1
00:00:03,200 --> 00:00:08,120
Speaker 1: This is Bloomberg Law, with June Brusso from Bloomberg.

2
00:00:07,680 --> 00:00:14,640
Speaker 2: Radio Cruiser undertaking the complicated work of removing mangled steel

3
00:00:14,720 --> 00:00:17,720
Speaker 2: and concrete at the site of the deadly collapse of

4
00:00:17,800 --> 00:00:22,360
Speaker 2: Baltimore's Francis Scott Key Bridge after a container ship lost

5
00:00:22,440 --> 00:00:26,759
Speaker 2: power and crashed into a supporting column, killing six workers

6
00:00:27,200 --> 00:00:32,600
Speaker 2: and throwing the Eastern US transportation network into chaos. Officials

7
00:00:32,640 --> 00:00:35,879
Speaker 2: say that in those murky waters, divers can't see a

8
00:00:35,880 --> 00:00:39,360
Speaker 2: foot in front of them, and with all that mangled,

9
00:00:39,440 --> 00:00:43,239
Speaker 2: intertwined steel above and below the water, the site is

10
00:00:43,280 --> 00:00:46,880
Speaker 2: a safety risk. Here's Marylyn, Governor Wes Moore.

11
00:00:47,680 --> 00:00:50,720
Speaker 3: You're looking at three four thousand tons of steel that's

12
00:00:50,720 --> 00:00:53,040
Speaker 3: sitting on top of the ship, and so beginning to

13
00:00:53,360 --> 00:00:56,200
Speaker 3: in sections be able to create that pathway, create open

14
00:00:56,280 --> 00:00:59,960
Speaker 3: channels so we can actually get boats, get tugs inside

15
00:01:00,080 --> 00:01:01,400
Speaker 3: the area.

16
00:01:01,520 --> 00:01:04,319
Speaker 2: And two channels have been opened near the side of

17
00:01:04,319 --> 00:01:08,480
Speaker 2: the collapse bridge to make way for smaller vessels and

18
00:01:08,600 --> 00:01:11,600
Speaker 2: as the crews continue to work. The owner of the

19
00:01:11,600 --> 00:01:15,600
Speaker 2: ship filed a lawsuit on Monday, denying responsibility for the

20
00:01:15,640 --> 00:01:19,479
Speaker 2: collapse and trying to limit its legal liability to forty

21
00:01:19,520 --> 00:01:22,760
Speaker 2: three point seven million dollars the current value of the

22
00:01:22,800 --> 00:01:26,000
Speaker 2: ship and its cargo, in a case that credit rating

23
00:01:26,040 --> 00:01:31,200
Speaker 2: agency Morning Star DBRs predicts could become the most expensive

24
00:01:31,280 --> 00:01:35,040
Speaker 2: marine insured laws in history. Joining me is Michael Stirley,

25
00:01:35,319 --> 00:01:38,240
Speaker 2: a maritime law expert at the University of Texas at

26
00:01:38,240 --> 00:01:41,679
Speaker 2: Austin School of Law. Michael, who do you anticipate will

27
00:01:41,720 --> 00:01:43,240
Speaker 2: be filing lawsuits here?

28
00:01:44,080 --> 00:01:47,160
Speaker 4: The short answer is, anybody who did something wrong is

29
00:01:47,280 --> 00:01:50,160
Speaker 4: likely to be sued here, or anybody who can plausibly

30
00:01:50,200 --> 00:01:52,680
Speaker 4: be claimed to have done something wrong is likely to

31
00:01:52,680 --> 00:01:53,440
Speaker 4: be sued here.

32
00:01:54,400 --> 00:01:57,200
Speaker 2: So of course the victims and the families of the

33
00:01:57,320 --> 00:02:01,240
Speaker 2: victims are going to sue. But what about the state

34
00:02:01,400 --> 00:02:05,480
Speaker 2: or county or whoever for the cost of rebuilding the bridge,

35
00:02:05,640 --> 00:02:09,079
Speaker 2: which could cost experts say four hundred million dollars or more.

36
00:02:10,200 --> 00:02:12,720
Speaker 4: Oh, I'd be surprised if get that small, but I

37
00:02:12,760 --> 00:02:15,480
Speaker 4: read recently that the inflation adjusted value of the original

38
00:02:15,560 --> 00:02:19,800
Speaker 4: construction was roughly twice that. I mean, broadly speaking, you'd

39
00:02:19,800 --> 00:02:23,799
Speaker 4: see claims coming from three main points. You have the

40
00:02:23,840 --> 00:02:27,239
Speaker 4: property damage claims. Anybody whose property was damaged as a

41
00:02:27,240 --> 00:02:30,080
Speaker 4: result of this accident. Most obviously that's going to be

42
00:02:30,120 --> 00:02:32,600
Speaker 4: the owner of the bridge, which understands the state of Maryland,

43
00:02:32,880 --> 00:02:36,680
Speaker 4: so they will certainly be doing The federal government has

44
00:02:36,720 --> 00:02:39,120
Speaker 4: indicated that it's going to be paying the rebuilding costs,

45
00:02:39,400 --> 00:02:42,520
Speaker 4: so they may have the subrogated claims, basically stepping into

46
00:02:42,520 --> 00:02:45,640
Speaker 4: the shoes of the state of Maryland saying we paid

47
00:02:45,919 --> 00:02:49,280
Speaker 4: reimburss Us for what we paid for your your damage.

