1 00:00:02,759 --> 00:00:07,000 Speaker 1: This is Bloomberg Law with June Grossel from Bloomberg Radio. 2 00:00:08,680 --> 00:00:13,720 Speaker 2: Why do you think Presidents Clinton, Bush Obama have not 3 00:00:15,280 --> 00:00:18,079 Speaker 2: used i EPA to impose tariffs. 4 00:00:18,480 --> 00:00:21,160 Speaker 3: It's one of the most important cases of the term, 5 00:00:21,640 --> 00:00:26,680 Speaker 3: a test of presidential power where President Trump's signature economic 6 00:00:26,800 --> 00:00:30,520 Speaker 3: policy is at stake and a decision against him could 7 00:00:30,560 --> 00:00:33,680 Speaker 3: mean the refunding of more than one hundred billion dollars. 8 00:00:34,159 --> 00:00:37,960 Speaker 3: And after nearly three hours of oral arguments in November, 9 00:00:38,159 --> 00:00:43,839 Speaker 3: Supreme Court justices across the ideological spectrum appeared skeptical that 10 00:00:43,960 --> 00:00:48,240 Speaker 3: Trump has the legal authority to impose the tariffs. Chief 11 00:00:48,440 --> 00:00:52,840 Speaker 3: Justice John Roberts and Justice Sonya Sotomayor said, the tariffs 12 00:00:52,880 --> 00:00:57,760 Speaker 3: are taxes, and the Constitution gives taxing power to Congress. 13 00:00:58,440 --> 00:01:02,040 Speaker 4: It's a congressional power or not a presidential power to tax. 14 00:01:02,680 --> 00:01:05,080 Speaker 4: And you want to say tarifts are not taxes, but 15 00:01:05,240 --> 00:01:10,400 Speaker 4: that's exactly what they are, degenerating money from American citizens revenue. 16 00:01:11,000 --> 00:01:15,319 Speaker 5: The vehicle is in position of taxes on Americans and 17 00:01:15,640 --> 00:01:17,800 Speaker 5: that has always been the core power of Congress. 18 00:01:17,959 --> 00:01:22,600 Speaker 3: Trump is arguing that the International Emergency Economic Powers Act 19 00:01:22,720 --> 00:01:27,720 Speaker 3: or AIPA, gives him virtually unlimited powers to impose tariffs 20 00:01:27,720 --> 00:01:32,240 Speaker 3: by executive order. But as several justices pointed out, the 21 00:01:32,280 --> 00:01:35,880 Speaker 3: word tariffs is nowhere to be found in that law. 22 00:01:36,200 --> 00:01:39,920 Speaker 3: Here are the Chief Justice and Justice Katanji Brown Jackson. 23 00:01:40,440 --> 00:01:44,240 Speaker 5: Well, but the exercise of the power is to impose tariffs, right, 24 00:01:44,880 --> 00:01:47,000 Speaker 5: and the statute doesn't use the word tariffs. 25 00:01:47,400 --> 00:01:51,200 Speaker 1: Your argument suggests that we should see the word imposed, 26 00:01:51,440 --> 00:01:55,480 Speaker 1: the phrase impose tariffs in that same series of things 27 00:01:55,480 --> 00:01:58,160 Speaker 1: that the president could do. We don't see that word. 28 00:01:58,240 --> 00:02:02,320 Speaker 1: And instead you take regulator and say that must mean that. 29 00:02:02,920 --> 00:02:06,880 Speaker 3: No other president has tried to impose tariffs under AEPA. 30 00:02:07,240 --> 00:02:12,040 Speaker 3: And Justice Neil Gorsuch, a Trump appointdee, expressed alarm at 31 00:02:12,040 --> 00:02:17,040 Speaker 3: the idea that Congress could delegate such seemingly unlimited power 32 00:02:17,240 --> 00:02:18,120 Speaker 3: to the president. 33 00:02:18,720 --> 00:02:21,680 Speaker 6: So Congress, as a practical matter, can't get this power 34 00:02:21,800 --> 00:02:24,120 Speaker 6: back once it's handed it over to the President's a 35 00:02:24,160 --> 00:02:28,880 Speaker 6: one way ratchet toward the gradual but continual accretion of 36 00:02:28,919 --> 00:02:32,000 Speaker 6: power in the executive branch and away from the people's 37 00:02:32,040 --> 00:02:33,120 Speaker 6: elected representative. 38 00:02:33,560 --> 00:02:36,720 Speaker 3: All three lower courts that ruled on the issue found 39 00:02:36,800 --> 00:02:40,799 Speaker 3: the tariffs to be unlawful. My guest is Timothy Bright Bell, 40 00:02:41,120 --> 00:02:44,400 Speaker 3: partner and co chair of the International Trade practice at 41 00:02:44,480 --> 00:02:48,640 Speaker 3: Wiley Rhin. Tim tell us what's at stake in this case? 42 00:02:49,400 --> 00:02:55,480 Speaker 7: This case involves the centerpiece of President Trump's economic agenda. 43 00:02:55,840 --> 00:02:58,360 Speaker 7: Is the biggest trade case the Supreme Court has ever heard, 44 00:02:58,639 --> 00:03:03,000 Speaker 7: and it goes straight to the key constitutional issue of 45 00:03:03,080 --> 00:03:07,000 Speaker 7: who has the power to impose tariffs, the US Congress 46 00:03:07,120 --> 00:03:10,600 Speaker 7: or the president. President Trump says the law that he used, 47 00:03:10,919 --> 00:03:15,120 Speaker 7: the International Emergency Economic Powers Act, gives him the power 48 00:03:15,360 --> 00:03:19,000 Speaker 7: to regulate imports, and that that includes the power to 49 00:03:19,120 --> 00:03:24,919 Speaker 7: impose tariffs, including entanyl tariffs on China, Canada, and Mexico, 50 00:03:25,320 --> 00:03:28,880 Speaker 7: and reciprocal economic tariffs on almost all countries. Whereas the 51 00:03:28,919 --> 00:03:31,519 Speaker 7: plaintiffs in this case say that Congress has that power 52 00:03:31,720 --> 00:03:35,400 Speaker 7: and cannot delegate that power, and that AEPA, which has 53 00:03:35,480 --> 00:03:39,040 Speaker 7: never before been used to impose tariffs, does not include 54 00:03:39,080 --> 00:03:42,280 Speaker 7: that power and authority. So that is what is at stake. 55 00:03:42,440 --> 00:03:46,520 Speaker 7: And of course the tariffs under AYEPA have led to 56 00:03:46,720 --> 00:03:50,120 Speaker 7: collection of hundreds of billions of dollars of tariffs already, 57 00:03:50,600 --> 00:03:53,920 Speaker 7: so it's very high economic stakes for the companies and 58 00:03:54,000 --> 00:03:55,960 Speaker 7: industries that have paid those tariffs as well. 59 00:03:56,080 --> 00:03:59,640 Speaker 3: There's always a textual analysis these days, and many of 60 00:03:59,680 --> 00:04:02,960 Speaker 3: the els his work concerned that the text of the 61 00:04:03,040 --> 00:04:08,040 Speaker 3: statute doesn't mention the word tariffs at all exactly. 62 00:04:08,200 --> 00:04:11,760 Speaker 7: The argument focused quite heavily on this law used by 63 00:04:11,760 --> 00:04:15,640 Speaker 7: President Trump AIPA and whether that law, which gives the 64 00:04:15,680 --> 00:04:20,080 Speaker 7: president the power to regulate imports, also includes the power 65 00:04:20,160 --> 00:04:23,440 Speaker 7: to impose tariffs. That really dominated most of the hearing, 66 00:04:23,800 --> 00:04:27,760 Speaker 7: and the justices asked very difficult questions on both sides. 67 00:04:28,000 --> 00:04:32,400 Speaker 7: The administration said that the ability to impose tariffs is 68 00:04:32,480 --> 00:04:36,600 Speaker 7: a core application of the ability to regulate imports in 69 00:04:36,640 --> 00:04:40,800 Speaker 7: a historical context, said that, of course, the power to 70 00:04:40,880 --> 00:04:45,240 Speaker 7: regulate imports would be read to include tariffs because tariffs 71 00:04:45,240 --> 00:04:48,120 Speaker 7: have been used throughout our country's history. On the other hand, 72 00:04:48,520 --> 00:04:51,600 Speaker 7: several justices were skeptical of that, and the plaintiffs in 73 00:04:51,640 --> 00:04:56,800 Speaker 7: this case said that when the delegation includes tariff authority, 74 00:04:57,040 --> 00:05:00,440 Speaker 7: there is always specific language to that effect, and that 75 00:05:00,600 --> 00:05:05,080 Speaker 7: there are always conditions and tests and agency decisions that 76 00:05:05,160 --> 00:05:08,120 Speaker 7: have to go into that tariff power. So there was 77 00:05:08,160 --> 00:05:10,760 Speaker 7: a good amount of the argument focused on those issues, 78 00:05:10,920 --> 00:05:14,400 Speaker 7: and again, whether power to regulate imports includes the power 79 00:05:14,440 --> 00:05:16,000 Speaker 7: to impose tariffs and. 80 00:05:15,920 --> 00:05:19,080 Speaker 3: What did you think about the Solicitor General's argument that 81 00:05:19,120 --> 00:05:23,080 Speaker 3: the Trading with the Enemy Act of nineteen seventeen gives 82 00:05:23,120 --> 00:05:26,200 Speaker 3: the president authority to impose these tariffs. 