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Cookies, Cocktails and Mushrooms on the Menu as Justices Hear Bank Fraud Case

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Cookies, Cocktails and Mushrooms on the Menu as Justices Hear Bank Fraud Case

In a lively Supreme Court argument on Tuesday that included references to cookies, cocktails and toxic mushrooms, the justices tried to find the line between misleading statements and outright lies in the case of a Chicago politician convicted of making false statements to bank regulators.

The case concerned Patrick Daley Thompson, a former Chicago alderman who is the grandson of one former mayor, Richard J. Daley, and the nephew of another, Richard M. Daley. He conceded that he had misled the regulators but said his statements fell short of the outright falsehoods he said were required to make them criminal.

The justices peppered the lawyers with colorful questions that tried to tease out the difference between false and misleading statements.

Chief Justice John G. Roberts Jr. asked whether a motorist pulled over on suspicion of driving while impaired said something false by stating that he had had one cocktail while omitting that he had also drunk four glasses of wine.

Caroline A. Flynn, a lawyer for the federal government, said that a jury could find the statement to be false because “the officer was asking for a complete account of how much the person had had to drink.”

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Justice Ketanji Brown Jackson asked about a child who admitted to eating three cookies when she had consumed 10.

Ms. Flynn said context mattered.

“If the mom had said, ‘Did you eat all the cookies,’ or ‘how many cookies did you eat,’ and the child says, ‘I ate three cookies’ when she ate 10, that’s a false statement,” Ms. Flynn said. “But, if the mom says, ‘Did you eat any cookies,’ and the child says three, that’s not an understatement in response to a specific numerical inquiry.”

Justice Sonia Sotomayor asked whether it was false to label toxic mushrooms as “a hundred percent natural.” Ms. Flynn did not give a direct response.

The case before the court, Thompson v. United States, No. 23-1095, started when Mr. Thompson took out three loans from Washington Federal Bank for Savings between 2011 and 2014. He used the first, for $110,000, to finance a law firm. He used the next loan, for $20,000, to pay a tax bill. He used the third, for $89,000, to repay a debt to another bank.

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He made a single payment on the loans, for $390 in 2012. The bank, which did not press him for further payments, went under in 2017.

When the Federal Deposit Insurance Corporation and a loan servicer it had hired sought repayment of the loans plus interest, amounting to about $270,000, Mr. Thompson told them he had borrowed $110,000, which was true in a narrow sense but incomplete.

After negotiations, Mr. Thompson in 2018 paid back the principal but not the interest. More than two years later, federal prosecutors charged him with violating a law making it a crime to give “any false statement or report” to influence the F.D.I.C.

He was convicted and ordered to repay the interest, amounting to about $50,000. He served four months in prison.

Chris C. Gair, a lawyer for Mr. Thompson, said his client’s statements were accurate in context, an assertion that met with skepticism. Justice Elena Kagan noted that the jury had found the statements were false and that a ruling in Mr. Thompson’s favor would require a court to rule that no reasonable juror could have come to that conclusion.

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Justices Neil M. Gorsuch and Brett M. Kavanaugh said that issue was not before the court, which had agreed to decide the legal question of whether the federal law, as a general matter, covered misleading statements. Lower courts, they said, could decide whether Mr. Thompson had been properly convicted.

Justice Samuel A. Alito Jr. asked for an example of a misleading statement that was not false. Mr. Gair, who was presenting his first Supreme Court argument, responded by talking about himself.

“If I go back and change my website and say ‘40 years of litigation experience’ and then in bold caps say ‘Supreme Court advocate,’” he said, “that would be, after today, a true statement. It would be misleading to anybody who was thinking about whether to hire me.”

Justice Alito said such a statement was, at most, mildly misleading. But Justice Kagan was impressed.

“Well, it is, though, the humblest answer I’ve ever heard from the Supreme Court podium,” she said, to laughter. “So good show on that one.”

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Cinemas and unions sound alarms over Netflix-Warner Bros. deal

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Cinemas and unions sound alarms over Netflix-Warner Bros. deal

Hollywood unions and trade groups are pushing back against the proposed $82.7-billion deal for streaming giant Netflix to acquire Warner Bros.’ film and television studios, HBO and HBO Max, citing concerns about greater industry consolidation, job losses and the potential hit to theatrical box office revenue.

