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Speaker 1: You're listening to Bloomberg Law with June Grasso from Bloomberg Radio.

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Speaker 1: The price of a taxi medallion in New York City

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Speaker 1: has plummeted from highs and excess of one billion dollars

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Speaker 1: in thirteen because of competition from ride sharing services like

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Speaker 1: Uber and Left. The New York Court of Appeals will

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Speaker 1: be considering two class actions against the City of New

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Speaker 1: York and the Taxian Limousine Commission by the buyers of

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Speaker 1: taxi medallions in three public auctions held in twenty sixteen

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Speaker 1: and seventeen. The medallion buyers are seeking about half a

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Speaker 1: billion dollars in damages, alleging that immediately after the third

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Speaker 1: auction ended, the TLC allowed tens of thousands of Uber

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Speaker 1: and Lift cars to flood the market, effectively destroying the

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Speaker 1: value of the medallions they'd sold. My guest is Mark Rifkin,

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Speaker 1: a partner Wolf Haldenstein who represents the plaintiffs in these

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Speaker 1: class actions. Mark start by telling us about the dry

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Speaker 1: eivers who purchased these medallions at auction and the situation

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Speaker 1: there in now well, most of the medallion buyers are

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Speaker 1: small business people who certainly could not afford to absorb

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Speaker 1: the kinds of losses that they suffered. Most of them,

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Speaker 1: if not all of them, took out loans to buy

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Speaker 1: the medallions, and the loans were even facilitated by the

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Speaker 1: city before the auctions took place, and now they have

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Speaker 1: to service the debt on those loans despite the fact

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Speaker 1: that they really can't generate the kind of income they

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Speaker 1: used to be able to generate before Uber and Left

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Speaker 1: were allowed to come into the city. Now that Uber

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Speaker 1: and Left are there, they can't afford to pay the

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Speaker 1: debt on the medallions. Most of the loans are into fault.

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Speaker 1: There have been many, many bankruptcies, and as you may know,

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Speaker 1: personal tragedies have also followed the city's action. Several of

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Speaker 1: the medallion buyers took their own lives because they couldn't

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Speaker 1: face the shame of not being able to pay back

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Speaker 1: loans it took to buy these medaias it's just been

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Speaker 1: a tragic episode, tell us what happened here sort of

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Speaker 1: your cause of action. So we have sued the City

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Speaker 1: of New York and the TLC for their conduct both

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Speaker 1: in conducting three auctions for taxi medallions the end of

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Speaker 1: two thousand thirteen and early two thousand fourteen, and then

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Speaker 1: what they did right after the third of those auctions,

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Speaker 1: they sold about a half billion dollars worth of taxi

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Speaker 1: medallions general taxidions, and as soon as the auctions were over,

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Speaker 1: they let in tens of thousands of over and lift

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Speaker 1: vehicles to flood the market with competition for the cabs,

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Speaker 1: and it destroyed the value of the medallions that they

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Speaker 1: had just sold at auctions. Are you asserting that this

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Speaker 1: was a deliberate move on their part, Well, whether it's

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Speaker 1: deliberate or not, it doesn't really matter. And there were

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Speaker 1: two problems with what they did. When they conducted the auction.

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Speaker 1: They provided misleading information to the public in terms of

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Speaker 1: the sales price for medallions, which was inaccurate, and also

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Speaker 1: the trend in the sales of the dallions, which was

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Speaker 1: also inaccurate. They sold the medallions and then they turned

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Speaker 1: around and they decimated the value of the medallions, which

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Speaker 1: deprived the buyers of the benefit of their bargain. Whether

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Speaker 1: they had a plan to do that before they sold

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Speaker 1: the medallion doesn't really matter. They did after after the sale.

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Speaker 1: That is what we what we alleges a breach of

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Speaker 1: their duty of good faith and fair dealing. I have

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Speaker 1: to let the other side of the contract enjoy the

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Speaker 1: benefit of the bargain, and they didn't do that. What

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Speaker 1: did the medallion owners pay for the medallions? On average?

