court.
Speaker 7 (30:04):
Ken you has come out and you know said that
there's multiple studies say that there's no length. But I
think with regard to timing, there was a hearing on
October six I read some in one of the newspapers
that it's been pushed, that the party's got a letter
that said it's been pushed. But I haven't seen anything
(30:26):
on the docket that suggests that it's been pushed yet.
So as of now, the hearing was October sixth.
Speaker 1 (30:33):
All right, good stuff, all right, I think we will
leave it there. We'll wrap up this episode of Votes
and Verdicts. As always, thank you for listening. If you
have any questions about any of the matters we discussed
on this episode, please don't hesitate to reach out to
us at your convenience with your questions. As a reminder,
you can find all of our research on the Bloomberg
terminal at BI go or on our litigation and policy
(30:55):
dashboard at BI laws go. We also want to thank
our producer, just Somani, without whom this podcast would never
publish on time. Thank you for listening, and have a
great day.
Hello, and welcome to the Votes and Verdicts podcast, hosted
by the litigation and policy team at Bloomberg Intelligence, the
investment research platform of Bloomberg LP on the Bloomberg Terminal.
Bloomberg Intelligence has five hundred analysts and strategists working across
the globe and focused on all major markets. Our coverage
includes over two thousand equities and credits, and we have
(00:37):
outlooks on more than ninety industries and one hundred market indices,
currencies and commodities. This podcast series examines the intersection of
business policy and law, and today's our weekly look at
the litigation and policy catalysts that we're currently watching and
that we think will impact companies across a number of
different sectors. My name is Elliot Stein. I'm an analyst
(01:00):
Bloomberg Intelligence covering litigation in the financial sector, and I'm
delighted as always to be joined today by several of
my BI colleagues. As always, you can find all of
our research on the Bloomberg terminal at BI go, and
you can find most of our litigation and policy research
on our dashboard, which is available on the terminal at
(01:21):
BI laws go. Just to time stamp this episode because
things always do move quickly. Today is Thursday, September twenty fifth.
We're recording this at about ten oh three am New
York time. So once again, there is a lot going
on in terms of litigation and policy developments coming out
(01:44):
of Washington, DC and elsewhere. First, President Trump proclaimed this
week that H one B visa fees actually I think
it was towards enda last week, that H one B
visa fees would increase to one hundred thousand dollars. He
also held the Press con friends this week to discourage
the use of tail and all by pregnant women due
(02:04):
to what he claims is a potential link to autism.
And of course, the threat of a government shut down
still looms. So to get the conversation go in, let's
start with the H one B visa issue. Let me
bring in my colleagues, Matt Schettenhelm and then Tamlin Basin. Matt,
let's start with you, since you've been looking into the
(02:25):
legal issues around President Trump's proclamation. You wrote this week
that you think there's only a thirty percent chance that
the proclamation survives in court. You want to just tell
us a little bit more about your thinking there.
Speaker 2 (02:38):
Yeah, So this is a case where Trump is using
a statute that Congress passed in the nineteen fifties that
gives him very clear power to control entry into the
United States and using that that historical power to create
a new fee scheme, a novel expansion of what you
(03:03):
typically would think of as the power to control entry.
This is typically the power to create revenue raising programs
or to tax is Congress's authority. And the question will
be when Congress passed this statute in the nineteen fifties
restricting entry, giving president the president the power to restrict entry,
(03:23):
did it also empower him to create a fee you know,
the fee process that is typically Congress is on top
of that, Congress already put guardrails or at least some
structure around what these fees should be. And they are
a fraction of the fees that President Trump actually imposes.
(03:45):
And so what we're headed to here is is a
battle in court about how broadly do we read that
grant to the president to restrict entry in light of
the structure of a program that Congress has already put
in place. The interesting thing on one sort of side
point is, you know President Trump's order on this cast
(04:08):
has a lot of discussion about abuse of the program.
