# Social Media Addiction Verdict & Cox SCOTUS Decision

An episode of [Bloomberg Law](https://invisiblenetwork.ai/podcast/277975394), 26 Mar 2026, 32 min.

Audio: https://podtrac.com/pts/redirect.mp3/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/7c892d84-801f-4c0b-b0e9-ae2b0012ff5f/36d0f8c6-1e51-4328-b531-b4190049692c/audio.mp3?utm_source=Podcast&in_playlist=91224201-26a6-429d-ac3c-ae2b0012ff6d

Collin Walke who leads Hall Estill’s Cybersecurity & Data Privacy practice, discusses the jury verdict against Meta and YouTube in a landmark social media addiction trial. Intellectual property expert Shyam Balganesh, a professor at Columbia Law School, discusses the Supreme Court decision in favor of Cox Communications in a music piracy case. June Grasso hosts. See omnystudio.com/listener for privacy information.

## Transcript

[0:02] Speaker 1: This is Bloomberg Law with June Grossel from Bloomberg Radio.
[0:08] Speaker 2: After nine days of deliberations, a jury found Meta and
[0:12] Speaker 2: YouTube libel in a first of its kind lawsuit that
[0:16] Speaker 2: aimed to hold social media platforms responsible for harm to
[0:20] Speaker 2: children from using their services. Los Angeles jurors decided that
[0:25] Speaker 2: Meta and YouTube were negligent in the design or operation
[0:29] Speaker 2: of their platforms, and that each company's negligence was a
[0:33] Speaker 2: substantial factor in causing harm to the plaintiff. The twenty
[0:37] Speaker 2: year old woman had argued that her use of social
[0:40] Speaker 2: media as a child addicted her to the technology and
[0:44] Speaker 2: exacerbated her mental health struggles. The jury awarded her three
[0:48] Speaker 2: million dollars in compensatory damages and three million dollars in
[0:53] Speaker 2: punitive damages. Her attorney, Mark Lanier said the case is
[0:58] Speaker 2: a game changer.
[1:00] Speaker 3: I feel like what we're about here is something beyond
[1:02] Speaker 3: just trying to make a buck, beyond just trying to
[1:06] Speaker 3: help Kayley. I feel like we're about something that is
[1:09] Speaker 3: incredibly socially important and responsible.
[1:14] Speaker 2: Meta spokesperson Ashley Nicole Davis says the company will appeal.
[1:20] Speaker 4: We respectfully disagree with the verdict and will appeal team.
[1:25] Speaker 4: Mental health is profoundly complex and cannot be linked to
[1:29] Speaker 4: a single app. We will continue to defend ourselves vigorously
[1:33] Speaker 4: as every case is different, and we remain confident in
[1:37] Speaker 4: our record of protecting teens online.
[1:40] Speaker 2: My guest is Colin Walkee, a cybersecurity and data privacy
[1:44] Speaker 2: partner at haul Estel. Colin, this is one case among thousands.
[1:50] Speaker 2: What does this verdict stand for?
[1:52] Speaker 5: This verdict actually stands for the proposition that Meta and
[1:56] Speaker 5: YouTube intentionally made their algorithm addictive and negatively impacted someone's
[2:04] Speaker 5: mental health as a result. This particular claim is based
[2:07] Speaker 5: upon negligence, i e. They knew and owed a duty
[2:11] Speaker 5: to individuals to not make their algorithms addictive.
[2:14] Speaker 1: They did it anyway.
[2:16] Speaker 5: However, you could look at a recent case out of
[2:18] Speaker 5: New Mexico to the tune of three hundred and seventy
[2:20] Speaker 5: five million dollars where tech companies were found to have
[2:23] Speaker 5: violated the consumer protection law. So the difference here is
[2:27] Speaker 5: is this is just a traditional negligence theory. There is
[2:29] Speaker 5: no statutory action against these companies.
[2:32] Speaker 2: Meta argued that the plaintiff had struggle with her mental
[2:36] Speaker 2: health separately from her social media use, and they pointed
[2:41] Speaker 2: to her turbulent home life and bullying at.
[2:44] Speaker 6: School, et cetera, et cetera.
[2:46] Speaker 2: Did the jury discount those factors? Did they find they
[2:50] Speaker 2: were not contributory?
[2:52] Speaker 5: That wasn't the only thing that their attorneys pointed to.
[2:56] Speaker 5: YouTube's attorney also pointed to the fact that in all
[2:58] Speaker 5: of the evidence presented, only a few moments or a
[3:01] Speaker 5: few minutes worth of time was actually proven to have
[3:03] Speaker 5: been on YouTube. So I don't think that the jury
[3:06] Speaker 5: discounted that fact. I think the jury knew what we
[3:09] Speaker 5: all know, which is we reach for our phones when
[3:12] Speaker 5: we don't intend to, when we're sitting on their couch
[3:14] Speaker 5: without thinking, and why because social media is addictive.
[3:18] Speaker 1: And not only that, this case is a long time coming.
[3:21] Speaker 5: It's not as though we haven't read tell All book
[3:24] Speaker 5: after tell All book about the manner and method by
[3:26] Speaker 5: which these tech companies have attempted to make their algorithms
[3:30] Speaker 5: more addictive in order to get more attention, in order
[3:32] Speaker 5: to sell more advertising. When you are using a free product,
[3:36] Speaker 5: you are the product. And so I think the jury
[3:38] Speaker 5: knew that, understood it and have lived through it, and
[3:41] Speaker 5: simply did what has been a long time coming.