83 00:05:26,600 --> 00:05:29,960 Speaker 7: The Solicitor General argued, yes, that the Trading with the 84 00:05:30,080 --> 00:05:34,440 Speaker 7: Enemy Act was used to impose tariffs in a prior 85 00:05:34,480 --> 00:05:38,160 Speaker 7: situation by President Nixon, and that there's no reason to 86 00:05:38,200 --> 00:05:41,920 Speaker 7: think that anything had changed when AIPA had passed. On 87 00:05:41,960 --> 00:05:45,080 Speaker 7: the other hand, the plaintiffs had a response to that 88 00:05:45,360 --> 00:05:50,120 Speaker 7: in terms of the fact again that when tariffs are involved, 89 00:05:50,480 --> 00:05:53,040 Speaker 7: there are always conditions on their use, there are always 90 00:05:53,040 --> 00:05:56,960 Speaker 7: specific procedures, and also the fact that the reality is 91 00:05:57,000 --> 00:06:01,520 Speaker 7: that no other president in fifty years has used AIPA 92 00:06:01,560 --> 00:06:02,640 Speaker 7: to impose tariffs. 93 00:06:02,920 --> 00:06:07,400 Speaker 3: The Major Questions doctrine came up several times during the arguments. 94 00:06:07,680 --> 00:06:11,440 Speaker 3: It basically says that when the executive branch takes an 95 00:06:11,520 --> 00:06:16,960 Speaker 3: action with major political or economic significance, Congress has to 96 00:06:17,120 --> 00:06:21,640 Speaker 3: have expressly authorized it, and the Chief Justice made it 97 00:06:21,800 --> 00:06:26,719 Speaker 3: fairly clear that he thought the Major Questions doctrine applies here. 98 00:06:27,360 --> 00:06:30,640 Speaker 7: Yes, So the question here is does the Major Questions 99 00:06:30,680 --> 00:06:35,000 Speaker 7: doctrine require a clear statement in AIPA that it includes 100 00:06:35,040 --> 00:06:39,760 Speaker 7: the power to impose tariffs, and this Court has not 101 00:06:39,920 --> 00:06:45,120 Speaker 7: hesitated to start using that doctrine more broadly. But I 102 00:06:45,160 --> 00:06:49,320 Speaker 7: think you're right that the justices had some concerns about 103 00:06:49,360 --> 00:06:53,119 Speaker 7: pursuing it in this venue. And again, the question comes 104 00:06:53,160 --> 00:06:57,279 Speaker 7: to is the power to tariff implied in the power 105 00:06:57,320 --> 00:07:01,200 Speaker 7: to regulate imports or if it's not. Was this a 106 00:07:01,320 --> 00:07:06,000 Speaker 7: question that Congress was required to state clearly that tariffs 107 00:07:06,000 --> 00:07:09,760 Speaker 7: were a part of what was envisioned by the new law. 108 00:07:10,080 --> 00:07:14,280 Speaker 3: The Conservatives us the Major Questions doctrine to block several 109 00:07:14,320 --> 00:07:19,480 Speaker 3: of President Biden's initiatives, like his student loan forgiveness program. 110 00:07:19,960 --> 00:07:23,680 Speaker 3: If they allowed Trump to impose these tariffs, do you 111 00:07:23,680 --> 00:07:27,160 Speaker 3: think they'll have to explain why the Major Questions doctrine 112 00:07:27,160 --> 00:07:30,040 Speaker 3: applied to Biden but not Trump. 113 00:07:30,360 --> 00:07:32,840 Speaker 7: I think it's an interesting question whether they'll go there 114 00:07:32,960 --> 00:07:35,240 Speaker 7: or whether they will just focus on the language of 115 00:07:35,280 --> 00:07:38,360 Speaker 7: AIBA and this issue of whether the power to regulate 116 00:07:38,360 --> 00:07:42,440 Speaker 7: imports includes the power of tariff, and I think several 117 00:07:42,840 --> 00:07:46,040 Speaker 7: justices went down that road. I don't think just because 118 00:07:46,440 --> 00:07:49,000 Speaker 7: these doctrines have been used in other cases, such as 119 00:07:49,080 --> 00:07:52,800 Speaker 7: the Biden student bond forgiveness case, doesn't necessarily mean that 120 00:07:52,840 --> 00:07:55,720 Speaker 7: they will have to address it in this opinion if 121 00:07:55,720 --> 00:07:59,000 Speaker 7: they have other bases for finding that the tariffs were 122 00:07:59,280 --> 00:08:01,760 Speaker 7: legal or improper in any way. 123 00:08:02,520 --> 00:08:08,560 Speaker 3: And Justice Gorsuch in particular expressed alarm about the seeming 124 00:08:08,640 --> 00:08:12,320 Speaker 3: lack of limitations on the powers the President was claiming. 125 00:08:12,400 --> 00:08:17,800 Speaker 7: Here, Justice Corsa the hypothetical of if Congress can delegate 126 00:08:17,840 --> 00:08:22,280 Speaker 7: the tariff authority, what would prohibit Congress from delegating everything, 127 00:08:22,440 --> 00:08:25,679 Speaker 7: including the power to declare war, which is clearly given 128 00:08:25,720 --> 00:08:29,520 Speaker 7: in the Constitution to Congress. And so that was a 129 00:08:29,640 --> 00:08:34,920 Speaker 7: very interesting discussion. I'm certainly raising some concerns about the limits, 130 00:08:35,160 --> 00:08:39,199 Speaker 7: if any, on the authority that the government was claimed. 131 00:08:39,360 --> 00:08:41,520 Speaker 3: So where do you think the justices are going to 132 00:08:41,559 --> 00:08:42,280 Speaker 3: come out here. 133 00:08:42,679 --> 00:08:45,960 Speaker 7: Well, I'm not in the business of making predictions. Generally, 134 00:08:46,200 --> 00:08:48,959 Speaker 7: my own personal view is that the Court's three Democratic 135 00:08:49,120 --> 00:08:52,400 Speaker 7: justices probably vote against these tariffs. And then the question 136 00:08:52,520 --> 00:08:55,079 Speaker 7: is whether some of the majority of the Court have 137 00:08:55,480 --> 00:08:58,720 Speaker 7: similar concerns about the president's use of this law. And 138 00:08:59,000 --> 00:09:02,120 Speaker 7: I do think that it's still a very close decision. 139 00:09:02,360 --> 00:09:05,240 Speaker 7: It could go either way. I thought Chief Justice Roberts 140 00:09:05,600 --> 00:09:10,040 Speaker 7: and Justice Barrett and Justice Gorsich were perhaps more skeptical 141 00:09:10,360 --> 00:09:14,319 Speaker 7: of the president's tariff authority under I than the other justices. 142 00:09:14,559 --> 00:09:16,640 Speaker 7: I guess the only other point I would make is, 143 00:09:17,120 --> 00:09:20,680 Speaker 7: although it was discussed in the oral argument, I have 144 00:09:20,760 --> 00:09:24,400 Speaker 7: a hard time seeing this court making a split decision 145 00:09:24,559 --> 00:09:27,520 Speaker 7: that some of President Trump's tariffs are acceptable but others 146 00:09:27,520 --> 00:09:27,800 Speaker 7: are not. 147 00:09:28,280 --> 00:09:31,920 Speaker 3: So if the Court does rule against Trump, what happens 148 00:09:31,960 --> 00:09:35,080 Speaker 3: next as far as his tariffs are concerned. 