# Courts Are Stopping Trump's Cuts to Funding

An episode of [Bloomberg Law](https://invisiblenetwork.ai/podcast/277975394), 12 Feb 2026, 35 min.

Audio: https://podtrac.com/pts/redirect.mp3/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/7c892d84-801f-4c0b-b0e9-ae2b0012ff5f/e741f66d-de24-4233-a705-b3ef0000deef/audio.mp3?utm_source=Podcast&in_playlist=91224201-26a6-429d-ac3c-ae2b0012ff6d

Bloomberg legal reporter Zoe Tillman discusses how courts have stopped President Trump’s cuts to funding in more than half of the spending fights last year. Then an expert in tort law, Michael Green, a professor at Washington University School of Law, discusses the implications of the $8.5 million verdict against Uber in a case alleging sexual assault by a driver. June Grasso hosts. See omnystudio.com/listener for privacy information.

## Transcript

[0:02] Speaker 1: This is Bloomberg Law with June Grosseol from Bloomberg Radio.
[0:08] Speaker 2: Time after time, President Trump has tried to freeze federal
[0:12] Speaker 2: funding as a cudgel against political opponents and programs he
[0:17] Speaker 2: considers woke, from freezing ten billion dollars for childcare and
[0:22] Speaker 2: aid for low income families to freezing five billion dollars
[0:26] Speaker 2: for a Federal Highway Administration program to build infrastructure for
[0:31] Speaker 2: electric vehicle charging. But also, time after time, federal courts
[0:36] Speaker 2: have stepped in to lift those funding freezes. In fact,
[0:41] Speaker 2: in more than half of the one hundred sixty seven
[0:43] Speaker 2: spending fights reviewed by Bloomberg News, joining me is the
[0:48] Speaker 2: reporter who crunched the numbers, Bloomberg Legal reporter Zoe Tillman. Zoe,
[0:53] Speaker 2: for those who may not know, explain President Trump's use
[0:58] Speaker 2: of federal funding freezes against people or groups or programs
[1:03] Speaker 2: that he disagrees with.
[1:04] Speaker 3: So, I mean from day one of the administration, and
[1:08] Speaker 3: really before day one, there was this big push where
[1:12] Speaker 3: Elon Musk was the face of this Department of Government
[1:15] Speaker 3: efficiency initiative.
[1:16] Speaker 1: They're going to cut spending, They're going to cut the
[1:19] Speaker 1: federal workforce.
[1:21] Speaker 3: This was really a message from the incoming administration from
[1:25] Speaker 3: the very beginning, and you know, right away it was
[1:29] Speaker 3: a slash and burn approach. Grants were cut, executive orders
[1:34] Speaker 3: were signed right from the start saying, you know, no
[1:37] Speaker 3: more federal money is going to go to things that
[1:41] Speaker 3: this administration doesn't support. So nothing that is DEI related
[1:46] Speaker 3: in any way, nothing that relates to you know, the
[1:49] Speaker 3: term they used as gender ideology, but really has to
[1:52] Speaker 3: do with programs that relate or involve transgender individuals, things
[1:57] Speaker 3: related to climate change, really just using the flow of
[2:01] Speaker 3: federal dollars to achieve any number of policy objectives. Later on,
[2:06] Speaker 3: we saw a number of actions related to immigration, including
[2:11] Speaker 3: efforts to condition grants on compliance with immigration enforcement, even
[2:17] Speaker 3: for grants that weren't directly related to immigration. So this
[2:21] Speaker 3: has been just a big priority for this administration from
[2:25] Speaker 3: day one and has been, you know, predictably met with
[2:29] Speaker 3: legal challenges from day one.
[2:32] Speaker 2: So you reviewed one hundred and sixty seven fights over spending,
[2:36] Speaker 2: tell us a little bit more about them.
[2:38] Speaker 3: Yeah, so I should say, I mean taking a few
[2:40] Speaker 3: more steps back. You know, we've been tracking every lawsuit
[2:44] Speaker 3: against administration, you know, from day one to the best
[2:47] Speaker 3: of our ability with an eye to sort of looking
[2:50] Speaker 3: at what the role of the courts will be and
[2:53] Speaker 3: has been in you know, our government.
[2:57] Speaker 1: Are they serving as a check?
[2:58] Speaker 3: Is there an adversarial rellylationship with the executive branch At
[3:01] Speaker 3: a moment when Congress has sort of removed itself in
[3:04] Speaker 3: many ways from the policy make sphere and so much
[3:08] Speaker 3: is coming out through executive action, you know, what is
[3:11] Speaker 3: the dynamic with courts? So with that in mind, at
[3:14] Speaker 3: the one year mark, we decided to drill down and
[3:18] Speaker 3: look at funding to see just where the money is
[3:21] Speaker 3: going or not and what role the courts have played. So,
[3:25] Speaker 3: you know, there have been cases about really any realm
[3:29] Speaker 3: of federal spending you could think of, you know, money
[3:31] Speaker 3: going to universities for medical research, scientific research, transportation, infrastructure grants, agriculture, arts, media, humanities.
