In short
The episode covers three legal stories and a Supreme Court stats segment. Topic 1: Birthright citizenship. A New Hampshire federal judge issued a nationwide block on President Trump’s birthright-citizenship executive order and certified a class action for children born on/after Feb. 20, 2025 whose parents’ immigration status would make citizenship “jeopardized.” Lead attorney Cody Wafse (ACLU) argues the president can’t rewrite who counts as a citizen. Leon Fresco (Holland & Knight; former Obama Office of Immigration Litigation head) explains the class was structured to avoid Supreme Court limits on nationwide injunctions, focusing on children’s common claim (citizenship/passport). Topic 2: Campus protests and non-citizen students/faculty. A Boston trial challenges visa/crackdowns as free-speech suppression; judge William Young will weigh whether non-citizens have First Amendment rights like citizens and whether actions are pretextual. Topic 3: Lululemon v. Costco. Lululemon alleges Costco sells illegal “dupes” via design patents, trade dress, and trademarks (e.g., scuba design, Tidewater Teal), plus unfair competition. Susan Scafidi (Fordham Law; Fashion Law Institute director) says selling dupes can be illegal depending on protected IP and that Lululemon must prove valid IP and likely consumer confusion for trade dress.
Guests
Cody Wafse (ACLU lead attorney); Leon Fresco (Holland & Knight; former Obama immigration litigation head); Harold Krent (Chicago-Kent constitutional law scholar); Susan Scafidi (Fordham Law; Fashion Law Institute director).
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Chapters
Tap a time to open that second in VOIntroduction to ChatGPT Work
0:00 to 0:35
Learn about the new features of ChatGPT designed for productivity.
“Some people treat ChatGPT like some kind of smart search engine, and some use it to get work done.”
Introduction to ChatGPT Work
1:12 to 1:39
Learn about the new features of ChatGPT designed for productivity.
“So as a pizza genius, I know pizza shop orders come from, well, everywhere.”
Birthright Citizenship Legal Battle
1:50 to 2:30
Discussion on the ongoing legal battle over birthright citizenship.
“No matter how much the Trump administration may dislike it, they cannot break it, they cannot ignore it.”
ACLU Lawsuit Against Executive Order
2:30 to 3:03
Exploration of the ACLU's class action lawsuit regarding citizenship.
“Cody Wafse of the ACLU is the lead attorney on this class action lawsuit.”
Class Certification Explained
3:03 to 3:38
Explanation of how the class action lawsuit was certified.
“limited the ability of federal judges to issue nationwide injunctions.”
Judge's Ruling on Class Action
3:38 to 4:38
Details on the judge's decision regarding class certification.
“and the judge wasn't actually ordering a quote-unquote nationwide class action.”
Potential Supreme Court Implications
4:38 to 7:16
Discussion on how the Supreme Court may respond to the ruling.
“He's just looking at it from the perspective of, is this a common class with typical claims?”
Supreme Court's Approach to Executive Order
7:16 to 8:00
Insights on how the Supreme Court might approach the executive order.
“This looks like it's on a fast track to return to the Supreme Court.”
Impact of Stay Orders on Citizenship Case
8:00 to 9:24
Exploration of the implications of issue of stay orders in the case.
“They could also just issue one of those stays that's basically a one-page order that stays the district court's order.”
Federal Trial on Non-Citizen Rights
9:24 to 13:17
Discussion on the federal trial regarding non-citizen rights and free speech.
“That kind of stay would be against Supreme Court precedent, but they have overturned precedent before, so we'll see.”
Show all 29 chapters
Upcoming Supreme Court Term Stats
13:17 to 14:03
Teaser on discussing recent Supreme Court term statistics.
“Coming up next on the Bloomberg Law Show, the stats are out on the Supreme Court's recent term.”
Justice Ketanji Brown-Jackson's Dissenting Voice
15:10 to 16:56
Explore Justice Jackson's critiques of the Trump administration and her role in SCOTUS.
“and daily cash back, making Apple Card a road trip must have.”
SCOTUS Agreement Statistics
16:56 to 18:19
Discover the significance of the Supreme Court's unanimous decisions and their implications.
“Joining me is constitutional law scholar Harold Krent, a professor at the Chicago-Kent College of Law.”
Shifts in Justice Alliances
18:19 to 19:50
Analyze the changing dynamics among justices and their voting patterns.
“Obviously, those three justices do wield a lot of the power on this current court, and they will do so for the foreseeable future.”
Fourth Circuit Reversal Rates
19:50 to 21:46
Examine the Fourth Circuit's reversal rate and its implications for judicial principles.
“And I don't know if that'll have any kind of long-lasting impact or if it will change the trajectory of the court.”
The Fifth Circuit's Conservative Turn
21:46 to 23:36
Understand the Fifth Circuit's shift in cases and its implications for the Supreme Court.
“to opt their children out of lessons where LGBTQ-friendly books are read, and the case paving the way for South Carolina to exclude a Planned Parenthood affiliate from its Medicaid program.”
Supreme Court's Emergency Docket Trends
23:36 to 25:36
Learn about the Supreme Court's recent decisions on the emergency docket and their impacts.
