Business
The justices are expected to rule quickly in the case.
When the Supreme Court hears arguments on Friday over whether protecting national security requires TikTok to be sold or closed, the justices will be working in the shadow of three First Amendment precedents, all influenced by the climate of their times and by how much the justices trusted the government.
During the Cold War and in the Vietnam era, the court refused to credit the government’s assertions that national security required limiting what newspapers could publish and what Americans could read. More recently, though, the court deferred to Congress’s judgment that combating terrorism justified making some kinds of speech a crime.
The court will most likely act quickly, as TikTok faces a Jan. 19 deadline under a law enacted in April by bipartisan majorities. The law’s sponsors said the app’s parent company, ByteDance, is controlled by China and could use it to harvest Americans’ private data and to spread covert disinformation.
The court’s decision will determine the fate of a powerful and pervasive cultural phenomenon that uses a sophisticated algorithm to feed a personalized array of short videos to its 170 million users in the United States. For many of them, and particularly younger ones, TikTok has become a leading source of information and entertainment.
As in earlier cases pitting national security against free speech, the core question for the justices is whether the government’s judgments about the threat TikTok is said to pose are sufficient to overcome the nation’s commitment to free speech.
Senator Mitch McConnell, Republican of Kentucky, told the justices that he “is second to none in his appreciation and protection of the First Amendment’s right to free speech.” But he urged them to uphold the law.
“The right to free speech enshrined in the First Amendment does not apply to a corporate agent of the Chinese Communist Party,” Mr. McConnell wrote.
Jameel Jaffer, the executive director of the Knight First Amendment Institute at Columbia University, said that stance reflected a fundamental misunderstanding.
“It is not the government’s role to tell us which ideas are worth listening to,” he said. “It’s not the government’s role to cleanse the marketplace of ideas or information that the government disagrees with.”
The Supreme Court’s last major decision in a clash between national security and free speech was in 2010, in Holder v. Humanitarian Law Project. It concerned a law that made it a crime to provide even benign assistance in the form of speech to groups said to engage in terrorism.
One plaintiff, for instance, said he wanted to help the Kurdistan Workers’ Party find peaceful ways to protect the rights of Kurds in Turkey and to bring their claims to the attention of international bodies.
When the case was argued, Elena Kagan, then the U.S. solicitor general, said courts should defer to the government’s assessments of national security threats.
“The ability of Congress and of the executive branch to regulate the relationships between Americans and foreign governments or foreign organizations has long been acknowledged by this court,” she said. (She joined the court six months later.)
The court ruled for the government by a 6-to-3 vote, accepting its expertise even after ruling that the law was subject to strict scrutiny, the most demanding form of judicial review.
“The government, when seeking to prevent imminent harms in the context of international affairs and national security, is not required to conclusively link all the pieces in the puzzle before we grant weight to its empirical conclusions,” Chief Justice John G. Roberts Jr. wrote for the majority.
In its Supreme Court briefs defending the law banning TikTok, the Biden administration repeatedly cited the 2010 decision.
“Congress and the executive branch determined that ByteDance’s ownership and control of TikTok pose an unacceptable threat to national security because that relationship could permit a foreign adversary government to collect intelligence on and manipulate the content received by TikTok’s American users,” Elizabeth B. Prelogar, the U.S. solicitor general, wrote, “even if those harms had not yet materialized.”
Many federal laws, she added, limit foreign ownership of companies in sensitive fields, including broadcasting, banking, nuclear facilities, undersea cables, air carriers, dams and reservoirs.
While the court led by Chief Justice Roberts was willing to defer to the government, earlier courts were more skeptical. In 1965, during the Cold War, the court struck down a law requiring people who wanted to receive foreign mail that the government said was “communist political propaganda” to say so in writing.
That decision, Lamont v. Postmaster General, had several distinctive features. It was unanimous. It was the first time the court had ever held a federal law unconstitutional under the First Amendment’s free expression clauses.
It was the first Supreme Court opinion to feature the phrase “the marketplace of ideas.” And it was the first Supreme Court decision to recognize a constitutional right to receive information.
That last idea figures in the TikTok case. “When controversies have arisen,” a brief for users of the app said, “the court has protected Americans’ right to hear foreign-influenced ideas, allowing Congress at most to require labeling of the ideas’ origin.”
Indeed, a supporting brief from the Knight First Amendment Institute said, the law banning TikTok is far more aggressive than the one limiting access to communist propaganda. “While the law in Lamont burdened Americans’ access to specific speech from abroad,” the brief said, “the act prohibits it entirely.”