[3:44] Speaker 2: I mean, can you compare this to let's say you know,
[3:46] Speaker 2: a bakery bakes delicious cakes and you start to gain weight.
[3:50] Speaker 2: I mean, are you responsible or is the bakery responsible
[3:53] Speaker 2: for trying to make the cakes as delicious as possible
[3:56] Speaker 2: to hook you. I know that's a far out example,
[3:59] Speaker 2: but I'm just trying to get to the question of
[4:02] Speaker 2: where does our personal responsibility or parental responsibility factor in
[4:08] Speaker 2: or do the social media company shoulder all the blame.
[4:12] Speaker 5: So let me show you the distinction between your example
[4:15] Speaker 5: and the tech companies, which is to say, some of
[4:18] Speaker 5: the evidence that came out during this trial. For example,
[4:20] Speaker 5: was a study that Meta had suppressed and they had
[4:23] Speaker 5: conducted it themselves that showed when individuals in particularly youth,
[4:28] Speaker 5: put away their phone for a week, there was an
[4:31] Speaker 5: actual causative relation. We're not talking correlative relation, We're talking
[4:36] Speaker 5: causitive relationship between that showing that there was an effect
[4:40] Speaker 5: on mental health. Not only that, but another study that
[4:43] Speaker 5: they conducted showed that individuals who are were already predisposed
[4:47] Speaker 5: to mental health issues increase their usage of social media
[4:51] Speaker 5: and increase their worsening mental health. So these were some
[4:55] Speaker 5: of the studies that were shown. So this put meta
[4:57] Speaker 5: on notice of what their algorithm were doing. So in
[5:01] Speaker 5: your case, if the bakery knew that all of that
[5:03] Speaker 5: fat and sugary goods was in fact addicting the individuals,
[5:07] Speaker 5: there might be a claim there.
[5:08] Speaker 2: So Colin, what's the ultimate answer. Are the social media
[5:11] Speaker 2: companies supposed to go out of business?
[5:14] Speaker 1: Well, I don't think that they're supposed to go out
[5:16] Speaker 1: of business.
[5:16] Speaker 5: I think that they are supposed to show generalized and
[5:19] Speaker 5: neutralized algorithms, not algorithms that are designed to get you hooked.
[5:24] Speaker 5: In other words, one thing they could do, for example,
[5:27] Speaker 5: is stop infinite scroll. The whole reason why infinite scroll
[5:30] Speaker 5: was invented was because ase people got tired of having
[5:33] Speaker 5: to wait for their page to load. A little bit
[5:35] Speaker 5: of patients built into an algorithm might actually get us
[5:38] Speaker 5: off of our phones. And that's one of the things
[5:40] Speaker 5: that I find so ironic about this. The entire point
[5:44] Speaker 5: of this case is that social media negatively impacts mental health.
[5:49] Speaker 5: And I go and I look at the front page
[5:51] Speaker 5: of the newspaper after this verdict comes down, and everybody
[5:55] Speaker 5: is on their cell phone sharing it in social media.
[5:58] Speaker 1: The irony is thick here.
[6:00] Speaker 5: And we don't realize that we ourselves are participating in
[6:03] Speaker 5: this problem.
[6:04] Speaker 6: Will you just explain what infinite scroll is.
[6:07] Speaker 5: Yeah, So, anybody who grew up with the Internet between
[6:10] Speaker 5: two thousand and about twenty and eleven, if you had
[6:13] Speaker 5: a GPS unit, for example, when you were driving, it
[6:16] Speaker 5: would show that your car was driving towards the top
[6:19] Speaker 5: of the screen, and then once it got to the
[6:21] Speaker 5: top of the screen, it loaded more data, so you
[6:23] Speaker 5: would know where to drive further. Now it just tracks
[6:26] Speaker 5: along as you drive. And so the same thing on
[6:29] Speaker 5: social media. You'd get to the bottom of a page
[6:31] Speaker 5: and you'd have to wait for it to load. Well,
[6:33] Speaker 5: now you don't even have to wait for it to load.
[6:35] Speaker 5: It just shows you the next thing that you want
[6:37] Speaker 5: to see.
[6:38] Speaker 2: So only nine out of the twelve jurors had to
[6:41] Speaker 2: agree on each claim against each defendant. Two jurors consistently
[6:46] Speaker 2: disagreed with the other ten on whether the tech company
[6:50] Speaker 2: should be held liable. So the social media companies now
[6:53] Speaker 2: know what kinds of jurors lean toward their position. Will
[6:58] Speaker 2: they be looking to select jurors with similar characteristics to
[7:02] Speaker 2: those two in upcoming trials?
[7:05] Speaker 4: Oh?
[7:06] Speaker 5: Absolutely, And I'm confident that Meta and the tech companies
[7:09] Speaker 5: spend tons of money on jury consultants and identifying the
[7:12] Speaker 5: type of juror they want. And I'm confident now that
[7:14] Speaker 5: they've identified these two jurors, their personality profiles will be
[7:18] Speaker 5: what is sought out in the future. I mean that
[7:20] Speaker 5: being said, Meta has already indicated it's going to appeal,
[7:24] Speaker 5: so they have legal arguments to appeal from, and then
[7:27] Speaker 5: they may have some factual arguments to appeal from. And
[7:30] Speaker 5: the fact that you have two descending jurors certainly helps
[7:33] Speaker 5: that case. But at the end of the day, jury
[7:36] Speaker 5: verdicts are typically fairly sacred and they're very hard to overturn.