149 00:09:34,840 --> 00:09:37,360 Speaker 7: Well, two things would happen. First of all, there would 150 00:09:37,400 --> 00:09:40,920 Speaker 7: likely be some sort of a refund process for importers 151 00:09:40,920 --> 00:09:43,520 Speaker 7: that paid the tariffs during this time, and there is 152 00:09:43,559 --> 00:09:46,400 Speaker 7: some precedent for that before that was discussed during the 153 00:09:46,520 --> 00:09:49,480 Speaker 7: oral argument a situation where the court struck down a 154 00:09:49,559 --> 00:09:53,040 Speaker 7: harbor maintenance tax and there was basically a process where 155 00:09:53,240 --> 00:09:56,480 Speaker 7: companies could file claims for the amount of the tax 156 00:09:56,480 --> 00:09:59,520 Speaker 7: that they paid. So Justice Barrett's was concerned that this 157 00:09:59,520 --> 00:10:02,439 Speaker 7: could be a and could be very unwieldy. I guess 158 00:10:02,480 --> 00:10:04,839 Speaker 7: the more important point is what will the president do 159 00:10:04,960 --> 00:10:08,280 Speaker 7: going forward? And I think it's clear that tariffs are 160 00:10:08,320 --> 00:10:12,880 Speaker 7: still a cornerstone of this administration's economic policy, and if 161 00:10:13,000 --> 00:10:17,400 Speaker 7: the Court says that the President cannot use AIPA, the 162 00:10:17,400 --> 00:10:21,640 Speaker 7: president will likely pivot to one of several other trade 163 00:10:21,640 --> 00:10:25,360 Speaker 7: tools that are available, and the Court mentioned many of these, 164 00:10:25,880 --> 00:10:29,560 Speaker 7: including Section one twenty two, the section two thirty two, 165 00:10:29,679 --> 00:10:33,079 Speaker 7: the National Security Law, which the administration has already made 166 00:10:33,200 --> 00:10:36,160 Speaker 7: quite a bit of use of in this administration, Section 167 00:10:36,240 --> 00:10:39,240 Speaker 7: three zero one, and so forth. The limit on those 168 00:10:39,360 --> 00:10:43,000 Speaker 7: laws is that they do require studies or actions by 169 00:10:43,040 --> 00:10:46,720 Speaker 7: other agencies. So Section two thirty two requires a study 170 00:10:46,720 --> 00:10:50,000 Speaker 7: and a report by the Commerce Department and consultation with 171 00:10:50,160 --> 00:10:54,600 Speaker 7: Defense Department in order to decide that imports of a 172 00:10:54,640 --> 00:11:00,280 Speaker 7: certain product like semiconductors or pharmaceuticals are a threat to 173 00:11:00,400 --> 00:11:04,880 Speaker 7: national security. Similarly, Section three oh one, which was the 174 00:11:04,960 --> 00:11:08,480 Speaker 7: law used to impose tariffs on China during the first 175 00:11:08,520 --> 00:11:13,240 Speaker 7: Trump administration, also requires a detailed study by the US 176 00:11:13,320 --> 00:11:17,640 Speaker 7: Trade Representative with public inputs. So those tools, for the 177 00:11:17,679 --> 00:11:21,040 Speaker 7: most part, cannot be used as quickly as AIPA was 178 00:11:21,120 --> 00:11:22,320 Speaker 7: used by President Trump. 179 00:11:22,640 --> 00:11:25,840 Speaker 3: The Court put this tariff's case on a fast track, 180 00:11:26,120 --> 00:11:29,880 Speaker 3: suggesting that the justices we'll try to resolve the case quickly, 181 00:11:30,320 --> 00:11:33,640 Speaker 3: so a decision could come down at any time. Thanks 182 00:11:33,679 --> 00:11:38,040 Speaker 3: tim that's Timothy Brightbill of Wilie Rhine Coming up next, 183 00:11:38,360 --> 00:11:42,280 Speaker 3: will the Supreme Court give the president control over dozens 184 00:11:42,320 --> 00:11:46,320 Speaker 3: of independent federal agencies. I'm June Grosso when you're listening 185 00:11:46,400 --> 00:11:52,280 Speaker 3: to Bloomberg. A ninety year old president maybe toppled this 186 00:11:52,400 --> 00:11:56,400 Speaker 3: year by the Supreme Court's conservatives, and reversing the Humphreys 187 00:11:56,480 --> 00:12:01,520 Speaker 3: executor ruling would give the president control over potentially dozens 188 00:12:01,520 --> 00:12:06,800 Speaker 3: of traditionally independent federal agencies. At oral arguments last month, 189 00:12:07,120 --> 00:12:12,080 Speaker 3: the conservative justices suggested they will allow President Trump to 190 00:12:12,240 --> 00:12:16,800 Speaker 3: fire Rebecca Kelly's slaughter from the Federal Trade Commission, despite 191 00:12:16,840 --> 00:12:19,960 Speaker 3: a law that says commissioners can be fired only for 192 00:12:20,040 --> 00:12:24,600 Speaker 3: specific reasons. The liberal justices like Sonya Soto Mayor and 193 00:12:24,640 --> 00:12:29,520 Speaker 3: Elena Kagan expressed alarm at giving the president such unchecked 194 00:12:29,559 --> 00:12:35,319 Speaker 3: authority over agencies that overlook crucial areas like nuclear energy, 195 00:12:35,520 --> 00:12:38,640 Speaker 3: consumer products safety, and labor relations. 196 00:12:39,280 --> 00:12:43,840 Speaker 4: You're asking us to destroy the structure of government and 197 00:12:43,880 --> 00:12:49,520 Speaker 4: to take away from Congress its ability to protect its 198 00:12:49,600 --> 00:12:55,280 Speaker 4: idea that the government is better structured with some agencies 199 00:12:55,640 --> 00:12:56,560 Speaker 4: that are independent. 200 00:12:57,559 --> 00:13:00,920 Speaker 8: So the result of what you want is that the 201 00:13:00,960 --> 00:13:05,880 Speaker 8: president is going to have massive, unchecked, uncontrolled power not 202 00:13:05,960 --> 00:13:09,520 Speaker 8: only to do traditional execution but to make law. 203 00:13:09,800 --> 00:13:13,520 Speaker 3: But the conservative justice is like Brett Kavanaugh and Neil 204 00:13:13,559 --> 00:13:18,439 Speaker 3: Gorsuch say the real concern is Congress's creation of agencies 205 00:13:18,760 --> 00:13:23,319 Speaker 3: that exercise executive power but can't be held accountable. 206 00:13:23,640 --> 00:13:28,400 Speaker 2: Independent agencies are not accountable to the people. They're not elected, 207 00:13:29,600 --> 00:13:32,680 Speaker 2: as Congress and the President are, and are exercising massive 208 00:13:33,360 --> 00:13:38,640 Speaker 2: power over individual liberty and billion dollar industries, whether it's 209 00:13:38,679 --> 00:13:40,920 Speaker 2: the FCC or the FTC or whatever it might be. 210 00:13:42,000 --> 00:13:45,679 Speaker 9: Tomorrow we could have the Labor Commission, the Education Commission, 211 00:13:46,760 --> 00:13:52,640 Speaker 9: the Environmental Commission, rather than Departments of Interior and so forth. 212 00:13:53,000 --> 00:13:57,199 Speaker 3: Opponents of regulation have long sought to reverse the nineteen 213 00:13:57,360 --> 00:14:02,280 Speaker 3: thirty five Humphreys Executor ruling, a decision that upheld FTC 214 00:14:02,600 --> 00:14:07,040 Speaker 3: job protections and cleared the way for the independent agencies 215 00:14:07,120 --> 00:14:11,760 Speaker 3: that proliferate across the federal government. My guest is constitutional 216 00:14:11,840 --> 00:14:16,440 Speaker 3: law expert William Traynor, a professor at Georgetown Law, Bill 217 00:14:16,480 --> 00:14:20,920 Speaker 3: tell us about the issues in Rebecca Slaughter's case against 218 00:14:20,960 --> 00:14:22,200 Speaker 3: Trump for firing her. 219 00:14:22,720 --> 00:14:25,880 Speaker 10: The issue before the screen Couard is that Congress puts 220 00:14:25,880 --> 00:14:30,320 Speaker 10: the limits on when the President and fire the heads 221 00:14:30,400 --> 00:14:33,760 Speaker 10: of independent agencies. So an independent agency is like the 222 00:14:33,800 --> 00:14:38,120 Speaker 10: Federal Trade Commission or the Federal Reserve. So really, since 223 00:14:38,320 --> 00:14:41,440 Speaker 10: the start of the Constitution, Congress has imposed limits on 224 00:14:42,080 --> 00:14:44,720 Speaker 10: when the president can fired these people. The question in 225 00:14:44,720 --> 00:14:48,360 Speaker 10: the case is whether that's unconstitutional, whether the president can 226 00:14:48,480 --> 00:14:51,520 Speaker 10: fire the head of an independent agency for any reason, 227 00:14:51,840 --> 00:14:54,600 Speaker 10: even if Congress has said they can only fire them, 228 00:14:54,800 --> 00:14:58,200 Speaker 10: you know, if they're engaged in bad behavior. So this 229 00:14:58,280 --> 00:15:00,880 Speaker 10: is a very big deal. So much of the government 230 00:15:00,920 --> 00:15:04,080 Speaker 10: structure that protects people in different ways or regulates the 231 00:15:04,120 --> 00:15:07,800 Speaker 10: economy is done through independent agencies. Congress has wanted to 232 00:15:07,960 --> 00:15:12,240 Speaker 10: insulate them from total executive control, and the Supreme Court 233 00:15:12,400 --> 00:15:15,040 Speaker 10: is deciding right now whether, in fact the president has 234 00:15:15,040 --> 00:15:17,200 Speaker 10: the kind of control that comes with being able to 235 00:15:17,200 --> 00:15:18,720 Speaker 10: fire the leaders of the agencies. 