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 --> 00:00:13,920 Speaker 2: Why do you think Presidents Clinton, Bush Obama have not. 3 00:00:15,280 --> 00:00:18,079 Speaker 3: Used i EPA to impose tariffs? 4 00:00:18,560 --> 00:00:21,560 Speaker 4: It's one of the most important cases of the term, 5 00:00:21,800 --> 00:00:26,800 Speaker 4: a test of presidential power where President Trump's signature economic 6 00:00:26,920 --> 00:00:30,720 Speaker 4: policy is at stake and a decision against him could 7 00:00:30,840 --> 00:00:34,600 Speaker 4: mean refunding of more than one hundred billion dollars. And 8 00:00:34,720 --> 00:00:38,960 Speaker 4: after nearly three hours of oral arguments on Wednesday, it 9 00:00:39,000 --> 00:00:44,599 Speaker 4: appears that Supreme Court justices across the ideological spectrum are 10 00:00:44,760 --> 00:00:49,120 Speaker 4: skeptical that Trump has the legal authority to impose billions 11 00:00:49,200 --> 00:00:53,360 Speaker 4: of dollars in tariffs. Chief Justice John Roberts and Justice 12 00:00:53,400 --> 00:00:58,240 Speaker 4: Sonya Sotomayor said, the tariffs are taxes, and the Constitution 13 00:00:58,520 --> 00:01:00,840 Speaker 4: gives taxing power to Congress. 14 00:01:01,520 --> 00:01:05,160 Speaker 5: It's a congressional power, not a presidential power to tax. 15 00:01:05,760 --> 00:01:08,200 Speaker 5: And you want to say tariffs are not taxes, but 16 00:01:08,319 --> 00:01:13,320 Speaker 5: that's exactly what they are, degenerating money from American citizens revenue. 17 00:01:14,080 --> 00:01:18,399 Speaker 6: The vehicle is in position of taxes on Americans and 18 00:01:18,760 --> 00:01:20,880 Speaker 6: that has always been the core power of Congress. 19 00:01:21,040 --> 00:01:25,679 Speaker 4: Trump is arguing that the International Emergency Economic Powers Act, 20 00:01:25,800 --> 00:01:30,800 Speaker 4: or AIPA gives him virtually unlimited powers to impose tariffs 21 00:01:30,800 --> 00:01:35,320 Speaker 4: by executive order. But as several justices pointed out, the 22 00:01:35,360 --> 00:01:38,960 Speaker 4: word tariffs is nowhere to be found in that law. 23 00:01:39,280 --> 00:01:43,880 Speaker 4: Here are the Chief Justice and Justice Katanji Brown Jackson, Well, but. 24 00:01:43,840 --> 00:01:47,319 Speaker 6: The exercise of the power is to impose tariffs, right, 25 00:01:47,960 --> 00:01:50,080 Speaker 6: and the statute doesn't use the word tariffs. 26 00:01:50,480 --> 00:01:54,280 Speaker 3: Your argument suggests that we should see the word imposed, 27 00:01:54,520 --> 00:01:58,560 Speaker 3: the phrase impose tariffs in that same series of things 28 00:01:58,560 --> 00:02:01,240 Speaker 3: that the president could do. We don't see that word, 29 00:02:01,320 --> 00:02:05,240 Speaker 3: And instead you take regulate and say that must mean that. 30 00:02:06,000 --> 00:02:09,959 Speaker 4: No other president has tried to impose tariffs under AJEPA, 31 00:02:10,320 --> 00:02:15,120 Speaker 4: and Justice Neil Gorsuch, a Trump appointdee, expressed alarm at 32 00:02:15,160 --> 00:02:20,120 Speaker 4: the idea that Congress could delegate such seemingly unlimited power 33 00:02:20,320 --> 00:02:21,240 Speaker 4: to the president. 34 00:02:22,320 --> 00:02:25,320 Speaker 2: Congress, as a practical matter, can't get this power back 35 00:02:25,440 --> 00:02:27,639 Speaker 2: once it's handed it over to the President's a one 36 00:02:27,680 --> 00:02:32,600 Speaker 2: way ratchet toward the gradual but continual accretion of power 37 00:02:33,240 --> 00:02:36,400 Speaker 2: in the executive branch and away from the people's elected representative. 38 00:02:36,880 --> 00:02:40,079 Speaker 4: All three lower courts that ruled on the issue found 39 00:02:40,080 --> 00:02:44,079 Speaker 4: the tariffs to be unlawful. My guest is Timothy Bright Bell, 40 00:02:44,440 --> 00:02:47,720 Speaker 4: partner and co chair of the International Trade practice at 41 00:02:47,760 --> 00:02:51,919 Speaker 4: Wiley Rhin. Tim tell us what's at stake in this case. 42 00:02:52,720 --> 00:02:58,800 Speaker 7: This case involves the centerpiece of President Trump's economic agenda. 43 00:02:59,120 --> 00:03:01,640 Speaker 7: Is the biggest trade case the Supreme Court has ever heard, 44 00:03:01,960 --> 00:03:06,320 Speaker 7: and it goes straight to the key constitutional issue of 45 00:03:06,400 --> 00:03:10,040 Speaker 7: who has the power to impose tariffs, the US Congress 46 00:03:10,440 --> 00:03:13,920 Speaker 7: or the president. President Trump says the law that he used, 47 00:03:14,200 --> 00:03:18,400 Speaker 7: the International Emergency Economic Powers Act, gives him the power 48 00:03:18,639 --> 00:03:22,280 Speaker 7: to regulate imports, and that that includes the power to 49 00:03:22,400 --> 00:03:28,240 Speaker 7: impose tariffs, including ventanyl tariffs on China, Canada, and Mexico, 50 00:03:28,639 --> 00:03:32,200 Speaker 7: and reciprocal economic tariffs on almost all countries. Whereas the 51 00:03:32,200 --> 00:03:34,840 Speaker 7: plaintiffs in this case say that Congress has that power 52 00:03:35,000 --> 00:03:38,680 Speaker 7: and cannot delegate that power, and that AEPA, which has 53 00:03:38,760 --> 00:03:42,360 Speaker 7: never before been used to impose tariffs, does not include 54 00:03:42,360 --> 00:03:45,560 Speaker 7: that power and afford So that is what is at stake. 55 00:03:45,720 --> 00:03:49,800 Speaker 7: And of course the tariffs under AEPA have led to 56 00:03:50,040 --> 00:03:53,440 Speaker 7: collection of hundreds of billions of dollars of tariffs already, 57 00:03:53,880 --> 00:03:57,240 Speaker 7: so it's very high economic stakes for the companies and 58 00:03:57,320 --> 00:03:59,240 Speaker 7: industries that it paid those tariffs as well. 59 00:04:00,000 --> 00:04:04,120 Speaker 4: There's always a textual analysis these days, and many of 60 00:04:04,160 --> 00:04:08,160 Speaker 4: the justices were concerned that the text of the statute 61 00:04:08,600 --> 00:04:12,600 Speaker 4: doesn't mention the word tariffs at all exactly. 62 00:04:12,760 --> 00:04:16,680 Speaker 7: The argument focused quite heavily on this law used by 63 00:04:16,680 --> 00:04:20,560 Speaker 7: President Trump AIPA and whether that law, which gives the 64 00:04:20,560 --> 00:04:25,240 Speaker 7: president the power to regulate imports, also includes the power 65 00:04:25,279 --> 00:04:28,560 Speaker 7: to impose tariffs. That really dominated most of the hearing, 66 00:04:28,920 --> 00:04:32,960 Speaker 7: and the justices asked very difficult questions on both sides. 67 00:04:33,160 --> 00:04:37,560 Speaker 7: The administration said that the ability to impose tariffs is 68 00:04:37,600 --> 00:04:41,719 Speaker 7: a core application of the ability to regulate imports in 69 00:04:41,760 --> 00:04:45,960 Speaker 7: a historical context, said that, of course, the power to 70 00:04:46,040 --> 00:04:50,359 Speaker 7: regulate imports would be read to include tariffs because tariffs 71 00:04:50,360 --> 00:04:53,239 Speaker 7: have been used throughout our country's history. On the other hand, 72 00:04:53,640 --> 00:04:56,719 Speaker 7: several justices were skeptical of that, and the plaintiffs in 73 00:04:56,760 --> 00:05:01,919 Speaker 7: this case said that when the delegation and includes tariff authority, 74 00:05:02,320 --> 00:05:05,920 Speaker 7: there is always specific language to that effect, and that 75 00:05:06,320 --> 00:05:10,960 Speaker 7: there are always conditions and tests and agency decisions that 76 00:05:11,040 --> 00:05:14,000 Speaker 7: have to go into that tariff power. So there was 77 00:05:14,040 --> 00:05:16,640 Speaker 7: a good amount of the argument focused on those issues, 78 00:05:16,800 --> 00:05:20,279 Speaker 7: and again, whether power to regulate imports includes the power 79 00:05:20,320 --> 00:05:21,880 Speaker 7: to impose tariffs, and. 80 00:05:21,800 --> 00:05:24,960 Speaker 4: What did you think about the Solicitor General's argument that 81 00:05:25,000 --> 00:05:29,360 Speaker 4: the Trading with the Enemy Act of nineteen seventeen gives 82 00:05:29,360 --> 00:05:32,480 Speaker 4: the president authority to impose these tariffs. 