Weekend Law: H-1B Visa Fee Struck Down & How Lawyers Use AI

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2:00Justin Daniels:And analysis of important legal issues, cases, and headlines. The trial judge may well want to hold a hearing. They have never said this case should never have been brought in the first place. Bloomberg Law with June Grosso from Bloomberg Radio.

2:17Welcome to the weekend edition of Bloomberg Law. I'm Amy Morris, in for June Grosso. June is off this week. Coming up this hour, how Amazon is using a special program to decide the fate of sellers with very little oversight. We'll also take a look at how lawyers and others in the legal system are using and sometimes abusing artificial intelligence. All of that on the way on Bloomberg Law. But first, we start with a roundup of the latest headlines in immigration law. Earlier this week, a federal judge struck down President Trump's$100 ,000 fee for H-1B visas. They're often used by large tech companies to bring in skilled workers from overseas.

2:56Joining us now is Leon Fresco, a partner at Holland and Knight. Leon, thank you for taking the time with us today. We want to start with the H-1B visas. The Trump administration has already said that it will appeal that ruling. So what happens now? Well, what happens now is that the case will then now go to the First Circuit Court of Appeals. There's also a case that's happening where we're waiting for a decision from the D.C. Circuit. And this is a decision that was entered into in the District Court of Massachusetts, where there was a lawsuit filed by the state of California and 20 other states saying that there was a$100 ,000 fee that the Trump administration had placed into the H-1B visa program.

3:43The H-1B visa program is a program where employers want to hire skilled workers from abroad. And there's a two-pronged test. The test is, first of all, is the occupation one that requires a specific university or master's or PhD degree in order to perform that job? For instance, for a lawyer, that requires a law degree in order to do that job. And then the second prong of the test is, does the person have the degree that's necessary in order to perform that job? And so what the Trump administration did is that they used their same authority that they have under the travel ban, which is an authority to ban people from entering the United States, meaning people from abroad.

4:28And what they said was, let's see if we can use this not to ban people who want to come in from abroad on H-1B, but instead say they can only come in if they pay a$100 ,000 fee. So it'd be like a quasi ban. So it's a ban unless you do something, which is in this case, pay a $100 ,000 fee. And so what the 20 states did is they used the Supreme Court precedent that happened in the tariffs litigation, where they said that when the president was imposing these tariffs pursuant to the statutory authority that the president claimed he had. He was actually, in fact, levying a tax that only the Congress could actually levy.

5:09The president couldn't actually sort of create a new tariff out of nowhere. And so they said that's what he was doing here. And the district court of Massachusetts agreed. The district court said, yes, in fact, this$100 ,000 fee isn't a ban. The ban could be done because the ban has been approved by the Supreme Court in the context of the original 2017 travel ban that was in the Trump versus Hawaii case. But instead, ban is OK, but a$100 ,000 fee is not OK because that's actually a tax. And so the tax couldn't be done unless Congress passed it. OK, there are a lot of immigration related cases from the Trump administration.

5:52many policies that the administration is putting forth that are facing court time. One judge has blocked a series of those policies. They were adopted after the shooting of National Guard members in D.C. last year. Those policies were about holds on work permits and asylum grants, keeping people from being able to work or at least those permits and grants being stuck in limbo interminably until a judge ruled that that would be illegal as well. Are you finding that there are so many cases and so many things coming up because the Trump administration seems to keep pushing stuff forward that keep facing challenges in court?

6:33That is correct. Every week there is a new administrative effort, whether it be a regulation or a policy memo or a proclamation under the INA Section 212F travel ban statute or a pause. So in that case, this was a combination of things. So first, after that shooting near the White House, there was a ban that was issued for over 39 countries for their individuals to come into the United States. But then what the administration tried to do is to say, fine, we know we have the authority to ban people from those 39 countries from entering the United States, again, for the same reason we discussed earlier, which was the original 2017 Trump versus Hawaii travel ban U.S.

7:20Supreme Court decision. Let's see if what we can also do is to then ban the internal processing from inside the United States for people with those cases. And so what was happening is, or it continues to happen because this decision hasn't really yet been implemented. So there's going to need to be further litigation here. But what What ended up happening is you have a lot of foreign students who were already here from a lot of these countries and a lot of foreign people on other visas like H-1B, the work visa we talked about, or L visas, which is that they were transferred from abroad into the U.S.

7:56for specific work. They were already here. There was tens of thousands of people already here, and they've been trying to renew statuses that they have or change from student visa to other worker status applications. and all of those applications have been put on hold. They've simply been tucked into a drawer and nothing has been done. So people finally sued saying, what are you gonna do? You can't have taken all of these people's fees and decided not to do anything with it. Well, exactly. Because even as some cases are in appeal, it appears that the administration is finding other ways to go around it.