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Speaker 1: The medallion buyers paid a little bit over a million

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Speaker 1: dollars per medallion, and that was consistent with the roughly

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Speaker 1: consistent with the price of the medallions before the auction

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Speaker 1: took place. The city set an upset price that was

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Speaker 1: based on the sale of the medallions before the auctions

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Speaker 1: took place. And then as soon as the auctions happened

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Speaker 1: and the city led uber and left into the market,

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Speaker 1: the market for medallion's basically froze. And so now the

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Speaker 1: medallions are worth just a fraction of what they work before.

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Speaker 1: If there's even a sale that's not a force sale,

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Speaker 1: that's not a bankruptcy sale or something else, the buyers

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Speaker 1: lost most of the of the purchase price they paid.

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Speaker 1: Is it Is it solely because of the uber and

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Speaker 1: lift drivers. That's the only thing that changed from from before.

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Speaker 1: After all, everything else about the markets stayed the same.

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Speaker 1: If anything, it got better. The economy improved ridership. Total

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Speaker 1: ridership improved. But the big negative is whereas the taxi

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Speaker 1: medallions had had an exclude us have right to pick

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Speaker 1: up passengers on city streets before Uber and Lift showed up.

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Speaker 1: As soon as Uber and Lift showed up, that exclusivity disappeared.

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Speaker 1: Then the medallion prices collapsed as a result. Have you

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Speaker 1: filed two class actions? We did. We we fild two

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Speaker 1: separate class actions on behalf of purchasers in the different

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Speaker 1: medallion auctions, and um, we we never did consolidate the

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Speaker 1: two cases. So they've run down paramount tracks since we

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Speaker 1: file the complaints, but they are essentially the same cases.

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Speaker 1: And what are the specific laws that you're suing under.

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Speaker 1: So there's two claims. One is breach of contract, and

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Speaker 1: that's breach of the city's implied covenant of good faith

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Speaker 1: and fair dealing. It's implied in every contract. The City's

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Speaker 1: contracts are no different, and that covenant requires that both

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Speaker 1: parties to the contract acting good faith to let the

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Speaker 1: other side enjoy the benefit of the bargain. So that's unclaimed.

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Speaker 1: That's a breach of contract plane and then separately, we're

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Speaker 1: also suing the city under gb L three forty nine,

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Speaker 1: which prohibits unfair competition and false and deceptive conduct. So

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Speaker 1: tell us what the procedural history is, what happened at

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Speaker 1: the various stages below. So I'll mix the two cases

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Speaker 1: together because it really doesn't make that much difference. But

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Speaker 1: essentially what happened is that we were permitted to proceed

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Speaker 1: on certain of our claims. The trial court sustained a

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Speaker 1: portion of the complaint, and so we were we were

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Speaker 1: proceeding on that basis. Then the court certified class of

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Speaker 1: all the medallion buyers, and so we were we were

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Speaker 1: prepared to proceed on a class basis. The city then

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Speaker 1: one on appeal in the Appellent Division, and the Appellent

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Speaker 1: Division has entirely dismissed the case. And now we asked

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Speaker 1: the Court of Appeals to hear an appeal, and the

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Speaker 1: Court of Appeals has now granted us that motion, and

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Speaker 1: so we'll be briefing the appeal in the Court of

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Speaker 1: Appeals over the next few months. So why did the

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Speaker 1: Appellate Division dismiss the complaints? The Appellate Division ruled first

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Speaker 1: that a disclaimer in the contract that the cab drivers

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Speaker 1: all signed when they bought the medallions, which said that

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Speaker 1: they were not relying on any statements made by the

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Speaker 1: city as to the value of the medowners, that that

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Speaker 1: waiver prohibited the medallion buyers from bringing a breach of

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Speaker 1: contract claim, even though what we allege was the breach

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Speaker 1: of contract did not even take place until after the

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Speaker 1: contracts were signed. So it make no sense to us

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Speaker 1: how the auction purchasers could agree to wave future claims.