Zephyr Teachout, a law professor at Fordham, said that was the wrong analysis. “Imposing foreign ownership restrictions on communications platforms is several steps removed from free speech concerns,” she wrote in a brief supporting the government, “because the regulations are wholly concerned with the firms’ ownership, not the firms’ conduct, technology or content.”
Six years after the case on mailed propaganda, the Supreme Court again rejected the invocation of national security to justify limiting speech, ruling that the Nixon administration could not stop The New York Times and The Washington Post from publishing the Pentagon Papers, a secret history of the Vietnam War. The court did so in the face of government warnings that publishing would imperil intelligence agents and peace talks.
“The word ‘security’ is a broad, vague generality whose contours should not be invoked to abrogate the fundamental law embodied in the First Amendment,” Justice Hugo Black wrote in a concurring opinion.
The American Civil Liberties Union told the justices that the law banning TikTok “is even more sweeping” than the prior restraint sought by the government in the Pentagon Papers case.
“The government has not merely forbidden particular communications or speakers on TikTok based on their content; it has banned an entire platform,” the brief said. “It is as though, in Pentagon Papers, the lower court had shut down The New York Times entirely.”
Mr. Jaffer of the Knight Institute said the key precedents point in differing directions.
“People say, well, the court routinely defers to the government in national security cases, and there is obviously some truth to that,” he said. “But in the sphere of First Amendment rights, the record is a lot more complicated.”
The state’s trial attorneys and Uber say they have reached a last-minute deal to scrap their dueling ballot measures and avert what was gearing up to be one of most expensive battles of the November election.
The deal, which comes a day after both measures qualified for the November ballot, has Uber agreeing to bulk up safety measures, while the trial attorneys will limit how much they can claim for lien-based medical treatment of victims who get in Uber or Lyft accidents, according to spokespeople for both sides of the campaign.
“Both sides agree: Californians deserve a system that’s safe, fair, and accountable,” read a joint statement from Uber and the Consumer Attorneys of California, a powerful attorney trade group. “This agreement protects patients from unnecessary treatment or getting overcharged, ensures access to medical care and legal representation, and strengthens safety measures.”
The agreement, finalized Thursday, means the ride-share giant will kill its ballot measure to cap how much attorneys can earn in vehicle collision cases and limit medical damages to rates based on insurance. Uber has argued that the costs for medical treatment done on a lien, which allows doctors to get paid from a cut of the plaintiff’s payout, far exceed what it would cost if the victim had used their own insurance.
In return, the Consumer Attorneys of California will cancel its competing ballot measure that sought to increase legal liability for ride-share companies if a passenger is sexually assaulted by a driver. The measure followed an investigation by the New York Times into sexual assault by drivers.
Both sides had poured tens of millions into the campaigns, plastering billboards across Los Angeles.
Lawyers claimed the fight had turned existential with the measure threatening to decimate the profit margin of many personal injury cases and leave drivers with small or thorny cases unable to find an attorney willing to take their case.
Spokespeople say the deal is predicated on their agreement being codified into a bill within the next week. Otherwise, they said, each side will move forward with its ballot measure.
Business
Commentary: A porn firm that a judge called a ‘copyright troll’ now has Meta in its sights — and it could win
This porn company made millions by shaming the little guys who downloaded its films. But now it’s going after Meta for copyright infringement.
It isn’t often that a lawsuit can make me smile, much less laugh out loud. The latest exception is Strike 3 Holdings vs. Meta Platforms, which is currently unfolding in San Jose federal court.
Two things are amusing about the case. One is that Meta, the giant social media company, is accused of copyright infringement for allegedly downloading 2,400 of the plaintiff’s movies to train its AI bots. If Meta loses, that would be a serious (and in my opinion, deserved) blow against AI companies that have used copyrighted materials without permission.
The second part of the joke is the identity of the plaintiff. Strike 3 Holdings, you see, makes porn. Moreover, for years it has pursued a plainly unscrupulous business model in which it sues individuals for allegedly downloading its movies without permission, and shames them into settling for a few thousand dollars at a pop.
While it is possible one or more Meta employees downloaded Plaintiffs’ videos, it is just as possible…that a ‘guest, or freeloader,’ or contractor, or vendor, or repair person—or any combination of such persons—was responsible for that activity.
— Meta points the finger at others for a porn scandal
Whether or not Strike 3 has a legitimate claim for copyright infringement, it doesn’t deserve your sympathy. The firm was flayed in 2018 by federal Judge Royce C. Lamberth of Washington, D.C., for engaging in what he labeled a “high-tech shakedown … smacking of extortion.” Lamberth called Strike 3 a “copyright troll” and threw out its lawsuit against an unidentified internet user for having treated his court “not as a citadel of justice, but as an ATM.”