[7:39] Speaker 5: So absence the judge making an error on the law
[7:43] Speaker 5: or the jury really abusing their findings of fact, I
[7:45] Speaker 5: think this verdict stent.
[7:47] Speaker 2: The jury was out for nine days forty hours over
[7:50] Speaker 2: nine days, so they must have been struggling with some
[7:53] Speaker 2: aspect of the plaintiff's case, right, Well, it.
[7:56] Speaker 5: Could be something that was holding them up from a
[7:58] Speaker 5: liability standpoint. To your point earlier, well, this individual did
[8:02] Speaker 5: have mental health issues in any event, is that really
[8:05] Speaker 5: the cause here, because we have to prove its causative.
[8:08] Speaker 5: But I think more to the point, it could also
[8:11] Speaker 5: be on the damage valuation. This woman was ultimately awarded
[8:15] Speaker 5: three million dollars in actual damages and three million dollars
[8:18] Speaker 5: in punitive damages. Sometimes the fight isn't over the liability.
[8:23] Speaker 5: The fight is is, okay, how much do we award?
[8:26] Speaker 2: And where huge liability for the companies could have come
[8:30] Speaker 2: in is in the punitive damages. I mean, three million
[8:34] Speaker 2: dollars in punitive damages is just a drop in the
[8:37] Speaker 2: bucket to Meta or Google. Isn't it usually the case
[8:41] Speaker 2: that when you hear about these huge verdicts, most of
[8:44] Speaker 2: it is in the punitives.
[8:46] Speaker 5: Absolutely absolutely, and so whether the evidence shows that their
[8:49] Speaker 5: actions were willful and wanton and in reckless disregard of.
[8:53] Speaker 1: The plaintiff's rights. And they're going to point back.
[8:55] Speaker 5: To those studies where the individuals new at Meta the
[8:58] Speaker 5: consequences of these algorithms. And so, for example, one famous
[9:02] Speaker 5: jury verdict that resulted in a several hundred million dollars
[9:05] Speaker 5: perunit of damage award was likened to a parking ticket.
[9:10] Speaker 5: If I make one hundred thousand dollars a year and
[9:12] Speaker 5: I get a parking ticket for one hundred and fifty dollars, well,
[9:15] Speaker 5: you know that's really one percent.
[9:17] Speaker 1: Of my income or whatever. That comes out to be
[9:19] Speaker 1: point oh one.
[9:20] Speaker 5: And so if you did the same thing to Meta's point,
[9:23] Speaker 5: you know, sixty billion dollars in profits last year, that
[9:25] Speaker 5: can be a fairly big number just for a speeding ticket.
[9:28] Speaker 2: You know. Lawyers for both platforms consistently pointed to the
[9:33] Speaker 2: safety features and guard rails they each have available for
[9:37] Speaker 2: people to monitor and customize their use. I guess the
[9:41] Speaker 2: jury didn't think much of those well.
[9:44] Speaker 5: And part of the issue in this particular case, if
[9:46] Speaker 5: I recall correctly, is that this individual actually started before
[9:51] Speaker 5: Instagram had begun the age control checks and those sorts
[9:55] Speaker 5: of things. So if the facts had been different to
[9:57] Speaker 5: your point earlier June, the jury might go, well, there
[9:59] Speaker 5: were rental controls, there was age verification.
[10:02] Speaker 1: Those sorts of things.
[10:03] Speaker 5: But it also begs the question whether or not those
[10:06] Speaker 5: companies are actually fulfilling their requirements on the back end
[10:09] Speaker 5: to verify and the evidence that would show to the contrary.
[10:12] Speaker 2: So, as I mentioned, this is just the first verdict.
[10:15] Speaker 2: Do you think that Meta now goes out and tries
[10:18] Speaker 2: to start settling. Do you think they're going to take
[10:20] Speaker 2: the long road and say, well, wait for the appeal,
[10:23] Speaker 2: wait to see how other cases shake out.
[10:27] Speaker 5: Yeah, I mean, I found it odd that they wanted
[10:29] Speaker 5: to use this as their test case, but they clearly
[10:32] Speaker 5: have and they have a creative First Amendment argument with
[10:36] Speaker 5: regard to.
[10:38] Speaker 1: The whole problem with prosecuting. Previously has been thought that
[10:42] Speaker 1: section two.
[10:42] Speaker 5: Thirty of federal law, which says that social media companies
[10:46] Speaker 5: cannot be liable for the information that is posted on
[10:49] Speaker 5: their website.
[10:50] Speaker 1: This lawsuit says.
[10:52] Speaker 5: That that's true, but they can be held liable for
[10:56] Speaker 5: the decisions and the algorithms that show that content, how
[11:00] Speaker 5: all that content is portrayed. And typically in intellectual property law,
[11:05] Speaker 5: those are considered editorial rights. We are editing what you
[11:10] Speaker 5: are seeing. Why is that a problem? And so there's
[11:12] Speaker 5: a First Amendment case that they are alleging here. And
[11:15] Speaker 5: so if it goes up on appeal, makes to the
[11:17] Speaker 5: Supreme Court, and the Supreme Court insulates them from liability.
[11:21] Speaker 1: They're not likely to settle anything in the future.
[11:23] Speaker 5: And that's why I think they'll keep prolonging in this
[11:24] Speaker 5: litigation at least through that opinion.
[11:26] Speaker 2: Do you think people are jumping the gun too much?
[11:28] Speaker 2: They're comparing this to the tobacco litigation and the global
[11:31] Speaker 2: settlement there, and the opioid litigation. I mean, it seems
[11:35] Speaker 2: like we're just at the starting gate.