[3:43] Speaker 3: Really every aspect of federal spending has landed in court
[3:48] Speaker 3: at this point.
[3:49] Speaker 2: Tell us about some of the cases where judges lifted freezes.
[3:54] Speaker 2: In January alone.
[3:56] Speaker 3: There was an instance of a specific set of grants
[3:59] Speaker 3: that I went to a pediatricians organization, a national.
[4:04] Speaker 1: Group of pediatric doctors.
[4:06] Speaker 3: They had had twelve million dollars in grants cut off
[4:09] Speaker 3: a number of medical groups have you found themselves in
[4:14] Speaker 3: an adversarial position with this administration on everything from vaccines
[4:18] Speaker 3: to care for transgender children, and the court in this instance,
[4:24] Speaker 3: a DC federal judge found that the way the government
[4:28] Speaker 3: had gone about, you know, suddenly cutting off these grants
[4:31] Speaker 3: that had been approved, that that was likely unlawful and
[4:34] Speaker 3: ordered them to resume paying them out. So that was
[4:36] Speaker 3: an instance of sort of a direct stream of money
[4:39] Speaker 3: to a particular organization. In another set of cases, there
[4:43] Speaker 3: was a trio of appeals before the first Circuit involving
[4:48] Speaker 3: a cut to the rate that research institutions are reimbursed
[4:53] Speaker 3: for what's commonly known as indirect costs, things like overhead facilities,
[4:57] Speaker 3: you know, not the cost of the research, but all
[5:00] Speaker 3: the money spent to support that research, you know, around it.
[5:05] Speaker 3: And the first circuit upheld lower court judge who had
[5:09] Speaker 3: enjoined the way the administration had gone about doing that,
[5:12] Speaker 3: and that was, you know, costs that the government itself
[5:16] Speaker 3: had estimated.
[5:17] Speaker 1: You know, we're worth billions of dollars of reinforcements to
[5:20] Speaker 1: research institutions.
[5:22] Speaker 3: So it's really run the gamut, and you know, we've
[5:25] Speaker 3: just continued to see orders come down that you know,
[5:29] Speaker 3: are often preliminary, so I should say we haven't reached
[5:32] Speaker 3: the final judgment phase in most cases we're talking about
[5:35] Speaker 3: temporary restraining orders. We're talking about preliminary injunctions. Some cases
[5:40] Speaker 3: are nationwide, many or not, especially after the Supreme Court
[5:44] Speaker 3: last year made a big step to rein in nationwide
[5:48] Speaker 3: or so called nationwide or universal injunctions. So some of
[5:51] Speaker 3: these orders have been limited to the states that have
[5:54] Speaker 3: sued the organizations that have sued, although I should say,
[5:58] Speaker 3: you know, sometimes there are membership groups that involve hundreds
[6:02] Speaker 3: of individual nonprofit members or organizations, so you know, sometimes
[6:07] Speaker 3: the relief is limited. But advocates in the course of
[6:11] Speaker 3: doing this have said, you know, if we didn't sue,
[6:13] Speaker 3: we would get nothing, so they see every win as
[6:17] Speaker 3: valuable at this point.
[6:18] Speaker 2: And how often did judges halt the Trump administration's funding cuts.
[6:24] Speaker 3: So as of when you know, I sort of cut
[6:27] Speaker 3: off the data collection for this project or data collection
[6:30] Speaker 3: has continued, but for this project, as of mid January,
[6:33] Speaker 3: across the one hundred and sixty seven cases that you
[6:36] Speaker 3: know we looked at dockets, there were more orders in place,
[6:41] Speaker 3: halting in fuller in part that contested actions in more
[6:45] Speaker 3: than half, just over half, so you know, more often
[6:48] Speaker 3: than not, there continued to be court orders either requiring
[6:53] Speaker 3: money to go out the door. In some cases it
[6:56] Speaker 3: wasn't money going out the door, but it was just
[6:58] Speaker 3: preserving the funding it issue or access to that funding,
[7:03] Speaker 3: making sure it couldn't be redistributed amid the litigation. Other
[7:07] Speaker 3: cases there are orders lifting I mentioned earlier sort of
[7:10] Speaker 3: conditions on grants, lifting those new conditions. So that doesn't
[7:13] Speaker 3: guarantee that everyone who's sued will get the money, but
[7:17] Speaker 3: it means they don't have to satisfy those new and
[7:21] Speaker 3: what they contend are you know, improperly crafted conditions to
[7:28] Speaker 3: at least apply for money. So that's that's where things
[7:31] Speaker 3: are as of middle end of last month.
[7:34] Speaker 2: Does the government almost always appeal these lower court orders?