Groups began voicing opposition even before the proposed tie-up was officially announced. Amid reports Thursday night that Netflix had secured exclusive rights to negotiate with Warner Bros., the Directors Guild of America said it had “significant concerns” about the development and intended to meet with Netflix for further discussion.

“We believe that a vibrant, competitive industry — one that fosters creativity and encourages genuine competition for talent — is essential to safeguarding the careers and creative rights of directors and their teams,” the DGA said in a Thursday statement.

A major point of contention is Netflix’s long-standing resistance to traditional theatrical film releases. Though the Los Gatos, Calif., streamer has released films in theaters — including about 30 this year alone — it does so typically for marketing or awards purposes and limits the amount of time those movies are available on the big screen.

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That theatrical window was once at least 80 days, but has varied by studio since the pandemic. Last year, the average length of time a film was in theaters was about 32 days, according to data from the Numbers, a movie business information site.

Netflix has not been shy about its main goal of offering subscribers first-run movies on its platform, which upends the traditional strategy of having films debut in theaters for an exclusive period before being available at home.

For Netflix, having films launch on its platform allows the company to attract new users, as well as keep existing customers engaged.

But that stance has led to a testy relationship between Netflix and some exhibitors, which have pushed in general for more films to be released on the big screen. The urgency of that effort has only increased in recent years, particularly as the movie theater business continues to recover from the pandemic and dual writers’ and actors’ strikes of 2023.

Theater owner trade group Cinema United has voiced staunch opposition to the deal, saying it represented an “unprecedented threat to the global exhibition business.”

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The group urged regulators to take a close look at the proposed transaction, saying in a statement that annual box office revenue in the U.S. and Canada could decrease by 25% if films that typically get a theatrical release by Warner Bros. bypass the theaters and instead are sent directly to streaming.

“The negative impact of this acquisition will impact theatres from the biggest circuits to one-screen independents in small towns in the United States and around the world,” Michael O’Leary, the group’s chief executive, said in a statement. “Netflix’s stated business model does not support theatrical exhibition. In fact, it is the opposite.”

To ease concerns about the effect on box office revenue, Netflix Co-Chief Executive Ted Sarandos told analysts in a call Friday that Warner Bros. films slated for theatrical release will still go to theaters, while Netflix films will follow the company’s existing release strategy. Future Warner Bros. films without existing exhibition commitments will also go to theaters, Netflix said.

But Netflix’s impact on Hollywood’s entire business model has been a point of contention for years, including how its streaming strategy upended existing compensation models for writers and the way shows were made — a key concern during the 2023 strike.

Hollywood unions and trade groups also noted the possibility of more job losses due to the consolidation. Already this year, Hollywood has seen scores of layoffs, some due to the recent merger between Paramount and Skydance Media.

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“The world’s largest streaming company swallowing one of its biggest competitors is what antitrust laws were designed to prevent,” the Writers Guild of America West and Writers Guild of America East said in a statement calling for the deal to be blocked. “The outcome would eliminate jobs, push down wages, worsen conditions for all entertainment workers, raise prices for consumers, and reduce the volume and diversity of content for all viewers.”

The Screen Actors Guild-American Federation of Television and Radio Artists said it planned to analyze the details of the proposed deal with an eye toward jobs and production commitments.

“A deal that is in the interest of SAG-AFTRA members and all other workers in the entertainment industry must result in more creation and more production, not less,” the union said in a Friday statement.

While Netflix was once seen as simply a disrupter in the industry, it’s clear it could soon be the face of the new studio system, said former producer Travis Knox, an associate professor of creative producing at Chapman University’s Dodge College of Film and Media Arts.

“Every time a disruption hits — whether the introduction of television, the rise of cable, home video, the arrival of the internet — Hollywood always reacts like it’s an extinction-level event,” he said. “In five years, we’ll look back and realize this wasn’t the final nail in the coffin of the studio system. It was just a much-needed system update.”

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To protect underage farmworkers, California expands oversight of field conditions

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To protect underage farmworkers, California expands oversight of field conditions

California officials said they are launching new enforcement actions to protect underage farmworkers, including enhanced coordination among two state agencies charged with inspecting work conditions in the fields.