48
00:02:49,639 --> 00:02:54,000
Speaker 4: They will probably be minor property damage claims. Whatever vehicles

49
00:02:54,080 --> 00:02:56,000
Speaker 4: ended up in the water, you know their owners will

50
00:02:56,000 --> 00:02:58,600
Speaker 4: have property damage claims and relatively mine on the scheme

51
00:02:58,639 --> 00:03:00,920
Speaker 4: of things. Then the second brought category you have as

52
00:03:00,960 --> 00:03:03,880
Speaker 4: the personal injury claims. There were at least two workers

53
00:03:03,919 --> 00:03:06,440
Speaker 4: who went into the water who survived, and then you

54
00:03:06,520 --> 00:03:09,799
Speaker 4: had the six workers who went into the water tragically

55
00:03:09,800 --> 00:03:13,120
Speaker 4: did not survive, So the be wrongful death claims from

56
00:03:13,120 --> 00:03:16,680
Speaker 4: the families of the decedents and that it was only

57
00:03:16,720 --> 00:03:19,600
Speaker 4: be personal injury claims from the two people who survived.

58
00:03:20,280 --> 00:03:23,360
Speaker 4: There may be other people who claim negligent fiction of

59
00:03:23,360 --> 00:03:27,000
Speaker 4: emotional distress who were in the zone of danger and

60
00:03:27,400 --> 00:03:32,560
Speaker 4: suffered mental harm. Broadcasts of personal jury claimants. Typically these

61
00:03:32,600 --> 00:03:36,160
Speaker 4: disasters tend to attract what are called economic laws claimant,

62
00:03:36,400 --> 00:03:39,680
Speaker 4: people whose claims they suffered economic loss as a result

63
00:03:39,760 --> 00:03:44,040
Speaker 4: of this disaster. Typically, those claims do not succeed unless

64
00:03:44,080 --> 00:03:47,640
Speaker 4: the person also suffered some physical injury property damage. So,

65
00:03:47,800 --> 00:03:51,440
Speaker 4: for example, this stake to recover for the economic loss

66
00:03:51,560 --> 00:03:54,800
Speaker 4: and not collecting bridge tolls for the next however many

67
00:03:54,880 --> 00:03:57,560
Speaker 4: years it takes to rebuild the bridge. Because they suffered

68
00:03:57,560 --> 00:04:00,920
Speaker 4: property damage, they can also recover for their econom I'm across,

69
00:04:01,160 --> 00:04:05,040
Speaker 4: but if you have businesses to say I'm getting less

70
00:04:05,080 --> 00:04:07,400
Speaker 4: business because people can't cross the bridge to get to

71
00:04:07,440 --> 00:04:09,680
Speaker 4: my business, you know they're going somewhere else because now

72
00:04:09,680 --> 00:04:12,560
Speaker 4: they're going through the tunnel. But they didn't suffer any damage,

73
00:04:12,600 --> 00:04:15,720
Speaker 4: any physical damage. Those claims are typically dismissed in the

74
00:04:15,760 --> 00:04:19,080
Speaker 4: maritime law. How many people will be in those three categories,

75
00:04:19,760 --> 00:04:22,920
Speaker 4: I don't have enough information, but the ape workers and

76
00:04:22,960 --> 00:04:25,599
Speaker 4: the bridge owner are certainly going to be obvious claims.

77
00:04:26,040 --> 00:04:29,280
Speaker 4: It looks like those woill be the big money amounts.

78
00:04:30,040 --> 00:04:32,839
Speaker 2: So the owner of the ship is trying to limit

79
00:04:32,960 --> 00:04:37,440
Speaker 2: liability to about forty two point seven million dollars and

80
00:04:37,480 --> 00:04:39,440
Speaker 2: they claim that the collapse of the bridge was not

81
00:04:39,520 --> 00:04:41,800
Speaker 2: due to any fault, neglect, or want of care of

82
00:04:41,839 --> 00:04:45,120
Speaker 2: the companies, and they shouldn't be held liable first of all,

83
00:04:45,120 --> 00:04:47,279
Speaker 2: and if they are held liable, then they shouldn't be

84
00:04:47,279 --> 00:04:49,719
Speaker 2: for more than the current value of the ship and cargo.

85
00:04:50,160 --> 00:04:54,440
Speaker 2: This is a common move by ship owners after catastrophic crashes.

86
00:04:54,600 --> 00:04:57,480
Speaker 2: Isn't it tell us about that skewer? I'd say obscure

87
00:04:57,560 --> 00:05:00,279
Speaker 2: for most of US law from eighteen fifty one that

88
00:05:00,400 --> 00:05:01,440
Speaker 2: involves the Titanic.

89
00:05:01,760 --> 00:05:05,320
Speaker 4: Well, I mean eighteen fifty one was obviously what sixty

90
00:05:05,440 --> 00:05:08,839
Speaker 4: some years before the Titanic, although the law was famously

91
00:05:08,839 --> 00:05:11,919
Speaker 4: invoked in the Titanic case. So Congress passed the statute

92
00:05:11,920 --> 00:05:15,280
Speaker 4: in eighteen fifty one designed to encourage investment in shipping.

93
00:05:16,120 --> 00:05:19,400
Speaker 4: Middle of the nineteenth century was before the era when

94
00:05:19,600 --> 00:05:23,560
Speaker 4: the corporate form became common, so it was designed for

95
00:05:23,600 --> 00:05:28,520
Speaker 4: an era when individuals and partnerships generally owned vessels, and

96
00:05:28,560 --> 00:05:32,400
Speaker 4: the idea was that if an individual risked all of

97
00:05:32,440 --> 00:05:35,279
Speaker 4: their assets by investing in the ship, that made it

98
00:05:35,520 --> 00:05:38,520
Speaker 4: a less appealing investment. I mean, you could imagine today

99
00:05:38,560 --> 00:05:41,760
Speaker 4: that if all of the shareholders of BP had to

100
00:05:41,839 --> 00:05:43,799
Speaker 4: chip in to pay for the cost of the BP

101
00:05:43,920 --> 00:05:47,160
Speaker 4: oil spill and the golf, that would make people less

102
00:05:47,160 --> 00:05:50,320
Speaker 4: willing to invest in companies that base those kinds of risks.