He says that the foreign share of workforce for computer
and math occupations has grown from seventeen point seven percent
to twenty six point one percent, that the share of
IT workers in the program has grown from thirty two
percent to sixty five percent. He casts all of this
as abuse. I'm not sure the court are courts will
(04:31):
see that as abuse as much as use of the
program that Congress put put in place. And so all
of that I think combines to an interesting court fight.
But I think judges, many judges are going to bristle
at the novelty of letting the president craft a revenue
(04:54):
raising scheme of this scale.
Speaker 1 (04:56):
So I mean, I take it. Then you mentioned the no,
I take it. There's really not much precedent here.
Speaker 3 (05:04):
It's limited.
Speaker 2 (05:05):
So so I mean, one thing that Trump has going
for himself that he's going to cite on page one
of any brief is the case about his travel man
that went to the US Supreme Court. This was restricting countries,
restricting entry from certain countries that posed national security risks.
This went all the way to the Supreme Court, and
(05:26):
I believe it's twenty eighteen, and they the Supreme Court
used this very statute we're talking about, in this nineteen
fifties statute, to say that, look, the president has the
power to restrict entry, and this statute exudes deference to
the president in every clause. That's great language for the president.
(05:47):
So he starts in a really strong place using that statute.
This this is going to test it. You know, how
far does that power go? And what really kind of
stuck in my head. I went to the Supreme Court
this term when and the Court announced its decision in June,
when the FCC had created was challenged for creating a
(06:10):
program that raised billions of dollars its Universal Service program,
and whether that was Congress giving away too much of
its power to the FCC without some intelligible principle, some
sort of limit on the delegation. And the Supreme Court
ultimately said, now we're okay with that that you know
there is some intelligible principle in this statute. We can
(06:31):
read that statute to impose some qualitative limits on how
this fee program can be structured. When you read this
immigration statute, I'm not so sure there's any limit here.
So you know, in terms of how much you know,
this is one hundred thousand dollars per applicant fee, there's
really no limit on the sky's the limit on that
(06:54):
in terms of what Congress did, so, I think that
might guide courts in imposing limits and saying no, you
have the power to restrict entry. I'm not sure you
have the power to create a whole new fee structure.
But it's going to be the tension between those two
doctrines of Okay, there is a broad power to control
trol immigration and to control entry that the President has
(07:15):
and Congress has given that away. How far does that
extend into creating a new fee program?
Speaker 3 (07:21):
Right, So two questions for you.
Speaker 1 (07:24):
Do you think then this becomes the vehicle for the
Supreme Court to finally take up the non delegation doctrine
and actually applying on it in you know, in more detail.
And then second, secondly, you were talking about the fee
structure that's in the statute.
Speaker 3 (07:38):
What exactly is that structure? Yeah?
Speaker 2 (07:41):
So, so you know, the Supreme Court you know, basically
decided in the FCC case that it decided in June
that look, we're going to we're going to keep our
non delegation doctrine, the intelligible principle doctrine. Even though there's
been a push on from from some justices, including Justice
Corsic who dissented in that case, to make to give
(08:05):
that doctrine much more teeth, you know, the Court basically
stuck with it. It's very broad deference. You know, we're we're
not going to be real aggressive in second guess in Congress.
So Trump has that going for him here too. That
that and so so well, we'll see. But the Court
still was was pretty pretty searching in looking for some limits.
(08:29):
You know, this is Congress can't give away everything, and
and and so this might might you know, give the
Court a chance to find at least interpret the statute
to have a limit in it. Even if it doesn't
find that this statute violates the non delegation doctrine, it
guides the court in interpreting limits on what Congress actually
gave the president the power to do. In terms of
(08:51):
what this statute actually does. That you can work through
the precise law that structures the H one B program,
and there are about three or four different provisions that say, okay,
the the administration can create a fee for this the
administration can can create a fee for for that. There's
three or four other things I'm not gonna be able
to pull pull right here, but each of those are
(09:13):
are in the much lower fees, and Congress specifies the fees.