“So it's not surprising that decisions from those two circuits disproportionately go to the Supreme Court.”
Balancing Harms in Court Decisions
25:36 to 28:00
Discuss the Supreme Court's approach to balancing harms in its decisions and the implications.
“more generally they take cases when there's a split and the court needs to resolve a split in the circuits.”
Impact of Government Restructuring on Employees
28:00 to 28:23
Discussing the balance between government cost-saving measures and employee welfare.
“good illustration of that because yes, the government wants to save money and restructure the federal government and there is a loss if they can't do that to what they consider to be the public good.”
Impact of Government Restructuring on Employees
28:32 to 29:08
Discussing the balance between government cost-saving measures and employee welfare.
“Some people treat ChatGPT like some kind of smart search engine, and some use it to get work done.”
Impact of Government Restructuring on Employees
30:14 to 31:04
Discussing the balance between government cost-saving measures and employee welfare.
“With thousands of customizable options, 4imprint makes it easy to find what fits your brand and your budget.”
Lululemon's Legal Action Against Costco
31:04 to 31:34
Exploring Lululemon's lawsuit against Costco for design copying.
“Explore the possibilities at 4imprint.com.”
Evolution of Fashion Terminology
31:34 to 31:56
Discussing how the terminology around dupes and knockoffs has changed.
“My guest is Susan Scafidi, a professor at Fordham Law School and director of the Fashion Law Institute.”
Legal Considerations for Selling Dupes
31:56 to 33:59
The legality of selling dupes and the complexities involved.
“And I think, honestly, part of the story of the public accepting them more is they sound cute and adorable now.”
Lululemon's Claims Against Costco Products
33:59 to 35:46
Detailing Lululemon's various claims against Costco for trademark infringements.
“And then they're throwing in some state law unfair competition claims.”
Strategic Choices in Brand Protection
35:46 to 37:34
How Lululemon chooses to focus its legal battles on specific retailers like Costco.
“But if they can do that, then they actually have to be able to show that the Costco items are close enough to the Lululemon items that they actually infringe.”
The Challenge of Proving Consumer Confusion
37:34 to 39:43
Discussing the difficulties Lululemon faces in proving consumer confusion with dupes.
“And of course, Lululemon has a history of bringing other lawsuits in the past.”
Shifts in Consumer Perception of Dupes
39:43 to 41:54
How consumer attitudes towards dupes have evolved over time.
“You know, what's interesting in that regard, June, is that Lululemon actually has a trademark application pending for the phrase Lululemon dupe in the context of retail stores.”
Fashion Law and Consumer Perception
42:00 to 46:16
Explore how consumer perceptions of knockoffs have shifted and their implications for fashion law.
“Then they finally acknowledged the problem.”
Transcript
Automatic transcript. May contain errors.0:00Some people treat ChatGPT like some kind of smart search engine, and some use it to get work done. ChatGPT Work is a new way of working in ChatGPT that can take action across your apps and files, stay with a project for hours if needed, and turn a goal into finished work. It's designed to help you move from a chaotic starting point to a reviewable first version. So all the source materials, briefs, and scattered information that you have to grind through to turn into something useful can just become something useful. Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChatGPT.com by selecting Work Mode, available on Plus and Pro plans.
0:42Healthcare doesn't always work great. If you've ever waited on a refill or couldn't schedule an appointment, you get it. That's the kind of stuff Optum is changing. They're using data and technology to integrate patient care, pharmacy, and everything else. So healthcare is connected, not complicated. What's that look like? Cheaper prescriptions that are easier to get and care that looks at the whole person. How you need it. Optum is helping make healthcare work as one for everyone. Learn more at business.optum.com. So as a pizza genius, I know pizza shop orders come from, well, everywhere. With Genius by Global Payments, online orders actually sink straight into your kitchen.
1:23It's as simple as pie. And with digital menu boards, your specials, your prices, your brand, always front and center. It's one system, ready for game night crowds. Any night of the week, really. Big league reliability for any business. That's genius.
1:44This is Bloomberg Law with June Grosso from Bloomberg Radio. No matter how much the Trump administration may dislike it, they cannot break it, they cannot ignore it. It is the right of every child born in this country. The legal battle over President Trump's executive order on birthright citizenship went all the way up to the Supreme Court and is now back at the district courts where it started. And on Thursday, a federal judge in New Hampshire placed a new nationwide block on the order and certified a class action lawsuit against the administration on behalf of all children whose automatic citizenship could be jeopardized by the president's order.
2:30Cody Wafse of the ACLU is the lead attorney on this class action lawsuit. The idea that the president can rewrite who is a citizen and decide who gets to count as an American is extremely dangerous and deeply, deeply contrary to our national values. This case may be on a fast track back to the Supreme Court. Joining me is Leon Fresco, a partner at Holland and Knight and the former head of the Office of Immigration Litigation in the Obama administration. Liam, at the end of June, the Supreme Court in the birthright citizenship case limited the ability of federal judges to issue nationwide injunctions.