103
00:05:50,480 --> 00:05:53,720
Speaker 4: Now the corporate form obviously takes away that risk. You know,

104
00:05:53,760 --> 00:05:56,800
Speaker 4: if you buy shares in BP, the value of your

105
00:05:56,839 --> 00:06:00,600
Speaker 4: share is at risk. But worst case scenario is your

106
00:06:00,600 --> 00:06:03,039
Speaker 4: share value goes down to nothing. You know, the company

107
00:06:03,240 --> 00:06:06,360
Speaker 4: goes into liquidation. But the rest of your assets are

108
00:06:06,360 --> 00:06:09,520
Speaker 4: not subject to those cranes. And what the eighteen fifty

109
00:06:09,560 --> 00:06:13,440
Speaker 4: one Limitation Act essentially does is treat every ship as

110
00:06:13,480 --> 00:06:17,040
Speaker 4: though it were an individual corporation. So if you can imagine,

111
00:06:17,200 --> 00:06:19,919
Speaker 4: you know, suppose that this shipowner, instead of owning this

112
00:06:20,000 --> 00:06:24,239
Speaker 4: ship and other assets as well, owned nothing but the ship,

113
00:06:24,600 --> 00:06:27,280
Speaker 4: and then the ship is in a terrible accident, takes

114
00:06:27,279 --> 00:06:30,600
Speaker 4: out a bridge, facing massive lawsuits. If the ship were

115
00:06:30,600 --> 00:06:34,839
Speaker 4: in fact a single corporation, the corporation with clear bankruptcy

116
00:06:35,480 --> 00:06:38,000
Speaker 4: say that our only asset is the ship. You know,

117
00:06:38,080 --> 00:06:42,000
Speaker 4: total value, you know, forty million dollars. Liquidate the corporation,

118
00:06:42,560 --> 00:06:45,360
Speaker 4: take our assets and distribute them pro rat among the claimants.

119
00:06:45,560 --> 00:06:48,880
Speaker 4: Shareholders lose the value of their investment, but that's the

120
00:06:48,920 --> 00:06:52,640
Speaker 4: extent of it. Essentially, what the Limitation Act does is

121
00:06:52,680 --> 00:06:56,200
Speaker 4: the same thing. It says, even though the shipowner owns

122
00:06:56,240 --> 00:06:59,160
Speaker 4: other assets. It will be allowed to limit its liability

123
00:06:59,200 --> 00:07:04,039
Speaker 4: under circumstances to the value of the asset involved in

124
00:07:04,120 --> 00:07:08,160
Speaker 4: the accident. Now, as you say this is very common,

125
00:07:08,640 --> 00:07:11,440
Speaker 4: I've previously predicted that the chances of a limitation action

126
00:07:11,880 --> 00:07:14,120
Speaker 4: being filed here were somewhere north of ninety nine point

127
00:07:14,200 --> 00:07:16,920
Speaker 4: nine nine percent. It didn't take long for that prediction

128
00:07:17,000 --> 00:07:21,560
Speaker 4: to be to be justified. Chippotas routinely do this, and

129
00:07:21,600 --> 00:07:24,400
Speaker 4: they routinely do it even in circumstances where they know

130
00:07:24,480 --> 00:07:27,200
Speaker 4: they don't qualify for limitation. You know, if you look

131
00:07:27,240 --> 00:07:30,280
Speaker 4: at the look at the BP oil spill again, you

132
00:07:30,320 --> 00:07:32,720
Speaker 4: know Transotion was the owner of the vessel there. They

133
00:07:32,760 --> 00:07:35,760
Speaker 4: filed a limitation petition. The district court held they were

134
00:07:35,760 --> 00:07:39,600
Speaker 4: not taught to limit their liability, but Transition still got

135
00:07:39,600 --> 00:07:41,960
Speaker 4: a major benefit out of doing that. You look at

136
00:07:41,960 --> 00:07:46,559
Speaker 4: the Alfarro disaster, the Bestlona there filed a limitation proceeding. Again,

137
00:07:46,600 --> 00:07:49,560
Speaker 4: they were held not entitled limitation, but they still got

138
00:07:49,560 --> 00:07:54,640
Speaker 4: a benefit. What the limitation action does is centralize all

139
00:07:54,640 --> 00:07:58,280
Speaker 4: the litigation in one court. Now Here, we've got the

140
00:07:58,320 --> 00:08:01,760
Speaker 4: bridge owner a personally claimants that we've got at least

141
00:08:02,720 --> 00:08:07,440
Speaker 4: nine obvious claimants, but for the limitation proceeding, they could

142
00:08:07,920 --> 00:08:12,120
Speaker 4: possibly file in nine different courts, and very likely they

143
00:08:12,200 --> 00:08:14,080
Speaker 4: might be filing in the state court. You know, the

144
00:08:14,080 --> 00:08:16,680
Speaker 4: state of Maryland may well prefer to sue in its

145
00:08:16,720 --> 00:08:19,480
Speaker 4: own courts rather than going to federal court. Personal linjay

146
00:08:19,520 --> 00:08:23,360
Speaker 4: lawyers often prefer state court over federal court, and depending

147
00:08:23,440 --> 00:08:26,080
Speaker 4: on where the eight workers live, they may file in

148
00:08:26,200 --> 00:08:29,240
Speaker 4: eight different state courts. So the vessel owner would be