[7:39] Speaker 3: Not always often, you know. I think the one trend
[7:43] Speaker 3: that we've seen is in cases that involve very straightforward
[7:48] Speaker 3: you know, you owe me money, you haven't paid it,
[7:51] Speaker 3: and I want that money back, they are more likely
[7:54] Speaker 3: to appeal and they are more likely to seek emergency
[7:57] Speaker 3: relief from an appeals court in case that involve conditions
[8:02] Speaker 3: where there's less of a time sensitivity involved and you know,
[8:06] Speaker 3: it's not as if a judge has literally turned the
[8:08] Speaker 3: spigot back on and money has to come out. They
[8:11] Speaker 3: are appealing some of those, but not always pursuing, you know,
[8:15] Speaker 3: this emergency relief, and then in some cases they're not appealing,
[8:19] Speaker 3: and you know, they're letting preliminary injunctions or temporary restraining
[8:24] Speaker 3: orders stay on the books as the litigation plays out.
[8:27] Speaker 3: You know, it's in the first year, there was so
[8:30] Speaker 3: much activity on sort of emergency dockets, not just for
[8:34] Speaker 3: the Supreme Court, but up and down the judicial chain
[8:38] Speaker 3: that so many things happened on a preliminary basis, and
[8:41] Speaker 3: in the moment, we and you know, we including me
[8:45] Speaker 3: and our coverage would often characterize a temporary or preliminary
[8:49] Speaker 3: injunction as a win or a loss for one side
[8:52] Speaker 3: or the other. But those are not final orders, and
[8:55] Speaker 3: you know, those orders will.
[8:57] Speaker 1: Stay on the docket.
[8:58] Speaker 3: But then later on courts might take a different position
[9:02] Speaker 3: once they've had a full airing of the evidence and arguments.
[9:06] Speaker 3: So I think it's worth stressing that many of these cases,
[9:09] Speaker 3: even when we've had sort of quote unquote wins and
[9:11] Speaker 3: losses early on, they keep going, and you know, there's
[9:15] Speaker 3: more action potentially down the pike.
[9:18] Speaker 2: What happens to the funds. Let's say a lower court says,
[9:22] Speaker 2: you know, we're lifting this freeze and then the government appeals.
[9:26] Speaker 2: Are the funds paid out in the meantime they are?
[9:29] Speaker 3: I mean, it depends on how the order is structured.
[9:31] Speaker 3: So we've had cases where there's an injunction. I know
[9:36] Speaker 3: from talking to grantees that you know they've gotten the money.
[9:39] Speaker 3: It might not always be a lot of money, but
[9:42] Speaker 3: they've gotten money even with an appeal. You know, in
[9:45] Speaker 3: cases where the government gets a stay of a lower
[9:47] Speaker 3: court injunction, than the government doesn't have to do anything
[9:52] Speaker 3: while the.
[9:52] Speaker 1: Case goes forward.
[9:53] Speaker 3: There have been some issues with compliance, not to the
[9:57] Speaker 3: extent that we've seen more recently in the immigration context,
[10:00] Speaker 3: where you know, there have been a number of judicial
[10:04] Speaker 3: rulings that have gotten a lot of understandably attention for saying,
[10:08] Speaker 3: you know, there's defiance by ice when we've ordered release,
[10:11] Speaker 3: where we've ordered bond hearings. It hasn't reached that level
[10:17] Speaker 3: in funding cases. What I've heard in reporting the story
[10:20] Speaker 3: out is that for the most part, states and nonprofits
[10:23] Speaker 3: feel that the government is mostly complying when ordered to
[10:27] Speaker 3: keep paying out or accept applications, you know, what have you.
[10:31] Speaker 3: But it has not always been smooth sailing, even after
[10:34] Speaker 3: an injunction or temporary restraining order comes down.
[10:38] Speaker 2: Coming up next on the Bloomberg Law Show, I'll continue
[10:40] Speaker 2: this conversation with Bloomberg Legal reporter Zoe Tillman, will take
[10:44] Speaker 2: a look at what the Supreme Court has done when
[10:46] Speaker 2: these funding freezes have reached the justices. I'm June Grosso
[10:51] Speaker 2: and you're listening to Bloomberg. President Donald Trump's expansive efforts
[10:57] Speaker 2: to use federal funding as a cudgel against political opponents
[11:01] Speaker 2: and programs he considers woke remain mired in court more
[11:06] Speaker 2: than a year since his return to the White House.
[11:09] Speaker 2: By the start of twenty twenty six, federal judges had
[11:12] Speaker 2: halted his funding cuts and limits in more than half
[11:15] Speaker 2: of one hundred and sixty seven spending fights reviewed by
[11:19] Speaker 2: Bloomberg News. The rulings against the government underscore how the
[11:23] Speaker 2: legal system has persisted as a roadblock, or at the
[11:26] Speaker 2: very least, a speed bump, to Trump's second term agenda.
[11:30] Speaker 2: I've been talking to Bloomberg Legal reporter Zoe Tillman, so
[11:34] Speaker 2: some of these fights have reached the Supreme Court. Tell
[11:38] Speaker 2: us about how the Supreme Court has ruled generally.