When I wrote about this scheme in 2023, I counted more than 12,440 lawsuits that the Los Angeles-based firm had filed in federal courts coast-to-coast. The latest count, according to a Lexis search a defense lawyer ran for me, is more than 21,000. The vast majority were settled and closed within a few months of their filing, an indication that they were never meant to go to trial.
Now Strike 3 appears to have hooked a big fish. In the first significant ruling in its lawsuit against Meta, the firm scored a surprise win: On June 11, federal Judge Eumi K. Lee of San Jose denied Meta’s motion to dismiss the case. Meta’s defense, she wrote, “strains credulity.”
More about that in a moment. First, a few words about the litigants. Meta needs no introduction: Formerly known as Facebook and based in Menlo Park, Calif., Meta recorded a profit of $60.5 billion last year on $201 billion in revenue.
Strike 3 portrays itself as an avatar of “Hollywood style and quality” in its adult films, which it distributes through its streaming websites such as Blacked, Tushy, Vixen and Wifey. It has described Greg Landry, its former owner and house auteur, as the porn industry’s “answer to Steven Spielberg.”
Neither Meta nor Strike 3 responded to my request for comment beyond the claims and defenses in court filings.
As I reported in 2023, Strike 3 has flooded federal courts with cookie-cutter lawsuits alleging that defendants infringed its copyrights by downloading its movies via BitTorrent, an online service on which unauthorized content can be accessed by almost anyone with an internet connection. Its targets generally have been individuals with plenty to lose from being publicly outed as porn viewers.
“Given the nature of the films at issue,” a federal judge in Connecticut observed last year, “defendants may feel coerced to settle these suits merely to prevent public disclosure of their identifying information, even if they believe they have been misidentified.”
Strike 3’s letters to its target defendants have warned that the statutory penalty for willful copyright infringement is $150,000, but offer to make the case go quietly away for a few thousand bucks, which would be a fraction of the cost of hiring a defense lawyer, not to mention the downside of exposing oneself as a porn fiend.
J. Curtis Edmondson, a Portland, Ore., lawyer who won a case against Strike 3, estimated in 2023 that Strike 3 “pulls in about $15 million to $20 million a year from its lawsuits.” But financial data that could validate his estimate hasn’t surfaced in court records.
There’s nothing new about content owners’ aggressive pursuit of copyright infringers. The practice was pioneered by the Recording Industry Assn. of America, when the industry feared that unauthorized downloading of music through programs such as Napster threatened its very existence. From 2003 through 2008, the association sued some 35,000 alleged song pirates.
But it abandoned the strategy because its legal dragnet swept up sympathetic targets such as single mothers and teenage girls, creating a public relations disaster.
There followed the appearance of outright trolls such as Prenda Law Group, which posted porn films online as bait to attract downloaders, whom it then sued in what judges ultimately found to be sham lawsuits. Prenda principal John L. Steele even bragged publicly that Prenda had made nearly $15 million with its lawsuits. U.S. Judge Otis Wright II of Los Angeles put the kibosh to its practice by slapping the Prenda lawyers with stiff sanctions for contempt.
That brings us to Strike 3’s case against Meta, which it filed in July. Strike 3 hasn’t been accused of a Prenda-style fraud, since it does own the films at issue and its right to sue copyright infringers isn’t disputed. But its allegation that Meta downloaded its films to train its AI bots, rather than just for personal enjoyment, is a new wrinkle for an old issue.
Strike 3 says its lawsuit grew out of a separate case in which a witness testified that Meta had downloaded thousands of pirated books to train its LLaMA AI bots — that is, feeding the content into LLaMA for it to use to generate answers to user questions. (Numerous lawsuits have been filed against AI firms alleging similar infringement.)
Strike 3 says that case prompted it to look into whether Meta had downloaded any of its content. It says it discovered that 47 IP addresses owned by Meta — that is, digital identifiers of internet accounts — had downloaded its movies without permission.
In all, Strike 3 alleges, those Meta addresses downloaded at least 2,396 of its movies — almost its entire catalog — more than 6,000 times via BitTorrent. What’s more, Strike 3 says Meta then posted some of that content back onto BitTorrent to take advantage of BitTorrent’s “tit-for-tat” mechanism through which users can obtain faster download speeds by uploading content to the platform.
If Strike 3 were to prevail on all its claims for illicit downloading, it would be entitled to about $360 million in damages, observes Eric Fruits, an Oregon economist who has testified for the defense in some Strike 3 lawsuits.
