USA Trends and Developments Contributed by: Paul M “Tad” O’Connor III, Joshua D Fulop, Daniel J Koevary and Matthew B Stein, Kasowitz Benson Torres LLP
from their name and likeness. Victims may also have state defamation or false light claims, par- ticularly when portrayed doing or saying some- thing objectionable. Federal law, too, offers some protection. The Lanham Act establishes a cause of action for false endorsement where a party’s image is used to falsely suggest that they support a given service or good. Balancing such rights and claims against the First Amend- ment implications of deepfakes promises to be a thorny new issue for courts to resolve. Deepfakes are also likely to have a profound impact on procedural aspects of law. By way of example, academics and practitioners alike have expressed concerns that ‒ as deepfakes become more advanced, more widespread, and more difficult to detect ‒ courts will be faced with an unprecedented evidentiary issue: smoking- gun video or photographic evidence that may be entirely false. Employment Companies increasingly use AI to screen poten- tial employees, monitor current ones, and review performance. Given that AI ‒ created by humans and trained by humans ‒ may reflect human bias- es, it has spawned liability for discrimination in hiring or the workplace. In one instance, an AI tool used by an employer to screen applicants rejected all women over the age of 55 and men over 60. As this violated the Age Discrimination in Employment Act of 1967, the Equal Employment Opportunity Commission filed suit against the employer, resulting in the employer entering into a consent decree. There is also a pending federal class action against a software developer, alleging that its widely used screening software discriminates against candi- dates based on protected class characteristics such as race, age and disability.
Some companies are choosing to err on the side of caution. After its own AI hiring tool was shown to favour male candidates, Amazon ceased using a hiring algorithm altogether. Bankruptcy litigation: non-consensual third- party releases On 27 June 2024, the US Supreme Court issued its opinion in In re Purdue Pharma LP reversing the decision of the US Court of Appeals for the Second Circuit, which had reversed the decision of the US District Court for the Southern District of New York and reinstated the decision of the US Bankruptcy Court for the Southern District of New York. The US Supreme Court, in a 5-4 deci- sion, held that the non-consensual third-party releases constituting the backbone of Purdue Pharma LP’s plan of reorganisation violated the provisions of the US Bankruptcy Code. Section 1141(d) of the US Bankruptcy Code generally allows pre-petition liabilities of a reor- ganised, non-liquidating Chapter 11 debtor to be discharged. However, there is no analogous provision in the US Bankruptcy Code expressly extending non-consensual releases to third par- ties. Nonetheless, prior to the issuance of the US Supreme Court’s opinion, non-consensual third- party releases and related injunctions were rec- ognised in a majority of circuit courts and were often approved as part of a plan of reorganisa- tion in Chapter 11 cases. In its opinion, the Supreme Court held that a dis- charge in a bankruptcy case generally applies only to claims against the debtor pursuant to Section 524(e) of the US Bankruptcy Code, and that the beneficiaries of the third-party release sought to obtain “what essentially amounts to a discharge” without placing “virtually all their assets on the table for distribution to creditors”. The US Supreme Court further held that the US
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