8:34For example, the Department of Homeland Security just this past week said it would be restricting certain immigrants access to work permits because they would have to demonstrate economic necessity for their employment, putting more restrictions on allowing immigrants to work in the U.S., regardless of what their status is. It seems almost like whack-a-mole for the court system to try to figure out which case is going where and at what time and who is bringing this one and then which agency is involved with that one. Yeah, correct. It's very complicated. And the fact is There are many lawsuits having to be filed all throughout the United States because the Supreme Court ended earlier this year the process where you could file one case that would sort of have a nationwide injunction.

9:19And then you could then just take that case directly to the Supreme Court. The Supreme Court said you had to file different cases for different parts of the United States. And then those cases would work their way up to the Supreme Court. So what ends up happening is you end up having a slower and also fragmented area where perhaps in one part of the country something is legal and in another part of the country something is illegal. You see that now, for instance, with regard to whether the administration can detain you and your human body while you are in deportation proceedings. In some circuits, that's allowed, meaning if you are here and you are in a removal proceeding, they can keep you detained without any possibility of bond at all.

10:07And in other parts of the country, that's not possible because those circuits have said, no, they have to give you a bond. And so this is the same with the work permit case that you've talked about, which is that the administration is now trying to say to about a million people who currently have work permits that their renewals are going to be taken away unless they can show an economic necessity for their work permit. And that's going to be completely discretionary decision that the agency makes. And so now all of these individuals are going to have to file different lawsuits in different parts of the country unless and until finally one of the cases makes it up to the Supreme Court.

10:45Is this such a tangled web that this is probably something the courts are going to still be dealing with even after this Trump administration is done? It obviously will depend who the next president is. But let's say the next president is from a different party than President Trump's party and tries to unwind a lot of the Trump administration's efforts. What you will actually end up seeing is, so, yes, some of them will be more easily unwound than others. But then you'll have people from the perspective of President Trump who will sue saying that the unwinding of the efforts that the Trump administration implemented also violate the Administrative Procedure Act.

11:26And so all of this is going to be so tangled that it won't just be so easy for some future president to deactivate what President Trump did. What is the bottom line for the courts then? They just have to keep on keeping on through this. Is there any recourse? I mean, could they, I don't know, I don't think Congress can get involved at this point because now this is firmly within the jurisdiction of the courts. But the way you described it, it's not just the Supreme Court and it's not just the state Supreme Court. It is now down to the different district levels. Well, absolutely. The courts, I think the best thing that the courts can do in these situations is work through these cases as quickly as possible to try to get people finality on all of these important issues as quickly as possible.

12:12Even if that turns the court system into, you know, an immigration focused system. But that is where a lot of the case law and a lot of the memos and a lot of the policies are being focused on. Other administrations have other focuses, but this administration has immigration as a very, very large focus. So that means that a lot of the cases that the courts are going to need to be doing are immigration related. That certainly wasn't what a lot of these Supreme Court justices ever came onto the bench to do or a lot of these appellate court or district court justices. But now that this is the highest area of regulation that the government is engaging in, they're going to have to move these cases faster.

12:51Now, one thing interesting, Congress can actually get involved in fixing a lot of these policies and saying that certain memos can or cannot be done. But the problem is they refuse to sort of get involved in that as part of the appropriations process to say we're going to defund a certain memo or say you can't do a certain policy. And so it'll be interesting to see if the Congress changes hands. Will there be more of this attempt for Congress in terms of future appropriations bills to say that they will not fund? Now, here's the problem. They can't say they're not going to fund the Department of Homeland Security because now that's been funded for the remainder of the Trump administration.

13:36But perhaps they can say that they won't fund other parts of the government unless certain appropriations memos happen that say, hey, look, you can't just refuse to do immigration applications anymore. Or you can't refuse people from certain countries or you can't refuse to do work permits, that kind of thing. So we'll have to see where the Congress wants to go. Our thanks to Holland and Knight partner at Leon Fresco for joining us. Fascinating discussion. Up next, we're going to turn to Amazon and a special program designed to protect sellers against copyright infringers and how it could be overstepping a bit.

14:16You're listening to Bloomberg Law. I'm Amy Morris. In for June Grasso, this is Bloomberg.

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17:25But Amazon's size as the largest online retailer and the lack of oversight on the program has some legal experts worried that the company may be wielding too much power. Bloomberg legal reporter Annalise Levy has a story on this. She joins us now. Annalise, thank you so much for taking the time with us. Of course. I'm really excited to talk about that story. It's a great story. First, let's get some background on it. It's the Amazon Patent Evaluation Express. How does this work? You and your story refer to this as a pseudo court. Yes. So it starts by a patent owner, and this can be a patent owner that does not sell products on Amazon.

18:05It can be anyone who owns a patent, files a complaint against a seller, and the seller only has three weeks to respond, and their options include opting in to Amazon's patent court, which severely limits the defenses that they're able to present. They can take it to federal district court, which is an extremely expensive process to litigate a patent infringement claim, or they don't respond and their products are immediately taken down. OK, so is it an actual court with all the rights and responsibilities and the legal that goes along with it? Or does it just work like that? Like how how does this work?