The actions follow an investigation by Capital & Main, produced in partnership with the Los Angeles Times and McGraw Center for Business Journalism, which found that the state is failing to protect underage farmworkers who labor in harsh and dangerous circumstances. Thousands of children and teenagers work in California fields to provide Americans with fresh fruit and vegetables. While laborers as young as 12 can legally work in agriculture, many described being exposed to toxic pesticides, dangerous heat and other hazards.

The new enforcement efforts will be overseen by the state Labor and Workforce Development Agency, which directs key agencies charged with regulating child labor and worksite safety laws, officials said.

Officials said the state’s Bureau of Field Enforcement, which regulates child labor and wage and hour laws, is developing plans to conduct joint operations with an existing agricultural enforcement task force assigned to the Division of Occupational Safety and Health, known as Cal/OSHA.

Inspectors from the two agencies typically perform field operations separately and enforce different laws.

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Working together will enable the state to “increase its presence in the fields and its capacity to identify violations,” according to Crystal Young, deputy secretary of communications for the Labor and Workforce Development Agency.

The agency is also overseeing an effort to share data among enforcement teams from departments such as the Agricultural Labor Relations Board, Department of Industrial Relations and Employment Development Department. Sharing information, Young said, will “further bolster our ability to identify potential violations for investigation.”

In a written statement, she said that state officials have been actively enforcing child labor rules across all industries, assessing 571 violations that resulted in “millions of dollars in penalties” from 2017 through 2024.

But records obtained under the California Public Records Act for that period show that only a small number of child labor enforcement actions involved the agricultural industry. Just 27 citations were issued for child labor violations to the thousands of agricultural employers across California, the records show. The fines totaled $36,000, but the state collected only $2,814.

Jose, seen at 13, picks strawberries in the Salinas Valley.

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(Barbara Davidson / Capital & Main)

Cal/OSHA enforcement records show that the agency failed to investigate most complaints about alleged violations of California’s outdoor heat law and reports of outdoor heat injuries, as well as an overall 74% drop in citations issued to agricultural employers for all infractions. The heat law requires employers to provide safety training as well as cool water and shade when temperatures exceed 80 degrees.

Worker advocates lauded the plans for increased enforcement as steps in the right direction. But they added that any long-term solutions need to address issues such as low wages and poverty, both of which drive minors to work in the fields to help their families pay rent and put food on the table.

“Being able to support farmworker families through a living wage, you know, is one of the ways that we can really address this issue,” said Erica Diaz-Cervantes, 25, a former underage strawberry picker who is now a senior policy advocate for the Central Coast Alliance United for a Sustainable Economy. With higher wages, “children won’t have to feel this responsibility to help their family financially by working in the fields,” she added.

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Other efforts are underway, nationally and in California, to address issues involving underage farmworkers.

U.S. Rep. Raul Ruiz (D-Palm Desert) recently reintroduced legislation that would change the federal minimum age for farmworkers from 12 to 14 years old for most farm jobs, as well as strengthen enforcement and improve nationwide data collection on injuries and fatalities. California requires minors to be 14 years old to work in most instances but allows children as young as 12 to labor up to 40 hours a week in agriculture when school is not in session.

Assemblymember Damon Connolly (D-San Rafael) said in a statement that he ordered an audit earlier this year to review issues such as inconsistent enforcement in California’s pesticide regulation process, which is split between local and state agencies.

The recently published investigation analyzed more than 40,000 state pesticide enforcement records from 2018 through early 2024 and found piecemeal regulation at the county level. The records showed that businesses operating in multiple counties were not fined for hundreds of pesticide violations — many of them involving worker safety.

More than two dozen underage farmworkers and their parents said in interviews that they worked in fields that smelled of chemicals and described feeling sick and dizzy or suffering from skin irritations. The workers and their parents are from families with mixed-immigration status, and Capital & Main has used only their first names.

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The audit, expected to be completed next year, “will help us determine whether the need is for additional resources, statutory and regulatory changes, or more vigorous enforcement of existing laws,” said Connolly, who chairs the Committee on Environmental Safety and Toxic Materials.

Strawberry pickers, like these in the Salinas Valley, squat and bend over for hours on a summer day.

Strawberry pickers, like these in the Salinas Valley, squat and bend over for hours on a summer day.

(Barbara Davidson / Capital & Main)

Connolly and Assemblymember Liz Ortega (D-San Leandro) said that the Department of Pesticide Regulation, which oversees pesticide safety statewide, should develop educational materials for underage workers to inform them about pesticides and how to report problems. Such information has been created for high school students to inform them of general worker rights.