149
00:08:29,680 --> 00:08:33,200
Speaker 4: in the position of having to defend you nine different suits,

150
00:08:33,200 --> 00:08:35,600
Speaker 4: but all arising out of the same incident, all involving

151
00:08:35,640 --> 00:08:40,320
Speaker 4: the same facts in nine different forms, and having to

152
00:08:40,360 --> 00:08:43,280
Speaker 4: go through everything nine different times, and having the risk

153
00:08:43,320 --> 00:08:47,240
Speaker 4: of inconsistent results. By filing this petition, all of the

154
00:08:47,280 --> 00:08:50,800
Speaker 4: litigation is channeled into the federal District Court for the

155
00:08:50,800 --> 00:08:53,880
Speaker 4: District of Maryland. If you read the petition that inevitably

156
00:08:53,880 --> 00:08:57,920
Speaker 4: includes the boilet plate provision, asking the court to require

157
00:08:57,960 --> 00:09:00,520
Speaker 4: all claims to be filed in that court and enjoining

158
00:09:00,559 --> 00:09:04,520
Speaker 4: litigation anywhere else. So even if they don't get limitations,

159
00:09:04,640 --> 00:09:06,520
Speaker 4: the best of owner at least gets the benefit of,

160
00:09:07,200 --> 00:09:09,920
Speaker 4: at least for the time being, having everything in this

161
00:09:10,000 --> 00:09:13,280
Speaker 4: one court, and what's more, in one court sitting in admiralty,

162
00:09:13,440 --> 00:09:14,800
Speaker 4: which generally means no jury.

163
00:09:15,040 --> 00:09:18,160
Speaker 2: What would plaintiffs have to do in order to overcome

164
00:09:18,240 --> 00:09:21,160
Speaker 2: that liability limit? What do they have to show?

165
00:09:21,679 --> 00:09:23,559
Speaker 4: But they have to show basically that the owner was

166
00:09:23,600 --> 00:09:27,280
Speaker 4: at fault. You know, the statutory language is the falter

167
00:09:27,440 --> 00:09:30,520
Speaker 4: knowledge of the owner. I think there are several limitation

168
00:09:31,160 --> 00:09:34,760
Speaker 4: provisions in maritime law that use somewhat different language falter privity,

169
00:09:34,920 --> 00:09:37,160
Speaker 4: falter knowledge. I think falter knowledge is the language in

170
00:09:37,160 --> 00:09:39,760
Speaker 4: this statue. So they have to show that the owner

171
00:09:40,640 --> 00:09:45,240
Speaker 4: did something wrong. Now, what's a bit unusual. The counterintuitive

172
00:09:45,280 --> 00:09:49,000
Speaker 4: there is that they have to show the personal fault

173
00:09:49,040 --> 00:09:51,200
Speaker 4: of the owner. And of course the owner is a corporation.

174
00:09:51,320 --> 00:09:54,320
Speaker 4: The corporation acts only to its agents. But the way

175
00:09:54,360 --> 00:09:58,160
Speaker 4: the law has been developed, they have to show the

176
00:09:58,200 --> 00:10:01,320
Speaker 4: fault of basically se your management. They have to show

177
00:10:01,360 --> 00:10:05,440
Speaker 4: that shore side management is at fault here, not simply

178
00:10:05,480 --> 00:10:07,880
Speaker 4: that people onboard the vessel did something wrong.

179
00:10:08,240 --> 00:10:09,560
Speaker 2: What about mechanical failure.

180
00:10:10,040 --> 00:10:13,360
Speaker 4: Well, mechanical failure could be a late defect that the

181
00:10:13,400 --> 00:10:15,960
Speaker 4: owner is not it fought for, or it could be

182
00:10:16,080 --> 00:10:19,040
Speaker 4: the result of a failure to maintain the vessel properly,

183
00:10:19,080 --> 00:10:21,760
Speaker 4: which the owner, is it fault? For often when a

184
00:10:21,760 --> 00:10:25,680
Speaker 4: ship loses power, it's some problem with the bunker fuel. Now,

185
00:10:25,679 --> 00:10:27,800
Speaker 4: if it's a problem with the bunker fuel, the owner

186
00:10:27,840 --> 00:10:29,920
Speaker 4: is going to going to bring in the bunker fuel

187
00:10:29,960 --> 00:10:32,680
Speaker 4: supplier and say it's your fault that this happened. But

188
00:10:32,760 --> 00:10:34,840
Speaker 4: the claimants are certainly going to say to the owner,

189
00:10:35,200 --> 00:10:36,960
Speaker 4: you know, you should have taken better care to make

190
00:10:37,000 --> 00:10:39,000
Speaker 4: sure you got good bunker fuel, and then there'll be

191
00:10:39,040 --> 00:10:41,640
Speaker 4: a fight about whether or not the owner was responsible

192
00:10:41,640 --> 00:10:41,880
Speaker 4: for that.

193
00:10:42,360 --> 00:10:46,040
Speaker 2: Is it a difficult hurdle for plaintiffs to overcome this

194
00:10:46,960 --> 00:10:47,920
Speaker 2: liability limit.

195
00:10:48,559 --> 00:10:52,880
Speaker 4: Most limitation actions result in limitation not being granted. So

196
00:10:53,160 --> 00:10:56,120
Speaker 4: most limitations and vessel owners know this, they still file

197
00:10:56,200 --> 00:10:59,120
Speaker 4: the limitation claims to get the benefit of the concursis

198
00:10:59,120 --> 00:11:01,439
Speaker 4: to get the benefit of having all of the claims

199
00:11:01,440 --> 00:11:04,000
Speaker 4: filed in the same court. Even if they don't get limitation,

200
00:11:04,080 --> 00:11:06,640
Speaker 4: they still get a major benefit from the concursives. In

201
00:11:06,679 --> 00:11:11,320
Speaker 4: most cases, the court finds that the owner did something wrong,

202
00:11:11,480 --> 00:11:15,240
Speaker 4: they could have avoided the accident. The owner's management did

203
00:11:15,280 --> 00:11:18,239
Speaker 4: something wrong and therefore they're not entoitled in the liability.