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Speaker 1: But nonetheless, that's what the Telet Division decided, and so

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Speaker 1: dismissed the breach of contract claim on that basis, And

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Speaker 1: then the Appellent Division also dismissed our gb L three

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Speaker 1: forty nine claim on the basis that, um, we had

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Speaker 1: to follow certain procedures under the Municipal Code before we

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Speaker 1: could bring a claim under gb L three forty nine,

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Speaker 1: which we say is inconsistent with prior precedent. That those

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Speaker 1: claims are not treated under the Municipal Code. They don't

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Speaker 1: require a kind of notice that a typical municipal claim

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Speaker 1: would require, and the Corps of Appeals doesn't have to

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Speaker 1: take your appeal. It's not an appeal as of right, No,

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Speaker 1: not at all. In fact, uh statistically only a very

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Speaker 1: small percentage. Fewer than two of of appeals are are granted,

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Speaker 1: requests for leave to appeal are granted. So we're excited

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Speaker 1: that the Court of Appeals recognized the importance of the

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Speaker 1: issues that this case presents, both legally and factually and

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Speaker 1: uh and granted our motion for me to appeal. Is

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Speaker 1: there any implication to be drawn from the fact that

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Speaker 1: the Attorney General, Letitia James didn't pursue any action on

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Speaker 1: the medallions, No, I think I think the more interesting

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Speaker 1: thing is is the all of the public commentary that

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Speaker 1: came out in the aftermath of um an investigation that

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Speaker 1: was done by the City Council finding fault with the

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Speaker 1: way the city conducted the medallion auctions, and then how

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Speaker 1: they flooded, how the TLC essentially ignored its own rules

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Speaker 1: and flooded the market with uber and lift cars right

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Speaker 1: after the right after the auctions took place. How much

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Speaker 1: money do you think might be involved here, Well, it's

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Speaker 1: it's the principal amount that the city earned from the

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Speaker 1: medallions is about three sixty million, and then of course

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Speaker 1: you have all of the interests that accruise on that

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Speaker 1: over the intervening seven or eight years, So it's a

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Speaker 1: you know, it's a considerable sum. How fast can this

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Speaker 1: move at this point you're going to the Court of

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Speaker 1: Appeals will take years. Well, let's let's hope that it

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Speaker 1: moves quickly through the Court of Appeals if we get

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Speaker 1: back to the back to Supreme Court where we can

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Speaker 1: proceed to a trial quickly, now that most of the

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Speaker 1: procedural steps are out of the way, but I would

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Speaker 1: imagine that it will be at least three to six

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Speaker 1: months before we have a resolution in the court of

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Speaker 1: What is the city's response been. Has it just been

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Speaker 1: on technical issues or has there been response to the

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Speaker 1: heart of the charges? But well, the city's view is

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Speaker 1: that they can do whatever they want and the buyers

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Speaker 1: of the medallions were responsible for for their for their

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Speaker 1: own problem. How that can be, I don't know. But

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Speaker 1: but it's not just a technical defense. The city is

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Speaker 1: also denying any any claimablerongulance than for being on the show.

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Speaker 1: Mark that's Mark Rifkin of wolf Haldenstein. President Joe Biden

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Speaker 1: is outpacing every president since Richard Nixon in confirming Circuit

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Speaker 1: court judges joining me as Carl Tobai as a professor

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Speaker 1: at the University of Richmond Law School. Biden's sixth appellate

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Speaker 1: nominee was confirmed. Tell us about Gustavo Gelpi. Well, he

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Speaker 1: was a district judge in Puerto Rico who was elevated

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Speaker 1: by Biden. Actually, George W. Bush appointed him to the

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Speaker 1: district bench. He served for many years there and now

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Speaker 1: has been confirmed for the First Circuit as the second

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Speaker 1: person from Puerto Rico to ever be confirmed to that court.

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Speaker 1: Is there a so called Puerto Rico seat on the

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Speaker 1: First Circuit? Well, I guess you could say that, but

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Speaker 1: only the last two named from Puerto Rico are the

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Speaker 1: people who have sat on the First Circuit, So you

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Speaker 1: could say that, but we'll see in the future what happened.