3:12But it left open the path to reach the same result with a class action lawsuit. Explain how this lawsuit did just that. So this was the first of many cases where basically litigates raced to the courthouse and tried to get a class certified that would encompass the entire nation. And the judge here actually did certify a class. The judge certified a class of all current and future persons who are born on or after February 20th, 2025, where the person's mother was unlawfully present in the United States, and the person's father was not a United States citizen or lawful permanent resident, and then vice versa, same thing on the other side.
3:57So the government objected to this and said, well, the Supreme Court stated that they didn't want class certification to be used as an end run around the nationwide injunction issue, to which this court said there's nationwide class actions all the time for all kinds of issues. and the judge wasn't actually ordering a quote-unquote nationwide class action. The judge was just saying that he was ordering a class action of people who were born on or after February 20, 2025 that were subject to this birthright citizenship executive order. So if those people are in one state or another, it's not his problem.
4:38He's just looking at it from the perspective of, is this a common class with typical claims? And so the judge certified that class, Interestingly, the judge did not include the parents, even though the litigants wanted to include the parents in the class, because the judge said, look, the problem with the parents is each parent is going to suffer a different kind of harm from their kids not receiving citizenship. And so that's not going to be common to a class. So the judge was actually very precise and thorough there. And the judge said the only thing that's common that you can form a class is you get the passport or not, essentially.
5:15So we're kind of back to where we were before the Supreme Court's decision. And the judge has stayed the order for seven days, allowing for an appeal, allowing the First Circuit to be able to weigh in. I'm sure the First Circuit will approve of what this district court judge did. And then the question will be, what, if anything, does the Supreme Court do about this? In issuing the injunction, Judge Joseph LaPlante, who, by the way, is a George W. Bush appointee, said it wasn't even a close call. Do you think his preliminary injunction and class certification will pass muster at the Supreme Court?
5:52It's going to be a very interesting test from the standpoint of does the Supreme Court really want to crack down on anything nationwide and will simply say, look, you have to just have class actions that are not nationwide either. But that's going to be very strange because, for instance, let's say there's some product that's not working and causing the same damage to every single person. Is there really supposed to be 11 different class actions in different circuits where they say, you know, everybody whose mechanism exploded in the first circuit and everybody whose mechanism exploded in the second circuit?
6:32That doesn't seem like it would make a lot of sense. So why a class action with regard to people affected by birth right citizenship should be constrained to a particular circuit or a particular state doesn't seem to be very compatible here. There's that and the fact that the judge really took pains to not just willy-nilly certify a class, but go through the fact that the parents didn't have these common and typical claims, but the kids did have this one typical claim, which is they want citizenship and they are unable to get it, seems to me very strong. And I don't know how the Supreme Court would say that you can't certify a class that would then operate nationally in a case like this.
7:14But we'll have to wait and see. This looks like it's on a fast track to return to the Supreme Court. And during the oral arguments in the case, several of the justices indicated that they wanted to rule quickly on the actual legality of the executive order. Justice Neil Gorsuch said, how do we get to the merits fast? Obviously, they did not do that. But on its return to the Supreme Court, do you think the justices will actually decide the merits of Trump's executive order on birthright citizenship? They could say that we will preserve the injunction and we will take up very fast the merits of this first thing in October when we come back.
7:59So they could do that. They could also just issue one of those stays that's basically a one-page order that stays the district court's order. And if they do that, then what that would mean is that the birthright citizenship executive order will actually go into effect while the case is working its way as a matter of the full merit through a final judgment in the district court through the First Circuit and back up to the Supreme Court. because there have already been two of these stay orders with respect to eliminating temporary protected status and parole and being able to deport people to any country you want to be able to deport them to other than their home country that were decided with these very brief stays and not really the merit discussions of the ramifications of making those decisions.
8:52And I saw that former Attorney General Alberto Gonzalez said that he didn't think that there were the votes right now to say that the birthright citizenship executive order is unconstitutional, and that's why the court punted the issue. So if he's right, then they might issue this stay, which would be quite an upheaval to figure out then what happens to these individuals during the time period that this case is working its way up to the Supreme Court. That kind of stay would be against Supreme Court precedent, but they have overturned precedent before, so we'll see. Leanne, I want to turn now to this federal trial in Boston where several university associations are challenging the Trump administration's crackdown on non-citizen students and faculty who participated in pro-Palestinian demonstrations.
9:46They argue it's suppressing free speech on campuses. The plaintiffs have singled out several activists by name, including Columbia University graduate student Mamou Khalil, who was the first target of this crackdown and spent 104 days in federal immigration detention before being released. They tried to portray me as a violent person. They tried to portray me as a terrorist, as some lunatic, but not presenting any evidence, not presenting any shred of credibility to their claims. This is the first case of its kind to actually go to trial, where the judge isn't just looking at what happened to specific individuals, but rather is looking at the policy.
10:36Now, the Trump administration denies that it has any such policy and says that it's enforcing the immigration laws to protect national security. The trial judge William Young has said the trial is likely to center on the question of whether non-citizens legally in the country have the same free speech rights as citizens. Is there case law on that? Well, there actually is case law on that, and that case law is pretty bad. There's a case called Harris-The-Obbis v. Shaughnessy from the 1950s, and it dealt with actual lawful permanent residents of the United States, so not non-immigrant visa holders like student visa or visitor visa holders.