236 00:15:19,040 --> 00:15:21,680 Speaker 3: In these oral arguments, you often hear the Supreme Court 237 00:15:21,960 --> 00:15:25,480 Speaker 3: justices say, well, that's a job for Congress. You know, 238 00:15:25,640 --> 00:15:28,960 Speaker 3: that's not something that we should be interfering in. So 239 00:15:29,080 --> 00:15:32,320 Speaker 3: why are they interfering here where Congress has set up 240 00:15:32,400 --> 00:15:34,480 Speaker 3: these agencies and the rules. 241 00:15:35,120 --> 00:15:37,280 Speaker 10: That's a great question. There have been so many times 242 00:15:37,360 --> 00:15:40,520 Speaker 10: in which the Court is saying this is a political matter, 243 00:15:41,280 --> 00:15:44,400 Speaker 10: we shouldn't be deciding. But at the same time, the 244 00:15:44,480 --> 00:15:49,080 Speaker 10: conservative justices of the Court are very dedicated to what's 245 00:15:49,120 --> 00:15:53,160 Speaker 10: called the unitary executive theory, which means that the president 246 00:15:53,360 --> 00:15:57,120 Speaker 10: is in total charge of the executive branch. So what 247 00:15:57,120 --> 00:16:00,480 Speaker 10: they're saying here is Congress doesn't get to be involved. 248 00:16:00,720 --> 00:16:03,920 Speaker 10: The president is in total charge of the executive branch, 249 00:16:03,960 --> 00:16:07,680 Speaker 10: including what is historically been things like the independent agencies. 250 00:16:07,800 --> 00:16:10,400 Speaker 10: That is kind of one of the core commitments that 251 00:16:10,680 --> 00:16:13,960 Speaker 10: has really been at the basis of what Chief Justice 252 00:16:14,040 --> 00:16:16,800 Speaker 10: Roberts has thought, really going back to when he was 253 00:16:16,800 --> 00:16:19,320 Speaker 10: a young attorney, and that's the same thing for most 254 00:16:19,360 --> 00:16:20,800 Speaker 10: of the whole conservative wing. 255 00:16:21,160 --> 00:16:25,680 Speaker 3: What kind of concerns did the conservative justices express during 256 00:16:25,720 --> 00:16:31,680 Speaker 3: the oral arguments about this ninety year old President Humphrey's executor. 257 00:16:32,320 --> 00:16:35,320 Speaker 10: There are two things that we're seeing the conservative wing 258 00:16:35,360 --> 00:16:38,520 Speaker 10: of the Court struggle with. One is they want the 259 00:16:38,680 --> 00:16:43,680 Speaker 10: Federal Reserve to continue to be independent. They don't want 260 00:16:43,800 --> 00:16:46,600 Speaker 10: the president to be able to fire somebody on the 261 00:16:46,640 --> 00:16:49,440 Speaker 10: Federal Reserve. And they don't want that because you know, 262 00:16:49,600 --> 00:16:52,840 Speaker 10: that would be terrible for the economy. If the Federal 263 00:16:52,840 --> 00:16:55,720 Speaker 10: Reserve is setting interest rates just in order to help 264 00:16:55,800 --> 00:16:58,680 Speaker 10: the president rather than to help the economy, that would 265 00:16:58,680 --> 00:17:01,960 Speaker 10: be a disaster, a disaster for the market, the disaster 266 00:17:02,040 --> 00:17:04,800 Speaker 10: for the economy as a whole. So the conservative wing 267 00:17:04,840 --> 00:17:08,399 Speaker 10: of the Court I think wants to overturn Humphrey's executor. 268 00:17:08,600 --> 00:17:11,760 Speaker 10: But they're trying to come up with some rationale in 269 00:17:11,880 --> 00:17:15,119 Speaker 10: which they can say, the president can fire somebody on 270 00:17:15,160 --> 00:17:18,960 Speaker 10: the FTC, but he can't fire somebody on the Federal Reserve. 271 00:17:19,400 --> 00:17:21,800 Speaker 10: And they're going to be looking at the Federal Reserve 272 00:17:22,160 --> 00:17:25,480 Speaker 10: later in the term. That's a big concern for them. 273 00:17:25,520 --> 00:17:28,640 Speaker 10: So I think that animates all of the conservative justices 274 00:17:28,680 --> 00:17:31,000 Speaker 10: of the Court. I think also, you know, what I'm 275 00:17:31,040 --> 00:17:34,199 Speaker 10: hearing with the Chief Justices, what he's trying to do 276 00:17:34,400 --> 00:17:36,920 Speaker 10: is to come up with some way in which there's 277 00:17:37,000 --> 00:17:41,760 Speaker 10: some agencies where Congress can in fact limit the president's 278 00:17:41,760 --> 00:17:45,320 Speaker 10: ability to fire people. And he's thinking about, you know, 279 00:17:45,359 --> 00:17:48,119 Speaker 10: are the ones that are essentially kind of judicial in 280 00:17:48,200 --> 00:17:51,320 Speaker 10: their function, and you know, that may be an area 281 00:17:51,440 --> 00:17:55,000 Speaker 10: in which Congress can establish requirements for when the prison 282 00:17:55,040 --> 00:17:58,040 Speaker 10: can terminate somebody. But that's not the Federal Trade Commission. 283 00:17:58,119 --> 00:18:01,800 Speaker 10: Federal Trade Commission is not making the judicial decisions, you know, 284 00:18:01,880 --> 00:18:05,560 Speaker 10: it's very much deciding executive type rules. So I think 285 00:18:05,560 --> 00:18:08,160 Speaker 10: we're seeing two things on the conservative wing of the Court. 286 00:18:08,640 --> 00:18:11,200 Speaker 10: One is they're trying to come up with some way 287 00:18:11,240 --> 00:18:13,720 Speaker 10: in which they can say the president can fire somebody 288 00:18:13,800 --> 00:18:16,560 Speaker 10: the FDC, but not at the FED. And I think 289 00:18:16,760 --> 00:18:19,000 Speaker 10: the Chief is trying to come up with some way 290 00:18:19,000 --> 00:18:21,960 Speaker 10: in which there's some type of agencies in which the 291 00:18:22,040 --> 00:18:25,119 Speaker 10: president can be limited by Congress, but those would be 292 00:18:25,160 --> 00:18:28,520 Speaker 10: ones that are really deciding kind of fuzzi judicial matters, 293 00:18:28,960 --> 00:18:29,800 Speaker 10: not the FDC. 294 00:18:30,280 --> 00:18:33,520 Speaker 3: The liberals painted a dire picture of what would happen 295 00:18:33,560 --> 00:18:36,480 Speaker 3: if Trump wins here, just as sot Of Mayr said 296 00:18:36,560 --> 00:18:39,719 Speaker 3: to the Solicitor General, you're asking us to destroy the 297 00:18:39,800 --> 00:18:43,680 Speaker 3: structure of government. Do you think it's that serious. 