[11:37] Speaker 1: I do think it's the starting gate.
[11:38] Speaker 5: But I think that so many people, in spite of
[11:41] Speaker 5: their constant social media usage, have been expecting this to
[11:44] Speaker 5: come for so long that it does feel like the
[11:46] Speaker 5: big tobacco settlement a scenario the opioid issues. But what
[11:51] Speaker 5: I will tell you is that at least with regards
[11:53] Speaker 5: to tobacco, to your point, June, three million dollars is
[11:56] Speaker 5: a drop in the bucket, And last year Metapos is
[12:00] Speaker 5: sixty billion dollars in profit. In nineteen ninety seven, the
[12:03] Speaker 5: year before the tobacco settlement got entered into Philip Morris,
[12:07] Speaker 5: their profits were magnitudes of orders less than that, like
[12:10] Speaker 5: five billion. And so the point here is is Meta
[12:13] Speaker 5: and these other tech companies have plenty of money to
[12:15] Speaker 5: continue to fight on. Even if they settle a billion
[12:18] Speaker 5: dollars yere and a billion dollars there, they have plenty
[12:21] Speaker 5: of money to keep fighting.
[12:23] Speaker 2: So bottom line, Colin, how depressed do you think Meta
[12:26] Speaker 2: and Google should be about this verdict?
[12:29] Speaker 4: Well?
[12:30] Speaker 5: I don't know, because if you look at the approach
[12:33] Speaker 5: that our government has taken to regulating AI and data
[12:37] Speaker 5: privacy in general, which is to say we.
[12:39] Speaker 1: Don't and we won't.
[12:41] Speaker 5: I would not be surprised at all if what you
[12:44] Speaker 5: see is a bunch of legislation coming down the pike,
[12:46] Speaker 5: pushed by tech industry lobbyists that says we're insulating these
[12:51] Speaker 5: companies from these types of lawsuits. The only manner and
[12:54] Speaker 5: method by which you consue these companies is for X, Y,
[12:57] Speaker 5: and Z and negligence. Ain't one of them some sort
[12:59] Speaker 5: of insulation from their liabilities. I can see that happening,
[13:03] Speaker 5: and I can see the legislators, if history is prologued,
[13:07] Speaker 5: bending over backwards to accommodate that request.
[13:09] Speaker 2: When I look at the big picture, social media is
[13:13] Speaker 2: so entwined with our everyday lives, whether it's Instagram or
[13:17] Speaker 2: TikTok or whatever, or whether it's just looking at the
[13:21] Speaker 2: news and getting caught up in one news story after
[13:23] Speaker 2: the other, I find it hard to believe.
[13:25] Speaker 6: That there'll be a time when it won't be.
[13:27] Speaker 2: If you want to use the word addictive, I mean
[13:30] Speaker 2: it's all around us.
[13:31] Speaker 1: Well to that point.
[13:33] Speaker 5: So a few years ago, there was an editorial I
[13:35] Speaker 5: believe it was in the New York Times, and what
[13:37] Speaker 5: it spoke about was the future. The number one indicator
[13:40] Speaker 5: right now if you are in poverty is whether you smoke, period,
[13:43] Speaker 5: end of sorty. And so the argument here was in
[13:46] Speaker 5: the future, those who are impoverished are going to be
[13:49] Speaker 5: the ones utilizing social media for free. They're the ones
[13:52] Speaker 5: who are going to be bought and sold and exploited.
[13:55] Speaker 5: The individuals who have money will be able to subscribe
[13:58] Speaker 5: and obtain their privacy through paying for the product into
[14:01] Speaker 5: the future.
[14:02] Speaker 1: And so if you think.
[14:03] Speaker 5: About it from that perspective, yeah, social media will always
[14:06] Speaker 5: be around, but not necessarily in the way that we
[14:09] Speaker 5: see it today.
[14:10] Speaker 2: Is there a big lesson from this verdict?
[14:13] Speaker 5: I think that this should be a lesson to everyone
[14:15] Speaker 5: who says we can't regulate tech, because we don't need
[14:19] Speaker 5: to regulate tech. We need to apply the laws that
[14:21] Speaker 5: we currently have on the books in the same area
[14:24] Speaker 5: and method and we can get the same results.
[14:26] Speaker 1: This is a negligence claim. It's common law.
[14:28] Speaker 5: It's been around for hundreds of years, so I think
[14:31] Speaker 5: it was a long time coming, and we'll see what.
[14:33] Speaker 1: Happens on appeal.
[14:34] Speaker 2: Colin, do you think the defendants have a good chance
[14:36] Speaker 2: on appeal.
[14:37] Speaker 1: I do not necessarily like their first Amendment argument, I e.
[14:41] Speaker 5: That it's editorial commentary, because again you're going back to
[14:45] Speaker 5: thinking about advertising for tobacco companies. They knew what they
[14:48] Speaker 5: were portraying in these advertisements was addictive, you know, the
[14:52] Speaker 5: product was.
[14:53] Speaker 1: So I don't know that goes very far.
[14:55] Speaker 5: And I haven't seen any strong arguments that the judge
[14:58] Speaker 5: made a huge factual errors or someth along those lines.
[15:01] Speaker 5: Evidence chariers trial. So I think it's gonna be a
[15:03] Speaker 5: hard road to hoe. And let's think get that first
[15:05] Speaker 5: mimic claim in.