[11:42] Speaker 3: Yeah, so what the Supreme Court has said, and it's
[11:44] Speaker 3: really two cases that pushed this newer jurisprudence to evolve.
[11:50] Speaker 3: What the Court has said is if you've got to
[11:52] Speaker 3: basically a breach of contract claim and you're coming in
[11:55] Speaker 3: and saying this grant was approved, I was supposed to
[11:59] Speaker 3: get a million dollar for my project and they terminated it,
[12:03] Speaker 3: and I should get this money. Or I already spent
[12:06] Speaker 3: money and submitted for reimbursement and I didn't get the money.
[12:09] Speaker 3: The Court has said those really belong in the US
[12:12] Speaker 3: Court of Federal Claims and not a US district court.
[12:16] Speaker 3: The US Court of Federal Claims is a specialized federal court.
[12:19] Speaker 3: Its judges are not They don't get lifetime appointments in
[12:23] Speaker 3: the same vein as US district courts.
[12:25] Speaker 1: It's a more limited forum.
[12:26] Speaker 3: You can't get, you know, preliminary injunctions or relief turning
[12:30] Speaker 3: money back on.
[12:31] Speaker 1: It's you have to play it out to the end.
[12:33] Speaker 3: And you know, sources I talked to you for this
[12:36] Speaker 3: said if you're a small nonprofit, you can't spend a
[12:39] Speaker 3: year waiting for money.
[12:41] Speaker 1: It's really make or break.
[12:43] Speaker 3: You need that preliminary or temporary order from a court
[12:46] Speaker 3: to preserve status quo while you litigate. So moving these
[12:51] Speaker 3: types of funding cases over to federal claims, which is
[12:54] Speaker 3: what the Supreme Court said needs to happen, is considered
[12:58] Speaker 3: a big win for the government, and it you know,
[13:00] Speaker 3: knocks out certain types of cases over funding cuts. But critically,
[13:05] Speaker 3: these cases didn't rule out all funding fights from US
[13:09] Speaker 3: district courts. There are constitutional claims even if they involve
[13:13] Speaker 3: funding terminations. If it's purely a you know, you retaliated
[13:16] Speaker 3: against me for exercising my First Amendment right and the
[13:21] Speaker 3: relief involves getting the money back, you know, that is
[13:25] Speaker 3: still fair game, or at least you know, the court
[13:27] Speaker 3: didn't say you can't pursue those claims. Issues with the
[13:32] Speaker 3: conditions on funding, those are still fair game to pursue.
[13:36] Speaker 3: And so, you know, advocates that are opposed to what
[13:41] Speaker 3: the government is doing say that it didn't help to.
[13:44] Speaker 1: Have these Supreme Court orders come down.
[13:46] Speaker 3: But that they didn't knock out all funding fights, and
[13:50] Speaker 3: judges have certainly not felt that they can't issue, you know,
[13:55] Speaker 3: more relief against the government in light of what the
[13:58] Speaker 3: justices that and I should say, you know, the Supreme
[14:02] Speaker 3: Court orders came on the emergency or so called shadow docket,
[14:05] Speaker 3: so they too were preliminary and not very fulsome so
[14:10] Speaker 3: you know, I quote one judge in the story who
[14:12] Speaker 3: had an order that said, you know, they felt like
[14:14] Speaker 3: their funding case fell in a gray area of what
[14:17] Speaker 3: Supreme Court had said, and you know, barring a more
[14:21] Speaker 3: fully aired judgment articulating all the ways that funding cases
[14:27] Speaker 3: can be litigated or not in district courts.
[14:29] Speaker 1: This judge said, I see room for me to act. Here.
[14:33] Speaker 2: Is there a number for how much money, how much
[14:37] Speaker 2: in funding the government has frozen?
[14:40] Speaker 3: We don't have a complete number, at least not one
[14:44] Speaker 3: that everyone agrees on. We know that the Department of
[14:48] Speaker 3: Government Efficiency, which was you know, the Elon Musk driven project,
[14:52] Speaker 3: even though Elon Musk is no longer part of the administration,
[14:56] Speaker 3: DOAGE said that they saved two hundred and fifteen billion
[14:59] Speaker 3: dollars and that savings covered you know, terminated spending streams.
[15:05] Speaker 3: It covered government employees salaries or the cost of running
[15:09] Speaker 3: agencies that were trimmed or shut down. There's also some
[15:12] Speaker 3: nuance to that number where Bloomberg reported, you know that
[15:16] Speaker 3: spending still went up.
[15:18] Speaker 1: In other ways over the past fiscal years.
[15:20] Speaker 3: So that you know, might cancel out whatever those savings were.
[15:24] Speaker 3: But that said, you know, we have this number of
[15:26] Speaker 3: like two hundred and fifteen billion. We know that states,
[15:29] Speaker 3: state a g offices, state attorney general offices have offered
[15:33] Speaker 3: their own estimates of money that.
[15:35] Speaker 1: They say they've protected.