11:16These were actual lawful permanent residents. And the issue was there was a statute that said not just current communists, but even former members of the Communist Party could be deported. And this was in the height of the Cold War. And these folks argued, wait a second, I'm not even in the Communist Party anymore. I've renounced my affiliation with the Communist Party. And even if I was a communist, what difference would it make if I wasn't actually violently seeking to overthrow the government? Why would I be deported for my First Amendment values? And that court in 1952 said, no, in these statutes involving non-citizens, the First Amendment does not overcome the security concerns and the legitimate security concerns of the government, even if the person is a lawful permanent resident.
12:06So if the Supreme Court actually upholds that doctrine here again in 2025, then it will remain the same, which is that when you're not a citizen of the United States, your First Amendment rights are not superior to the rights of the government to be able to deport you for conduct that they feel is deportable conduct. We shall see. Is the judge also going to consider whether the Secretary of State is revoking these visas in good faith because of concerns about foreign policy and national security? Yes. First, what First Amendment rights do the non-citizens have? But then number two, the judge may say, well, fine, that's all fine and dandy.
12:47But if the adjudications here are pretextual and I can find that they're completely pretextual, meaning there actually is no threat to foreign policy of any kind, I can still halt these deportations. The trial will continue next week. And in yet another lawsuit, Mahmoud Khalil has filed a$20 million claim against the Trump administration for false imprisonment. So many immigration cases. Thanks so much, Leon. That's Leon Fresco of Holland and Knight. Coming up next on the Bloomberg Law Show, the stats are out on the Supreme Court's recent term. I'm June Grosso, and you're listening to Bloomberg.
13:27Some people treat ChatGPT like some kind of smart search engine, and some use it to get work done. ChatGPT Work is a new way of working in ChatGPT that can take action across your apps and files, stay with a project for hours if needed, and turn a goal into finished work. It's designed to help you move from a chaotic starting point to a reviewable first version. So all the source materials, briefs, and scattered information that you have to grind through to turn into something useful can just become something useful. Put ChachiPT to work on your most ambitious ideas and projects. Get started at ChachiPT.com by selecting Work Mode, available on Plus and Pro plans.
14:10Let's talk about healthcare for a second. It doesn't always work the way people expect it to. If you've ever waited on a prescription refill or had a hard time getting the care you needed, you know the feeling. The system should just work better for everyone. That's exactly what the people at Optum are trying to do every day. They're a health care company linking patient care and pharmacy services and using data and technology to drive the whole system so care is connected, not complicated, for patients and providers. Things like making it easier to get care that looks at the whole person, from primary care doctors to mental health support and even in-home care, and then using technology to make sure they all work together.
14:48Technology designed to help doctors spend less time on busy work and more time with their patients. And those prescriptions? Optum is working to bring costs down, save patients money, and make it easier to get refills. Little by little, Optum is helping make healthcare work as one for everyone. Head to business.optum.com to see how.
15:35and daily cash back, making Apple Card a road trip must have. Apply for Apple Card now and use in minutes with Apple Pay. Subject to credit approval, Apple Card is issued by Goldman Sachs Bank USA, Salt Lake City branch. Terms and more at applecard.com. Justice Ketanji Brown-Jackson has been a vocal critic of the Trump administration. This term, she's written strong dissents, bemoaning Trump's attempts to expand presidential authority, raising concerns about a lack of willingness to adhere to the rule of law and accusing her conservative colleagues of running the risk of eroding public trust in the impartiality of judicial decisions.
16:15That viewpoint was apparent as she answered questions at an Indianapolis Bar Association on Thursday. What keeps you up at night? I would say the state of our democracy.
16:35I would say that I am really very interested in getting people to focus and to invest and to pay attention to what is happening in our country and in our government. So it comes as no surprise that Jackson was the justice most often in dissent this term. Joining me is constitutional law scholar Harold Krent, a professor at the Chicago-Kent College of Law. How SCOTUS blog's stats of the term have come out, and 42 percent of the Supreme Court's decisions were unanimous. And that's something that Chief Justice John Roberts in particular likes to point to in order to show how much the justices are in agreement.
17:19But does that agreement really matter when, in all the controversial cases involving hot-button issues like LGBTQ rights, religious rights, those all fall down ideological lines six to three? Well, the union in me, I think, is a reminder to us that it's still a court and that members of the court can agree with each other in questions in terms of, you know, error review, in terms of what the courts of appeals make a mistake, which is in terms of reconciling a split in the circuits. And I think it's a good reminder that the court is a court, but that shouldn't obscure the fact that, as you said, in socially divisive cases, there's almost inevitably a 6-3 split with some changes around the margins.
18:04Roberts was in the majority 95 percent of the time, the most of any of the justices, followed by Brett Kavanaugh at 86 percent and Amy Coney Barrett at 81 percent. Do any of those numbers surprise you, just to tell you that the middle of the court is ruling? No, it doesn't surprise me at all. Obviously, those three justices do wield a lot of the power on this current court, and they will do so for the foreseeable future. Obviously, there's some changes around the margin. I mean, sometimes Justice Gorsuch sides with the minority, same thing with Justice Barrett. And I think we've even seen Justice Kagan occasionally trying to side with the more conservative wing of the court in order to, I think, in her view, probably try to establish more of a middle ground.