[15:06] Speaker 2: Thanks so much, Colin. That's Colin Walkee, a cybersecurity and
[15:10] Speaker 2: data privacy partner at Holestell. The Supreme Court threw out
[15:14] Speaker 2: a copyright infringement verdict against Cox Communications, dealing a major
[15:20] Speaker 2: blow to music industry efforts to hold internet providers responsible
[15:25] Speaker 2: for piracy by their customers. Any unanimous decision, the justices
[15:30] Speaker 2: said Cox couldn't be held liable for failing to shut
[15:34] Speaker 2: down the accounts of people who repeatedly downloaded and distributed
[15:38] Speaker 2: songs without permission. A federal appeals court had upheld the
[15:42] Speaker 2: jury's finding that Cox contributed to infringement by its subscribers.
[15:49] Speaker 2: My guest is an expert in intellectual property law. Shambalganesh,
[15:53] Speaker 2: a professor at Columbia Law School, tell us about the
[15:56] Speaker 2: Supreme Court's decision today.
[15:59] Speaker 7: Okay, So Fox versus Sony Communications was the Court being
[16:03] Speaker 7: asked to reconsider what the level of intent is under
[16:06] Speaker 7: a doctrine called contributory infringement in copyright law, which traces
[16:10] Speaker 7: itself back to decisions of the Court, the most prominent
[16:13] Speaker 7: of which was Sony versus Universal City in Post nineteen
[16:16] Speaker 7: seventy six. But a basically judge made doctrine that wasn't
[16:20] Speaker 7: codified in the statute that says that someone who actively
[16:24] Speaker 7: encourages or induces infringement could themselves be liable for infringement.
[16:30] Speaker 7: So it was a case examining contributory infringement and its
[16:34] Speaker 7: scope around the prong of intent by the person who's
[16:37] Speaker 7: doing the encouraging. And so the question was the liability
[16:41] Speaker 7: of an Internet service provider for potential knowledge that it
[16:45] Speaker 7: had that some of its users based on IP addresses
[16:49] Speaker 7: were engaged in illegal copyright infringement, and the question was
[16:53] Speaker 7: whether that satisfied the intent requirement when this knowledge was
[16:57] Speaker 7: made available to the Internet service provider, and despite subsequent
[17:01] Speaker 7: requests and notices, it didn't terminate the services of the subscribers.
[17:06] Speaker 7: Many of them it allowed to continue, and it knowingly therefore,
[17:10] Speaker 7: in some sense allowed the illegal activity to go on.
[17:13] Speaker 7: So the question was whether this knowledge was sufficient to
[17:16] Speaker 7: satisfy the intent requirement, and the Supreme Court says no.
[17:20] Speaker 7: The Supreme Court says no. What contributory infringement requires on
[17:25] Speaker 7: the intent prong is very specific, as we've told you
[17:29] Speaker 7: before in our prior decisions referencing Sony versus Universal and
[17:33] Speaker 7: then later on MGM versus Grockster, two major decisions where
[17:37] Speaker 7: the Court clarified what it means. The first thing it
[17:40] Speaker 7: says is, well, the two meanings of intent for our
[17:43] Speaker 7: purposes are one, if there's an active encouragement of the
[17:47] Speaker 7: infringement by specific actions. That was the Grockster case where
[17:52] Speaker 7: a peer to peer file sharing service was marketing itself
[17:56] Speaker 7: for usage for infringement. That active inducement, active encouragement. That's
[18:01] Speaker 7: the first prong. And the second one is if a service,
[18:05] Speaker 7: it says, is specifically tailored to infringement. So if the
[18:09] Speaker 7: service being offered by the provider is tailored for infringement. Well,
[18:13] Speaker 7: how do we understand if it's tailored for infringement? Here
[18:16] Speaker 7: the Court says, if that service is not capable of
[18:20] Speaker 7: substantial non infringing uses. So, if it's capable of substantial
[18:23] Speaker 7: non infringing users, that means it wasn't tailored to the infringement.
[18:26] Speaker 7: But only if it's not capable of substantial noninfringing uses
[18:30] Speaker 7: we could say that it's tailored to the infringement, not
[18:33] Speaker 7: simply on the basis of knowledge we have never held before.
[18:36] Speaker 7: The Court says that mere knowledge is sufficient for satisfying
[18:40] Speaker 7: the intent prong and here Cox did not satisfy either
[18:44] Speaker 7: of them, and as a result cannot be held liable.
[18:46] Speaker 7: So it reverses the decision of the Fourth Circuit on
[18:49] Speaker 7: contributory infringement.
[18:50] Speaker 6: So the decision was unanimous.
[18:52] Speaker 2: And if the Supreme Court's precedence was so clear, how
[18:57] Speaker 2: did the Fourth Circuit get it so wrong?
[19:00] Speaker 7: Yeah, the honest answer is the Supreme Court's prior president
[19:03] Speaker 7: was not this clear. So there is a oversimplistic reiteration
[19:08] Speaker 7: of the prior precedent by Justice Thomas, writing for the majority.
[19:12] Speaker 7: I think one of the things that's very glaring in
[19:14] Speaker 7: the opinion is how there is an oversimplification of the
[19:18] Speaker 7: entire complexity of the doctrine that was present not just
[19:23] Speaker 7: in the Supreme Court's own prior presidents, but the way
[19:26] Speaker 7: in which the intermediate courts of appeal had understood those
[19:29] Speaker 7: precedents and applied it in case after case. So there's
[19:32] Speaker 7: a simplification here. So just to give you an example,
[19:35] Speaker 7: one of the things that the majority doesn't talk about
[19:38] Speaker 7: is the fact that when Congress enacted the nineteen seventy
[19:41] Speaker 7: six Act and put in place Section one zero six,
[19:43] Speaker 7: which deals with the different kinds of infringement, the legislative
[19:46] Speaker 7: history makes clear that Congress used a phrase to authorize,
[19:51] Speaker 7: and it used that phrase specifically to recognize that contributory
[19:56] Speaker 7: infringement was meant to continue under thenineteen seventy six Act,
[20:01] Speaker 7: which was a doctrine that had been created by courts before.