[15:36] Speaker 3: Will usually say like they've protected or secured for their residence,
[15:41] Speaker 3: and that can mean both, you know, literal money going
[15:45] Speaker 3: back out the door to grantees. It can mean the
[15:48] Speaker 3: conditions on funding streams. It can mean you know, they've
[15:52] Speaker 3: preserved access to a pool of money even if it's
[15:55] Speaker 3: not clear who will get it in the end. But
[15:57] Speaker 3: they've offered up their own estimates, sometimes in the billions
[16:00] Speaker 3: of dollars that they've you know, won in litigation.
[16:04] Speaker 1: And it's very fluid.
[16:05] Speaker 3: You know, in one day last month, there was an
[16:09] Speaker 3: order lifting a freeze on something with ten billion dollars
[16:12] Speaker 3: in aid funding for low income families. So you know,
[16:17] Speaker 3: in an instant the numbers can fluctuate by the billions.
[16:20] Speaker 3: As far as what's at stake in these legal fights.
[16:25] Speaker 2: And these funding freezes are continuing. Recently, Trump tried to
[16:29] Speaker 2: freeze the sixteen billion dollar Gateway rail tunnel between New
[16:34] Speaker 2: York and New Jersey. And that's been unfolding rapidly.
[16:38] Speaker 3: That's right, I mean, speaking of fluid that case, I
[16:41] Speaker 3: think it's been a week a week and a half,
[16:43] Speaker 3: and forebody gone through so many iterations where I think
[16:48] Speaker 3: it was sixteen billion that was frozen. A judge ordered
[16:52] Speaker 3: it unfrozen for this massive, you know, rail tunnel project
[16:56] Speaker 3: between New Jersey and New York. The government appealed, and
[17:00] Speaker 3: then the district judge sort of suspended her own order
[17:05] Speaker 3: for a few days to give the government a chance
[17:08] Speaker 3: to go to the appeals court to get a longer
[17:11] Speaker 3: term pause on that injunction. The States then went to
[17:15] Speaker 3: the district judge and said, can you lift your own
[17:18] Speaker 3: pause of your own order lifting the freeze. So it's
[17:22] Speaker 3: one of those cases where, you know, as I said earlier,
[17:25] Speaker 3: when it's about money going out the door, things have
[17:29] Speaker 3: moved often very quickly in a way that if we
[17:32] Speaker 3: were just talking about, you know, conditions on accessing that
[17:36] Speaker 3: money long term, it likely wouldn't have unfolded at such
[17:40] Speaker 3: a rapid clip.
[17:41] Speaker 2: You're anticipating I'm anticipating too. We're all anticipating that there
[17:46] Speaker 2: are going to be a lot more funding freezes connected
[17:50] Speaker 2: with Trump's immigration crackdown. In his railing against sanctuary cities
[17:56] Speaker 2: and states, you.
[17:57] Speaker 1: Know, it's a big question mark.
[17:59] Speaker 3: They have not had success defending these types of funding
[18:04] Speaker 3: decisions tied to you know, whether a city or state
[18:08] Speaker 3: is a so called sanctuary fiction. There's an order still
[18:11] Speaker 3: an effect from a San Francisco federal judge last year
[18:15] Speaker 3: that's being appealed at the moment, but there's alredient order
[18:19] Speaker 3: finding a similar effort was unlawful. So the President more
[18:22] Speaker 3: recently had again said that they would pull funding from
[18:26] Speaker 3: these types of jurisdictions that they feel are failing to
[18:30] Speaker 3: be as cooperative as they would.
[18:32] Speaker 1: Like on immigration enforcement.
[18:35] Speaker 3: And you know, we as part of this story talked
[18:37] Speaker 3: with municipal services loving the Seattle City Attorney's office, which
[18:43] Speaker 3: was part of the earlier sanctuary cities fight, and the
[18:46] Speaker 3: message very broadly, not addressing specific litigation, but broadly was
[18:52] Speaker 3: if there's grounds to sue, you know, they're ready to
[18:55] Speaker 3: sue if something is threatening. They're funding many that they
[18:58] Speaker 3: need for their cipal services. They're ready and able and
[19:03] Speaker 3: prepared to go back to court as needed.