18:48Yeah. What's gotten a lot of tension in the legal press was that Justice Kagan came in fourth. She was in the majority of 70 percent of the term's non-unanimous outcomes. There was a 13 percent drop in the agreement between Kagan and Justice Sonia Sotomayor. And the agreements between Kagan and conservative justices, up 22 points with Justice Alito and up 29 points with Justice Thomas. Some people say, oh, well, she's getting more conservative. But is that really the case? No, I think she tries to find common ground when she can. And maybe that can be criticized, is that she's sort of tempering her own views to that of trying to help the institution gain a middle ground.
19:32But I think it is perhaps a positive institutional development, as she is, at least in my view, in some of her decisions, trying to establish that there is common ground amongst the so-called conservative and so-called liberal justices. And not in all cases, but in some where she can. And I don't know if that'll have any kind of long-lasting impact or if it will change the trajectory of the court. But I think that's her goal. Justice Ketanji Brown-Jackson had the honor of being in the majority, the least of all the justices, at 72 percent. And she's written some biting dissents. She is carving out her role as being the most progressive justice and the one least willing to compromise with the rest of the court.
20:17Voices like that are important to hear, but they're not necessarily positive ways to galvanize a majority of the court. My favorite part of the stat pack is seeing which circuits get reversed the most. And this year, the fourth circuit went from being the best to the worst, or at least one of the worst. From 2007 through 2023, it had the lowest rate of being reversed, 62.1%. But this term, it jumped to a 100 % reversal rate, eight out of eight cases overturned. Any idea why? I think a little bit is just a blip. These variances occur from time to time. But I also think that given the location of Fourth Circuit, they are centered where so many federal government employees are, centered where there's a lot of grants in terms of HHS offices, Social Security Administration, and so forth, that there's a lot of current litigation against the Trump administration, which is just centered geographically in that district.
21:16So it's not surprising that there's a higher percentage of cases in the Fourth Circuit that are reaching the Supreme Court. And of course, it's a little bit of a blip, but it's understandable that there's going to be more cases that the Supreme Court's going to resolve against the Fourth Circuit. Fourth Circuit is relatively ideologically balanced, so it's not considered to be either a very liberal or a very conservative court. But nonetheless, there's a lot of these cases that have arisen there. And so we're seeing tension between the Fourth Circuit and the Supreme Court. The reversals of the Fourth Circuit included some of the blockbuster cases of the term, like the birthright citizenship case where the court made it harder for judges to issue nationwide injunctions, the case where the court allowed religious parents to opt their children out of lessons where LGBTQ-friendly books are read, and the case paving the way for South Carolina to exclude a Planned Parenthood affiliate from its Medicaid program.
22:13All of those cases were six to three with the liberals dissenting. So I'm wondering if the Fourth Circuit is more in line with the liberals on the court than the conservatives on the court. Is there a certain partisanship there? I would frame it that the Fourth Circuit is in line with traditional conservative judicial principles and that this court has veered from those traditional conservative judicial principles, which is why we're seeing the gap. I think that the Fourth Circuit is cautious and it's trying to adhere to the sort of judicial principles or judicial customs, perspectives, the way they've understood them for a generation.
22:54And that's running against the current Supreme Court's position, which seems to be far more solicitous of both judicial power as well as presidential power. It used to be that the Ninth Circuit had the most cases reviewed by the Supreme Court. But now it's the Fifth Circuit, the most conservative circuit. It had 13 cases taken up by the court this term compared to four from the Ninth Circuit. And the Fifth Circuit was reversed in 10 of the 13 cases. So has it taken the place of the Ninth Circuit as most reversed? Well, the Fifth Circuit is known as the most conservative but an activist conservative court.
23:35The Ninth Circuit has been historically known as the most activist of progressive or liberal courts. So it's not surprising that decisions from those two circuits disproportionately go to the Supreme Court. And indeed, we're seeing an interesting switch now in the Fifth Circuit because the Fifth Circuit led the charge against the Biden administration in some very surprising cases, including two delegation cases in which the Supreme Court struck them down this term. And the question is, will they be as anti-administration when it comes time to review that which the Trump administration is doing?
24:09and early records are mixed. So that's something to look to. I think that some of the ardor of the Fifth Circuit in terms of being anti-administration will be dampened now with the switch politically at the top of the helm. Has the Fifth Circuit been trying to push the envelope, so to speak, and be more aggressive in terms of conservative policies or jurisprudence? Well, the Fifth Circuit has been at the cusp in terms of pushing against administrative power, power of the agencies to rule. I mean, for instance, in the telecommunications case, they had sought to curb the power of the Federal Communications Commission to impose attacks on telecoms.
24:51And that, of course, was upheld. I mean, the Biden administration pursued that plan, but so did the Trump administration. And so the question is, will the Fifth Circuit continue its sort of skepticism about administrative power, given that President Trump is now atop of the executive branch. So time will tell whether they'll continue. But clearly, in case after case, particularly during the Biden administration, they challenged the legitimacy of administrative agencies, you know, in terms of the vaccine policies, in terms of student loans, and more. When the justices take cases, they usually take them to reverse, don't they?