“That’s one tool that we can use in agriculture to keep these children safe,” said Ortega, who chairs the Labor and Employment Committee and has held hearings on workplace safety in the fields.

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A spokesperson for the Department of Pesticide Regulation said the agency has pesticide safety information in multiple languages for all farmworkers but has not created materials for minors.

Underage farmworkers said that such information is badly needed.

“Many of us don’t know what pesticides are, how they can harm our health or … what we’re supposed to do to safely work around them,” said Lorena, 17, who has been harvesting strawberries since she was 11 years old in the Santa Maria Valley. She described being exposed to chemicals that caused her eyes to burn and her skin to break out in rashes.

“Having all that information in one simple flier,” she said, “could make it much easier for us to be able to recognize the dangers and know how to protect ourselves.”

Lopez is an independent journalist and fellow with the McGraw Center for Business Journalism at the Craig Newmark Graduate School of Journalism at the City University of New York. This article by Capital & Main was produced in partnership with the McGraw Center and was supported by the California Health Care Foundation and the Fund for Investigative Journalism.

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Los Angeles says so long to coal

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Los Angeles says so long to coal

Los Angeles has officially broken up with coal.

City officials on Thursday announced that the Los Angeles Department of Water and Power has stopped receiving coal-powered electricity from its last remaining coal source, the Intermountain generating station in Utah.

“This is a defining moment for the City of Los Angeles,” Mayor Karen Bass said at a news conference. “L.A.’s coal divestment is not just about discontinuing the use of coal to power our city — it’s about building a clean energy economy that benefits every Angeleno. This milestone will further accelerate our transition to 100% clean energy by 2035.”

Electricity generation is one of biggest causes of climate change and burning coal is the most destructive way to generate power from a climate and environmental perspective. The city has committed to achieving carbon-free energy in the next decade through investments in cleaner technologies such as solar, wind, battery energy storage and hydrogen.

California has been gradually moving away from coal, which supplied just 2.2% of the state’s electricity in 2024, according to the California Energy Commission. Nearly all of that was from the Intermountain Power Project, which provided 11% of L.A.’s energy last year. The DWP divested from another large coal source, the Navajo Generating Station in Arizona, in 2016.

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“This transition has been years in the making,” DWP chief executive Janisse Quiñones said in a statement. “It reflects the hard work of our employees, the support of our customers, and the leadership of our elected officials. Together, we are building a cleaner, more resilient energy future for Los Angeles.”

More than 60% of the city’s energy supply is now coming from renewable sources, Quiñones said, including the newly completed Eland solar-plus-storage center in Kern County, which began supplying L.A. and Glendale in August. The facility is one of the largest solar-plus-battery power plants in the nation.

It’s a stark change from 20 years ago, when the city’s energy composition was about 3% renewables and more than 50% coal, Bass said.

However, L.A. is not completely free of fossil fuels. The city will still draw from new natural gas-fired units at Intermountain. They can run on a fuel blend of natural gas and up to 30% green hydrogen, with plans to eventually transition to 100% green hydrogen in the future. (City officials said green hydrogen is expected to be added to the fuel mix next year.)

The board of the DWP also recently approved an $800-million plan to convert two units of its Scattergood Generating Station in Playa del Rey to run on a mixture of natural gas and green hydrogen, with a similar goal of running entirely on hydrogen as more supply becomes available.

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Some energy and environmental groups were critical of that plan, which they said prolongs the life of fossil fuel infrastructure at a time when the city should focus squarely on proven clean technologies like solar, wind and battery energy storage.

Still, many celebrated the end of coal power in the nation’s second-largest city as a major step forward — particularly at a moment when the federal government is working against clean energy and promoting coal, oil and other fossil fuels.

“It is a remarkable, remarkable day,” said Evan Gillespie, partner at the decarbonization nonprofit Industrious Labs, during the news conference. He noted that when he first moved to L.A. nearly 20 years ago, the charge to get the nation’s largest public utility off of coal was seen as audacious and even laughable.

“If every utility, if every city, had the courage and the leadership that this city has had, today the world would be a very different place,” he said. “I know that the model that we’ve built here is going to help the rest of this country and the rest of the world follow in L.A.’s footsteps over the next 20 years.”

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