[19:06] Speaker 2: And I'm sure you'll be looking at that lawsuit if
[19:09] Speaker 2: they do. Thanks so much, Zoe, great research. That's Bloomberg
[19:13] Speaker 2: Legal reporter Zoe Tillman. Uber's facing some three thousand cases
[19:19] Speaker 2: from around the country over passengers sexual assault claims. Last week,
[19:24] Speaker 2: and Arizona jury found the ride sharing giant libel for
[19:28] Speaker 2: not preventing an alleged sexual assault of a passenger by
[19:32] Speaker 2: a driver, returning an eight and a half million dollar
[19:36] Speaker 2: verdict for the passenger. The jurors found that the driver
[19:39] Speaker 2: was acting as an apparent agent of Uber. However, they
[19:43] Speaker 2: rejected claims that the ride share company itself acted negligently
[19:48] Speaker 2: in its safety standards or designed a deceptive product. Now
[19:52] Speaker 2: jurors came to a different result in a similar case
[19:55] Speaker 2: in California State court last year. Uber says it's going
[19:59] Speaker 2: to to appeal the Arizona verdict. But are these Bellweather
[20:03] Speaker 2: cases likely to lead to a global settlement. My guest
[20:07] Speaker 2: is Michael Green, a tourt law professor at Washington University
[20:11] Speaker 2: School of Law. Uber has been fighting sexual assault claims
[20:16] Speaker 2: for a decade, and the argument is that the company
[20:22] Speaker 2: can't be blamed for the misconduct of its drivers, that
[20:26] Speaker 2: there are contractors rather than employees. Has that been working
[20:30] Speaker 2: until now?
[20:32] Speaker 4: Just the basics here is that Uber can be liable
[20:36] Speaker 4: in two respects. One is, if Uber acts wrongfully negligently
[20:43] Speaker 4: on its own. Suppose Uber hires a known sexual offender
[20:49] Speaker 4: to drive cars. In that case, we would say, Uber,
[20:54] Speaker 4: you're negligent and you are subject to liability. The second basis,
[20:59] Speaker 4: and this is what you reverting to, is employers can
[21:03] Speaker 4: be vicariously liable for the torts of their employees. Okay,
[21:10] Speaker 4: and that's where the Dean verdict was based. Uber says
[21:17] Speaker 4: two things. One is, these drivers are not our employees.
[21:23] Speaker 4: They are independent contractors. And the law is that a
[21:27] Speaker 4: person who hires an independent contractor is not normally vicariously
[21:32] Speaker 4: liable for that independent contractor's towards. And then secondly, it says, alternatively,
[21:40] Speaker 4: even if the driver is our employee, we are not
[21:45] Speaker 4: vicariously liable when an employee goes off and does things
[21:50] Speaker 4: that are not for our benefit, that goes off on
[21:54] Speaker 4: a personal detour and frolic. Well, almost all of these
[22:00] Speaker 4: sexual assaults, virtually all of them, are not for the
[22:04] Speaker 4: benefit of Uber. They are personal whatever they are by
[22:10] Speaker 4: the drivers. So Uber really has two claims with regard
[22:16] Speaker 4: to why it's not vicariously libel tell us what.
[22:20] Speaker 2: The jury found in the case in Arizona.
[22:24] Speaker 4: So that's the Dan case. And interestingly, what the jury
[22:29] Speaker 4: found was that Uber was not negligent, So they didn't
[22:35] Speaker 4: find anything that Uber did wrong vis a vis protecting
[22:40] Speaker 4: its passengers from sexual assaults. But what they did find
[22:46] Speaker 4: was that Uber was vicariously liable for its driver based
[22:53] Speaker 4: on a subtle doctrine that exists in Arizona but is
[22:59] Speaker 4: not widespread across the states, and that would not apply,
[23:03] Speaker 4: for example, in the next case that Judge Bryer is
[23:06] Speaker 4: planning to try, which is in North Carolina. That is,
[23:11] Speaker 4: if we had the law of North Carolina applied in
[23:14] Speaker 4: the Dean case, the planeff would not have succeeded on
[23:18] Speaker 4: vicarious liability.
[23:20] Speaker 2: The jury award of the eight and a half million
[23:23] Speaker 2: was substantial, but it was far below the twenty four
[23:26] Speaker 2: million she'd ask for for compensatory damages for her past
[23:31] Speaker 2: and future sufferings, and she asked for one hundred and
[23:33] Speaker 2: twenty million impunitive damages, and the jury awarded no punitive damages.
[23:38] Speaker 2: So what do you make of the actual amount awarded?
[23:44] Speaker 4: Well, first of all, I don't pay any attention to
[23:46] Speaker 4: what planeiffs seek. They can seek the moon, and there's
[23:51] Speaker 4: no cost to them seeking the moon, right, So, plainiff's
[23:55] Speaker 4: lawyers typically will ask for lots and lots of in
[23:58] Speaker 4: the hope that somehow that will stick with the jury.
[24:02] Speaker 4: Often it does not, and the Dean case is an
[24:06] Speaker 4: example where that was the case. I'm not surprised that
[24:10] Speaker 4: they did not award punitive damages given their finding that
[24:17] Speaker 4: Uber did nothing wrong. That is, they found Uber did
[24:20] Speaker 4: not act negligently. It's very difficult to get punitive damages
[24:25] Speaker 4: based on vicarious liability, which was the basis for liability
[24:29] Speaker 4: and Dean. You need really bad behavior more even than
[24:37] Speaker 4: acting unreasonably to get punitive damages. It commits a jury
[24:43] Speaker 4: that this is really something heinous that deserves punitive damages.