298 00:18:44,000 --> 00:18:47,040 Speaker 10: I think that's absolutely right. You know, we have had 299 00:18:47,280 --> 00:18:52,040 Speaker 10: independent agencies which largely exists to protect people of limited power, 300 00:18:52,480 --> 00:18:54,959 Speaker 10: you know, and they've been in place really for one 301 00:18:55,040 --> 00:18:58,080 Speaker 10: hundred years. And the idea is that these should be 302 00:18:58,160 --> 00:19:03,000 Speaker 10: basically bipartisan or apolitical. They should not just be tools 303 00:19:03,000 --> 00:19:05,479 Speaker 10: of the president. So what the Court is considering right 304 00:19:05,520 --> 00:19:08,479 Speaker 10: now is whether that whole kind of structure gets got it. 305 00:19:08,800 --> 00:19:11,320 Speaker 10: So the stakes on this are huge. 306 00:19:11,680 --> 00:19:17,040 Speaker 3: Well, President Trump wasn't specifically mentioned by name. Two of 307 00:19:17,080 --> 00:19:22,920 Speaker 3: the liberal justices, Elina Kagan, and Katanji Brown Jackson did 308 00:19:22,960 --> 00:19:27,840 Speaker 3: make broad references to his firing of experts and dismantling 309 00:19:27,880 --> 00:19:29,160 Speaker 3: of the Department of Education. 310 00:19:29,560 --> 00:19:33,119 Speaker 8: The more realistic danger here is that we'll have an 311 00:19:33,240 --> 00:19:37,840 Speaker 8: Education Department, as authorized by Congress by law, that won't 312 00:19:37,840 --> 00:19:39,159 Speaker 8: have any employees in it. 313 00:19:40,520 --> 00:19:45,000 Speaker 1: Having a president come in and fire all the scientists 314 00:19:45,040 --> 00:19:48,080 Speaker 1: and the doctors and the economists and the PhDs and 315 00:19:48,160 --> 00:19:52,840 Speaker 1: replacing them with loyalists and people who don't know anything 316 00:19:53,119 --> 00:19:55,840 Speaker 1: is actually not in the best interest of the citizens 317 00:19:55,880 --> 00:19:56,840 Speaker 1: of the United States. 318 00:19:57,040 --> 00:19:59,199 Speaker 10: You know, what we're seeing right now is that in 319 00:19:59,240 --> 00:20:03,119 Speaker 10: the Trump admin the independent agencies and all of the 320 00:20:03,160 --> 00:20:06,520 Speaker 10: government watchtols, there's an attempt to politicize them in a 321 00:20:06,520 --> 00:20:09,399 Speaker 10: way that you know, we've never seen before. So the 322 00:20:09,480 --> 00:20:12,320 Speaker 10: stakes are very different, and they're much higher. You know, 323 00:20:12,440 --> 00:20:17,679 Speaker 10: if Humphrey's executor has been overturned in President Bush forty 324 00:20:17,680 --> 00:20:21,440 Speaker 10: three's administration, the stakes would have been very different because 325 00:20:21,720 --> 00:20:26,040 Speaker 10: President Bush was not focused on making independent agencies kind 326 00:20:26,080 --> 00:20:28,520 Speaker 10: of the tool for his politics. But that's what we're 327 00:20:28,520 --> 00:20:31,320 Speaker 10: seeing with President Trump, and that's why the stakes are 328 00:20:31,359 --> 00:20:35,200 Speaker 10: so high. They've always been big, but in this administration 329 00:20:35,520 --> 00:20:38,760 Speaker 10: where there's such an attempt to kind of move away 330 00:20:38,880 --> 00:20:43,919 Speaker 10: from scientific expertise and neutral decision making to control every 331 00:20:44,040 --> 00:20:47,479 Speaker 10: part of the executive branch. The stakes are huge, and 332 00:20:47,520 --> 00:20:51,400 Speaker 10: that's really a part of what those three liberal justices 333 00:20:51,560 --> 00:20:54,040 Speaker 10: we're questioning. You know, the other thing that they really 334 00:20:54,200 --> 00:20:58,000 Speaker 10: are focusing in and on. It's very, very hard to 335 00:20:58,119 --> 00:21:01,560 Speaker 10: come up with some law where you can say, Congress 336 00:21:01,600 --> 00:21:04,720 Speaker 10: can limit the president's ability to fire the heads of 337 00:21:04,720 --> 00:21:08,040 Speaker 10: the sec they can't fire at will the heads of 338 00:21:08,119 --> 00:21:10,159 Speaker 10: the set. And I can't think of any kind of 339 00:21:10,240 --> 00:21:13,960 Speaker 10: coherent way to distinguish those two cases. And that's one 340 00:21:13,960 --> 00:21:16,600 Speaker 10: of the things that the liberals were pressing on. You know, 341 00:21:16,600 --> 00:21:18,760 Speaker 10: I think they're also pressing on the history. If you 342 00:21:18,760 --> 00:21:21,639 Speaker 10: look at the constitutions, the text of the constitutions doesn't 343 00:21:21,680 --> 00:21:24,000 Speaker 10: say that the president gets to fire people in the 344 00:21:24,040 --> 00:21:27,000 Speaker 10: executive reruntion. It doesn't deal with removal at all. So 345 00:21:27,119 --> 00:21:30,320 Speaker 10: there's not a text that really helps the conservative way 346 00:21:30,320 --> 00:21:34,800 Speaker 10: of the Court and Congress really, starting in the Washington administration, 347 00:21:35,280 --> 00:21:39,240 Speaker 10: limited the president's ability to fire people running agencies kind 348 00:21:39,240 --> 00:21:41,680 Speaker 10: of what was analogous to modern agencies at the time. 349 00:21:41,880 --> 00:21:44,080 Speaker 10: So I think what the liberals on the Court are 350 00:21:44,119 --> 00:21:47,640 Speaker 10: focusing on are the text, the original understanding, as well 351 00:21:47,680 --> 00:21:51,679 Speaker 10: as the huge consequences of essentially giving the president the 352 00:21:51,720 --> 00:21:54,200 Speaker 10: power to politicize all of the independent agencies. 353 00:21:54,280 --> 00:21:57,359 Speaker 3: I wonder what happens when there is a democratic president. 354 00:21:57,760 --> 00:22:01,680 Speaker 3: Do the Conservatives then try to limit the ruling they're 355 00:22:01,720 --> 00:22:02,720 Speaker 3: expected to make here? 356 00:22:03,080 --> 00:22:05,600 Speaker 10: You know, one of the reasons why I think that 357 00:22:06,040 --> 00:22:09,919 Speaker 10: the court should not overturn Humphrey's Executor is to the 358 00:22:09,960 --> 00:22:12,920 Speaker 10: extent that you have any kind of political con terms, 359 00:22:13,119 --> 00:22:16,360 Speaker 10: you're giving a democratic president the power to do exactly 360 00:22:16,400 --> 00:22:20,360 Speaker 10: what President Trump is doing, to politicize every independent agency 361 00:22:20,359 --> 00:22:22,479 Speaker 10: in the way that that president wants, you know. And 362 00:22:22,520 --> 00:22:25,479 Speaker 10: then how does a conservative court say, well, you know, 363 00:22:25,640 --> 00:22:29,359 Speaker 10: Humphrey Executors is back. Once you establish a rule, you know, 364 00:22:29,400 --> 00:22:32,359 Speaker 10: it applies to everybody. And that's something that they really 365 00:22:32,400 --> 00:22:35,080 Speaker 10: have to think through because of the long term consequences, 366 00:22:35,160 --> 00:22:38,040 Speaker 10: because I don't think they would feel comfortable, you know, 367 00:22:38,080 --> 00:22:42,439 Speaker 10: with limiting a democratic president after they allow President Trump 368 00:22:42,560 --> 00:22:44,320 Speaker 10: to fire people whenever he wants. 369 00:22:44,600 --> 00:22:48,040 Speaker 3: So then you think this is the end of Humphrey's Executor. 