18:47There is an neutral evaluator is what Amazon calls it, who serves as the judge over these proceedings. It's an attorney that does not work at Amazon. They work at outside firms and Amazon selects them and assigns them to cases. and it is very similar to a court. Each party files briefs. They do not exchange evidence, though. And like I said earlier, the defendants are very limited in what defenses they can present. So that is different from what would happen in a district court case. And it moves extremely quickly. These decisions are usually issued within a matter of weeks, whereas a case in federal court usually takes years for patent infringement allegations.

19:37Is that why the participants may be more inclined to use this evaluation process or, quote, evaluation express because it's faster and maybe doesn't cost as much as a regular district court? Yes, that's definitely one of the reasons that many parties opt in. And Amazon says that that's why they've received so much good feedback about the program. Another thing that is very big for patent owners is that they can essentially receive relief that they don't often receive in federal district court. And by that, I mean an injunction by having their competitors or this accused infringers products permanently taken down.

20:22Federal courts do not issue those often. Patent owners have to meet a very high bar to qualify for those. They have to show that monetary damages would not be enough to compensate them if a defendant is shown to have infringed. But at Amazon, they can get that relief in a matter of weeks. And because so many businesses rely on Amazon as their number one sales venue, it essentially serves as an injunction that a federal court would issue. And, you know, that's one of the pieces that you make or one of the points that you make in your piece is that Amazon is really big. It has almost as much power as a federal judge because of the relief that it can give patent owners.

21:10And where is the danger in that, though, in your reporting? What have you found? I mean, the danger is that they're wielding all of this power to essentially destroy sellers without the benefits that accused infringers typically have in federal court. And, you know, there's no public docket for these cases. Amazon is pretty secretive about it. They make each party that participates agree that they'll keep everything that happens in the process confidential. the briefs aren't public, the decisions that they're quasi judges issue are not public. So as one law professor I spoke to said, there could be a lot going wrong, but we don't know because we can't see it.

22:00Right. That was another point that you made in your piece is that the secrecy is pretty right. No public documents. You don't even know who the judges are when you enter this system. It also seems like it automatically favors the rights owner without really considering the story behind the alleged infringer. Because, as you mentioned, there's only so much evidence that the defendant can present. Is that correct? Yes. The patent owners walk into these proceedings with huge leverage. One, because they know that the risk for the accused infringer is potentially losing their business if all of their products are taken down.

22:42And two, they know that the accused seller can't argue that their patents are invalid, which is often a big argument that comes up in federal court cases. And the parties do know once a judge is assigned to their case, the parties are informed of who that is. But Amazon does not disclose who those judges are to the public. And the only reason we were able to get these documents is because parties that were either trying to avoid the Amazon process or were upset with the decision that it handed down filed these documents as exhibits once they moved the fight to federal court. Because this is all in the Amazon ecosystem and in the Amazon bubble, is this legal?

23:30I mean, they can do this because it's their house, right? Yes, they're policing their own platform. There are other large retailers that have IP complaint systems that patent owners can also use. Walmart has one. I believe eBay has one. But those don't appear to create a court, a mini court system, if you want to call it that. They don't hire outside attorneys to serve as evaluators. I don't believe the parties exchange briefs like they would in court. they're much different than what Amazon has created here. You go into a case between Latchit and RV Lock, and these are folks who make locks for recreational vehicles.

24:20And RV Lock accused Latchit of infringing on their product. And they went to this case, they went through this process with Amazon and Latchit lost. Is there recourse beyond that? I mean, at that point, can they take it to a regular court? Is there an appeals process within Amazon? There is not an appeals process within Amazon, but Amazon has made it clear that if a party receives a conflicting decision, either from a federal court or from the patent office, that they will respect that decision. And I believe one of Amazon's vice presidents has testified at a congressional hearing about this and said, you know, we are aware that our decisions don't hold up like a federal court decision would.

25:12So we respect those if they conflict with the decision we've issued. So then the onus is on the defendant to come up with the money and the time and the lawyers to go to a regular court and then take all the time that may not, that they may not have, than they certainly didn't have when they went into the patent evaluation express. That's why they went the Amazon route, because it's cheaper and faster. Yes. And if they even do go to federal court and decide to go that route, they know that they're losing money every single day that these products are down. I mean, one seller who had their products delisted said they were losing upwards of$70 ,000 per day.

25:56So even if a party does want to take this fight to federal court, if they're upset with the Amazon decision, they know that's going to be a huge financial investment. And they're not receiving the revenue that they're used to from Amazon because their products are gone, which is why many parties appear to just settle these cases. they understand the huge threat of their products being delisted and come to the decision that it's probably cheaper to pay up than maybe fight a patent that they strongly believe is invalid. So they have the option then of settling and they can still remain listed? Yes, that is one of the options that Amazon provides.