83 00:05:33,200 --> 00:05:36,560 Speaker 7: The Solicitor General argued, yes, that the Trading with the 84 00:05:36,680 --> 00:05:41,040 Speaker 7: Enemy Act was used to impose tariffs in a prior 85 00:05:41,080 --> 00:05:44,760 Speaker 7: situation by President Nixon, and that there's no reason to 86 00:05:44,800 --> 00:05:48,520 Speaker 7: think that anything had changed when AIPA had passed. On 87 00:05:48,560 --> 00:05:51,680 Speaker 7: the other hand, the plaintiffs had a response to that 88 00:05:51,960 --> 00:05:56,719 Speaker 7: in terms of the fact again that when tariffs are involved, 89 00:05:57,080 --> 00:05:59,599 Speaker 7: there are always conditions on their use, there are always 90 00:05:59,600 --> 00:06:03,560 Speaker 7: specific procedures, and also the fact that the reality is 91 00:06:03,600 --> 00:06:08,120 Speaker 7: that no other president in fifty years has used AIPA 92 00:06:08,160 --> 00:06:09,240 Speaker 7: to impose tariffs. 93 00:06:09,520 --> 00:06:14,000 Speaker 4: The Major Questions doctrine came up several times during the arguments. 94 00:06:14,400 --> 00:06:18,360 Speaker 4: It basically says that when the executive branch takes an 95 00:06:18,440 --> 00:06:23,880 Speaker 4: action with major political or economic significance, Congress has to 96 00:06:24,040 --> 00:06:28,560 Speaker 4: have expressly authorized it, and the Chief Justice made it 97 00:06:28,720 --> 00:06:33,640 Speaker 4: fairly clear that he thought the Major Questions doctrine applies here. 98 00:06:34,279 --> 00:06:37,600 Speaker 7: Yes, So the question here is, does the Major Questions 99 00:06:37,600 --> 00:06:41,920 Speaker 7: doctrine require a clear statement in AIPA that it includes 100 00:06:42,000 --> 00:06:46,680 Speaker 7: the power to impose tariffs, and this Court has not 101 00:06:46,839 --> 00:06:52,039 Speaker 7: hesitated to start using that doctrine more broadly. But I 102 00:06:52,080 --> 00:06:56,520 Speaker 7: think you're right that the justices had some concerns about 103 00:06:56,600 --> 00:07:00,360 Speaker 7: pursuing it in this venue. And again, the question comes 104 00:07:00,400 --> 00:07:04,719 Speaker 7: to is the power to tariff implied in the power 105 00:07:04,760 --> 00:07:08,640 Speaker 7: to regulate imports or if it's not. Was this a 106 00:07:08,760 --> 00:07:13,440 Speaker 7: question that Congress was required to state clearly that tariffs 107 00:07:13,440 --> 00:07:17,240 Speaker 7: were a part of what was envisioned by the new law. 108 00:07:17,760 --> 00:07:22,000 Speaker 4: The Conservatives us the Major Questions doctrine to block several 109 00:07:22,040 --> 00:07:27,200 Speaker 4: of President Biden's initiatives, like his student loan forgiveness program. 110 00:07:27,760 --> 00:07:31,440 Speaker 4: If they allow Trump to impose these tariffs, do you 111 00:07:31,480 --> 00:07:34,960 Speaker 4: think they'll have to explain why the Major Questions doctrine 112 00:07:34,960 --> 00:07:37,840 Speaker 4: applied to Biden but not Trump. 113 00:07:38,160 --> 00:07:40,680 Speaker 7: I think it's an interesting question whether they'll go there 114 00:07:40,760 --> 00:07:43,080 Speaker 7: or whether they will just focus on the language of 115 00:07:43,120 --> 00:07:46,160 Speaker 7: AIBA and this issue of whether the power to regulate 116 00:07:46,200 --> 00:07:50,240 Speaker 7: imports includes the power to tariff, and I think several 117 00:07:50,640 --> 00:07:53,840 Speaker 7: justices went down that road. I don't think just because 118 00:07:54,240 --> 00:07:56,880 Speaker 7: these doctrines have been used in other cases, such as 119 00:07:56,880 --> 00:08:00,600 Speaker 7: the Biden student bond forgiveness case doesn't necessary mean that 120 00:08:00,640 --> 00:08:03,520 Speaker 7: they will have to address it in this opinion if 121 00:08:03,520 --> 00:08:06,800 Speaker 7: they have other bases for finding that the tariffs were 122 00:08:07,080 --> 00:08:09,600 Speaker 7: legal or improper in any way. 123 00:08:10,320 --> 00:08:16,360 Speaker 4: And Justice Gorsuch in particular expressed alarm about the seeming 124 00:08:16,480 --> 00:08:20,480 Speaker 4: lack of limitations on the powers the President was claiming here. 125 00:08:21,600 --> 00:08:25,600 Speaker 7: Justice of course the hypothetical of if Congress can delegate 126 00:08:25,640 --> 00:08:30,080 Speaker 7: the tariff authority, what would prohibit Congress from delegating everything, 127 00:08:30,240 --> 00:08:33,480 Speaker 7: including the power to declare war, which is clearly given 128 00:08:33,520 --> 00:08:37,319 Speaker 7: in the Constitution to Congress. And so that was a 129 00:08:37,440 --> 00:08:42,720 Speaker 7: very interesting discussion. I'm certainly raising some concerns about the limits, 130 00:08:43,000 --> 00:08:47,120 Speaker 7: if any, on the authority that the government was claiming. 131 00:08:47,200 --> 00:08:49,360 Speaker 4: So where do you think the justices are going to 132 00:08:49,360 --> 00:08:50,079 Speaker 4: come out here? 133 00:08:50,760 --> 00:08:54,040 Speaker 7: Well, I'm not in the business of making predictions. Generally. 134 00:08:54,280 --> 00:08:57,040 Speaker 7: My own personal view is that the Court's three Democratic 135 00:08:57,200 --> 00:09:00,680 Speaker 7: justices probably vote against these tariffs. And the question is 136 00:09:00,679 --> 00:09:04,000 Speaker 7: whether some of the majority of the Court have similar 137 00:09:04,040 --> 00:09:07,160 Speaker 7: concerns about the president's use of this law. And I 138 00:09:07,280 --> 00:09:10,560 Speaker 7: do think that it's still a very close decision. It 139 00:09:10,600 --> 00:09:13,839 Speaker 7: could go either way. I thought Chief Justice Roberts and 140 00:09:14,000 --> 00:09:18,600 Speaker 7: Justice Barrett and Justice Gorsich were perhaps more skeptical of 141 00:09:18,640 --> 00:09:23,200 Speaker 7: the president's tariff authority under a than the other justices. Yues. 142 00:09:23,320 --> 00:09:26,400 Speaker 7: The only other point I would make is, although it 143 00:09:26,559 --> 00:09:29,679 Speaker 7: was discussed in the oral argument, I have a hard 144 00:09:29,760 --> 00:09:33,439 Speaker 7: time seeing this court making a split decision that some 145 00:09:33,520 --> 00:09:36,240 Speaker 7: of President Trump's tariffs are acceptable but others are not. 146 00:09:37,280 --> 00:09:40,960 Speaker 4: So if the Court does rule against Trump, what happens 147 00:09:41,000 --> 00:09:44,120 Speaker 4: next as far as his tariffs are concerned. 148 00:09:43,880 --> 00:09:46,360 Speaker 7: Well, two things would happen. First of all, there would 149 00:09:46,400 --> 00:09:49,920 Speaker 7: likely be some sort of a refund process for importers 150 00:09:49,960 --> 00:09:52,680 Speaker 7: that paid the tariffs during this time, and there is 151 00:09:52,720 --> 00:09:55,560 Speaker 7: some precedent for that before That was discussed during the 152 00:09:55,720 --> 00:09:58,680 Speaker 7: oral argument a situation where the court struck down a 153 00:09:58,760 --> 00:10:02,200 Speaker 7: harbor maintenance tax and there was basically a process where 154 00:10:02,400 --> 00:10:05,640 Speaker 7: companies could file claims for the amount of the tax 155 00:10:05,679 --> 00:10:08,720 Speaker 7: that they paid. So Justice Barrettz was concerned that this 156 00:10:08,720 --> 00:10:11,320 Speaker 7: could be a mess and could be very unwieldy. I 157 00:10:11,320 --> 00:10:13,920 Speaker 7: guess the more important point is what will the president 158 00:10:13,960 --> 00:10:17,280 Speaker 7: do going forward? And I think it's clear that tariffs 159 00:10:17,320 --> 00:10:21,640 Speaker 7: are still a cornerstone of this administration's economic policy. And 160 00:10:21,760 --> 00:10:26,280 Speaker 7: if the Court says that the President cannot use AIPA, 161 00:10:26,440 --> 00:10:30,360 Speaker 7: the President will likely pivot to one of several other 162 00:10:30,520 --> 00:10:34,040 Speaker 7: trade tools that are available, and the Court mentioned many 163 00:10:34,080 --> 00:10:38,280 Speaker 7: of