370 00:22:48,520 --> 00:22:51,800 Speaker 10: No, I think they will completely overrule Humphrey's Executor. I 371 00:22:51,840 --> 00:22:56,040 Speaker 10: think the one question for me is whether the Chief 372 00:22:56,400 --> 00:23:00,680 Speaker 10: comes up with some limiting principle in which if there 373 00:23:00,760 --> 00:23:06,480 Speaker 10: are causing judicial independent agencies, then Congress can put limitations 374 00:23:06,480 --> 00:23:08,720 Speaker 10: on the president's ability to fire. But you know, the 375 00:23:08,840 --> 00:23:11,480 Speaker 10: basic point is, I think they're going to overturn Humphrey's 376 00:23:11,480 --> 00:23:14,359 Speaker 10: executive So I think what the Court will try to 377 00:23:14,400 --> 00:23:17,639 Speaker 10: do is to say the President can't fire Jerome Power, 378 00:23:17,840 --> 00:23:20,480 Speaker 10: can't fire Lisa Cook. But you know, I don't think 379 00:23:20,480 --> 00:23:23,480 Speaker 10: that that is a coherent approach because I think it 380 00:23:23,520 --> 00:23:26,359 Speaker 10: would be based on history, but the history doesn't support it. 381 00:23:26,560 --> 00:23:26,720 Speaker 2: Well. 382 00:23:26,720 --> 00:23:31,800 Speaker 3: We often see some strained interpretations of history from this court, 383 00:23:32,160 --> 00:23:34,880 Speaker 3: and we'll learn more about the carve out the Supreme 384 00:23:34,960 --> 00:23:37,800 Speaker 3: Court is indicating it wants to create for the FED 385 00:23:38,200 --> 00:23:41,960 Speaker 3: on January twenty first, that's when the justices we'll hear 386 00:23:42,240 --> 00:23:45,720 Speaker 3: oral arguments in the case over President Trump's attempt to 387 00:23:45,840 --> 00:23:49,840 Speaker 3: fire Federal Reserve Governor Lisa Cook. Thanks so much for 388 00:23:49,880 --> 00:23:53,960 Speaker 3: your insights, Bill. That's Professor William Traynor of Georgetown Law 389 00:23:54,359 --> 00:23:57,280 Speaker 3: coming up next on the Bloomberg Law Show. The Supreme 390 00:23:57,320 --> 00:24:01,400 Speaker 3: Court is weigh in giving Internet providers a stronger shield 391 00:24:01,440 --> 00:24:06,399 Speaker 3: from lawsuits when customer's pirate copyrighted works. At issue is 392 00:24:06,440 --> 00:24:10,199 Speaker 3: a jury's verdict of one billion dollars in a music 393 00:24:10,320 --> 00:24:15,320 Speaker 3: industry lawsuit against Cox Communications. I'm June Grosso and you're 394 00:24:15,359 --> 00:24:20,760 Speaker 3: listening to Bloomberg. The music industry faced off against internet 395 00:24:20,800 --> 00:24:24,800 Speaker 3: providers at the Supreme Court in December. At issue a 396 00:24:25,000 --> 00:24:29,720 Speaker 3: one billion dollar jury verdict against Cox Communications for not 397 00:24:29,840 --> 00:24:33,440 Speaker 3: shutting down the accounts of customers who pirated more than 398 00:24:33,600 --> 00:24:38,840 Speaker 3: ten thousand copyrighted songs by artists like Beyonce and Justin Timberlake. 399 00:24:39,119 --> 00:24:43,680 Speaker 3: The lawyers painted very different bleak pictures of the consequences 400 00:24:43,720 --> 00:24:48,720 Speaker 3: of a decision against their clients. Joshua Rosenkrantz represents the 401 00:24:48,760 --> 00:24:53,720 Speaker 3: internet provider Cox, and Paul Clement represents the record companies. 402 00:24:54,320 --> 00:24:59,200 Speaker 11: There is no short fireway for an ISP to avoid liability. 403 00:25:00,040 --> 00:25:03,560 Speaker 11: The only way it can is to cut off the Internet, 404 00:25:04,000 --> 00:25:08,439 Speaker 11: not just for the accused infringer, but for anyone else 405 00:25:08,760 --> 00:25:12,040 Speaker 11: who happens to use the same connection. That could be 406 00:25:12,320 --> 00:25:17,359 Speaker 11: entire towns, universities, or hospitals. If Cox is right on 407 00:25:17,400 --> 00:25:20,399 Speaker 11: the law, then Cox could take tens of thousands of 408 00:25:20,440 --> 00:25:23,160 Speaker 11: copyright notices and throw them in the trash. 409 00:25:23,200 --> 00:25:25,880 Speaker 6: And they could have its employees say f the DMCA. 410 00:25:26,160 --> 00:25:30,080 Speaker 3: The issue is whether Internet providers should be held responsible 411 00:25:30,160 --> 00:25:34,320 Speaker 3: for contributing to copyright infringement when they know their customers 412 00:25:34,359 --> 00:25:39,360 Speaker 3: are pirrating music but don't terminate their Internet access. Several 413 00:25:39,640 --> 00:25:44,440 Speaker 3: justices appeared skeptical that Cox had done enough to stop piracy, 414 00:25:44,720 --> 00:25:48,720 Speaker 3: and questioned whether a favorable ruling would allow Internet service 415 00:25:48,800 --> 00:25:53,840 Speaker 3: providers to ignore clear copyright infringement. Here are Justices Sonya 416 00:25:53,880 --> 00:25:56,320 Speaker 3: Sotomayor and Amy Cony Barrett. 417 00:25:56,800 --> 00:26:02,399 Speaker 4: You did nothing and in fact your clients sort of 418 00:26:02,640 --> 00:26:08,199 Speaker 4: lays a fair attitude towards the respondents is probably what 419 00:26:08,359 --> 00:26:09,640 Speaker 4: got the jury upset. 420 00:26:10,720 --> 00:26:13,359 Speaker 8: What incentive would you have to do anything? If you 421 00:26:13,400 --> 00:26:17,040 Speaker 8: want you if you win and mayor knowledge isn't enough. 422 00:26:17,119 --> 00:26:19,520 Speaker 1: Why would you bother to send out any notices in 423 00:26:19,560 --> 00:26:20,080 Speaker 1: the future. 424 00:26:20,560 --> 00:26:25,040 Speaker 3: But Justice Samuel Alito expressed concerns about the effect on 425 00:26:25,240 --> 00:26:30,280 Speaker 3: large institutions like universities or hospitals. If an Internet service 426 00:26:30,359 --> 00:26:32,920 Speaker 3: provider is forced to cut off infringers. 427 00:26:33,359 --> 00:26:37,280 Speaker 6: What is an ISP supposed to do with a university 428 00:26:37,320 --> 00:26:41,520 Speaker 6: account that has let's say, seventy thousand users? What is 429 00:26:41,560 --> 00:26:42,960 Speaker 6: the university supposed to do? 430 00:26:43,359 --> 00:26:47,359 Speaker 3: My guest is Intellectual property litigator Terrence Ross, a partner 431 00:26:47,400 --> 00:26:51,360 Speaker 3: at Katan Euchen Rosenman Terry, will you explain the issue 432 00:26:51,400 --> 00:26:55,679 Speaker 3: here and the process of policing music piracy. 433 00:26:56,280 --> 00:27:00,639 Speaker 12: The issue in the case involved process by which recording 434 00:27:00,840 --> 00:27:07,520 Speaker 12: companies track online sharing of musical compositions that they own. 435 00:27:07,560 --> 00:27:12,280 Speaker 12: The copyright in the process allows them to identify the 436 00:27:12,520 --> 00:27:18,160 Speaker 12: IP address and the ISP that is providing the service 437 00:27:18,200 --> 00:27:22,000 Speaker 12: to that IP address, and so the music companies recording 438 00:27:22,000 --> 00:27:26,800 Speaker 12: companies regularly on a daily basis, in fact, send notices 439 00:27:27,080 --> 00:27:32,400 Speaker 12: of infringement to the ISPs that are providing the internet 440 00:27:32,440 --> 00:27:35,600 Speaker 12: service to these infringers. And there are days in which 441 00:27:35,600 --> 00:27:40,840 Speaker 12: they're sending out ten thousand notices to each individual ISP service. 442 00:27:41,280 --> 00:27:44,879 Speaker 12: And the recording companies finally became fed up that the 443 00:27:44,920 --> 00:27:48,280 Speaker 12: ISPs were not doing something. They wanted the ISPs to 444 00:27:48,280 --> 00:27:53,639 Speaker 12: cut off service to these identified infringers, and the ISPs 445 00:27:53,760 --> 00:27:58,240 Speaker 12: dragged their heels doing anything taking any real concrete action 446 00:27:58,400 --> 00:28:02,160 Speaker 12: to stop it. And so oh the recording company's finally 447 00:28:02,640 --> 00:28:07,040 Speaker 12: sued cos Cable Company, which is one of the largest 448 00:28:07,119 --> 00:28:11,119 Speaker 12: ISPs in the nation, alleging that they had engaged in 449 00:28:11,440 --> 00:28:14,200 Speaker 12: contributory copyright infringement. 