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Speaker 1: It's a very small court, only six judges, the smallest

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Speaker 1: of the appeals courts in the US. Guilty was confirmed

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Speaker 1: by a bipartisan vote. You had three Republican Senators supporting him,

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Speaker 1: Senator Susan Collins of Maine, Lindsay Graham of South Carolina,

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Speaker 1: and Lisa Murkowski of Alaska. Was he less controversial than

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Speaker 1: some of the other nominees where the vote was much

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Speaker 1: closer or well maybe, but those three you just named

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Speaker 1: have been voting for a number of the by nominees. Uh,

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Speaker 1: and so that isn't surprising. And I think, um, the

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Speaker 1: Republican Senators on the Judiciary Committee were very aggressive about

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Speaker 1: certain issues. Um. For example, he had written a book

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Speaker 1: about the Insular k and they asked a number of

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Speaker 1: questions about those in terms of treatment of territories and

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Speaker 1: the jurisprudence of the Supreme Court a hundred years ago.

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Speaker 1: But he did get those three votes, as have a

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Speaker 1: number especially the district nominees. So far. Uh, those three

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Speaker 1: and a few others have voted for Democrats, But there's

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Speaker 1: been a lot of lockstep voting on both sides of

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Speaker 1: the aisle. Gelpi has experience as a federal public defender,

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Speaker 1: and five of Biden's six confirmed Appeals Court judges have

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Speaker 1: that experience as a public defender. Explain why that's unusual

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Speaker 1: on the bench and why it's important. Well before those

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Speaker 1: people were confirmed, there were only three people on the

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Speaker 1: federal appeals courts who had that type of experience, And

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Speaker 1: one of Biden's foremost pledges in appointing much as was

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Speaker 1: to uh name more people who had federal public defenders

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Speaker 1: State public defender experience, as well as people who had

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Speaker 1: other experiences apart from being prosecutors or people who came

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Speaker 1: from big firms. And he's kept that pledge, and this

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Speaker 1: is what you're seeing. But it's really extraordinary the experiential diversity,

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Speaker 1: especially in terms of people who have been federal public defenders. Yeah,

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Speaker 1: that's the same number of former public defenders that President

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Speaker 1: Obama appointed to the Circuit Court in his two terms.

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Speaker 1: So that just shows a comparison. Now, I want to

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Speaker 1: turn to some of the hearings for the Ninth Circuit

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Speaker 1: Court of Appeals, But the hot button issue of transgender

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Speaker 1: bathroom access came up in the hearings for a nominee

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Speaker 1: to the San Francisco based Court of Appeals, Holly Thomas.

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Speaker 1: Well UH Senators crews and Holly used um an incident

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Speaker 1: that allegedly happened in Loudon County in Virginia to say

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Speaker 1: that there were concerns about people using the bathroom of

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Speaker 1: their gender identity, and then criticizing Holly Thomas for representing

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Speaker 1: transgender people in high profile cases. It's not clear at

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Speaker 1: all exactly the nature of what happened in Loudon County.

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Speaker 1: UM but they were vociferous in their opposition to her,

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Speaker 1: and she basically said, this is the first I've heard

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Speaker 1: of it, and a lot of it hasn't been verified

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Speaker 1: according to I think major news outlets about exactly what

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Speaker 1: did happen. But they is that as a reason to

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Speaker 1: attack her, and she said she wasn't aware of this,

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Speaker 1: and she also defended her positions on behalf of her clients.

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Speaker 1: Has any appellate court at this point ruled that transgender

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Speaker 1: bathrooms are unconstitutional or anything like that, I don't think so.

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Speaker 1: But it's enough of an issue that they can make

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Speaker 1: to attack her, and that's exactly what they did. And

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Speaker 1: it seems not fair because she's representing her clients to

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Speaker 1: the best of her ability in the cases they were criticizing,

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Speaker 1: and so she said that. I think otherwise, she had

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Speaker 1: a relatively smooth hearing. So another nominee to the Ninth Circuit,

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Speaker 1: Oregon labor lawyer Jennifer Sung, and her criticism of Brett

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Speaker 1: Kavanaugh came under fired. Well. She was criticized again vigorously

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Speaker 1: by the same members of the committee on the GOP

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Speaker 1: side because she had signed a letter, as had I

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Speaker 1: think a thousand or so other Yale Law School grads

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Speaker 1: written to the Yale Law School to criticize Brett Kavanaugh's nomination,

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Speaker 1: but she admitted that there was overheated rhetoric in the

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Speaker 1: letter h and then Republicans tried to say that that

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Speaker 1: which shows that she wouldn't have judicial temperament by signing

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Speaker 1: the letter. And so she received a ten to ten vote,

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Speaker 1: which means that majority of Leader Schumer will have to

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Speaker 1: discharge her from committee, and she's likely to have a

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Speaker 1: close vote, but she will ultimately be confirmed by the Senate.