And so I think courts are going to look at
that and say look that you know, look there's no
express limit on on additional fees. But the implication is
that Congress structured this program, and you're not really showing,
you know, an abuse or or a violation of of
(09:35):
the program. You're showing use of that program. And so
it's really a task for Congress.
Speaker 1 (09:41):
Got it, all right, that's good stuff, Camlon. Let's uh,
let's bring you in because you've also written about this
issue more in terms of what the impact is to
companies in the IT services industry. Uh, you know some
of the companies that you cover. Do you want to
just tell us you know what the impact is to
those companies?
Speaker 3 (10:01):
Yeah?
Speaker 4 (10:02):
Absolutely, thanks Elliott. So I think Matt did a really
good job of teeing up how this is a very interesting,
potentially novel You said the statute by the Trump administration,
but really this was nothing short of sort of a
policy shock to the entire H one B program, and
specifically to some of these sectors that have really leveraged
this program really extensively since it was developed in their
(10:23):
early nineteen nineties. As you mentioned, the IP services firms
are first and foremost what people often think about when
they think about H one B program and also potential
it's been claims of sort of abuse, and the reason
is these firms really have built their entire delivery model
based on this structure.
Speaker 3 (10:42):
So what they do is.
Speaker 4 (10:42):
They have a lot of offshore delivery of software engineers
that will sit in places where there's much lower cost delivery.
Often that's India, that can be Eastern Europe, that can
be Latin America. But they rely on this H one
B program to really serve thisce on clients and often
these are large financial services companies, healthcare clients, even technology
(11:03):
firms to bring some on shore talent. And they're doing
this because frankly, it's a relatively shallow.
Speaker 3 (11:10):
Talent pool in the US.
Speaker 4 (11:12):
There's not as many software engineers as the supply side demands,
so really you're needing to supplement your work first with
these education programs that are they're hotbeds and Indie again,
so you bring them in. It's potentially a lower cost,
but it really helps you deliver this model. Frankly, at
one hundred thousand dollars per AH one B fee, this
(11:33):
is an untenable operating model going forward. These are slim
margin industries. They simply can't absorb those costs. So really,
over the next few weeks, and even if there's litigation
on this, as that's playing out, they're going to have
to have these difficult conversations with their clients basically saying
we can't afford to front these costs. Either we're going
(11:54):
to move this work offshore, or we're going to need
you to pay that cost. So I think that's where
we're sort of the rubber meats rolled and road in
terms of the industry impacts.
Speaker 1 (12:04):
Here well, and I mean you cover some of the
IT services companies. What are some of the names in
the space, and have they said anything in response to
the president's proclamation.
Speaker 4 (12:14):
Interestingly, they've been very silent I think on this. I
think they're sort of waiting to see it play out.
This is September twenty fifth, and just earlier today, A Center,
which is the largest ID services company in the world.
They did report earnings. They noted that they have a
much smaller usage at based one B than some of
their peers that are based in India, so they said
(12:34):
it's probably not going to be a huge impact for them.
Where there could be more impacts is firms like Infosys,
Taught to Consultancy, and even Cognizant, which although it's US based,
does rely on H one bv's as much more than
some of its peers. I think as of now, these
firms don't see much benefit in sort of going out
(12:55):
and really attacking this policy. I think they're going to
let it play out and really look for clare on
what exactly it does mean, and maybe see if they're lawsuits.
I think the California A.
Speaker 3 (13:07):
Kurry General was talking about they.
Speaker 4 (13:08):
Might potentially seek to suit ondo this just because of
how much this program has been used in California by
the technique industry.
Speaker 1 (13:16):
Yeah, that's interesting. I wonder what the state's standing claim
would be. I don't know if either of you has
thoughts on that, but I'm sort of throwing that into
the ether right now. If you have a thought, great,
If not, Tamlin, I wanted to also ask you about
(13:37):
another issue that you follow because you cover intellectual property
litigation and the tech sector for US, and earlier this month, Anthropic,
one of the leading AI AI companies, settled copyright claims
brought by authors for about one and a half billion dollars.