450 00:28:13,920 --> 00:28:17,679 Speaker 3: In its papers. Cox had argued that Grandma will be 451 00:28:17,760 --> 00:28:23,160 Speaker 3: thrown off the Internet because Junior visited and illegally downloaded songs. 452 00:28:23,480 --> 00:28:25,840 Speaker 3: Did some of the justices seem to pick up on 453 00:28:25,920 --> 00:28:26,760 Speaker 3: that concern. 454 00:28:27,280 --> 00:28:30,440 Speaker 12: There was only one justice who seemed to give some 455 00:28:30,520 --> 00:28:32,840 Speaker 12: credence that, and that was Justice the Lead of He 456 00:28:32,880 --> 00:28:36,640 Speaker 12: was the only justice who really seemed to buy into 457 00:28:36,960 --> 00:28:41,360 Speaker 12: the position by Cox that it was hesitant to kick 458 00:28:41,360 --> 00:28:43,880 Speaker 12: people off because of and then you can fill in 459 00:28:43,920 --> 00:28:46,080 Speaker 12: the blank as to what the reason is their grandmother, 460 00:28:46,200 --> 00:28:50,160 Speaker 12: their a university, their hospital. In fact, the hypothetically posed 461 00:28:50,280 --> 00:28:53,280 Speaker 12: at oral argument in the Supreme Court was what happens 462 00:28:53,320 --> 00:28:56,360 Speaker 12: when all you can do is identify that the IP 463 00:28:56,480 --> 00:28:59,400 Speaker 12: address belongs to university? Or you wereing to shut down 464 00:28:59,400 --> 00:29:03,320 Speaker 12: the entire universe? One of those odd hypotheticals that takes 465 00:29:03,400 --> 00:29:07,480 Speaker 12: the case the extreme. The facts are actually contrast to that, 466 00:29:07,880 --> 00:29:10,640 Speaker 12: and indeed none of the other justices seemed to buy 467 00:29:10,720 --> 00:29:14,080 Speaker 12: into that argument. The reality is that over the period 468 00:29:14,080 --> 00:29:17,560 Speaker 12: of time and issue, Cox had received one hundred and 469 00:29:17,680 --> 00:29:22,720 Speaker 12: sixty three thousand notices of infringement and had kicked off 470 00:29:22,840 --> 00:29:28,520 Speaker 12: of its service only thirty two customers. The policy of 471 00:29:29,120 --> 00:29:33,520 Speaker 12: compliance used by Cox was described in some detail, and 472 00:29:34,000 --> 00:29:38,480 Speaker 12: it was sub law. They fare to use the word 473 00:29:38,600 --> 00:29:41,080 Speaker 12: that one of the justices used to describe it. They 474 00:29:41,080 --> 00:29:43,240 Speaker 12: had originally started off to say, well, if we get 475 00:29:43,280 --> 00:29:47,200 Speaker 12: three notices about a particular user, we're going to tell 476 00:29:47,240 --> 00:29:50,640 Speaker 12: them we're cutting off their service. That rose gradually over 477 00:29:50,680 --> 00:29:53,160 Speaker 12: time from being a three strikes you're out policy to 478 00:29:53,240 --> 00:29:56,640 Speaker 12: being a thirteen strikes and you're aut policy. And the 479 00:29:56,800 --> 00:30:00,000 Speaker 12: thirteen strikes reset every six months, so if you didn't 480 00:30:00,160 --> 00:30:03,120 Speaker 12: get to thirteen within a six month period, you went 481 00:30:03,200 --> 00:30:06,360 Speaker 12: back to zero. They also capped the number of notices 482 00:30:06,440 --> 00:30:10,800 Speaker 12: that they were accepting from recording companies at three hundred 483 00:30:10,800 --> 00:30:14,040 Speaker 12: a day. And then probably the worst fact of all 484 00:30:14,240 --> 00:30:17,040 Speaker 12: in which got brought up at the Supreme Court, if 485 00:30:17,040 --> 00:30:20,560 Speaker 12: you could believe that was the head of copyright Compliance 486 00:30:20,760 --> 00:30:23,600 Speaker 12: at Cox sent out an email to the people in 487 00:30:23,720 --> 00:30:28,760 Speaker 12: charge of enforcing copyright policy in which he said, f 488 00:30:29,280 --> 00:30:34,240 Speaker 12: the DMCA. Now, the DMCA refers to the Digital Millennium 489 00:30:34,280 --> 00:30:37,520 Speaker 12: Copyright Act, which is one of the key statutes that 490 00:30:37,720 --> 00:30:42,880 Speaker 12: shoe here and which requires ISPs to set up a 491 00:30:43,320 --> 00:30:48,040 Speaker 12: policing mechanism against copyright infringement if they want to claim 492 00:30:48,120 --> 00:30:51,720 Speaker 12: the safe harbor. That is embedded in the Digital Millennium 493 00:30:51,720 --> 00:30:55,280 Speaker 12: Copyright Act. In response to that, one of the minions 494 00:30:55,360 --> 00:30:57,520 Speaker 12: for the head of Compliance wrote back, say, but we're 495 00:30:57,520 --> 00:31:01,560 Speaker 12: helping law breaking customers. And there were dozens of emails 496 00:31:01,600 --> 00:31:04,400 Speaker 12: like this amongst the compliance group of Cocks that just 497 00:31:04,560 --> 00:31:10,320 Speaker 12: manifested a complete disdain for copyright laws, which obviously impacted 498 00:31:10,360 --> 00:31:13,320 Speaker 12: the jury because the jury below had awarded a billion 499 00:31:13,360 --> 00:31:16,160 Speaker 12: dollars in damages against Cock, and in the Supreme Court 500 00:31:16,240 --> 00:31:19,880 Speaker 12: argument it was clear that outside of Justice Alito, none 501 00:31:19,920 --> 00:31:23,720 Speaker 12: of the eight other justices were buying what Cox was 502 00:31:23,800 --> 00:31:27,120 Speaker 12: trying to claim was their reason for not cutting off 503 00:31:27,160 --> 00:31:30,960 Speaker 12: people that you'd kick grandma's off of the Internet. The 504 00:31:31,040 --> 00:31:33,280 Speaker 12: other eight justices just didn't buy it, and it was 505 00:31:33,280 --> 00:31:34,400 Speaker 12: a loser argument for. 506 00:31:34,400 --> 00:31:39,240 Speaker 3: Cock, and some of the justices appeared pretty skeptical about 507 00:31:39,280 --> 00:31:42,760 Speaker 3: Cox's excuses for not stopping the piracy. 508 00:31:43,160 --> 00:31:46,400 Speaker 12: There's apparently one period of time at which twenty one 509 00:31:46,480 --> 00:31:50,360 Speaker 12: percent of all traffic on the Cocks Internet connections involved 510 00:31:50,360 --> 00:31:53,840 Speaker 12: copyright in fringe, and the lawsuit below didn't go after 511 00:31:54,640 --> 00:31:59,400 Speaker 12: every single mom and pop business or every single college student. 512 00:32:00,200 --> 00:32:05,040 Speaker 12: Was targeted only at distributors, not people who were downloading 513 00:32:05,040 --> 00:32:09,160 Speaker 12: the occasional song, but people who were copying music digitally 514 00:32:09,560 --> 00:32:13,160 Speaker 12: and distributing it on a mass scale. So there was 515 00:32:13,440 --> 00:32:18,640 Speaker 12: this enormous skepticism expressed by the justice, except for Justice Alita, 516 00:32:19,000 --> 00:32:24,040 Speaker 12: that Cox really wasn't fulfilling its obligation and needed to 517 00:32:24,040 --> 00:32:27,160 Speaker 12: do something differently. Now. On the other hand, there also 518 00:32:27,240 --> 00:32:30,840 Speaker 12: seemed to be some concern about the size of the 519 00:32:30,920 --> 00:32:35,959 Speaker 12: jury verdict and whether or not the actions of Cocks 520 00:32:36,160 --> 00:32:41,480 Speaker 12: were sufficient to constitute willful contributory infringement, which is what 521 00:32:41,680 --> 00:32:45,640 Speaker 12: set them up for much larger scale of damages than 522 00:32:45,720 --> 00:32:48,640 Speaker 12: if this had been found to be just ordinary copyright infringement. 