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Speaker 1: She's not the first nominee, is she that had a

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Speaker 1: ten to ten vote in Schumer had to advance, yes,

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Speaker 1: But the others she's the first judicial nominee there were,

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Speaker 1: as you remember, Benita Gupta for Associate Attorney General and

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Speaker 1: Kristen Clark for Assistant Attorney General for the Civil Rights

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Speaker 1: Division both were in that situation, but they both were

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Speaker 1: ultimately confirmed. The vote against her was the first no

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Speaker 1: vote for Senator Lindsey Graham on a buying judicial nominee

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Speaker 1: in committee. Does that stand out well? It does because

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Speaker 1: I think he has reverted to the position he used

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Speaker 1: to take, and that is unless he is vehemently opposed

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Speaker 1: to someone. He's willing to give the President the benefit

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Speaker 1: of the doubt in nominating people the President thinks are qualified,

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Speaker 1: and so it was a departure from his other votes.

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Speaker 1: Sometimes he's passed, which still allows someone to go through

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Speaker 1: because then it's not a tie vote. And I think

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Speaker 1: he's done that with some of the other appellate nominees.

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Speaker 1: For most of the district nominees, he's voted yes. The

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Speaker 1: Committee advanced Vermont Supreme Court Justice Beth Robinson's nomination to

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Speaker 1: the Second Circuit. What else can you tell us about her?

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Speaker 1: She is an historic appointment if confirmed, because she would

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Speaker 1: be the first lgbt Q individual to serve on a

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Speaker 1: US Court of appeals, and she's very well qualified. She

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Speaker 1: is presently on the Vermont Supreme Court. I think it's

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Speaker 1: been there for a decade and litigated some critical cases

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Speaker 1: involving lgbt Q right and is highly respected in Vermont

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Speaker 1: and around the country. The Senate voted fifty two to

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Speaker 1: forty five to confirm Tara Lynn to the District Court

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Speaker 1: for Western Washington. And she'll be making some first as well. Yeah,

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Speaker 1: she's the first Asian American to be appointed to the

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Speaker 1: Western District. I think to use any district in Washington State.

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Speaker 1: And she has litigated a number of high profile cases,

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Speaker 1: especially I think involving immigration issues. Um and so that

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Speaker 1: also fills three of five emergency vacancies in Washington, which

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Speaker 1: shows Biden is recognizing the priority that should be given

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Speaker 1: to them. And then last week the Senate confirmed Christino Hearn.

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Speaker 1: So they have now filled three of six emergency vacancies

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Speaker 1: in New Jersey. We talked before about Second Circuit nominee

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Speaker 1: Murna Perez and some of the problems that she ran into.

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Speaker 1: Tell us about those and tell us where her nomination

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Speaker 1: stands well. The same GOP centators, especially Cruz, said that

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Speaker 1: she was an activist, uh and that that she would

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Speaker 1: carry on that perspective when she was confirmed to the bench.

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Speaker 1: And she vehemently denied that and said, I know the

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Speaker 1: difference between being an advocate and being a judge. I'll

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Speaker 1: decide the cases on the law and the facts. She

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Speaker 1: had a relatively close vote in committee, but on Thursday

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Speaker 1: she did have a cloture vote I think it was,

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Speaker 1: and she was confirmed on Monday afternoon. Uh. And so

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Speaker 1: we'll sit on the Second Circuit and that will be

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Speaker 1: the second nominee Unite Lee is the first. So where

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Speaker 1: does this put Biden as far as the pace of

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Speaker 1: judicial nominees and confirmations, Well, I think he is has

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Speaker 1: eclipse Trump of using the benchmark of Halloween. I saw

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Speaker 1: some article about that and just saying he's appointed more

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Speaker 1: judges and I think more Pellet judges than even Trump did,

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Speaker 1: and so he may be on track to eclipse that record.