[20:05] Speaker 7: Just as Thomas is basically saying right now that all
[20:08] Speaker 7: that generativity around the contributory infringement doctrine that existed before
[20:13] Speaker 7: is off the table, these are the only two variants.
[20:16] Speaker 7: He's effectively saying that, let's treat this almost as though
[20:19] Speaker 7: Its a textualist claim that unless it falls within the
[20:23] Speaker 7: narrow parameters of what we have said before, there is
[20:26] Speaker 7: no basis for contributory infringement. And that's the striking part
[20:29] Speaker 7: of the opinion in some ways, which is not that
[20:32] Speaker 7: the decision is problematic in any way or form. I
[20:35] Speaker 7: think many people believed that Cox should have won. The
[20:38] Speaker 7: outcome is not the problematic thing. It's what he does
[20:41] Speaker 7: with the doctrine of contributory infringement and really the role
[20:44] Speaker 7: of the courts, where he's basically saying that the room
[20:47] Speaker 7: for innovation and expansion, which has been the hallmark of
[20:51] Speaker 7: this entire area, is off the table. It's only these
[20:54] Speaker 7: narrow parameters that need to be complied with in the
[20:56] Speaker 7: expansion of the doctrine. And the reason that's problematic is
[20:59] Speaker 7: one June, just as you pointed out, the Court itself
[21:03] Speaker 7: had adopted a very different approach in MGM versus Rockster.
[21:07] Speaker 7: It introduced inducement which did not exist in the statute.
[21:10] Speaker 7: And secondly, Congress intended that generativity to continue. So there's
[21:14] Speaker 7: something institutional going on here where Justice Thomas does not
[21:18] Speaker 7: want the courts to continue developing it. When I say
[21:20] Speaker 7: Justice Thomas, writing for the majority.
[21:22] Speaker 2: So is that why two of the liberal justices Sonya
[21:26] Speaker 2: so To Mayor and Katanji Brown Jackson joined in a
[21:30] Speaker 2: concurrence saying the Court went too far in insulating Internet
[21:35] Speaker 2: service providers and the Court should have left open the
[21:39] Speaker 2: possibility of suits against companies that intentionally assist specific instances
[21:45] Speaker 2: of infringement.
[21:46] Speaker 7: That's exactly right. I think the concurring opinion by Justices
[21:49] Speaker 7: Sotomayor and Jackson agrees with the result, but it is
[21:54] Speaker 7: vehement in its disagreement on the reasoning adopted to come
[21:57] Speaker 7: at that because the concurrence, they see what Justice Thomas
[22:01] Speaker 7: the majority is doing is stifling the further creation of
[22:05] Speaker 7: expansion of contributory infringement to domains that Congress and the
[22:09] Speaker 7: Court itself indicated required potential expansion. And so Justice Sotomayor's
[22:14] Speaker 7: opinion actually goes to some lengths to indicate how such
[22:18] Speaker 7: an expansion should actually happen, How you might want to
[22:21] Speaker 7: look at instances where specific knowledge actually can be a
[22:25] Speaker 7: basis of intent. And she says, look, if you have
[22:28] Speaker 7: absolute certainty that something is going to be used for
[22:31] Speaker 7: a bad purpose, shouldn't that heightened level of knowledge be
[22:35] Speaker 7: equivalent to intent and therefore satisfy the prong. So you
[22:39] Speaker 7: give a product to someone when they come to you
[22:41] Speaker 7: saying I want to use it for X purpose and
[22:44] Speaker 7: X purpose only, and you say sure and give them
[22:46] Speaker 7: your product, Well, you have a heightened level of knowledge
[22:49] Speaker 7: that is the kind of intent that is sufficient for
[22:52] Speaker 7: the purposes of contributory infringement and the understanding of the
[22:55] Speaker 7: reasoning of the majority, she says, takes that entirely off
[22:58] Speaker 7: the table, and that.
[22:59] Speaker 1: Should not be the case.
[23:01] Speaker 7: But she's also very ready to point out that even
[23:03] Speaker 7: in that expanded universe, it did not exist here, which
[23:06] Speaker 7: is why she agrees and concurs with the results. So
[23:09] Speaker 7: she says, even under that modified, expanded standard of hers
[23:13] Speaker 7: differing from the majority, Cox would not be liable because
[23:17] Speaker 7: she basically says that while Cox may have had specific
[23:22] Speaker 7: knowledge as to the IP addresses which were committing the infringement,
[23:26] Speaker 7: what she points out is there is not a singular
[23:29] Speaker 7: correlation between an IP address and an individual user, right,
[23:33] Speaker 7: so multiple users could be associated with an IP address.
[23:37] Speaker 7: In fact, many IP addresses are establishments where you have
[23:40] Speaker 7: multiple users and employees. So all that they had was
[23:44] Speaker 7: the IP address specific knowledge, not the individual act specific knowledge,
[23:49] Speaker 7: and she says because of that, Cox would not be
[23:51] Speaker 7: found liable even under.