these, including Section one twenty two, the section two 164 00:10:38,320 --> 00:10:41,719 Speaker 7: thirty two, the National Security Law, which the administration has 165 00:10:41,760 --> 00:10:44,520 Speaker 7: already made quite a bit of use of in this administration, 166 00:10:45,040 --> 00:10:48,000 Speaker 7: Section three zero one, and so forth. The limit on 167 00:10:48,160 --> 00:10:51,960 Speaker 7: those laws is that they do require studies or actions 168 00:10:52,000 --> 00:10:55,480 Speaker 7: by other agencies. So Section two thirty two requires a 169 00:10:55,520 --> 00:10:59,000 Speaker 7: study and a report by the Commerce Department and consultation 170 00:10:59,120 --> 00:11:03,479 Speaker 7: with the Defense Department in order to decide that imports 171 00:11:03,520 --> 00:11:08,920 Speaker 7: of a certain product like semiconductors or pharmaceuticals are a 172 00:11:09,040 --> 00:11:13,400 Speaker 7: threat to national security. Similarly, Section three oh one, which 173 00:11:13,559 --> 00:11:17,360 Speaker 7: was the law used to impose tariffs on China during 174 00:11:17,360 --> 00:11:22,079 Speaker 7: the first Trump administration, also requires a detailed study by 175 00:11:22,080 --> 00:11:26,439 Speaker 7: the US Trade Representative with public inputs. So those tools, 176 00:11:26,600 --> 00:11:29,480 Speaker 7: for the most part, cannot be used as quickly as 177 00:11:29,600 --> 00:11:31,520 Speaker 7: AIPA was used by President Trump. 178 00:11:32,000 --> 00:11:35,160 Speaker 4: This case was fast tracked by the court so a 179 00:11:35,240 --> 00:11:38,520 Speaker 4: ruling could come as quickly as the end of the year. 180 00:11:38,880 --> 00:11:41,800 Speaker 4: Thanks so much for joining me, tim that's Timothy Bright, 181 00:11:41,880 --> 00:11:45,040 Speaker 4: Bill of Willie Rhin Coming up next to the Bloomberg 182 00:11:45,120 --> 00:11:49,080 Speaker 4: Law show. Prosecutors get us scolding from the judge in 183 00:11:49,120 --> 00:11:53,240 Speaker 4: the case against former FBI director James Comey. I'm June 184 00:11:53,280 --> 00:11:55,439 Speaker 4: Grosso and you're listening to Bloomberg. 185 00:11:55,760 --> 00:11:59,400 Speaker 2: My heart is broken for the Department of Justice, but 186 00:11:59,480 --> 00:12:02,280 Speaker 2: I have great confidence in the federal judicial system. 187 00:12:02,720 --> 00:12:05,200 Speaker 1: I'm innocent, so let's have a trial. 188 00:12:06,040 --> 00:12:10,120 Speaker 4: But will the criminal case against former FBI director James 189 00:12:10,160 --> 00:12:14,760 Speaker 4: Comy even get to trial. Comy is pleaded not guilty 190 00:12:14,840 --> 00:12:18,040 Speaker 4: to the charges of lying to Congress in twenty twenty, 191 00:12:18,520 --> 00:12:21,880 Speaker 4: and his defense has filed several motions to get the 192 00:12:21,920 --> 00:12:26,760 Speaker 4: case dismissed before trial. They include emotion to dismiss because 193 00:12:26,800 --> 00:12:30,720 Speaker 4: the government is engaged in a vindictive and selective prosecution, 194 00:12:31,280 --> 00:12:36,280 Speaker 4: emotion to dismiss because the interim us attorney was appointed illegally, 195 00:12:36,760 --> 00:12:41,840 Speaker 4: and emotion to dismiss because Comy's testimony was literally true. 196 00:12:42,400 --> 00:12:47,960 Speaker 4: And on Wednesday, a clearly exasperated judge scolded the prosecutors 197 00:12:48,120 --> 00:12:53,199 Speaker 4: for the Justice Department's indict first and investigate second approach 198 00:12:53,280 --> 00:12:58,000 Speaker 4: to the case. Magistrate Judge William Fitzpatrick then ordered the 199 00:12:58,080 --> 00:13:01,880 Speaker 4: prosecutors to turn over to the defense a raft of 200 00:13:01,960 --> 00:13:07,439 Speaker 4: potential evidence, including full transcripts of the grand jury proceedings. 201 00:13:08,040 --> 00:13:11,720 Speaker 4: My guest is former federal prosecutor Robert Mintz, a partner 202 00:13:11,840 --> 00:13:15,240 Speaker 4: maccarter and English Bob. How unusual is it for a 203 00:13:15,360 --> 00:13:19,040 Speaker 4: judge to make these kinds of remarks that the Justice 204 00:13:19,080 --> 00:13:23,760 Speaker 4: Department here indicted first, an investigated second, and that the 205 00:13:23,800 --> 00:13:26,360 Speaker 4: prosecutors may have mishandled some evidence. 206 00:13:27,280 --> 00:13:30,280 Speaker 8: Well, it's very unusual for the judge to comment on 207 00:13:30,400 --> 00:13:34,000 Speaker 8: the prosecutor's conduct and to comment on the evidence of 208 00:13:34,040 --> 00:13:37,480 Speaker 8: the case this early in the process. And it suggests 209 00:13:37,480 --> 00:13:40,120 Speaker 8: that the court, at least this judge, of the magistrate 210 00:13:40,200 --> 00:13:44,120 Speaker 8: judge who was handling this argument, has some serious questions 211 00:13:44,200 --> 00:13:47,960 Speaker 8: about the procedures used by prosecutors and whether or not 212 00:13:48,280 --> 00:13:51,880 Speaker 8: they had really put together the evidence necessary to pursue 213 00:13:51,920 --> 00:13:54,880 Speaker 8: this case. And the warning that he gave prosecutors with 214 00:13:54,920 --> 00:13:59,400 Speaker 8: regard to mishandling evidence turns on this whole question of 215 00:13:59,559 --> 00:14:03,080 Speaker 8: evidence seized from sirch warrants way back in twenty nineteen 216 00:14:03,520 --> 00:14:07,880 Speaker 8: and twenty twenty in an unrelated investigation, And there's going 217 00:14:07,920 --> 00:14:10,360 Speaker 8: to be an inquiry now into whether or not the 218 00:14:10,400 --> 00:14:15,000 Speaker 8: information that prosecutor seesed many years ago is being properly 219 00:14:15,200 --> 00:14:17,240 Speaker 8: utilized in this prosecution. 220 00:14:17,040 --> 00:14:20,560 Speaker 4: And that evidence was seized from Comy's friend and former 221 00:14:20,720 --> 00:14:25,640 Speaker 4: attorney Daniel Richmond as part of an internal investigation of 222 00:14:25,760 --> 00:14:29,280 Speaker 4: leaks in the Russia case during the first Trump administration. 223 00:14:29,920 --> 00:14:33,520 Speaker 4: Let's talk about the judge ordering the full grand jury 224 00:14:33,640 --> 00:14:37,200 Speaker 4: transcripts to be handed over. That could be a treasure 225 00:14:37,280 --> 00:14:40,960 Speaker 4: trove for the defense, which claims that there were severe 226 00:14:41,120 --> 00:14:45,880 Speaker 4: and pervasive irregularities in the presentation to the grand jury 227 00:14:46,400 --> 00:14:51,720 Speaker 4: by the newly installed interim US Attorney Lindsey Halligan, who 228 00:14:51,800 --> 00:14:54,200 Speaker 4: had no experience as a prosecutor. 229 00:14:54,960 --> 00:14:59,240 Speaker 8: It's not unusual for transcripts of witnesses who might appear 230 00:14:59,280 --> 00:15:01,200 Speaker 8: before the grand jury to be turned over. 231 00:15:01,080 --> 00:15:03,160 Speaker 9: To the defense. In fact, it's required. 232 00:15:03,520 --> 00:15:08,280 Speaker 8: Prosecutors generally prefer not to have witnesses who are favorable 233 00:15:08,320 --> 00:15:12,240 Speaker 8: to the government testify in the grand jury because then 234 00:15:12,360 --> 00:15:15,120 Speaker 8: those statements and that testimony has to be turned over 235 00:15:15,160 --> 00:15:18,520 Speaker 8: to the defense, and it provides defense lawyers fodder for 236 00:15:18,640 --> 00:15:22,600 Speaker 8: cross examination if the witness testifies at trial in any 237 00:15:22,640 --> 00:15:26,320 Speaker 8: way differently or inconsistently with the testimony they gave before 238 00:15:26,360 --> 00:15:27,240 Speaker 8: the grand jury. 239 00:15:27,520 --> 00:15:29,800 Speaker 9: But what's going to be interesting here for the. 240 00:15:29,760 --> 00:15:33,160 Speaker 8: Defense team is not so much what was said from 241 00:15:33,200 --> 00:15:35,960 Speaker 8: the witness, who in this case was an FBI agent 242 00:15:36,080 --> 00:15:39,640 Speaker 8: who is simply summarizing the case, but the questions that 243 00:15:39,720 --> 00:15:42,920 Speaker 8: were posed by the prosecutor in this case, the interim 244 00:15:43,000 --> 00:15:46,240 Speaker 8: US attorney Lindsay Halligan, how she presented the case to 245 00:15:46,280 --> 00:15:49,560 Speaker 8: the grand jurors, how she presented the law to the 246 00:15:49,600 --> 00:15:53,440 Speaker 8: grand jurors, how she may have answered any questions that 247 00:15:53,520 --> 00:15:56,960 Speaker 8: grand jurors raised. Because what happens during the grand jury 248 00:15:57,000 --> 00:15:59,920 Speaker 8: process is that there's a grand jury foreman and the 249 00:16:00,000 --> 00:16:03,680 Speaker 8: grand jury formant has a conversation, often when the prosecutor 250 00:16:03,880 --> 00:16:06,280 Speaker 8: is outside of the grand jury room, and then the 251 00:16:06,320 --> 00:16:09,080 Speaker 8: foreman will ask questions on behalf of all the grand jurors. 