[24:47] Speaker 4: So I'm not surprised there were no punitive damages. Now
[24:50] Speaker 4: that's not to say that in another case, the evidence
[24:55] Speaker 4: about Uber's bad behavior might not be stronger and might
[25:00] Speaker 4: not influence a jury to think, wow, or what Uber
[25:05] Speaker 4: did here was unconscionable, and I think that would probably
[25:09] Speaker 4: be much stronger for cases that occurred later rather than
[25:16] Speaker 4: back in the mid twenty tens, particularly the case in California.
[25:22] Speaker 2: The jury came to a different verdict in the case
[25:24] Speaker 2: in California, So tell us about that.
[25:27] Speaker 4: That was a case in state court in California, not
[25:31] Speaker 4: part of this federal multi district litigation. And in that case, interestingly,
[25:36] Speaker 4: the jury found that Uber was negligent for its own conduct,
[25:42] Speaker 4: but they also found another element of course of a
[25:46] Speaker 4: tort is not just that the defendant acted wrongfully, but
[25:51] Speaker 4: that that wrongful conduct caused the plane off's harm. And
[25:56] Speaker 4: what the jury found in that case was that Uber's
[26:00] Speaker 4: negligence was not a cause of the plainiff's harm. That
[26:06] Speaker 4: means that the jury felt that even if Uber had
[26:09] Speaker 4: done better, the planeff in that case would still have
[26:13] Speaker 4: suffered the assault that she suffered.
[26:16] Speaker 2: Is there a way to reconcile those two verdicts? I mean,
[26:20] Speaker 2: is it the facts of each of the cases are different.
[26:23] Speaker 2: Is it the law is different in Arizona and California?
[26:28] Speaker 2: Or is it just two juries looking at the same
[26:30] Speaker 2: thing and saying different things.
[26:33] Speaker 4: Well, of course we don't know what evidence was introduced
[26:36] Speaker 4: in those two cases, and whether it was the same
[26:40] Speaker 4: or it very That could very well be the case,
[26:44] Speaker 4: but it could also be the case that juries simply
[26:48] Speaker 4: respond to evidence differently. Earlier in my career, I was
[26:53] Speaker 4: looking at a very interesting trial that was conducted by
[26:58] Speaker 4: Judge Robert Parker of the Eastern District of Texas. At
[27:03] Speaker 4: the time, his docket was just flooded with asbestos cases
[27:08] Speaker 4: and he was looking for a way to try and
[27:10] Speaker 4: handle what was a Sissapian task. The more he resolved,
[27:17] Speaker 4: the bigger the pile god. And so what Judge Parker
[27:21] Speaker 4: did was to have a trial of five cases, five
[27:26] Speaker 4: asbestos cases, in the same courtroom before five different judges.
[27:32] Speaker 4: The evidence was the same in those five cases, the juries.
[27:37] Speaker 4: Five juris heard the same evidence for each of what
[27:44] Speaker 4: was their case, and then they rendered verdicts, and Judge
[27:48] Speaker 4: Parker gave me access to those verdict forms, and it
[27:51] Speaker 4: was remarkable how on the difficult issues, the difficult issues
[27:57] Speaker 4: the jury split and did not fly consist. I've taken
[28:02] Speaker 4: that as a pretty good evidence of the way in
[28:07] Speaker 4: which juries can come to different outcomes, and that's part
[28:12] Speaker 4: of the purpose of these Bellwether trials that Judge Bryar
[28:16] Speaker 4: is conducting to see how a variety of juries will
[28:21] Speaker 4: react to the evidence in these cases.
[28:26] Speaker 2: As you mentioned, and this goes to the Bellweather part,
[28:29] Speaker 2: there is something like three thousand cases obviously different facts,
[28:33] Speaker 2: but also different laws in the jurisdiction. So can it
[28:39] Speaker 2: still be a Bellweather when you have different laws that
[28:42] Speaker 2: are applied.
[28:43] Speaker 4: Well, that's part of the reason for trying cases in
[28:48] Speaker 4: different jurisdictions. He's got six cases teed up for Bellwether
[28:55] Speaker 4: Trials tour in California too, in Arizona, two are in
[28:59] Speaker 4: North Carolina. My guess is that he wants to see
[29:03] Speaker 4: how those come out before scheduling more. But you're right
[29:08] Speaker 4: at different state laws differences In the fact some of
[29:13] Speaker 4: these plaintiffs suffered horrific sexual assaults, I think that may
[29:20] Speaker 4: be important to a jury in deciding these cases. So
[29:25] Speaker 4: there's factual variation, legal variation across states, and jury variation
[29:32] Speaker 4: that could affect and produce different outcomes.
[29:36] Speaker 2: In response to the Arizona verdict, Uber said, this verdict
[29:40] Speaker 2: affirms that Uber acted responsibly and has invested meaningfully in writers' safety,
[29:46] Speaker 2: but it is going to appeal the finding that the
[29:49] Speaker 2: driver was acting as an agent of the company, saying
[29:52] Speaker 2: the judge aired on the instructions given to the jury.