25:31I mean, 44 out of the 59 cases they took this term were reversed. That's generally the case, but obviously more generally they take cases when there's a split and the court needs to resolve a split in the circuits. So sometimes it's just a matter of which of the two cases they take because one case goes one way and one case goes the other. So sometimes those figures are a tad misleading. A lot of the action this term has been on the shadow or emergency docket where the Trump administration has repeatedly been asking the Supreme Court to lift lower court orders while the cases proceed. Just this week, the court gave Trump the OK to move ahead with mass layoffs of federal workers.
26:13Is this just part of the trend of the court on the emergency docket, lifting lower court orders that blocked the Trump agenda? Well, I'm of two minds about the most recent decision. I mean, what the court did is removed an injunction on the administration from trying to carry out the RIF. But it did not say that the RIF was appropriate or consistent with congressional direction. And I think that was made clear as well because of the fact that Justice Kagan went along with the majority, allowing the administration's action to proceed. And the executive order says that the RIF or the reduction of force must proceed according to applicable law.
26:53And applicable law, of course, is Congress's very detailed instructions for how agencies should proceed. And I think the reason why Justice Kakin did join the majority was because we have yet to see whether the administration will conform to the congressional blueprint for carrying out the reduction force or not. And so, yes, the court is giving the benefit of the doubt to the administration. And yes, many would think that the administration doesn't deserve the benefit of the doubt. But I think what the court's action is saying, well, let's wait until there's a merits decision as to whether the applicable congressional rules were followed before we actually tell the administration they can't move forward in that way.
27:35The administration, they can't move forward in that way. Well, all along, the court has been letting the Trump administration go ahead for now. But the problem is that getting to the merits of these cases takes so long. and by that time the damage is done. People have been fired. Yeah, the court has been very cavalier, if you will, in terms of balancing the harms. I think the reduction in force case is a good illustration of that because yes, the government wants to save money and restructure the federal government and there is a loss if they can't do that to what they consider to be the public good.
Read the full transcript
28:11But on the other hand, the dislocation and financial deprivations that these employees may face should be counted perhaps even more greatly. And the court's not doing that. Thanks for joining me, Hal. That's Professor Harold Krent of the Chicago-Kent College of Law. Coming up next, why Lululemon is suing Costco. I'm June Grosso and you're listening to Bloomberg. Some people treat ChatGPT like some kind of smart search engine, and some use it to get work done. ChatGPT work is a new way of working in ChatGPT that can take action across your apps and files, stay with a project for hours if needed, and turn a goal into finished work.
28:49It's designed to help you move from a chaotic starting point to a reviewable first version. So all the source materials, briefs, and scattered information that you have to grind through to turn into something useful can just become something useful. Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChatGPT.com by selecting Work Mode, available on Plus and Pro plans. Let's talk about healthcare for a second. It doesn't always work the way people expect it to. If you've ever waited on a prescription refill or had a hard time getting the care you needed, you know the feeling.
29:24The system should just work better for everyone. That's exactly what the people at Optum are trying to do every day. They're a healthcare company linking patient care and pharmacy services and using data and technology to drive the whole system so care is connected, not complicated, for patients and providers. Things like making it easier to get care that looks at the whole person, from primary care doctors to mental health support and even in-home care, and then using technology to make sure they all work together. Technology designed to help doctors spend less time on busy work and more time with their patients.
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31:27Well, Lululemon is making a federal case out of it, taking Costco to court for copying their designs. My guest is Susan Scafidi, a professor at Fordham Law School and director of the Fashion Law Institute. Susan, a very basic question to start off with. Are dupes what we used to call knockoffs? We have definitely seen an evolution in nomenclature, right? So it used to be counterfeits and knockoffs and then replicas and then reps and now dupes. And I think, honestly, part of the story of the public accepting them more is they sound cute and adorable now. You know, you could have a pet dupe. You cannot have a pet counterfeit.
32:06Well, also social media, right, is blasting out where to find these. Precisely. Dupes are being sold all over. Is selling a dupe illegal? Well, it depends, right? Dupe, like knockoff before it, is a broad ambiguous term. When they are very exact and in those cases in which the IP is protected, yes, that is illegal. But if we're getting a little further away from the original or if the original itself is not protected under U.S. law, then no, it is not. So we do indeed have a lot of gray area here and not a chic little charcoal or dove, something a lot more sinister from the brand perspective. Lululemon, of course, pioneered yoga wear.
32:48Tell us what it's accusing Costco of. So Lululemon is claiming that the things that have been copied and are being sold at Costco do, in fact, cross the line into illegal. And what's so interesting about this case, June, is that they have gone through the entire list of potential IP claims and are basically throwing everything except copyright at Costco. They're looking at patents, specifically design patents, because they do have a design patent on their scuba design for hoodies. They are looking at trade dress protection, that subset of trademark that focuses on, among other things, product design.