252 00:16:09,240 --> 00:16:12,840 Speaker 8: That happens fairly frequently, and in this case, we know 253 00:16:13,080 --> 00:16:16,640 Speaker 8: that the grand jurors decided not to return an indictment 254 00:16:16,720 --> 00:16:19,760 Speaker 8: on one of the three counts, So there's no question 255 00:16:19,840 --> 00:16:23,240 Speaker 8: that there was some significant conversation and debate going on 256 00:16:23,640 --> 00:16:26,920 Speaker 8: among the grand jurors and probably a number of questions 257 00:16:26,920 --> 00:16:29,760 Speaker 8: that were posed to the prosecutor. The defense team is 258 00:16:29,800 --> 00:16:33,560 Speaker 8: going to be very interested in seeing how Lindsey Halligan 259 00:16:33,720 --> 00:16:36,680 Speaker 8: answered those questions, and they're going to be looking to 260 00:16:36,760 --> 00:16:40,000 Speaker 8: see whether there's anything she did that they will argue 261 00:16:40,240 --> 00:16:43,080 Speaker 8: was improper in front of that grand jury that could 262 00:16:43,120 --> 00:16:46,640 Speaker 8: possibly taint the entire indictment. And if they can ultimately 263 00:16:46,680 --> 00:16:49,920 Speaker 8: convince the judge that the irregularities are serious enough so 264 00:16:50,040 --> 00:16:52,840 Speaker 8: that it taints the entire grand jury process and that 265 00:16:52,960 --> 00:16:55,920 Speaker 8: indictment is thrown out, they may well have won their 266 00:16:56,000 --> 00:16:59,440 Speaker 8: case because the station of limitations, I'm sure they will argue, 267 00:16:59,640 --> 00:17:00,720 Speaker 8: has now expired. 268 00:17:01,400 --> 00:17:04,760 Speaker 4: Apparently the government is concerned about turning over the grand 269 00:17:04,800 --> 00:17:08,280 Speaker 4: jury transcripts because they agreed to turn over the evidence 270 00:17:08,320 --> 00:17:12,440 Speaker 4: ceased from Richmond, but they're appealing the magistrate judges ordered 271 00:17:12,480 --> 00:17:15,280 Speaker 4: to turn over the grand jury transcripts. 272 00:17:15,640 --> 00:17:19,160 Speaker 8: Well, that's not surprising that they are appealing that, because again, 273 00:17:19,200 --> 00:17:24,160 Speaker 8: it's so unusual for defense lawyers to get the actual presentation, 274 00:17:24,720 --> 00:17:27,479 Speaker 8: and it's quite possible that there were some statements that 275 00:17:27,520 --> 00:17:31,040 Speaker 8: were made that could be problematic for prosecutors. So they 276 00:17:31,040 --> 00:17:35,120 Speaker 8: have now appealed the magistrate judge's decision that's requiring them 277 00:17:35,160 --> 00:17:38,080 Speaker 8: to turn over the grand jury material to the district 278 00:17:38,119 --> 00:17:42,240 Speaker 8: court judge, and they're basically arguing that the magistrate judge 279 00:17:42,280 --> 00:17:46,399 Speaker 8: exceeded his authority in ordering the grand jury transcripts to 280 00:17:46,480 --> 00:17:49,480 Speaker 8: be turned over. They are arguing that the defense team 281 00:17:49,520 --> 00:17:52,760 Speaker 8: had already fought in motion to seek to get access 282 00:17:52,800 --> 00:17:56,240 Speaker 8: to the grand jury presentation, and that that was pending 283 00:17:56,280 --> 00:17:59,880 Speaker 8: before the District Court judge, and that the magistrate judge 284 00:18:00,240 --> 00:18:03,920 Speaker 8: was at that point only appointed to deal with a 285 00:18:04,000 --> 00:18:07,919 Speaker 8: question of potential privileged materials, and in requiring that the 286 00:18:07,960 --> 00:18:11,560 Speaker 8: grand jury material be turned over, he went beyond the 287 00:18:11,680 --> 00:18:15,040 Speaker 8: scope of the authority that was delegated to him by 288 00:18:15,080 --> 00:18:17,000 Speaker 8: the District Court Judge. 289 00:18:16,600 --> 00:18:19,480 Speaker 4: Bob in terms of the motion to dismiss the indictment 290 00:18:19,800 --> 00:18:23,199 Speaker 4: because Lindsay Halligan was illegally serving when she brought the 291 00:18:23,359 --> 00:18:28,399 Speaker 4: charges against Comy. US Attorney General Pam Bondy filed a 292 00:18:28,480 --> 00:18:34,399 Speaker 4: court document on Monday saying that she had retroactively given 293 00:18:34,440 --> 00:18:39,239 Speaker 4: Halligan the additional title of Special Attorney. I mean, I 294 00:18:39,280 --> 00:18:41,600 Speaker 4: too would like to go back in time and correct 295 00:18:41,600 --> 00:18:44,400 Speaker 4: some of my mistakes. But will a court allow her 296 00:18:44,440 --> 00:18:48,399 Speaker 4: to go back to September and basically say, oh, I 297 00:18:48,480 --> 00:18:49,920 Speaker 4: meant to give her this title too. 298 00:18:50,520 --> 00:18:53,520 Speaker 8: I think the argument by the Attorney General that she 299 00:18:53,640 --> 00:18:58,520 Speaker 8: can retroactively give Eastern Virginia's top prosecutors an extra title 300 00:18:58,760 --> 00:19:01,760 Speaker 8: in order to try to defend against the claims that 301 00:19:01,800 --> 00:19:05,920 Speaker 8: Halligan was improperly appointed is probably not going to gain 302 00:19:05,960 --> 00:19:07,440 Speaker 8: a lot of traction with the courts. 303 00:19:07,600 --> 00:19:09,240 Speaker 9: Typically, the courts will look. 304 00:19:09,080 --> 00:19:11,720 Speaker 8: At the facts at the time and whether or not 305 00:19:11,880 --> 00:19:15,480 Speaker 8: the appointment was proper under the rules, under the regulations, 306 00:19:15,520 --> 00:19:16,919 Speaker 8: under the statues. 307 00:19:16,400 --> 00:19:17,919 Speaker 9: At the time of the appointment. 308 00:19:18,280 --> 00:19:20,560 Speaker 8: And I think it's an uphill battle to argue that 309 00:19:20,640 --> 00:19:23,199 Speaker 8: even if there was a deficiency, then that can be 310 00:19:23,320 --> 00:19:25,760 Speaker 8: remedied retroactively by an appointment. 311 00:19:26,320 --> 00:19:29,199 Speaker 4: In one of the motions to dismiss, the defense claims 312 00:19:29,240 --> 00:19:33,360 Speaker 4: the indictment is hopelessly vague and defective on its face, 313 00:19:33,840 --> 00:19:39,119 Speaker 4: that Senator ted Cruz's questions to Comy were fundamentally ambiguous 314 00:19:39,400 --> 00:19:43,879 Speaker 4: and that Comy's response was literally true. Let's listen to 315 00:19:43,920 --> 00:19:46,280 Speaker 4: the exchange between Cruz and Komy. 316 00:19:46,680 --> 00:19:50,119 Speaker 2: What mister McKay is saying and what you testify to 317 00:19:50,160 --> 00:19:52,920 Speaker 2: this committee cannot both be true. One or the other 318 00:19:53,080 --> 00:19:55,480 Speaker 2: is false. Who's telling the truth? 319 00:19:56,680 --> 00:19:58,440 Speaker 1: I just can only speak to my testimony. 320 00:19:58,440 --> 00:20:01,040 Speaker 10: I stand by what the test money you summarized that 321 00:20:01,080 --> 00:20:02,840 Speaker 10: I gave in May of twenty seventeen. 322 00:20:03,080 --> 00:20:06,600 Speaker 4: So the defense wants the prosecution to tell them which 323 00:20:06,640 --> 00:20:10,320 Speaker 4: of Komy's statements are you claiming were false? 