Can you talk about why that settlement is important and
what it means for other AI companies and for copy
(14:00):
right holders.
Speaker 3 (14:01):
Yeah, of course.
Speaker 4 (14:02):
Yeah. So this has been a very big topic we've
been covering just because there are over fifty lawsuits between
content owners and developers of large language models in the US.
But I should sort of fact check a little bit.
And it's actually a proposed settlement, although by the time
people listening it might have been accepted and finalized. And
that's because this evening I'm in Northern District of California,
(14:24):
Judge als Up is holding a hearing where he's going
to try to decide if he's going to accept this
proposed settlement. Now, when it was announced a few years
weeks ago, he did push back fairly strongly on some
parts of this settlement. So the way it was structured
is this would be for about five thousand on books
that were downloaded, and the fee would be capped at
about three thousand dollars per work. Now this would potentially
(14:47):
be split between the author of the book and the publisher,
and one of his primary concerns was how does that
split breakdown breakdown? And also he's worried about class notification
because although there were five thousand books at issue in
the settlement, there were seven million books that are at
issue in this specific claim for copyright infringement. So he's
(15:09):
worried about getting noticed to all these impacted authors. And
he was also sort of worried that this was a
deal that was mainly agreed upon by the publishers with
not a lot of from the individual authors. So I
think we're going to see how that hearing goes on
September twenty fifth, whether or not he approves it. The
reason that Anthropic really sock to settle is because again
(15:30):
I mentioned there was seven million books at issue. These
were books that it downloaded through pirate libraries to train
its large language model. Judge also had ruled that that
was not fair use. It was fair use to sort
of scrape data generally off the Internet, but the use
of these pirate libraries was not fair use. Anthropic was
paid facing a trial on that in early December damages
(15:54):
in copyright infringement. The low end is seven hundred and
fifty dollars per work. The high end is one hundred
deep thousand dollars per work. So really, if he rejects
the settlement, we could still be looking at a trial
in December.
Speaker 1 (16:07):
Right, And so you said they settled for three thousand
dollars per work when the top end would be one
hundred and fifty thousand, So definitely a good deal.
Speaker 4 (16:15):
Yeah, And it's also a bit above the minimum, so
you could see that sort of the anthropic the least,
you know, understood that these were allegations that they were
not likely to convince a jury to sort of reach
that low end of the potential damages. Again, these are
statutory to images, so there's nowhere to go really butt up.
And I think these are issues that I don't think
many LM firms are going to really want to chance
(16:38):
a jury verdict on this. So this would you know,
if the settlement was accepted, it would sort of set
a benchmark of three thousand dollars per work. The other
firms who are facing identical or very similar claims for
god grant benchment are facing.
Speaker 1 (16:52):
Right and you're following those as well, So I guess
are there other trials coming up in those that to
figure sout like we saw here not?
Speaker 4 (17:02):
Yeah, so this was triggered both by that through use
ruling and also Judge also I've had certified this as
a class action. We don't see those both of those
decisions happening in any other case until potentially mid to
late twenty twenty six. I think a case against mattaw
would be the first to potentially get there with a
fair use hearing on these pirate book libraries, and potentially
(17:28):
the scheduled for early Jebruary, all of the parties might
be trying to push that back to the middle of
next year.
Speaker 3 (17:32):
Got it all right?
Speaker 1 (17:33):
Good stuff, Thanks Tammlin. All right, Nathan Dean, let's bring
you back in. Let's uh shift gears back to Washington
and check in on the possibility of a government shut down. Nathan,
was your dishwasher delivered?
Speaker 3 (17:48):
Okay?
Speaker 1 (17:49):
Just for the audience. Nathan missed the start of this,
but he jumped in as he was waiting for his
dishwasher to be delivered.
Speaker 5 (17:56):
You know, it was delivered, and this was the second
time I was supposed to come and So we've been
without a dishwasher for three weeks now, which I will
say to anybody listening out, there is a great way
to get your children to actually start doing chores because
the amount of times are like, oh, can we use
paper plates?