[29:56] Speaker 2: When Uber looks at this behind closed doors, should they
[30:01] Speaker 2: be motivated to start settling cases or should they look
[30:05] Speaker 2: at it and say, well, different juries can bring different results,
[30:10] Speaker 2: so let's forge ahead.
[30:12] Speaker 4: The first thing I hope is that this motivates Uber
[30:16] Speaker 4: to find better ways to protect their passengers. When tort
[30:21] Speaker 4: law is working right, it results in better safety precautions
[30:28] Speaker 4: being taken, and we can go across a whole lot
[30:32] Speaker 4: of areas. Asbestos is a great example of that. So
[30:36] Speaker 4: that's the first thing. I think it's probably too early. Publicly,
[30:42] Speaker 4: of course, Uber is going to deny that they have
[30:44] Speaker 4: any liability and appeal and do all the things that
[30:48] Speaker 4: defendants who are held liable do. I think it's probably
[30:53] Speaker 4: too early for Uber to say, Okay, what we need
[30:59] Speaker 4: to do now is figure out a global settlement in
[31:04] Speaker 4: other mass torques. As the cases develop, you see defendants
[31:10] Speaker 4: see global peace, and that's a complicated dance that occurs,
[31:19] Speaker 4: and I think that's what Judge Brier in those federal
[31:22] Speaker 4: cases that you referred to, is trying to develop. But
[31:27] Speaker 4: first Uber needs to get a feeling. Then the Plaineff
[31:31] Speaker 4: lawyers need to get a feel on really how much
[31:36] Speaker 4: is their exposure here, and these first two cases give
[31:39] Speaker 4: us a little bit of information. It might be different
[31:44] Speaker 4: if the first two cases both came in with very
[31:48] Speaker 4: high liability and very high damage awards or vice versa.
[31:53] Speaker 4: That hasn't happened. That may suggest we're going to need
[31:56] Speaker 4: to try more cases to see how jurys respond.
[32:02] Speaker 2: The American Law Institute amended its restatement of tourts.
[32:07] Speaker 4: Yeah. So there have been a lot of suits not
[32:10] Speaker 4: just against Uber, but by women who have been sexually
[32:15] Speaker 4: assaulted in a variety of contexts. Think a woman who's
[32:19] Speaker 4: arrested by a police officer. Think a woman who is
[32:24] Speaker 4: incarcerated in a jail or a prison, think about patients
[32:30] Speaker 4: in the hospital. What we also found as we were
[32:34] Speaker 4: doing this research is that there has been a trend.
[32:38] Speaker 4: Despite what I said earlier about no vicarious liability for
[32:43] Speaker 4: sexual assaults because they're not for the benefit of the employer,
[32:47] Speaker 4: and that was the Hornbuck black Letter rule, we found
[32:53] Speaker 4: a number of courts finding ways to permit those plaintiffs
[32:58] Speaker 4: to continue to pursue their case by curious liability case
[33:03] Speaker 4: against the employers of these people employees who are committing
[33:09] Speaker 4: sexual assaults, and there were enough cases where we found
[33:13] Speaker 4: that that the American Law Institute, which develops restatements of
[33:18] Speaker 4: the law, decided last May to promulgate a special rule
[33:24] Speaker 4: that says that employers of employees who are given power
[33:34] Speaker 4: or control over vulnerable potential victims and who use that
[33:41] Speaker 4: position to commit a sexual assault a special rule that
[33:46] Speaker 4: says by curious liability can be imposed there by a
[33:50] Speaker 4: journey that would be a significant game changer for these
[33:56] Speaker 4: cases if courts that do not have have not adopted
[34:01] Speaker 4: that rule decide to adopt it. I'm very interested to
[34:05] Speaker 4: see how that provision that the ALI adopted last May
[34:10] Speaker 4: plays out when plaintiffs attorneys try to use that to
[34:15] Speaker 4: convince accord in Kansas or Alaska or New Mexico to
[34:21] Speaker 4: expand the scope of vikeras liability for sexual assaults.
[34:25] Speaker 2: Thanks so much for joining me on the show. That's
[34:28] Speaker 2: Professor Michael Green of the Washington University School of Law.
[34:33] Speaker 2: And that's it for this edition of the Bloomberg Law Show.
[34:35] Speaker 2: Remember you can always get the latest legal news on
[34:38] Speaker 2: our Bloomberg Law Podcast. You can find them on Apple Podcasts, Spotify,
[34:42] Speaker 2: and at www dot bloomberg dot com, slash podcast Slash Law,
[34:48] Speaker 2: and remember to tune into The Bloomberg Law Show every
[34:50] Speaker 2: weeknight at ten pm Wall Street Time. I'm June Grosso
[34:54] Speaker 2: and you're listening to Bloomberg

Shows are listed from Apple Podcasts' charts and directory, and Podcast Index where it is used. Every show and episode belongs to its publisher and plays from the publisher's own feed; this site hosts none of them.