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Speaker 1: I think there were a dozen Trump's first year, and

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Speaker 1: after today then we'll have seven uh, and then Robinson,

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Speaker 1: Toby Heightens, Jennifer Sung would be up and then Lucy

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Speaker 1: co will have a vote in committee on Thursday for

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Speaker 1: the ninth Circuit, so uh, and Holly Thomas after that.

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Speaker 1: So it could well be that he will set that

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Speaker 1: record of most for the first year in the appellate system.

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Speaker 1: And he's confirmed quite a few district nominees, with six

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Speaker 1: more slated to have of confirmation votes this week, which

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Speaker 1: would bring that total two. I think something like UM

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Speaker 1: nineteen or twenty. I want to talk a little bit

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Speaker 1: about Ohio Republican Senator Rob Portman is leaving the Senate

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Speaker 1: and how that puts in jeopardy more than a decade

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Speaker 1: of bi parties in judicial screening in Ohio. Explain what

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Speaker 1: what we mean by bipartis in judicial screening, what the

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Speaker 1: process is. Well, what the senators have done, and they

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Speaker 1: have split in delegation, it's Portman and shared Brown, and

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Speaker 1: they've agreed to use um merit selection commissions which recommend

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Speaker 1: people and they're usually bipartisan, with some Democratic appointees and

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Speaker 1: some Republican appointees. And they've done it to keep the

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Speaker 1: bench full in Ohio. So, for example, in the Trump years, UM,

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Speaker 1: there were vacancies, but they were filled pretty expeditiously because

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Speaker 1: the two senators worked with the commissions. UH. They forwarded

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Speaker 1: well qualified mainstream nominees and they were easily confirmed because

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Speaker 1: both senators were strongly supportive. And now they're doing the

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Speaker 1: same thing with the three nominees for Ohio vacancies. Now,

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Speaker 1: I think you see the same thing in Illinois where

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Speaker 1: UM UH Durban has worked very closely when there was

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Speaker 1: a Republican from Illinois and still maintains his commissions and

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Speaker 1: kept his vacancies filled in UM Trump's years. UM. And

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Speaker 1: so it's a good lesson that if you work together

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Speaker 1: and even cooperate with the other party as the president

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Speaker 1: that you can fill your vacancies. We'll see. I don't

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Speaker 1: think Ohio is a really good test of whether red

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Speaker 1: state vacancies can be filled. I think we'd have to

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Speaker 1: see something like Texas or Idaho or other red states

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Speaker 1: with two Republican home state senators and how they work

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Speaker 1: with the White House. And none of those kinds of

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Speaker 1: states yet have even had a nominee. I believe I'm

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Speaker 1: surprised that the issue of judicial nominations hasn't been prominent

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Speaker 1: in Senate races. Why why not when we see what

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Speaker 1: judicial nominations can do when we've seen it well. I

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Speaker 1: think Biden again has not sent people who are very controversial. UM.

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Speaker 1: They have been what he promised UM, experienced and experiential diversity.

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Speaker 1: Most of them have had the highest rating from the A, B,

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Speaker 1: A UH. They're not considered controversial even by some Republicans,

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Speaker 1: and so it shouldn't be surprising that that they're moving quickly,

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Speaker 1: and they have, you know, a very well orchestrated UM

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Speaker 1: machine in the White House and on in the Senate

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Speaker 1: to move mont nominees through, and so there hasn't been

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Speaker 1: much cause to complain about the quality of the nominees,

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Speaker 1: and so we're not hearing a whole lot um. I

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Speaker 1: think the Administration deserves a lot of credit, as does

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Speaker 1: the Senate for moving on these well qualified nominees UM.

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Speaker 1: And maybe that's the reason why they're they're not so controversial, UM,

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Speaker 1: is that they're excellent people, um, and have the qualify

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Speaker 1: asians to be fine judges. Thanks for being the Bloomberg

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Speaker 1: Law Show, Carl. That's Professor Carl Tobias of the University

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Speaker 1: of Richmond Law School. And that's it for this edition

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Speaker 1: of the Bloomberg Law Show. Remember you can always get

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Speaker 1: the latest league lands our Blubber Law podcast. You can

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Speaker 1: find them wherever you get your favorite podcast. I'm joom Basso,

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Speaker 1: and you're listening to Bloomberg