[23:52] Speaker 2: Herbert Coming up, I'll continue this conversation with Columbia Law
[23:56] Speaker 2: School professor Balganesh. The Supreme Court today sided with internet
[24:02] Speaker 2: service provider Cox Communications in its copyright fight with record
[24:07] Speaker 2: labels over illegal music downloads by Cox customers. The justices
[24:13] Speaker 2: ruled unanimously that Cox bears no liability for the copyright
[24:17] Speaker 2: violations of its customers, reversing a jury verdict and lower
[24:21] Speaker 2: court rulings. I've been talking to Columbia Law School professor
[24:25] Speaker 2: sham Baganesh. Do you think that Cox, in arguing us
[24:30] Speaker 2: sort of scare tactics and saying, well, we could be
[24:33] Speaker 2: cutting off a whole university because of one person, or
[24:37] Speaker 2: a grandma because her grandchild is pirting music.
[24:42] Speaker 7: Yeah, so I think they did use that, and that's characteristic,
[24:45] Speaker 7: of course, as you know of Supreme Court arguments painting
[24:47] Speaker 7: the doomsday scenario of an expensive holding. Did that play
[24:52] Speaker 7: into it? Perhaps some, But I don't believe that the
[24:55] Speaker 7: decision coming out the other way in terms of saying
[24:58] Speaker 7: we're taking knowledge off the table was driven by the
[25:00] Speaker 7: doomsday scenario kind of you know, worst case, here's what
[25:04] Speaker 7: will happen if we adopt the alternate approach. Why do
[25:06] Speaker 7: I say that. I say that for two reasons. One,
[25:08] Speaker 7: I think the Court has in the past, when presented
[25:11] Speaker 7: with these kinds of doomsday scenarios, even in copyright, been
[25:13] Speaker 7: willing to split the difference in some ways and come
[25:16] Speaker 7: up with a compromise solution, saying we don't need to
[25:18] Speaker 7: go all the way to say any knowledge is enough.
[25:21] Speaker 7: We can, you know, slice and dice what kind of
[25:24] Speaker 7: knowledge is requirement. And that's what Justice Sotomayor.
[25:26] Speaker 1: Does, right.
[25:27] Speaker 7: She says, Look, even though I'm willing to accept a
[25:29] Speaker 7: level of knowledge as being possible in contributory infringement, I'm
[25:33] Speaker 7: not ready to accept that it's just any knowledge. I'm
[25:36] Speaker 7: looking for heightened and specific knowledge. So I don't think
[25:39] Speaker 7: it was the sort of worst case doomsday scenario that
[25:42] Speaker 7: was motivating the Court. It may have played a role,
[25:45] Speaker 7: perhaps amongst some of the justices, but I really do
[25:48] Speaker 7: think that at the end of the day, what seems
[25:50] Speaker 7: to be playing a real role in the majority of
[25:52] Speaker 7: his opinion is this vision of what the judicial role
[25:55] Speaker 7: should be in copyright lawmaking and June. To be honest,
[25:58] Speaker 7: that's giving me the big pause, which is that this
[26:02] Speaker 7: is not just a one off opinion. Justice Thomas has
[26:05] Speaker 7: made these views clear, interestingly in two prior opinions. One
[26:10] Speaker 7: he wrote the majority opinion in Star Athletica. If you remember,
[26:13] Speaker 7: this was an opinion about the design of cheerleading uniforms
[26:17] Speaker 7: and whether they would become eligible for copyright protection. And
[26:20] Speaker 7: we had a vast amount of case law from the
[26:23] Speaker 7: Intermediate Court of Appeals, multiple Courts of Appeals that had
[26:27] Speaker 7: developed standards for operationalizing what was called a separability test.
[26:31] Speaker 7: But what's striking in that opinion is what he says, right,
[26:33] Speaker 7: which is that developing a test is not a question
[26:37] Speaker 7: of looking for the best copyright policy. That is Congress's job.
[26:42] Speaker 7: Our task is simply to interpret the text of the opinion,
[26:45] Speaker 7: and then he goes to develop a framework which has
[26:48] Speaker 7: obvious workability.
[26:49] Speaker 1: Issues with it.
[26:50] Speaker 7: But he says something very similar in another dissenting opinion.
[26:53] Speaker 7: This was a case Public Dot Resource dot Org versus
[26:56] Speaker 7: Georgia having to do with the copyright ability of annotated
[27:01] Speaker 7: codes of Georgia, and the majority opinion was written by
[27:04] Speaker 7: Chief Justice Roberts. Justice Thomas wrote the dissenting opinion in
[27:08] Speaker 7: that case, and what he did very interestingly was he
[27:11] Speaker 7: called out Chief Justice Roberts as taking the Court's opinion
[27:16] Speaker 7: in a direction beyond the appropriate judicial role of courts
[27:21] Speaker 7: in copyright. And I think what I'm seeing in the
[27:23] Speaker 7: majority opinion here is him very much hewing to that
[27:27] Speaker 7: worldview that courts need to stay in their lane, interpret
[27:30] Speaker 7: the statute, not go beyond trying to look at the
[27:35] Speaker 7: narrow areas where Congress has left some room open for
[27:40] Speaker 7: courts to develop and should not be taking the law
[27:43] Speaker 7: and taking it in new directions. And insofar as the
[27:46] Speaker 7: Court had done that before in both Sony and Groster,
[27:49] Speaker 7: his view is maybe we need to really stop there.