204
00:11:18,880 --> 00:11:21,200
Speaker 4: Whether that happens here is going to depend on what

205
00:11:21,240 --> 00:11:24,199
Speaker 4: the facts are. I certainly don't know enough of the facts,

206
00:11:24,200 --> 00:11:27,400
Speaker 4: and I suspect nobody yet knows enough of the facts

207
00:11:27,400 --> 00:11:29,680
Speaker 4: to know how that's going to play out. But the

208
00:11:29,760 --> 00:11:32,640
Speaker 4: process will continue and the court will figure out whether

209
00:11:32,679 --> 00:11:34,160
Speaker 4: or not the owner did something wrong here.

210
00:11:34,559 --> 00:11:37,120
Speaker 2: Coming up next on the Bloomberg Lawn Show, I'll continue

211
00:11:37,160 --> 00:11:41,480
Speaker 2: this conversation with Michael Stirley of the University of Texas

212
00:11:41,480 --> 00:11:44,520
Speaker 2: at Austin's School of Law, and we'll talk about the

213
00:11:44,640 --> 00:11:48,920
Speaker 2: insurance coverage. I'm June Grosso and you're listening to Bloomberg.

214
00:11:51,280 --> 00:11:54,520
Speaker 2: Two channels with different damps have been opened near the

215
00:11:54,559 --> 00:11:58,320
Speaker 2: side of the collapse Francis Scott Keybridge in Baltimore Harbor

216
00:11:58,720 --> 00:12:02,160
Speaker 2: to make way for small vessels. During a briefing today,

217
00:12:02,200 --> 00:12:06,240
Speaker 2: authority said the weather was hindering the work. Brigadier General

218
00:12:06,360 --> 00:12:09,680
Speaker 2: John Lloyd said the divers are working in low visibility

219
00:12:09,920 --> 00:12:12,640
Speaker 2: and hazardous conditions on the bridge wreckage.

220
00:12:13,040 --> 00:12:16,679
Speaker 1: The same complexity and challenges, even more.

221
00:12:16,559 --> 00:12:19,559
Speaker 2: So, are below the water as well.

222
00:12:19,320 --> 00:12:21,680
Speaker 3: And I think that's what's going to make it such

223
00:12:21,679 --> 00:12:23,640
Speaker 3: a challenge in removing this wreckage.

224
00:12:23,760 --> 00:12:26,360
Speaker 1: It's not only what you see above the water, but

225
00:12:26,440 --> 00:12:27,160
Speaker 1: below the water.

226
00:12:27,240 --> 00:12:31,480
Speaker 2: As well. Transportation Secretary Pete Buddha Judge has said there's

227
00:12:31,559 --> 00:12:35,320
Speaker 2: no timeline for reopening the busy port of Baltimore because

228
00:12:35,360 --> 00:12:37,000
Speaker 2: of the complexity of the work.

229
00:12:37,480 --> 00:12:39,400
Speaker 1: It's not just that you have to remove the wreckage,

230
00:12:39,400 --> 00:12:40,760
Speaker 1: it's that you have to do it in a way

231
00:12:40,800 --> 00:12:44,280
Speaker 1: that doesn't cause portions of the bridge that are there

232
00:12:44,360 --> 00:12:47,199
Speaker 1: across the water to shift. They've been under a lot

233
00:12:47,200 --> 00:12:50,640
Speaker 1: of compression and tension. They could behave almost like a

234
00:12:50,760 --> 00:12:53,080
Speaker 1: spring if they are not expertly managed.

235
00:12:53,360 --> 00:12:56,640
Speaker 2: As the recovery continues and parts of the ship remain

236
00:12:56,840 --> 00:12:59,600
Speaker 2: stuck at the sign of the accident, the owner of

237
00:12:59,640 --> 00:13:02,560
Speaker 2: the ship that rammed into the bridge is seeking to

238
00:13:02,600 --> 00:13:06,640
Speaker 2: limit its liability for the accident. The company, Grace Ocean,

239
00:13:06,760 --> 00:13:10,120
Speaker 2: filed a lawsuit in federal court on Monday, claiming the

240
00:13:10,160 --> 00:13:13,840
Speaker 2: collapse of the bridge was not due to any fault, neglect,

241
00:13:14,040 --> 00:13:16,840
Speaker 2: or want of care, and that it shouldn't be held

242
00:13:16,920 --> 00:13:20,160
Speaker 2: liable for any loss or damage from the disaster. But

243
00:13:20,440 --> 00:13:23,080
Speaker 2: if it is held liable, it shouldn't be for more

244
00:13:23,120 --> 00:13:25,720
Speaker 2: than the current value of the ship and its cargo.

245
00:13:26,240 --> 00:13:29,319
Speaker 2: I've been talking to maritime law expert Michael Stirley of

246
00:13:29,440 --> 00:13:33,200
Speaker 2: the University of Texas at Austin School of Law. So

247
00:13:33,440 --> 00:13:37,520
Speaker 2: Bloomberg Intelligence reports that the ship alone has about three

248
00:13:37,559 --> 00:13:44,679
Speaker 2: billion dollars of reinsurance coverage just generally, does reinsurance kick in?

