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