324 00:20:11,280 --> 00:20:16,320 Speaker 8: Yeah, And that's exactly why false statement prosecutions are extremely difficult, 325 00:20:16,359 --> 00:20:19,439 Speaker 8: because you have to parse through exactly what was the 326 00:20:19,560 --> 00:20:23,760 Speaker 8: question and what was the answer and demonstrate that at 327 00:20:23,760 --> 00:20:26,359 Speaker 8: the time the answer was given, it was not only false, 328 00:20:26,359 --> 00:20:29,320 Speaker 8: but it was intentionally false, and that it was false 329 00:20:29,400 --> 00:20:33,560 Speaker 8: about something that was material. So in this case, the 330 00:20:33,600 --> 00:20:36,880 Speaker 8: prosecution is based on hearing before the Senate Judiciary Committee 331 00:20:36,920 --> 00:20:40,040 Speaker 8: on September thirtieth, twenty twenty, and at that hearing, Senator 332 00:20:40,080 --> 00:20:43,879 Speaker 8: Ted Cruz asked mister Comy whether he had authorized someone 333 00:20:43,880 --> 00:20:47,080 Speaker 8: at the FBI to be an anonymous. 334 00:20:46,400 --> 00:20:47,840 Speaker 9: Source in news reports. 335 00:20:48,240 --> 00:20:50,800 Speaker 8: The indictment says that mister Comy misled the committee by 336 00:20:50,840 --> 00:20:53,600 Speaker 8: saying that he had not done so. Now, Comy's lawyers 337 00:20:53,600 --> 00:20:56,560 Speaker 8: have attacked that indictment by saying that the questioning by 338 00:20:56,560 --> 00:21:01,040 Speaker 8: mister Cruz was vague and imprecise, and point out that 339 00:21:01,080 --> 00:21:04,320 Speaker 8: at the time that Senator Cruz was questioning mister Comy 340 00:21:04,320 --> 00:21:07,880 Speaker 8: about whether he had authorized anybody to leak information, that 341 00:21:07,920 --> 00:21:11,440 Speaker 8: Senator Cruz was referring to Andrew McCabe, who once served 342 00:21:11,680 --> 00:21:14,480 Speaker 8: as mister Comy's deputy at the FBI, and was not 343 00:21:14,600 --> 00:21:18,320 Speaker 8: referring to Daniel Richman, who had been a former FBI 344 00:21:18,400 --> 00:21:21,840 Speaker 8: employee and later became the attorney for James Comy. So 345 00:21:21,920 --> 00:21:25,320 Speaker 8: they're arguing that the indictment is defective on its face, 346 00:21:25,800 --> 00:21:28,359 Speaker 8: because in order to prove that mister Comy lied, you 347 00:21:28,440 --> 00:21:31,040 Speaker 8: have to show that there was a clear question and 348 00:21:31,040 --> 00:21:34,200 Speaker 8: that he gave a clearly false, a knowingly false answer 349 00:21:34,240 --> 00:21:37,040 Speaker 8: to it, and that he had an intention to mislead 350 00:21:37,080 --> 00:21:40,040 Speaker 8: the committee, and that the information he provided that was 351 00:21:40,119 --> 00:21:43,840 Speaker 8: false was material, and that this somehow obstructed the relevant 352 00:21:43,880 --> 00:21:47,640 Speaker 8: congressional proceeding. They say that that information is not contained 353 00:21:47,640 --> 00:21:50,000 Speaker 8: in the indictment, and one of their emotions is the 354 00:21:50,119 --> 00:21:53,119 Speaker 8: requirement that the government provide that information. 355 00:21:53,520 --> 00:21:55,560 Speaker 9: So what you have here basically. 356 00:21:55,320 --> 00:21:59,040 Speaker 8: Is an argument that the indictment is defective on its face. So, 357 00:21:59,080 --> 00:22:01,240 Speaker 8: in other words, it's not had an argument that the 358 00:22:01,280 --> 00:22:04,320 Speaker 8: government has its facts throng, because a factual dispute is 359 00:22:04,320 --> 00:22:05,120 Speaker 8: something that has to. 360 00:22:05,080 --> 00:22:07,199 Speaker 9: Be resolved by a jury at trial. 361 00:22:07,600 --> 00:22:10,280 Speaker 8: They are arguing that this is a decision that really 362 00:22:10,320 --> 00:22:13,359 Speaker 8: needs to be made by the judge because on its face, 363 00:22:13,960 --> 00:22:17,840 Speaker 8: the government is unable to prove the charges. The allegations 364 00:22:17,840 --> 00:22:21,320 Speaker 8: in the indictment simply are not enough to sustain a 365 00:22:21,440 --> 00:22:24,760 Speaker 8: valid conviction, and that's why they're filing this whole slew 366 00:22:24,800 --> 00:22:28,040 Speaker 8: of arguments to try to get this case dismissed before 367 00:22:28,040 --> 00:22:29,080 Speaker 8: it ever goes to trial. 368 00:22:29,760 --> 00:22:33,120 Speaker 4: And prosecutors would not be able to bring the charges 369 00:22:33,200 --> 00:22:37,760 Speaker 4: again because the statute of limitations has run out, and 370 00:22:37,840 --> 00:22:42,880 Speaker 4: supposedly that's why the indictment was rushed through. Comy's indictment 371 00:22:42,960 --> 00:22:47,320 Speaker 4: came just five days after President Trump had demanded on 372 00:22:47,440 --> 00:22:53,000 Speaker 4: truth Social that Attorney General Pam Bondi bring charges against Komy, 373 00:22:53,440 --> 00:22:57,280 Speaker 4: New York Attorney General Letitia James, and Senator Adam Schiff. 374 00:22:57,800 --> 00:23:01,399 Speaker 4: So legal experts were talking about as selective and vindictive 375 00:23:01,520 --> 00:23:06,040 Speaker 4: prosecution motion even before the defense made that motion in 376 00:23:06,080 --> 00:23:11,560 Speaker 4: the case. Comy's motion papers include a sixty page long 377 00:23:11,720 --> 00:23:16,920 Speaker 4: list of links that detail Trump's negative comments about him 378 00:23:16,960 --> 00:23:21,240 Speaker 4: over the years. How strong is their vindictive prosecution motion? 379 00:23:21,840 --> 00:23:24,360 Speaker 4: I know it's very hard to get a case dismissed 380 00:23:24,560 --> 00:23:27,400 Speaker 4: on those grounds, That's exactly right. 381 00:23:27,440 --> 00:23:29,920 Speaker 8: I mean, motions for vindictive prosecution. 382 00:23:29,560 --> 00:23:31,080 Speaker 9: Are exceedingly hard to win. 383 00:23:31,480 --> 00:23:35,520 Speaker 8: They require defendants to prove the prosecutors have displayed animus 384 00:23:35,520 --> 00:23:38,840 Speaker 8: towards them while they were seeking to exercise their rights, 385 00:23:39,119 --> 00:23:42,120 Speaker 8: and that the charges never would have been brought except 386 00:23:42,119 --> 00:23:45,600 Speaker 8: for that animus. Now, prosecutors have argued in response that 387 00:23:45,640 --> 00:23:50,360 Speaker 8: the comments made by President Trump to prosecute mister Komy 388 00:23:50,640 --> 00:23:54,280 Speaker 8: were only suggesting that if mister Komy committed a crime, 389 00:23:54,400 --> 00:23:56,440 Speaker 8: that they ought to prosecute him, and that he was 390 00:23:56,480 --> 00:23:59,960 Speaker 8: not directing the Department of Justice to prosecute mister Komey 391 00:24:00,359 --> 00:24:02,720 Speaker 8: regardless of whether or not a crime was committed. We'll 392 00:24:02,760 --> 00:24:04,560 Speaker 8: have to see how the judge handles that at the 393 00:24:04,640 --> 00:24:07,840 Speaker 8: end of the day. But the vindictive prosecution standard is 394 00:24:07,920 --> 00:24:11,040 Speaker 8: fairly high and that may be a difficult argument for 395 00:24:11,080 --> 00:24:12,159 Speaker 8: the defense to prevail on. 396 00:24:12,800 --> 00:24:15,280 Speaker 4: We'll see how it goes at the hearings next week. 397 00:24:15,720 --> 00:24:19,840 Speaker 4: Thanks for a great conversation, Bob. That's former federal prosecutor 398 00:24:19,960 --> 00:24:23,680 Speaker 4: Robert Mintz of McCarter and English. Coming up next on 399 00:24:23,720 --> 00:24:28,000 Speaker 4: the Bloomberg Law Show, Michael Jordan's racing team scores a 400 00:24:28,080 --> 00:24:32,680 Speaker 4: key victory in court in its antitrust lawsuit against NASCAR. 401 00:24:33,280 --> 00:24:36,040 Speaker 4: I'm June Grosso and you're listening to Bloomberg. 402 00:24:36,320 --> 00:24:37,760 Speaker 10: Look I've been a fan of the game for a 403 00:24:37,760 --> 00:24:40,600 Speaker 10: long period of time, you know, and you know, when 404 00:24:40,600 --> 00:24:43,200 Speaker 10: we first started this coal process, I've always said that 405 00:24:43,880 --> 00:24:45,680 Speaker 10: y'all want to fight for the betterment of the sport. 406 00:24:46,160 --> 00:24:46,359 Speaker 4: You know. 407 00:24:46,680 --> 00:24:48,439 Speaker 10: Even though they try to point out that, you know, 408 00:24:48,560 --> 00:24:51,919 Speaker 10: we made you know, some money, or we had successful business, 409 00:24:52,080 --> 00:24:54,080 Speaker 10: that's not the point. The point is is that the 410 00:24:54,119 --> 00:24:57,639 Speaker 10: sport itself needs to continually change for the better for 411 00:24:57,680 --> 00:24:59,840 Speaker 10: the fans as well as for the teams as well 412 00:24:59,880 --> 00:25:00,840 Speaker 10: as from NASCAR tooth. 