249
00:13:44,800 --> 00:13:47,520
Speaker 2: Does it cover the costs if the owner's suit for

250
00:13:47,760 --> 00:13:49,280
Speaker 2: limited liability fails?

251
00:13:49,720 --> 00:13:52,880
Speaker 4: Well, there are two kinds of insurance that are relevant here.

252
00:13:53,160 --> 00:13:55,560
Speaker 4: A number of news agencies have been reporting that the

253
00:13:55,600 --> 00:13:57,680
Speaker 4: ship had only I think it was ninety million dollars

254
00:13:57,720 --> 00:14:01,319
Speaker 4: of insurance. That's talking about its hullm machinery insurance, which

255
00:14:01,360 --> 00:14:04,440
Speaker 4: they're kind of properly insurance. That's the insurance that the

256
00:14:04,520 --> 00:14:08,520
Speaker 4: vessel owner has to reimburse it if the vessel is

257
00:14:08,720 --> 00:14:11,480
Speaker 4: lost or damage, and the vessel owner is citing that

258
00:14:11,640 --> 00:14:14,920
Speaker 4: in the limitation petition to show what the value of

259
00:14:14,920 --> 00:14:17,920
Speaker 4: the ship is, which is releatant limitation proceding. The insurance

260
00:14:17,960 --> 00:14:21,480
Speaker 4: that you're talking about is liability insurance, which is probably

261
00:14:21,520 --> 00:14:25,120
Speaker 4: the more important insurance here, and that's the insurance that

262
00:14:25,160 --> 00:14:28,640
Speaker 4: the vessel owner has to cover its liabilities if it's

263
00:14:28,640 --> 00:14:31,520
Speaker 4: not liable to a third party. And typically the case

264
00:14:31,640 --> 00:14:33,720
Speaker 4: like this, the vessel will be entered in what's known

265
00:14:33,760 --> 00:14:35,960
Speaker 4: as a P and I club, which is basically a

266
00:14:36,040 --> 00:14:38,760
Speaker 4: kind of mutual insurance company where the vessel owners get

267
00:14:38,800 --> 00:14:41,920
Speaker 4: together and pull their risks. I've read the news reports

268
00:14:42,000 --> 00:14:44,480
Speaker 4: that this vessel was entered with Britannia, one of the

269
00:14:44,560 --> 00:14:47,400
Speaker 4: major P and I clubs, and typically the vessel owner

270
00:14:47,440 --> 00:14:50,360
Speaker 4: will have a certain retention amount what most people would

271
00:14:50,360 --> 00:14:52,160
Speaker 4: think of it as a deductible, So the vesselan will

272
00:14:52,160 --> 00:14:55,040
Speaker 4: be responsible for the first some level I don't know

273
00:14:55,040 --> 00:14:59,040
Speaker 4: what the individually negotiated for each case, say the first

274
00:14:59,080 --> 00:15:01,840
Speaker 4: ten million dollars be the vessel owner's responsibility. Then the

275
00:15:01,880 --> 00:15:03,680
Speaker 4: P and I club will pick up the neck, you know,

276
00:15:03,800 --> 00:15:06,600
Speaker 4: whatever the club is arranged, and then beyond that you

277
00:15:06,680 --> 00:15:09,200
Speaker 4: go into reinsurance. There are about a dozen P and

278
00:15:09,240 --> 00:15:11,240
Speaker 4: I clubs in the world, the International Group of P

279
00:15:11,320 --> 00:15:14,080
Speaker 4: and I Clubs, and they pull the risk among themselves,

280
00:15:14,120 --> 00:15:16,360
Speaker 4: and then beyond that they go into reinsurance in the

281
00:15:16,760 --> 00:15:20,000
Speaker 4: secondary market. If the vessel owner is allowed to limit

282
00:15:20,040 --> 00:15:22,720
Speaker 4: its liability, then the vessel owner and it's P and

283
00:15:22,760 --> 00:15:25,480
Speaker 4: I club will be able to avoid taking advantage of that.

284
00:15:25,680 --> 00:15:28,320
Speaker 4: If they're not god of the limit liability, then you've

285
00:15:28,320 --> 00:15:30,400
Speaker 4: got a big insurance fund that's going to cover a

286
00:15:30,400 --> 00:15:32,720
Speaker 4: lot of the losses here one point to make those

287
00:15:32,840 --> 00:15:36,840
Speaker 4: The limitation, by its terms, permits the vessel owner to

288
00:15:36,880 --> 00:15:40,280
Speaker 4: limit its liability. That has been interpreted to allow both

289
00:15:40,280 --> 00:15:43,480
Speaker 4: the vessel owner and what's known as a bareboat charterer

290
00:15:43,680 --> 00:15:47,120
Speaker 4: to limit liability. A bareboat charter is someone who doesn't

291
00:15:47,120 --> 00:15:49,840
Speaker 4: actually own the vessel, but operates as though they were

292
00:15:49,880 --> 00:15:53,200
Speaker 4: the owner. Sometimes throwing some Latin here called them the

293
00:15:53,200 --> 00:15:55,400
Speaker 4: owner pro hot Beechey. I mean, if you think about

294
00:15:55,400 --> 00:15:58,440
Speaker 4: it in a more familiar consumer context. You know, if

295
00:15:58,440 --> 00:16:00,840
Speaker 4: you buy a car, obviously it's your car, you know

296
00:16:00,920 --> 00:16:02,920
Speaker 4: you own it. But if you lease your car, so

297
00:16:03,040 --> 00:16:05,240
Speaker 4: you get a three year lease, technically you don't own

298
00:16:05,320 --> 00:16:07,960
Speaker 4: the car, but you act like you own the car.