33:29So when a product design itself is so iconic, like the red soles on LeBetons or the Hermes Birkins, the design is so iconic that it serves as its own source indicator that can be protected. So they're claiming that kind of protection in the case of their define jackets. Then they're claiming unregistered protection for men's trousers. They're claiming word marks in the case of scuba and a word mark for the color Tidewater Teal that they say is proprietary to them. And then they're throwing in some state law unfair competition claims. So they are really going across the board looking at Costco in-house brands like Kirkland, but also other brands being sold at Costco like Danskin and Jockey in this case.
34:16So they are really taking a very broad brush approach to the items that Costco is selling that Lululemon believes are protected intellectual property. Costco is known for that Kirkland brand, and people often say that their products are high quality but sold for much less than name brand products. What kind of a price differential are we talking about with Lululemon apparel? Well, in the case of the men's trousers, they were saying$8 versus$118, so quite a bit less, which has actually been consistent with the prices of knockoffs over the years. We always say somewhere between 5 % and 20 % when we're looking at knockoffs across the board.
34:56That is quite a big price difference. Susan, what would Lululemon have to prove if this case went to trial? In these cases, the first step is going to have to be convincing the jury that the claims that Lululemon is making are actually valid with regard to what Lululemon owns. Now, they've done their homework. They have warmed up, stretched, and prepared for this particular case by registering some of those marks, trademarks and design patents. So in the case of registration, there's already an assumption, but it's an assumption that can be overturned. So Lululemon is going to have to be able to prove that these particular marks are indeed source indicators, or in the case of design patents, that they are indeed new, these designs.
35:39With regard to the things that are not registered, they have a somewhat higher bar to pass in order to convince the jury that they deserve protection. But if they can do that, then they actually have to be able to show that the Costco items are close enough to the Lululemon items that they actually infringe. In other words, it's a two-step process. Is the IP valid? And if so, are the Costco items infringing? And they do need to persuade a jury if it's a jury claim. What about the fact that, you know, there's that hashtag Lululemon dupes, and apparently some dupes are being sold on Amazon, Walmart, Target, and elsewhere.
36:16So why is Lululemon focusing on suing Costco? And, you know, will Costco be able to say, but look, They're selling these elsewhere. Well, Costco will be able to do that. But, of course, when you're engaged in brand protection, you need to make choices. No company, not even the very largest, wealthiest ones, have unlimited legal budgets, much to the sadness of their lawyers. So they make choices. And I think choosing Costco is smart in some ways. It's one-stop shopping. They're suing not only Costco over its house brand, but they're suing over some of the other brands that Costco carries. and they are suing an entity that is highly recognizable and trusted by the American public.
36:57So it's going to get attention when they go after Costco, much the way it got attention when Hermes said, yes, we know there are lots of counterfeit Birkins out there, but we're going after the work in the Walmart Birkins. So it's that kind of press release aspect to a complaint is relevant here. They want the attention on this case. They may not win the hearts and minds of consumers. They may not change this social tide toward the acceptance of dupes as something to be celebrated rather than hidden. But they will be able to convince some people that these dupes are not a good thing. And they will also be able to send a warning to vendors across the board that Lululemon is not to be messed with.
37:40And of course, Lululemon has a history of bringing other lawsuits in the past. So this has been a long-term strategy for them to try to become a harder target, if you will. And what happened with the copy of the Birkin bag? Well, they're no longer available for sale at Walmart. So let's assume that one has settled, which is, I think, the likelihood here is that we will get a settlement. It would be, from a legal perspective, wonderful to see what a jury thinks and then what an appellate court thinks about how close is too close in these cases. But more than likely, we will get a settlement. If this was in Europe, of course, this would be a very short complaint.
38:15We would simply have that other category of design protection. So we wouldn't be looking separately at trademarks and patents and asking whether the law applies in these cases. We would go straight to design protection and be done with it. Just suppose it does get to trial. Is it an uphill battle for Lululemon to convince a jury? I think it's going to vary amongst the different styles claimed. I think for the registered trade dress and registered design patents, that's going to be an easier sell. For the claims of unregistered protection, like for the men's ABC trousers and the Tidewater teal color, it's going to be a little more difficult, but not impossible.
38:55And does Lululemon have to prove that consumers are confused by the dupes? With regard to the trademark-related claims, so the trade dress claims, they do have to prove likelihood of consumer confusion. Which is why something like hashtag Lululemon dupe is maybe not helpful to Lululemon. It certainly fuels the fire to go after these dupes. But it's also saying that consumers may not be confused, at least at point of sale. Now, there's always post-sale confusion. There's the concern that consumers will see others wearing the dupes and think that they're Lululemon. So there's that form of consumer confusion that might be easier to prove in the era of hashtag Lululemon dupes.
39:39But it's problematic if consumers are not actually confused. You know, what's interesting in that regard, June, is that Lululemon actually has a trademark application pending for the phrase Lululemon dupe in the context of retail stores. They haven't said exactly how they'll use it, and they don't have to do that yet. And the trademark has not yet issued. They filed the application back in December, but they're obviously thinking about playing in this field in another way as well. You say most of these cases are settled, but is a lot of money spent just reaching the point of settlement? What are legal fees like?