413 00:25:00,880 --> 00:25:04,800 Speaker 4: They understand that Michael Jordan's racing team scored a huge 414 00:25:04,920 --> 00:25:08,879 Speaker 4: win off the track in its anti trust case against NASCAR. 415 00:25:09,520 --> 00:25:12,920 Speaker 4: Jordan's twenty three to eleven racing team and front Row 416 00:25:12,960 --> 00:25:17,960 Speaker 4: Motorsports claimed that NASCAR acts like an illegal monopoly in 417 00:25:18,000 --> 00:25:21,920 Speaker 4: a dispute that centers on new charter agreements which both 418 00:25:22,000 --> 00:25:26,200 Speaker 4: teams refuse to sign, and on Tuesday, a federal judge 419 00:25:26,240 --> 00:25:30,680 Speaker 4: agreed that NASCAR controls the market for premier stock car 420 00:25:30,800 --> 00:25:35,480 Speaker 4: racing and granted partial summary judgment to the two racing teams. 421 00:25:36,000 --> 00:25:39,159 Speaker 4: The decision turns up the pressure to settle ahead of 422 00:25:39,160 --> 00:25:43,720 Speaker 4: the December one trial date. Although Jordans says he's ready 423 00:25:43,720 --> 00:25:44,320 Speaker 4: for trial. 424 00:25:44,840 --> 00:25:47,000 Speaker 10: I look forward to going down on the fire. If 425 00:25:47,040 --> 00:25:49,880 Speaker 10: I have to fight this to the end for the beliment. 426 00:25:49,480 --> 00:25:50,879 Speaker 1: Of the sport, I will do that. 427 00:25:51,520 --> 00:25:54,720 Speaker 4: Joining me is anti trust law expert Harry First, a 428 00:25:54,800 --> 00:25:59,200 Speaker 4: professor at NYU Law School. Harry explained Michael Jordan's anti 429 00:25:59,200 --> 00:26:01,320 Speaker 4: trust case against NASCAR. 430 00:26:01,720 --> 00:26:05,280 Speaker 6: This is a tussle between the family that has controlled 431 00:26:05,600 --> 00:26:09,480 Speaker 6: NASCAR and I guess stock car racing for many years, 432 00:26:09,880 --> 00:26:11,480 Speaker 6: almost uniquely in sports. 433 00:26:11,880 --> 00:26:13,399 Speaker 1: You know, most sports. 434 00:26:13,200 --> 00:26:16,760 Speaker 6: Are controlled by groups of team owners, but this is 435 00:26:16,840 --> 00:26:20,639 Speaker 6: one that's only controlled by one family, this France family. 436 00:26:21,000 --> 00:26:22,880 Speaker 6: You know, I guess It's had its ups and downs, 437 00:26:22,920 --> 00:26:24,520 Speaker 6: but it's pretty up now. 438 00:26:25,359 --> 00:26:25,600 Speaker 1: You know. 439 00:26:25,680 --> 00:26:28,760 Speaker 6: They're sort of the only real game in town for 440 00:26:29,160 --> 00:26:33,920 Speaker 6: the top Line Cup racing. There basically been arguments between 441 00:26:34,160 --> 00:26:39,680 Speaker 6: the owners of these racing teams and the Frances over 442 00:26:40,280 --> 00:26:44,440 Speaker 6: who's going to sort of split the money, particularly broadcast revenue. 443 00:26:44,480 --> 00:26:47,840 Speaker 6: I think they both need each other. Race car owners 444 00:26:48,400 --> 00:26:51,720 Speaker 6: need tracks to race on, and NASCAR, you know, has 445 00:26:51,760 --> 00:26:55,720 Speaker 6: made itself through a series of moves, acquisitions and so forth, 446 00:26:55,840 --> 00:26:58,720 Speaker 6: is basically the only place where you can have these 447 00:26:58,880 --> 00:27:01,679 Speaker 6: high level races. And of course you've got to have 448 00:27:01,840 --> 00:27:06,040 Speaker 6: the race cars racing or else you've got nothing to show. 449 00:27:06,520 --> 00:27:09,879 Speaker 6: So they both need each other. But apparently the racing 450 00:27:09,960 --> 00:27:15,120 Speaker 6: teams have not been hugely profitable unlike other sports. It's 451 00:27:15,480 --> 00:27:18,880 Speaker 6: very expensive to maintain these, according to the litigation anyway, 452 00:27:19,640 --> 00:27:23,760 Speaker 6: and the Frances, So the plaintiffs say, the plaintiff's being 453 00:27:23,920 --> 00:27:26,479 Speaker 6: two of these teams, and one being this twenty three 454 00:27:26,520 --> 00:27:29,840 Speaker 6: to eleven racing, which is Michael Jordan's. The plaintiffs say 455 00:27:29,880 --> 00:27:33,520 Speaker 6: that the Frances take most of the revenue, particularly the 456 00:27:33,560 --> 00:27:37,359 Speaker 6: broadcast revenue, and we're not getting enough, you know. The 457 00:27:37,400 --> 00:27:39,720 Speaker 6: Francis say, well, you don't like it, take it or 458 00:27:39,760 --> 00:27:43,080 Speaker 6: leave it, and that's when the litigation particularly broke out. 459 00:27:43,440 --> 00:27:46,720 Speaker 4: It sounds like anti trust to me, but sounds like yeah, 460 00:27:47,320 --> 00:27:48,080 Speaker 4: sounds like it. 461 00:27:48,160 --> 00:27:48,320 Speaker 7: Is it? 462 00:27:48,720 --> 00:27:53,119 Speaker 4: So this partial summary judgment was about the relevant market, 463 00:27:53,160 --> 00:27:56,679 Speaker 4: which we've talked about before is key to anti trust. 464 00:27:57,200 --> 00:28:00,359 Speaker 6: So the litigations had a little back and forth. The 465 00:28:00,400 --> 00:28:04,800 Speaker 6: district court judge seems pretty well disposed of the plaintiff's claims, 466 00:28:05,359 --> 00:28:10,640 Speaker 6: at one point issuing this injunction requiring NASCAR to admit 467 00:28:10,800 --> 00:28:13,639 Speaker 6: the two teams into the I guess it was a 468 00:28:13,720 --> 00:28:17,560 Speaker 6: twenty twenty four Circuit and the Court of Appeals knocked 469 00:28:17,560 --> 00:28:19,400 Speaker 6: that down for various reasons. 470 00:28:19,960 --> 00:28:21,399 Speaker 1: So the district. 471 00:28:21,040 --> 00:28:26,560 Speaker 6: Court judge granted the plaintiff's motion for partial summary judgement. 472 00:28:26,640 --> 00:28:28,840 Speaker 6: I mean, some of the important issues are now out 473 00:28:28,880 --> 00:28:32,400 Speaker 6: of the case, and particularly, as you mentioned, this contentious 474 00:28:32,440 --> 00:28:36,240 Speaker 6: issue over what's the relevant market. Is it just this 475 00:28:36,480 --> 00:28:41,200 Speaker 6: NASCAR premiere racing market? Does it include you know, other 476 00:28:41,480 --> 00:28:45,480 Speaker 6: kinds of stock car racing? There are other tiers? Does 477 00:28:45,520 --> 00:28:49,240 Speaker 6: it include other motor sports? The game and anty trust 478 00:28:49,240 --> 00:28:52,320 Speaker 6: if you're a defendant, is to constantly include different kinds 479 00:28:52,360 --> 00:28:54,000 Speaker 6: of substitutes. 480 00:28:53,280 --> 00:28:56,640 Speaker 1: Of what people would watch. But here the market is 481 00:28:56,680 --> 00:28:57,520 Speaker 1: a labor. 482 00:28:57,280 --> 00:29:01,160 Speaker 6: Market that they're arguing about, and the question is, you know, 483 00:29:01,440 --> 00:29:05,760 Speaker 6: what are the choices available for these race car drivers 484 00:29:05,840 --> 00:29:09,120 Speaker 6: who are selling their services? And this is basically it. 485 00:29:09,600 --> 00:29:12,920 Speaker 6: So it looked like a pretty strong claim on market definition. 486 00:29:13,040 --> 00:29:17,360 Speaker 6: But proving market definition is expensive, you know, requires lots 487 00:29:17,360 --> 00:29:20,680 Speaker 6: of experts, and this is before you get to the jury, 488 00:29:20,880 --> 00:29:24,560 Speaker 6: this summary judgment stage. But a lot of the record's 489 00:29:24,560 --> 00:29:28,720 Speaker 6: been developed, and the district court judge sort of took 490 00:29:28,800 --> 00:29:31,920 Speaker 6: an interesting turn on this. He said, well, if there's 491 00:29:31,960 --> 00:29:35,480 Speaker 6: a dispute of fact, which there always is, in market definition. 