Speaker 3 (18:12):
Anyway?
Speaker 1 (18:13):
I think it sounds like a medieval torture chamber. All right, So, Nathan,
this week, among the many things we saw, President Trump
canceled the meeting with Hakeem Jeffries and Chuck Schumer. Yesterday
it was reported that the Office of Management and Budget
instructed federal agencies to prepare for essentially what would be
permanent mass terminations if there's a shutdown. What does all
(18:37):
this mean for your odds of a shutdown actually happening.
Speaker 5 (18:41):
So, you know, last week when we had this discussion,
I was at a forty percent chance. Today I'm still
at a forty percent chance. And I'm out of consensus
here because if you go to Polymarket and I pulled
it up on you know what, September twenty fifth, at
ten to fifteen in the morning, poly Markets as sixty
two percent chance of a shutdown, and they went above
fifty percent on September nineteenth. So call me a little
(19:03):
bit about of consensus here. But the reason why I
don't think we're going to have a shutdown is because
all this political rhetoric that's going on from both parties
was anticipated. Congress is out this week, the House is gone,
and Speaker Johnson is not bringing them back until after
October first, and the Senate doesn't isn't scheduled to come
back into the office until Monday, and so you have
(19:25):
Monday and Tuesday and then that's it.
Speaker 6 (19:27):
Now.
Speaker 5 (19:27):
The reason why I don't think you're going to have
a shutdown is for a variety of reasons that you know,
the Democrats, even though they need to be seen fighting
President Trump, there are still just a handful of senators,
moderate senators on the Democratic side that don't think shutting
the government down is good politics or good policy. And
(19:48):
I think there's actually a Virginia politics angle here at play,
because even though you know, if you look at the
number of Senators that voted for this deal back in March,
none of the Virginia or Maryland senators were in here.
I do think the threat from the OMB in terms
of mass firings does give the Virginia senators and the
Maryland senators an extra way of saying, hey, we need
(20:09):
to vote for this deal in order to protect our
government employees. And look, there are Democrats out there saying, look,
you fire hundreds of thousands of government workers, you're going
to drive people into the Democratic camp. But we're also
talking about people's lives here. And I would also just
note that, you know, here in Virginia we have a
governor race. I say here in Virginia because I'm coming
to you from the Northern Virginia Bureau today. You know,
(20:31):
in Virginia we have a governor race in November, and
right now Abigail Spanberger is up probably around five to
eight points, depending on the recent polling, and the Democrats
don't want to do anything to potentially dissuade voters from
doing that. And for those of you in New Jersey,
it's the same deal with your governor race that's coming up.
So I think eventually those handful of senators call it
(20:53):
maybe eight or ten, will ultimately sign the deal. And
for what it's worth, Senator Ran Paul just said last
night he thinks ten Democratic senators are going to sign
a deal on Monday night.
Speaker 1 (21:02):
Wow, what's that based on? I guess I think it's.
Speaker 3 (21:06):
Just internal conversations.
Speaker 5 (21:08):
But I would also just say that he's most likely
going to be one of the vote votes voting against
the deal because you know he doesn't like continuing resolutions.
But really, just to play Devil's advocate for a matter
for a second, the Democrats do have a strong case
here to shut the government down. I mean, shutting the
government down is not good politics.
Speaker 3 (21:26):
You get the blame.
Speaker 5 (21:27):
The party that doesn't have a clean CR is.
Speaker 6 (21:30):
The one that has the blame.
Speaker 5 (21:31):
And that's where the Democrats are right now, because the
Republicans have offered a clean CR through November twentieth. Now,
if the Democrats were to reject that, I do believe
the Democrats would most likely take the blame for this initially.