One might ask why Meta might be downloading porn for any reason, bot-training or otherwise. Meta, in its defense filings, says Strike 3 has offered no proof that Meta, as a corporation, was responsible for the downloading. If it happened, Meta says, it would have been inadvertent.
“Tens of thousands of employees and innumerable contractors, visitors, and third parties access the internet at Meta every day,” it wrote in its motion to dismiss the case. “While it is possible one or more Meta employees downloaded Plaintiffs’ videos, it is just as possible … that a ‘guest, or freeloader,’ or contractor, or vendor, or repair person — or any combination of such persons — was responsible for that activity.” The “sporadic downloads,” Meta says, “exhibit the hallmarks of personal use,” not corporate strategy.
This defense has borne fruit in other Strike 3 cases, in which defendants successfully argued simply having an IP address that was used to infringe wasn’t enough to prove they committed the infringements.
Strike 3 says it can show that the downloads weren’t the work of random users. Some downloads, it says, were coordinated among several Meta IP addresses, all based on the same algorithmic keywords and occurring simultaneously, suggesting that the infringements “took place within Meta’s walls.”
On Dec. 15, 2022, for instance, downloads apparently based on the keyword “teen” involved not only the movies “Teenage Mutant Ninja Turtles” and “Teen Titans Go to the Movies,” but also “Teen Sex Sessions 2” and “Teens love Tats XXX,” according to Lee’s ruling. Other simultaneous downloads swept up episodes of “The Big Bang Theory” and “Ted Lasso” out of order, though a putative human user would probably have downloaded them sequentially.
“It strains credulity,” Lee ruled, “to suggest that these correlations are mere coincidence and the product of individual human selections.” Rather, the use of an algorithm would account for “why pornography was downloaded alongside children’s cartoons and sitcoms. … The odds that multiple people using the Corporate IP addresses … coincidentally torrented the same show, rather than simply streaming it, on the exact same day strains belief.”
The case is still at an early stage. For Strike 3, the lawsuit offers the potential of a big score. But Meta has signaled that it’s not inclined to roll over like a family man caught downloading skin flicks and worrying about his reputation at home and around town.
This time, Strike 3 may have a fight on its hands with a defendant that has money to burn.
Rivian said it’s laying off hundreds of employees, or less than 2% of its workforce, as part of restructuring efforts aimed at making the company profitable for the first time.
The layoffs come one week after the Irvine-based electric vehicle maker began deliveries of its highly anticipated R2 SUV.
The company is hoping that the R2, which is currently only available as a performance version for $57,990, could attract more customers with its lower price tag.
But industry analysts said the performance R2 is still not affordable for many Americans, and investors reacted with disappointment to the first deliveries June 9, with shares falling 7% that day. On Wednesday, Rivian shares gained .33 points, or 2%, to close at $16.26.
The company said a standard version of the R2 starting at $44,990 will become available next year.
The layoffs took effect on Monday and affected Rivian’s service and customer organization employees, including sales and marketing teams. Rivian employed 15,232 people as of December.
“We recently restructured a handful of teams within Rivian as we work to profitably scale our business,” a company spokesperson said.
The laid off employees have been provided with severance packages and are encouraged to apply for other open roles with Rivian, the company said.
Rivian may be trying to reach profitability by saving money on labor, said Ivan Drury, director of insights at Edmunds.
“You have to wonder to what degree they do plan on replacing those people with some level of AI and automation,” he said.
Rivian, which is pouring money into autonomous vehicle efforts including a robotaxi partnership with Uber, has struggled to turn a profit with its luxury EVs.
The layoffs are likely not directly tied to recent reception of the R2, auto analyst Brian Moody said.
“I think that it’s declining interest in new electric cars, and maybe declining interest in expensive things,” he said. “We can surmise that [layoff] process began long before the R2 launch.”
The company lost $3.6 billion last year and recently said it is no longer expecting to meet its 2027 adjusted core profit target.
There has been a broad cooling of the EV market. Major automakers including Honda and Ford have cut back their EV options as excitement for the vehicles has fallen under the Trump administration. A $7,500 EV tax credit for new vehicles expired in September.
Rivian cut 4.5% of its workforce in October, or more than 600 jobs, following the expiration of the credit. The company also laid off about 200 employees in September.
In a recent turnaround, Rivian surprised the market with strong earnings results in February, reporting gross profits for 2025 of $144 million compared with a net loss in 2024 of $1.2 billion. Gross profit is revenue without subtracting the cost of production expenses.
In its earnings release, Rivian credited the swing to “strong software and services performance, higher average selling prices, and reductions in cost per vehicle.”
“The company has never posted a full year’s worth of profit, and this is the one lever they can pull to rightsize things,” Drury said.
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