492 00:29:35,960 --> 00:29:39,080 Speaker 6: I think it's really broad. You know, while you could 493 00:29:39,120 --> 00:29:41,960 Speaker 6: have lots of race car drivers, there are lots of 494 00:29:42,040 --> 00:29:45,160 Speaker 6: choices that the race car drivers have. I think it's 495 00:29:45,200 --> 00:29:48,360 Speaker 6: really narrow, say the plaintiffs. So lots of things to 496 00:29:48,440 --> 00:29:51,720 Speaker 6: argue in front of a jury. But the judge says, ah, 497 00:29:51,920 --> 00:29:57,560 Speaker 6: guess what, NASCAR you filed a counterclaim against these driver 498 00:29:57,760 --> 00:30:02,800 Speaker 6: teams which had gotten together to jointly negotiate with NASCAR 499 00:30:03,080 --> 00:30:08,479 Speaker 6: over these agreements that they're charges. So we're alleging that 500 00:30:08,720 --> 00:30:11,800 Speaker 6: you sort of engage in a price fixing conspiracy. So 501 00:30:11,840 --> 00:30:15,880 Speaker 6: they filed a counterclaim. Now, unfortunately for them, when you 502 00:30:15,960 --> 00:30:19,880 Speaker 6: file a complaint in anty trust, normally you have to 503 00:30:20,040 --> 00:30:23,120 Speaker 6: put in your complaint what the relevant market is. So 504 00:30:23,160 --> 00:30:26,160 Speaker 6: they defined a market which was pretty much the same 505 00:30:26,320 --> 00:30:31,440 Speaker 6: as the market that Michael Jordan defined, but basically the 506 00:30:31,480 --> 00:30:35,080 Speaker 6: same labor market. It's these racing teams, you know, the 507 00:30:35,120 --> 00:30:38,920 Speaker 6: premier stock car racing group, you know, at the very top. 508 00:30:39,360 --> 00:30:41,080 Speaker 1: So they basically define the same market. 509 00:30:41,160 --> 00:30:45,440 Speaker 6: So the judge says, sorry, you've already admitted it, and 510 00:30:45,520 --> 00:30:47,960 Speaker 6: you know, we hold that you've made this admission. That's 511 00:30:48,000 --> 00:30:52,640 Speaker 6: your admission, So we're done, and you're done and we 512 00:30:52,720 --> 00:30:56,480 Speaker 6: don't have to try this issue. I'm sure that defendants 513 00:30:56,520 --> 00:30:59,400 Speaker 6: and their lawyers were not all that happy with that, 514 00:30:59,720 --> 00:31:02,440 Speaker 6: and I mean, I think it's pretty supportable on appeal, 515 00:31:02,800 --> 00:31:05,720 Speaker 6: and there would have been ways to handle the complaint 516 00:31:05,800 --> 00:31:09,560 Speaker 6: that didn't fall into this trap. But they were sort 517 00:31:09,600 --> 00:31:12,720 Speaker 6: of too clever by half. It was a very clever counterclaim, 518 00:31:13,160 --> 00:31:16,080 Speaker 6: but there was no requirement that they even needed to file. 519 00:31:16,160 --> 00:31:18,280 Speaker 4: It is this sort of the ballgame. 520 00:31:17,920 --> 00:31:20,160 Speaker 1: Then well it's not quite the ballgame. 521 00:31:20,240 --> 00:31:22,640 Speaker 6: So the judge also did something else, not just the 522 00:31:22,680 --> 00:31:24,160 Speaker 6: market definition, but you have to. 523 00:31:24,080 --> 00:31:27,520 Speaker 1: Have monopoly power or in this case monops. 524 00:31:27,040 --> 00:31:30,040 Speaker 6: A EE power as the sole buyer, and there have 525 00:31:30,160 --> 00:31:33,000 Speaker 6: to be high barriers to entry, hard to get into 526 00:31:33,040 --> 00:31:36,360 Speaker 6: this market. And the judge found on all of those things. 527 00:31:36,480 --> 00:31:39,040 Speaker 6: You know, they've had this position for years and years 528 00:31:39,480 --> 00:31:42,800 Speaker 6: as the sole buyer. It's very hard to have a 529 00:31:42,840 --> 00:31:48,200 Speaker 6: competing leg. It's hard to even start your own racing team. 530 00:31:48,320 --> 00:31:51,440 Speaker 6: They had estimates on that in the record. So the 531 00:31:51,560 --> 00:31:54,680 Speaker 6: judge said, no, you've got this high entry barrier. It's 532 00:31:54,760 --> 00:31:58,440 Speaker 6: very hard to enter. There are really no substitutes. There 533 00:31:58,480 --> 00:32:02,200 Speaker 6: aren't other teams out there, you know, to race. So 534 00:32:02,360 --> 00:32:06,960 Speaker 6: on the having monopoly or monopsony power interrelevant market is 535 00:32:07,040 --> 00:32:10,760 Speaker 6: now out of the case, but that still leaves the 536 00:32:10,840 --> 00:32:15,240 Speaker 6: question really two questions. One is they have to engage 537 00:32:15,280 --> 00:32:20,520 Speaker 6: in some anti competitive conduct that maintains their monopoly position, 538 00:32:20,920 --> 00:32:24,840 Speaker 6: and that's still going to go to trial, and that involves, 539 00:32:25,120 --> 00:32:27,960 Speaker 6: you know, maybe their acquisitions of these other tracks, which 540 00:32:28,000 --> 00:32:32,240 Speaker 6: they did. There were some exclusive agreements. There's this agreement 541 00:32:32,320 --> 00:32:34,880 Speaker 6: that if you sign an agreement, you wave your. 542 00:32:34,920 --> 00:32:38,600 Speaker 1: Anti trust claims. All of those will go together into 543 00:32:38,640 --> 00:32:39,160 Speaker 1: a trial. 544 00:32:39,400 --> 00:32:42,880 Speaker 6: And then there's the question of damages and that's going 545 00:32:42,920 --> 00:32:46,560 Speaker 6: to be interesting because you know, the plaintiffs want more money. 546 00:32:47,240 --> 00:32:50,720 Speaker 1: As a plaintiffs always won isay, you took too much, 547 00:32:50,800 --> 00:32:52,800 Speaker 1: I didn't get enough. But they have to. 548 00:32:52,760 --> 00:32:57,120 Speaker 6: Show what the competitive rate would be for these teams, 549 00:32:57,840 --> 00:32:59,920 Speaker 6: and you know that's going to be a battle of 550 00:33:00,040 --> 00:33:04,000 Speaker 6: they're economists. So there's still a distance to go. Maybe 551 00:33:04,000 --> 00:33:06,120 Speaker 6: we'll never get there, and the parties are now going 552 00:33:06,200 --> 00:33:08,440 Speaker 6: to settle. I don't know, but this I think was 553 00:33:08,480 --> 00:33:10,920 Speaker 6: a pretty big win for the plaintiffs. 554 00:33:11,480 --> 00:33:17,200 Speaker 4: They've had mediation sessions and private negotiations which obviously haven't worked. 555 00:33:17,600 --> 00:33:21,440 Speaker 4: But after the last court hearing, Michael Jordan said, settlement 556 00:33:21,520 --> 00:33:24,240 Speaker 4: has always been on the table, and the pressure is 557 00:33:24,280 --> 00:33:26,320 Speaker 4: on when the trial date is coming up soon. 558 00:33:26,880 --> 00:33:29,600 Speaker 6: And it seems to me what they're really arguing over 559 00:33:29,800 --> 00:33:32,560 Speaker 6: is how do we split the pot so that the 560 00:33:32,640 --> 00:33:36,800 Speaker 6: teams have enough money to invest in these fast cars 561 00:33:36,840 --> 00:33:39,360 Speaker 6: and you know, all the things we need to do, 562 00:33:39,480 --> 00:33:42,440 Speaker 6: and you know, at the end of the day, perhaps 563 00:33:42,520 --> 00:33:45,800 Speaker 6: unfortunately for consumers, there's not going to be another circuit 564 00:33:46,080 --> 00:33:47,520 Speaker 6: because these are private. 565 00:33:47,200 --> 00:33:48,280 Speaker 1: Plaintiffs pursuing this. 566 00:33:48,440 --> 00:33:52,000 Speaker 6: So the goal is not to split up nascars so 567 00:33:52,080 --> 00:33:55,880 Speaker 6: there are competing circuits and you'd have real competition in 568 00:33:55,920 --> 00:34:00,320 Speaker 6: this kind of racing. This is not Michael Jordan's goal. 569 00:34:00,680 --> 00:34:03,400 Speaker 6: That's not the goal of private parties. The goal is 570 00:34:03,440 --> 00:34:08,000 Speaker 6: to basically split the monopoly profits differently so they will 571 00:34:08,200 --> 00:34:11,960 Speaker 6: likely benefit you know, consumers. I don't know, maybe not 572 00:34:12,080 --> 00:34:12,719 Speaker 6: so much. 573 00:34:12,920 --> 00:34:15,080 Speaker 4: If I'm the defendant. I don't want to be in 574 00:34:15,120 --> 00:34:19,480 Speaker 4: a courtroom sitting opposite Michael Jordan with his star power. 575 00:34:19,560 --> 00:34:23,800 Speaker 4: I mean, you know how juries are mesmerized right by stars. 576 00:34:24,360 --> 00:34:27,600 Speaker 6: Asking for damages in a jury trial is a good move, 577 00:34:27,680 --> 00:34:30,520 Speaker 6: particularly these days. I mean, juries have come in with 578 00:34:30,560 --> 00:34:34,520 Speaker 6: some pretty big verdicts in these big cases against major defendants. 