[27:51] Speaker 7: We do not want to go beyond that. And as
[27:54] Speaker 7: I said, my concern with that is that ignores the
[27:56] Speaker 7: fact that Congress wanted courts to go beyond that. Congress said,
[28:01] Speaker 7: this is an area that we are preserving by putting
[28:04] Speaker 7: in one word in the statute, and that preservation is
[28:07] Speaker 7: meant to indicate that this doctrine thrives, even though we're
[28:10] Speaker 7: not specifically referencing the doctrine. But he doesn't even cite
[28:13] Speaker 7: to that legislative history nor talk about it. It may
[28:16] Speaker 7: well be that he wanted to ignore it, but the
[28:18] Speaker 7: fact that he's not engaging it, I think is quite telling.
[28:20] Speaker 2: So according to Justice Thomas's opinion, what would it take
[28:26] Speaker 2: to hold an Internet service provider responsible libel for piracy
[28:33] Speaker 2: by their customers?
[28:34] Speaker 7: Yeah, so let's look at either of his prongs. So
[28:36] Speaker 7: one is if the Internet service provider is encouraging the infringement.
[28:40] Speaker 7: So if the internet service provider were to advertise it saying, hey,
[28:43] Speaker 7: we're going to look the other way if you infringe it, oh,
[28:46] Speaker 7: it would advertise its terms of service by saying, oh,
[28:49] Speaker 7: our terms of service are lenient to downloaders, we do
[28:52] Speaker 7: not kick you off if you are illegally downloading copyrighted
[28:56] Speaker 7: content or things like that. That could be interpreted as
[28:59] Speaker 7: active encouragement. But that's an extreme example, I think. The
[29:03] Speaker 7: other one, which is what comes closer to what was
[29:06] Speaker 7: an issue here, is the tailoring of the service and
[29:09] Speaker 7: whether that was capable of non infringing use.
[29:13] Speaker 1: So, in other.
[29:13] Speaker 7: Words, if the service were itself tailored in a way
[29:17] Speaker 7: that was specifically for infringing uses. And now again that
[29:21] Speaker 7: would perhaps be tailored technologically or some kind of protection
[29:25] Speaker 7: for infringing services. That might be the kind of situation
[29:28] Speaker 7: that would satisfy the second one. But as you can see,
[29:31] Speaker 7: these are so narrow and they're in some ways outlandish that,
[29:35] Speaker 7: as Justice Sotomayer points out, it's a really really low
[29:39] Speaker 7: bar for them to obtain protection. In other words, it's
[29:42] Speaker 7: a high bar for liability. Where she effectively says that
[29:46] Speaker 7: ISPs are now in some sense scott free.
[29:48] Speaker 2: There's a similar case, a music industry suit that seeks
[29:53] Speaker 2: as much as two point six billion dollars from Verizon.
[29:56] Speaker 6: Is that suit dead as well?
[29:58] Speaker 7: I think very very likely. I have to go back
[30:00] Speaker 7: and look at what the nature of the argument is,
[30:01] Speaker 7: and I do believe contributory infringement was one of them.
[30:04] Speaker 7: So it's important to recognize that this case was about
[30:07] Speaker 7: one doctrine of indirect lively, it was a contributory infringement.
[30:10] Speaker 7: So insofar as that case is claim about contributory infringement
[30:13] Speaker 7: goes and if they were relying on a heightened knowledge requirement,
[30:17] Speaker 7: I think it absolutely is they would have to recast
[30:20] Speaker 7: it in terms of one of the two available prongs
[30:22] Speaker 7: that the majority opinion recognizes. I think one additional thing
[30:25] Speaker 7: I will say June is. It is surprising but important
[30:28] Speaker 7: to note that Justice is Sodomyer and Jackson wrote this
[30:32] Speaker 7: concurring opinion because it's not always the case that you
[30:35] Speaker 7: have a concurring opinion that is so firmly on the
[30:38] Speaker 7: same side as the outcome, but writes in extra eight
[30:41] Speaker 7: or nine pages to talk about the flaw and the reasoning.
[30:44] Speaker 7: And I think that just goes to show you the
[30:45] Speaker 7: point that I'm making, which is how oversimplified the reasoning
[30:49] Speaker 7: of the majority is. I will say it to people
[30:52] Speaker 7: who have been following this area, if you just look
[30:54] Speaker 7: at the complexity of the briefing in the case, looking
[30:57] Speaker 7: at different versions of intent and the common life law
[31:00] Speaker 7: and how they had been structured, there's a sense in
[31:03] Speaker 7: which the majority basically is saying, we don't care one bit.
[31:06] Speaker 7: Our task is to look at what we have said
[31:09] Speaker 7: before narrow grounds. We can get to this in a
[31:12] Speaker 7: very very simplistic way. What are you talking about? And
[31:15] Speaker 7: I think that's the most in some ways surprising, if
[31:19] Speaker 7: not bewildering, part of the opinion.
[31:21] Speaker 2: I think Justice Thomas's opinions have bewildered some of us before.
[31:25] Speaker 2: Thanks so much for joining me tonight. That's Columbia Law
[31:29] Speaker 2: School Professor sham Balganesh. And that's it for this edition
[31:32] Speaker 2: of The Bloomberg Law Show. Remember you can always get
[31:35] Speaker 2: the latest legal news on our Bloomberg Law Podcast. You
[31:38] Speaker 2: can find them on Apple Podcasts, Spotify, and at www
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[31:47] Speaker 2: to tune into The Bloomberg Law Show every weeknight at
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[31:50] Speaker 6: Wall Street Time.
[31:52] Speaker 2: I'm June Grosso and you're listening to Bloomberg

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