But the Democrats do have a decent case here for
wanting to shut the government down, because you need to
see to prove to your base that you're going to
(21:52):
fight President Trump. We're still a year and change away
from the November twenty twenty six elections, and your approval
rating is around thirty percent, which is the lowest it's
been in many, many, many years. You can't really get
much lower because the Democratic Party, the Progressives are gonna
most likely remain with you no matter what, So what
do you have to lose? So you know, I don't
(22:15):
buy that argument, but I see that argument because ultimately
you will lose momentum and the Democrats need to try
and come up with a message going into twenty twenty six.
And I don't think that message is bolstered if you
get into and when government shutdown fight now again, I
have to say this in every single podcast that we do.
Remember there aren't much market impacts from a government shutdown
(22:37):
back in the thirty one days shutdown. In the first
Trump administration, S ANDP went down a little bit, ultimately
went up. Even defense contractors are paid on a two
year cycle. Yes, there are long term economic impacts. For example,
if seven hundred and fifty thousand government workers aren't paid,
that's gonna, you know, ultimately have some economic impact. But
the biggest thing that we've been talking to our clients
(22:58):
about is the lack of reporting and the lack of
data that comes from the government in a shutdown. For example,
the BLS has a October third employment report. We've had
some folks interested in that that's not going to happen
and So if we do get closer to a shutdown,
maybe this weekend, you'll see additional contingency plans come out
from each individual agency, and most of those contingency plans
(23:21):
will say, we're not going to issue any of this
data or any of these reports. So for the next
few weeks or days, you may have to trade without it.
Speaker 3 (23:29):
Got it, all right? Good stuff?
Speaker 1 (23:31):
So, speaking of market impacts, let's shift gears a little
bit and talk tail and all. Let's bring in Holly
from to discuss President Trump's press conference this week where
he linked Taalan Al to potential autism and babies, and
he discouraged pregnant women in particular from taking talent. All, Holly,
you've been following class action litigation against Kenview for some
(23:54):
time now related to similar claims. I think, can you
tell us these new developments with respect to President Trump's
press conference what that means for the litigation that you followed.
Does it make it harder for ken View to defend
the case. Do they face the prospect of new claims?
Why don't you come in and tell us you're thinking?
Speaker 6 (24:14):
Okay, sure, thanks Elliott.
Speaker 7 (24:16):
Yeah, So, as you said, the Trump administration came out
this week, and they said that the FDA would initiate
a label change to indicate there's a correlation between taile
and all usage and pregnant women in autism in babies. So,
a subsidiary of ken View was sued in a consolidated
(24:37):
proceeding in a multi district litigation proceeding that was formed
back in twenty twenty two in the Federal Court in
the Southern District of New York. That those cases were
actually dismissed by the court because the court in twenty
twenty three December twenty twenty three found that the experts
were unreliable.
Speaker 6 (24:57):
In that case.
Speaker 7 (24:58):
The court had also asked the FDA, which was under
the Biden administration at the time, if they would recommend
the label change, and the FDA referred them to a
March twenty twenty three I believe it was March twenty
twenty three report where the FDA said that no definitive
causal link between the two And so what that means is,
(25:21):
I don't think that the Federal court will reopen these
cases because what they have to do is the plaintiffs
would have to file a motion to reopen these cases,
and that motion would likely be time barred because it
has to be filed under federal court rules within a
year of decision, even if it's based on new evidence.
(25:41):
And so this has been you know, the decision was
in December twenty twenty three. Other experts were barred more
than a year ago, so I think it would most
likely be time barred.
Speaker 6 (25:53):
But even if the court considers it.
Speaker 7 (25:58):
A correlation or an associate, is not enough to get
past motions to bar experts.
Speaker 6 (26:04):
You need to have a causal association.
Speaker 7 (26:06):
And the FBA has come out and said they don't
have a causal association, it's just an association. In fact,
they warned that quote. It's important to note that while
in association has been described in many studies, a causal relationship
has not been established, and there are contrary studies in
the scientific literature, and that to me means it's going
(26:26):
to be a problem for the planis So there's an
appellate hearing in four Q on the appeal of the
Southern District Court's decision barring experts, and I don't think
that the court is going to reverse. So the real
battle I think will be in state courts. We saw
this happen with the Zantac litigation, where the planeiffs weren't
(26:51):
happy with the way the federal court litigation was going,
so they wound up suing in state court in Delaware.