523 00:32:49,000 --> 00:32:51,720 Speaker 3: So, Terry, where do you think the justices will come 524 00:32:51,760 --> 00:32:52,280 Speaker 3: out here? 525 00:32:52,880 --> 00:32:56,160 Speaker 12: I just don't know what they're going to do here. 526 00:32:56,560 --> 00:32:58,280 Speaker 12: I have to be frank, this is one of the 527 00:32:58,320 --> 00:33:02,240 Speaker 12: more opaque oral arguments I have listened to. Justice Soto 528 00:33:02,280 --> 00:33:06,320 Speaker 12: Mayor commented at one point during the argument that the 529 00:33:06,400 --> 00:33:10,360 Speaker 12: court was being forced to choose between two extreme positions, 530 00:33:10,680 --> 00:33:14,240 Speaker 12: and it was very skeptical of Cox's position, but also 531 00:33:14,800 --> 00:33:19,680 Speaker 12: didn't quite like the extreme argument being made by Sony 532 00:33:19,720 --> 00:33:22,560 Speaker 12: Music Corp. In the recording company seems really perplexed as 533 00:33:22,560 --> 00:33:25,560 Speaker 12: to what to do genuinely perplexed. The problem the Supreme 534 00:33:25,640 --> 00:33:30,640 Speaker 12: Court faces here is that the standard for contributory copyright 535 00:33:30,720 --> 00:33:35,240 Speaker 12: infringement has been pretty well settled in this court for 536 00:33:35,320 --> 00:33:40,240 Speaker 12: more than a century. As early as nineteen twelve, there 537 00:33:40,360 --> 00:33:44,920 Speaker 12: was a case that involved miniograph machines. They were Xerox 538 00:33:45,040 --> 00:33:49,280 Speaker 12: machines way of doing sort of a mass production. And 539 00:33:49,520 --> 00:33:52,320 Speaker 12: there was a case in which a publisher sued a 540 00:33:52,360 --> 00:33:58,320 Speaker 12: mimeograph company for knowingly selling mimeograph materials to a company 541 00:33:58,520 --> 00:34:02,800 Speaker 12: that it knew was in aged in infringing copyright works 542 00:34:02,920 --> 00:34:06,480 Speaker 12: by using the miniograph machine. And the standard was set 543 00:34:06,480 --> 00:34:10,520 Speaker 12: out there and has been repeated over and over since 544 00:34:10,560 --> 00:34:14,359 Speaker 12: that time nineteen twelve, and the standard is pretty simple. 545 00:34:14,400 --> 00:34:17,120 Speaker 12: If you provide something that you know is going to 546 00:34:17,160 --> 00:34:20,680 Speaker 12: be used by a person to commit copyright infringement, you've 547 00:34:20,680 --> 00:34:25,200 Speaker 12: engaged in contributory infringement. And the past cases haven't spoken 548 00:34:25,200 --> 00:34:28,360 Speaker 12: in terms of needing an affirmative act, although one could 549 00:34:28,440 --> 00:34:30,279 Speaker 12: argue this did not come up with the Supreme Court 550 00:34:30,360 --> 00:34:34,040 Speaker 12: hearing that providing the Internet service is an affirmative act. 551 00:34:34,600 --> 00:34:38,759 Speaker 12: The Cox company argued the Court that that's not an 552 00:34:38,760 --> 00:34:41,680 Speaker 12: affirmative act, but that's sort of a stretch in order 553 00:34:41,719 --> 00:34:44,960 Speaker 12: to try to get around that line cases, the Cox 554 00:34:45,000 --> 00:34:49,960 Speaker 12: Company argued that contributory infringement is really akin to aiding 555 00:34:50,040 --> 00:34:55,040 Speaker 12: and embedding liability in the context of torts and criminal laws, 556 00:34:55,080 --> 00:34:57,400 Speaker 12: and that's a real stretch that I think is just 557 00:34:57,640 --> 00:35:00,719 Speaker 12: dead wrong. It would give the court a way to 558 00:35:00,760 --> 00:35:02,799 Speaker 12: get out of this dilemma, but it would mean the 559 00:35:02,800 --> 00:35:06,160 Speaker 12: Court would have to overturn half a dozen cases going 560 00:35:06,200 --> 00:35:08,839 Speaker 12: back to nineteen twelve for over a century and say 561 00:35:08,920 --> 00:35:10,960 Speaker 12: now they're not good law anymore. I don't see the 562 00:35:10,960 --> 00:35:12,000 Speaker 12: Court doing that here. 563 00:35:12,440 --> 00:35:14,799 Speaker 3: Do you think we'll see that justices coming up with 564 00:35:14,880 --> 00:35:16,560 Speaker 3: some sort of middle ground. 565 00:35:17,160 --> 00:35:20,320 Speaker 12: So it's a shame that Justice Ginsburg is no longer 566 00:35:20,360 --> 00:35:22,920 Speaker 12: on the Court. And we've had many conversations about our 567 00:35:23,320 --> 00:35:26,960 Speaker 12: knowledge of copyright law and her ability to copy together 568 00:35:27,040 --> 00:35:31,760 Speaker 12: coalitions for positions under the Copyright Act that we're actually 569 00:35:31,840 --> 00:35:35,400 Speaker 12: quite pragmatic and useful. And I just don't see anybody 570 00:35:35,560 --> 00:35:38,440 Speaker 12: either with that depth of knowledge to copyright law or 571 00:35:38,480 --> 00:35:40,680 Speaker 12: the ability to do that sort of log rolling on 572 00:35:40,719 --> 00:35:42,480 Speaker 12: this court. And so I think it's going to be 573 00:35:42,520 --> 00:35:44,560 Speaker 12: a real struggle for this Court to come up with 574 00:35:44,640 --> 00:35:47,120 Speaker 12: some sort of middle ground, particularly in light of the 575 00:35:47,160 --> 00:35:50,000 Speaker 12: fact that the law here is just so set for 576 00:35:50,080 --> 00:35:52,640 Speaker 12: such a long period time, and the sort of odd 577 00:35:52,719 --> 00:35:56,080 Speaker 12: cases that cocksited to the Supreme Court, including this recent 578 00:35:56,360 --> 00:35:59,640 Speaker 12: gun distribution case. Topreme Court to site recently where the 579 00:35:59,719 --> 00:36:03,800 Speaker 12: gun companies were being sued for deaths in Mexico and 580 00:36:04,000 --> 00:36:07,480 Speaker 12: the argument was they were aiding embedding this criminal activity. 581 00:36:07,880 --> 00:36:10,440 Speaker 12: And the gun company said, well, we sold the guns 582 00:36:10,480 --> 00:36:13,879 Speaker 12: to dealers in Texas, not knowing what they were going 583 00:36:13,920 --> 00:36:16,440 Speaker 12: to do with them, and if anybody's contributed to them, 584 00:36:16,440 --> 00:36:18,400 Speaker 12: but it's not us. We had no knowledge of it. 585 00:36:18,760 --> 00:36:23,920 Speaker 12: And that case just doesn't fit here, either legally or factually. 586 00:36:24,320 --> 00:36:26,920 Speaker 12: And yet cops sort of beed a lot on that. 587 00:36:27,040 --> 00:36:29,080 Speaker 12: I mean, it was almost as if there's a oh, hey, 588 00:36:29,280 --> 00:36:33,120 Speaker 12: we cite to some case in which the second Circuit, 589 00:36:33,120 --> 00:36:36,080 Speaker 12: which everybody bleeds in on the Supreme Court, that'll get 590 00:36:36,120 --> 00:36:38,479 Speaker 12: us over the humpire. It's just such a strutch that 591 00:36:38,800 --> 00:36:42,160 Speaker 12: in fact backfires. One starts to think, well, what's wrong 592 00:36:42,239 --> 00:36:44,040 Speaker 12: with their case that that's the best they've got. 593 00:36:44,239 --> 00:36:48,800 Speaker 3: Yeah, gun distribution and pirated music don't seem to equate. 594 00:36:49,080 --> 00:36:52,239 Speaker 3: Thanks so much, Terry. As always, that's Terrence Fross of 595 00:36:52,440 --> 00:36:55,640 Speaker 3: Catain Euchen Rosenman, and that's it for this edition of 596 00:36:55,680 --> 00:36:58,320 Speaker 3: The Bloomberg Law Show. Remember you can always get the 597 00:36:58,400 --> 00:37:01,839 Speaker 3: latest legal news on our Bloomer podcasts. You can find 598 00:37:01,880 --> 00:37:06,440 Speaker 3: them on Apple Podcasts, Spotify, and at www dot bloomberg 599 00:37:06,520 --> 00:37:10,279 Speaker 3: dot com, slash podcast Slash Law, And remember to tune 600 00:37:10,320 --> 00:37:13,520 Speaker 3: into The Bloomberg Law Show every weeknight at ten pm 601 00:37:13,600 --> 00:37:17,160 Speaker 3: Wall Street Time. I'm June Grosso and you're listening to 602 00:37:17,200 --> 00:37:17,759 Speaker 3: Bloomberg