299
00:16:08,200 --> 00:16:10,880
Speaker 4: It's for all intents and purposes, you are operating it

300
00:16:10,920 --> 00:16:12,840
Speaker 4: as though you own the car. That's essentially what a

301
00:16:12,840 --> 00:16:15,640
Speaker 4: bareboat charter is that you have leased the vessel for

302
00:16:16,000 --> 00:16:19,160
Speaker 4: a fixed time period, but you operate it. You do

303
00:16:19,280 --> 00:16:21,560
Speaker 4: all of the you know, you hire the crew, you

304
00:16:21,760 --> 00:16:24,520
Speaker 4: arrange provisions, you make all the decisions, you run up

305
00:16:24,520 --> 00:16:26,880
Speaker 4: like you own it. So the Limitation Act protects the

306
00:16:26,920 --> 00:16:32,880
Speaker 4: owner and that bareboat charterer. This limitation petition claims limitations

307
00:16:32,920 --> 00:16:36,040
Speaker 4: on behalf of both the owner and the vessel manager.

308
00:16:36,560 --> 00:16:39,000
Speaker 4: I will be very curious to see whether the court

309
00:16:39,080 --> 00:16:42,520
Speaker 4: allows the vessel manager to lim a liability that's not

310
00:16:42,600 --> 00:16:46,040
Speaker 4: an obvious obvious beneficiary is a limitation Act. It's interesting

311
00:16:46,040 --> 00:16:47,120
Speaker 4: to see how that plays out.

312
00:16:47,400 --> 00:16:50,040
Speaker 2: Until I started doing research, I didn't realize how many

313
00:16:50,360 --> 00:16:54,480
Speaker 2: maritime accidents there have been in recent years. A dive

314
00:16:54,560 --> 00:16:57,400
Speaker 2: boat caught fire off the coast of southern California in

315
00:16:57,400 --> 00:17:00,880
Speaker 2: twenty nineteen and killed the thirty four pus. So the

316
00:17:01,000 --> 00:17:04,840
Speaker 2: litigation has not yet been resolved there. So are we

317
00:17:04,880 --> 00:17:08,200
Speaker 2: anticipating this is going to take years and years and years.

318
00:17:08,400 --> 00:17:09,879
Speaker 4: I don't know how long it's going to take to

319
00:17:09,880 --> 00:17:13,000
Speaker 4: resolve the Conception Fire case, but yes, there is a

320
00:17:13,000 --> 00:17:15,760
Speaker 4: lot of litigation going on there. The Conception Fire actually

321
00:17:15,840 --> 00:17:19,639
Speaker 4: prompted Congress to amend the Limitation Act for one of

322
00:17:19,680 --> 00:17:21,879
Speaker 4: the very few times in its history. You know, the

323
00:17:21,920 --> 00:17:25,240
Speaker 4: statute was amended after the Titanic. For the most part,

324
00:17:25,280 --> 00:17:27,760
Speaker 4: it hasn't changed a whole lot since eighteen fifty one.

325
00:17:27,920 --> 00:17:32,480
Speaker 4: But in December twenty two, I think it was, Congress

326
00:17:32,520 --> 00:17:36,560
Speaker 4: had a very minor amendment to exclude what it called

327
00:17:36,640 --> 00:17:39,760
Speaker 4: covered small passenger vessels from the scope of the Limitation Act,

328
00:17:39,920 --> 00:17:42,520
Speaker 4: basically to say that the next time that a disaster

329
00:17:42,720 --> 00:17:45,359
Speaker 4: like the conception happens, the vessel owner can't claim the

330
00:17:45,359 --> 00:17:48,600
Speaker 4: benefit of limitation. So every once in a while Congress

331
00:17:48,640 --> 00:17:52,359
Speaker 4: does respond to very high profile accidents when the mandments

332
00:17:52,359 --> 00:17:53,800
Speaker 4: of the Limitation Act.

333
00:17:53,600 --> 00:17:58,320
Speaker 2: And so the case is involving this bridge collapse will

334
00:17:58,359 --> 00:17:59,720
Speaker 2: take years and years.

335
00:18:00,119 --> 00:18:02,480
Speaker 4: I would be surprised if this has resolved quickly, but

336
00:18:02,560 --> 00:18:05,159
Speaker 4: you never know. I mean, most cases in fact settle

337
00:18:05,280 --> 00:18:07,439
Speaker 4: so as we learn more about the accident, that the

338
00:18:07,440 --> 00:18:10,120
Speaker 4: parties learned more about the accident, If it becomes obvious

339
00:18:10,160 --> 00:18:12,240
Speaker 4: that the vessel owner did something wrong, and if it

340
00:18:12,359 --> 00:18:14,760
Speaker 4: fault and won't be allowed to limit liability, then a

341
00:18:14,840 --> 00:18:18,040
Speaker 4: settlement may happen more quickly. I wouldn't be surprised if

342
00:18:18,080 --> 00:18:21,960
Speaker 4: the personal injury claimant end up settling fairly quickly, even

343
00:18:22,000 --> 00:18:24,680
Speaker 4: if the litigation overpaying for the replacement of the bridge

344
00:18:24,720 --> 00:18:27,440
Speaker 4: goes on much longer. In the VP oil spill case,

345
00:18:27,480 --> 00:18:30,000
Speaker 4: for example, there were I think it's there are eleven

346
00:18:30,359 --> 00:18:33,800
Speaker 4: Transocean Workers employees who were killed in the accident. Those

347
00:18:33,880 --> 00:18:36,800
Speaker 4: cases settled very quickly, Transocean took care of its employees

348
00:18:36,920 --> 00:18:40,119
Speaker 4: that didn't need to go into extended litigation. You know,

349
00:18:40,359 --> 00:18:42,120
Speaker 4: the big fight was over who is going to pay

350
00:18:42,160 --> 00:18:44,720
Speaker 4: for the clean up costs, not the personal injury claims.