They filed I think around seventy thousand cases in Delaware,
and they're able to do that and get out of
federal court jurisdiction because there's something called the home base rule,
which says that plaintiffs or a defendant can't remove a
case to federal court if they're in their home court.
And so for the companies in the Zantac case, they
(27:13):
were in Delaware, they were headquartered in Delaware, and here
the subsidiary is headquartered in New Jersey. So I think
the bulk of these cases would have to be filed
in state court in New Jersey to get out of
federal court jurisdiction. There is another way that they could
try to plead around what's called diversity jurisdiction, which means
(27:33):
like diversity is every planeff has to be from every
a different state from every defendant.
Speaker 6 (27:40):
Otherwise it remains in state court.
Speaker 7 (27:43):
If there's diversity and it's above a certain monetary threshold,
it could go to federal Most of the time you know,
in these cases, when you sue a manufacturer, you're not
going to be from the same state, so you're going
to go to federal but you can avoid diversity jurisdiction
by pleading another defendant who's from your same state. So
here they may try to sue the retailers like Walgreens
(28:04):
and CBS is where they bought the tile and all,
but you know, there's a there's other issues that may
make that attempt fail because the retailers can't change the label,
they can't change the products, so there's preemption issues, federal
preemption issues that naming that they can't sue the retailers.
(28:25):
And if that's the case, I think most of these
cases go to state court in New Jersey. So we'll
have to see what happens in the state court in
New Jersey and how receptive they are to this new information.
But again, New Jersey has not totally adopted, but has
largely adopted the Federal Court Dalbert standard. So even though
the federal Court's Dalbert decision is not binding on the
(28:47):
state court in New Jersey, I think that it would
be probably persuasive persuasive decision. Then the court will look to.
Speaker 1 (28:55):
And for those who don't know that, the ruling is
the Iceport ruling you were talking about, right, So we
haven't seen any These cases haven't been filed in state
court yet. The only case is this one in a
that's on appeal in federal court.
Speaker 6 (29:10):
No, there have been state cases, but there haven't.
Speaker 7 (29:13):
There hasn't been like seventy thousand as far as I know,
I don't think there's any information on how many state court.
Speaker 6 (29:19):
Cases there are at this time, got it?
Speaker 7 (29:22):
But I think that this has, you know, may have
breathed new life into at least the state court actions
for the plant to see a possibility that they can
pursue their claims in state court. So you may see
a lot of cases being filed, and I think you
likely will see a lot of state state cases being filed,
much more than you know they would have if they
just had this like federal court ruling saying that the
(29:44):
cases are dismissed.
Speaker 1 (29:45):
Right, And just a couple final questions to round out
the discussion. Have the parties said anything about the proclamation
in court yet? And then just remind us again what
the timing is on the appeal And the second.
Speaker 6 (29:59):
S I haven't seen the parties say anything in court.
Speaker 7 (30:04):
Ken you has come out and you know said that
there's multiple studies say that there's no length. But I
think with regard to timing, there was a hearing on
October six I read some in one of the newspapers
that it's been pushed, that the party's got a letter
that said it's been pushed. But I haven't seen anything
(30:26):
on the docket that suggests that it's been pushed yet.
So as of now, the hearing was October sixth.
Speaker 1 (30:33):
All right, good stuff, all right, I think we will
leave it there. We'll wrap up this episode of Votes
and Verdicts. As always, thank you for listening. If you
have any questions about any of the matters we discussed
on this episode, please don't hesitate to reach out to
us at your convenience with your questions. As a reminder,
you can find all of our research on the Bloomberg
terminal at BI go or on our litigation and policy
(30:55):
dashboard at BI laws go. We also want to thank
our producer, just Somani, without whom this podcast would never
publish on time. Thank you for listening, and have a
great day.
Host
Elliott Stein
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