579 00:34:35,040 --> 00:34:39,759 Speaker 1: You know, Google is one example. So, yeah, defendants have 580 00:34:39,840 --> 00:34:42,120 Speaker 1: never liked Church. Let's put it that way. 581 00:34:42,360 --> 00:34:46,320 Speaker 4: Yes, defendants do always seem to prefer a bench trial. 582 00:34:47,080 --> 00:34:48,880 Speaker 4: Before I let you go, Harry, I just want to 583 00:34:48,880 --> 00:34:53,080 Speaker 4: get your take on the bidding war between Pfizer and 584 00:34:53,160 --> 00:34:58,200 Speaker 4: Novo Nordisk over the obesity drugs startup met Sarah, which 585 00:34:58,239 --> 00:35:02,600 Speaker 4: has some antitrust implications. Pfizer had initially agreed to buy 586 00:35:02,680 --> 00:35:06,480 Speaker 4: met Sarah for four point nine billion dollars in September 587 00:35:07,040 --> 00:35:10,000 Speaker 4: and then let the bidding begin. The reports now are 588 00:35:10,040 --> 00:35:13,680 Speaker 4: that Pfizer has matched Novo's ten billion dollar bid. 589 00:35:13,920 --> 00:35:16,960 Speaker 6: This is an old fashioned bidding war. I keep saying 590 00:35:17,000 --> 00:35:20,640 Speaker 6: to people, this is obviously a really fat market for profits. 591 00:35:20,920 --> 00:35:24,480 Speaker 6: So the global market for weight loss drugs is now 592 00:35:24,719 --> 00:35:28,360 Speaker 6: figured out about seventy two billion dollars and in another 593 00:35:28,440 --> 00:35:31,600 Speaker 6: five years projected to be about one hundred and forty billion. 594 00:35:32,200 --> 00:35:35,239 Speaker 6: I mean, this is huge money. This is sort of 595 00:35:35,280 --> 00:35:38,920 Speaker 6: a fun fight, I guess, particularly if you're a shareholder 596 00:35:38,960 --> 00:35:42,799 Speaker 6: of Metzarah. What I love is the revenues of met 597 00:35:42,880 --> 00:35:46,560 Speaker 6: Sarah for this year have been zero. They don't have 598 00:35:46,600 --> 00:35:50,680 Speaker 6: a product their weight loss drug is now entering Phase 599 00:35:51,080 --> 00:35:56,000 Speaker 6: three clinical trials, which many but not all drugs get 600 00:35:56,040 --> 00:36:00,000 Speaker 6: through successfully. So everyone's betting that this will go through 601 00:36:00,040 --> 00:36:03,240 Speaker 6: through successfully. But it's not out yet and it hasn't 602 00:36:03,280 --> 00:36:06,640 Speaker 6: been approved yet by the Food and Drug Administration. But 603 00:36:06,960 --> 00:36:10,880 Speaker 6: Pfizer doesn't have a weight loss drug, and Novo Nordisk 604 00:36:11,000 --> 00:36:13,879 Speaker 6: is having a lot of financial problems even though they 605 00:36:13,960 --> 00:36:17,000 Speaker 6: probably have about fifty percent of the market, with those 606 00:36:17,120 --> 00:36:20,960 Speaker 6: Zembic and Wagovi literally having the rest. You know, this 607 00:36:21,120 --> 00:36:25,600 Speaker 6: is a market. It's not one hundred percent monopolized like NASCAR, 608 00:36:26,360 --> 00:36:30,719 Speaker 6: but maybe larger implications for health and money than nascars. 609 00:36:30,880 --> 00:36:34,480 Speaker 6: And the tactics that are being used are really quite 610 00:36:34,520 --> 00:36:40,800 Speaker 6: interesting because Phizer is not only arguing that Novo Nordists, 611 00:36:40,920 --> 00:36:43,600 Speaker 6: at least at a time higher bid, couldn't and shouldn't 612 00:36:43,600 --> 00:36:47,640 Speaker 6: be accepted and so in violation of their agreement that 613 00:36:47,680 --> 00:36:51,360 Speaker 6: they had, they've also filed the preemptive any trust case 614 00:36:51,920 --> 00:36:57,360 Speaker 6: against Novo Nordisk and Metsera alleging that their agreement, this 615 00:36:57,520 --> 00:36:59,280 Speaker 6: merger agreement is illegal. 616 00:36:59,840 --> 00:37:01,000 Speaker 1: They've not only. 617 00:37:00,719 --> 00:37:03,879 Speaker 6: Tried to stop it in Delaware Chancery Court, which has 618 00:37:04,040 --> 00:37:08,560 Speaker 6: normal jurisdiction over corporate matters, but they've also filed in 619 00:37:08,640 --> 00:37:12,839 Speaker 6: federal court in Delaware a separate any trust case. I'm 620 00:37:12,880 --> 00:37:17,840 Speaker 6: alleging some very unusual things about this deal and alleging 621 00:37:17,880 --> 00:37:21,399 Speaker 6: that the deal itself is illegal under the Sherman Act 622 00:37:21,480 --> 00:37:25,960 Speaker 6: monopolization any competitive and under the Clayton Act, and the 623 00:37:25,960 --> 00:37:29,240 Speaker 6: Federal Trade Commission has gotten involved a little bit as well. 624 00:37:29,800 --> 00:37:30,440 Speaker 1: The FTC. 625 00:37:30,760 --> 00:37:33,400 Speaker 6: You know, there's this shutdown that they haven't been able 626 00:37:33,440 --> 00:37:36,040 Speaker 6: to do anything. Lo and behold, they awaken from their 627 00:37:36,080 --> 00:37:39,920 Speaker 6: slumber and for the first time in almost a month, 628 00:37:39,960 --> 00:37:43,200 Speaker 6: they granted early termination. You know, when you have a 629 00:37:43,239 --> 00:37:45,959 Speaker 6: merger you have to file, you wait for thirty days 630 00:37:46,000 --> 00:37:50,920 Speaker 6: at least to give the government forcers time to at 631 00:37:51,000 --> 00:37:53,319 Speaker 6: least see if they want to get more information. They 632 00:37:53,400 --> 00:37:58,960 Speaker 6: gave Fizer's bid early termination after fifteen days in the 633 00:37:58,960 --> 00:38:02,920 Speaker 6: middle of this shutdown, saying, hey, no prob even though 634 00:38:02,960 --> 00:38:06,839 Speaker 6: apparently Pfizer has some weight loss drugs in its own pipeline. 635 00:38:07,320 --> 00:38:10,440 Speaker 1: Not clear exactly so, but they said, hey, no problem 636 00:38:10,440 --> 00:38:10,759 Speaker 1: with that. 637 00:38:11,320 --> 00:38:16,160 Speaker 6: And then they issued a letter to the lawyers for 638 00:38:16,680 --> 00:38:18,200 Speaker 6: Lenovo Nordisk. 639 00:38:17,880 --> 00:38:18,720 Speaker 1: And met Sarah. 640 00:38:19,120 --> 00:38:21,480 Speaker 6: We've read about this deal which has not been filed 641 00:38:21,719 --> 00:38:24,279 Speaker 6: with the federal takers. We read about it, and we're 642 00:38:24,280 --> 00:38:29,839 Speaker 6: a little concerned that it may violate the Hartscott Rodino Act, 643 00:38:29,920 --> 00:38:34,440 Speaker 6: which involves notification to the government that you're planning around 644 00:38:34,440 --> 00:38:37,160 Speaker 6: with this, and so you better watch this. 645 00:38:38,000 --> 00:38:40,200 Speaker 1: So what exactly is. 646 00:38:40,160 --> 00:38:43,759 Speaker 6: Going on, I don't know, but they seem to be 647 00:38:43,840 --> 00:38:47,719 Speaker 6: putting a little thumb on the scales in favor of Pfizer, 648 00:38:47,960 --> 00:38:52,640 Speaker 6: whether intentionally or not. But they've really injected, sorry, they've 649 00:38:52,680 --> 00:38:59,600 Speaker 6: injected themselves into this. It's an old fashioned antitrust tactical bruhaha. 650 00:39:00,080 --> 00:39:02,640 Speaker 6: You know how it's going to end up, I'm not sure, 651 00:39:02,719 --> 00:39:05,080 Speaker 6: but it's really something to be watching. This is one 652 00:39:05,160 --> 00:39:08,480 Speaker 6: with real implications for competition. 653 00:39:08,040 --> 00:39:08,880 Speaker 1: And for health. 654 00:39:09,200 --> 00:39:13,160 Speaker 4: Who knew that weight laws drugs would also involve antitrust? 655 00:39:13,400 --> 00:39:16,920 Speaker 4: Thanks so much, Harry. As always, that's Professor Harry First 656 00:39:17,000 --> 00:39:19,960 Speaker 4: of NYU Law School. And that's it for this edition 657 00:39:20,000 --> 00:39:22,680 Speaker 4: of The Bloomberg Law Show. Remember you can always get 658 00:39:22,680 --> 00:39:25,799 Speaker 4: the latest legal news on our Bloomberg Law Podcast. You 659 00:39:25,840 --> 00:39:29,920 Speaker 4: can find them on Apple Podcasts, Spotify, and at www 660 00:39:30,080 --> 00:39:34,360 Speaker 4: dot Bloomberg dot com, slash podcast Slash Law, and remember 661 00:39:34,400 --> 00:39:37,359 Speaker 4: to tune into the Bloomberg Law show every weeknight at 662 00:39:37,360 --> 00:39:40,839 Speaker 4: ten pm Wall Street Time. I'm June Grosso and you're 663 00:39:40,920 --> 00:39:42,160 Speaker 4: listening to Bloomberg