40:16Oh, of course. Just developing this complaint with a dozen different claims has taken a lot of time. And surely there has been some conversation between the companies in advance of this. So this has already been an expensive process. It may be worthwhile because, again, it is a legal process and a public relations process. You know, if it's one thing that a company that makes yoga pants is familiar with, it's inversions. And I think they would really like to be able to invert the public's perception of dupes. That's really the goal here from a public perspective, much the way that just, as you know, a few years ago, Lululemon set up a dupe swap in a mall in Los Angeles and said, look, bring us your dupes, any brand.
41:00We will give you genuine Align Lululemon trousers. They are so great that you'll be able to tell the difference immediately and you will become Lululemon fans. So they are playing both a legal game and an extra legal game as part of their brand protection strategy. And it's something that they've done for years. So if they can start to, again, invert the perception of dupes, maybe restore them to their former Sub Rosa underground, slightly shameful status, or at the very least, convince people that Lululemon products are of higher quality so that they can recapture some of the folks who would have instead gone to Costco or elsewhere, that's going to be a win without ever getting as far as a jury.
41:44I remember when if you had a knockoff, you hid the fact that it was a knockoff. You tried to pass it off as the real thing. Nowadays, they don't care. Exactly. There has been a huge shift in perception over 15 years. It used to be that brands didn't want to talk about counterfeits or knockoffs. Then they finally acknowledged the problem. But consumers have also gone from hiding the fact that their items were knockoffs or trying to pass them off as the real thing to bragging about them on social media. And that is actually of almost greater concern. The law hasn't changed a lot, but consumer perception has changed.
42:23So the law still is not great in the U.S. with regard to protecting fashion, but there are these bits and pieces of law that can protect fashion a little bit. But the perception, the social norms have changed dramatically. You know, Jean, in my classes, I tell my students that when we're dealing with law, we're dealing with it at several levels. We think about black letter law when we go to law school, things that come out of legislatures and courts. But then there's also rules, things like, in the fashion context, office dress codes or school dress codes. But at the most basic, simple, diffuse level, there are social norms.
42:59Sometimes those social norms are subsequently written into law, what's decent or indecent, for example. But social norms are really powerful in terms of controlling how we dress, how we perceive what we dress, how we perceive what other people dress. And we've seen a shift in social norms here. We haven't seen a shift into law. We've seen a shift in the norms so that it went from being knockoffs are bad and shameful and cheap and to be hidden to knockoffs are to be celebrated. And that's part of what Lululemon is addressing in this case. In December, Benefit lost a lawsuit to ELF over their Lash and Roll mascara, which is$6 compared to Benefit's$29 mascara.
43:44Does that have any relevance to this case? It's another trade dress lawsuit because the actual word ELF was right on there. There was an undermining of the question of likelihood of consumer confusion. So here, well, to back up, when we're dealing with counterfeits, when we're dealing with substantially identical copies of trademarks that we can identify, so if we were dealing with copies of the word mark Lululemon, or if we were dealing with copies of its little symbol that looks a little bit like an omega, right, that would be easy. There's no question of whether or not consumers are confused.
44:19We just assume that if we're dealing with those substantially identical copies. When we move into the realm of trade dress, and we are talking about infringement rather than counterfeiting, so we're dealing with things that are not necessarily quite as identical, but merely confuse the consumer, then yes, that likelihood of consumer confusion does have to be proven by Lululemon in this case, in other words, by the plaintiff. And that's a little bit tougher. It's a little bit of extra work that has to be done. It's why this case is interesting. It's why Lululemon is going for full-on four-way stretch in this regard.
44:58They're not going for easy things. They're not going for counterfeits that would not probably be sold at Costco. The copies of the signs, the symbols that we all recognize easily as trademarks, they're going for product configuration trade dress, right? So there are two kinds of trade dress. There's product packaging, so the shape of a Coke bottle or the shape of some shampoo bottles. And then there's the product design. And that's where fashion has to live because we get so little protection on the three-dimensional aspects of a garment generally. So if we are going to claim trademark beyond the label, beyond the logo, we're looking at product configuration trade dress.
45:39We are going to have to show that, first of all, consumers recognize that trade dress as a source indicator. It's not just a great-looking warm-up jacket. It's one that looks like Lululemon, one that we recognize as Lululemon just on the basis of curved seams, right? So we have to be able to prove that consumers see what Lululemon says consumers see. And then we have to show that those consumers are confused when they see a knockoff. And it's not easy. It's not impossible. but it is definitely going to be a battle. Or as you say, perhaps a settlement. Always great to have you on, Susan. Thanks so much.
46:18That's Professor Susan Scafidi of Fordham Law School. And that's it for this edition of the Bloomberg Law Show. Remember, you can always get the latest legal news on our Bloomberg Law Podcast. You can find them on Apple Podcasts, Spotify, and at www.bloomberg.com slash podcast slash law. And remember to tune into the Bloomberg Law Show every weeknight at 10 p.m. Wall Street time. I'm June Grosso, and you're listening to Bloomberg.
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From the publisher
June Grasso speaks to Leon Fresco, a partner at Holland & Knight, Harold Krent, a professor at the Chicago-Kent College of Law and Susan Scafidi, a professor at Fordham Law School, about the top legal stories of the week.
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