351
00:18:44,840 --> 00:18:46,720
Speaker 2: I have to say, this is a whole different legal

352
00:18:46,760 --> 00:18:50,840
Speaker 2: area for me. I appreciate your insights. That's Michael Sterley

353
00:18:51,119 --> 00:18:54,280
Speaker 2: of the University of Texas at Austin School of Law,

354
00:18:55,240 --> 00:18:58,080
Speaker 2: coming up next on the Bloomberg Law Show. This year's

355
00:18:58,119 --> 00:19:01,639
Speaker 2: congressional elections in South Carolina will be held under a

356
00:19:01,720 --> 00:19:04,840
Speaker 2: map that a panel of three judges head rule was

357
00:19:04,960 --> 00:19:10,640
Speaker 2: unconstitutional and discriminatory against black voters. Why because the Supreme

358
00:19:10,680 --> 00:19:13,760
Speaker 2: Court hasn't issued a decision in the case, despite the

359
00:19:13,800 --> 00:19:17,760
Speaker 2: fact that oral arguments took place back in October. In

360
00:19:17,840 --> 00:19:21,320
Speaker 2: other legal news today, Donald Trump has sued two co

361
00:19:21,440 --> 00:19:25,399
Speaker 2: founders of his newly public Trump Media and Technology Group,

362
00:19:25,840 --> 00:19:29,280
Speaker 2: claiming they set the company up improperly and shouldn't get

363
00:19:29,320 --> 00:19:32,720
Speaker 2: any stock in it. It's the latest legal skirmish over

364
00:19:32,800 --> 00:19:36,159
Speaker 2: who gets how much of the hot but flailing meme stock.

365
00:19:36,760 --> 00:19:40,080
Speaker 2: Trump alleges that the two violated an agreement about the

366
00:19:40,119 --> 00:19:43,919
Speaker 2: setup and don't deserve their eight point six percent stake,

367
00:19:44,280 --> 00:19:48,919
Speaker 2: currently valued at six hundred and six million dollars. The lawsuit,

368
00:19:49,359 --> 00:19:53,000
Speaker 2: which was filed on March twenty fourth in Florida State Court,

369
00:19:53,359 --> 00:19:56,480
Speaker 2: comes after the pair brought their own suit against the

370
00:19:56,520 --> 00:20:00,199
Speaker 2: former president in Delaware Chancery court over the they are

371
00:20:00,320 --> 00:20:04,560
Speaker 2: promised stake in the social media company. The legal fight

372
00:20:04,680 --> 00:20:08,639
Speaker 2: is playing out amid wild swings in shares of Trump Media,

373
00:20:09,000 --> 00:20:11,919
Speaker 2: which began trading last week after it merged with a

374
00:20:11,920 --> 00:20:15,800
Speaker 2: special purpose acquisition company known as a SPACK. The stock

375
00:20:15,880 --> 00:20:19,600
Speaker 2: dropped twenty one percent on Monday after Trump Media disclosed

376
00:20:19,640 --> 00:20:23,080
Speaker 2: in a securities filing a fifty eight million dollar loss

377
00:20:23,359 --> 00:20:26,640
Speaker 2: and a relative trickle of revenue for twenty twenty three,

378
00:20:26,960 --> 00:20:29,520
Speaker 2: and reiterated a warning that it needed the money from

379
00:20:29,520 --> 00:20:33,359
Speaker 2: the SPACK deal to keep operating. The judge in Delaware

380
00:20:33,400 --> 00:20:37,119
Speaker 2: said he was gobsmacked to learn of Trump's Florida suit,

381
00:20:37,560 --> 00:20:41,080
Speaker 2: which he filed instead of bringing counterclaims against the duo

382
00:20:41,600 --> 00:20:45,800
Speaker 2: in his Delaware courtroom. He also said he'd consider possible

383
00:20:45,880 --> 00:20:49,760
Speaker 2: sanctions against the former president in the Delaware case. I'm

384
00:20:49,840 --> 00:20:54,560
Speaker 2: June Grosso, and you're listening to Bloomberg. This year's congressional

385
00:20:54,600 --> 00:20:58,040
Speaker 2: elections in South Carolina will be held under a map

386
00:20:58,119 --> 00:21:02,119
Speaker 2: that a panel of federal judges found was unconstitutional and

387
00:21:02,160 --> 00:21:05,760
Speaker 2: discriminatory against black voters. The case is in the hands

388
00:21:05,760 --> 00:21:09,880
Speaker 2: of the Supreme Court, which heard oral arguments last October.

389
00:21:10,160 --> 00:21:12,960
Speaker 2: With no decision from the High Court, the failure of

390
00:21:13,000 --> 00:21:16,880
Speaker 2: Republican legislators to redraw the map, and time running out

391
00:21:16,920 --> 00:21:20,080
Speaker 2: ahead of voter deadlines, a federal court ruled that the

392
00:21:20,240 --> 00:21:24,000
Speaker 2: unconstitutional map will be used. Joining me is elections law

393
00:21:24,040 --> 00:21:27,960
Speaker 2: expert Richard Brefald, a professor at Columbia Law School. Rich

394
00:21:28,040 --> 00:21:29,919
Speaker 2: tell us about the history of this case.

395
00:21:30,400 --> 00:21:34,200
Speaker 5: Following the twenty twenty census, the Republican legislature of South

396
00:21:34,240 --> 00:21:36,840
Speaker 5: Carolina redistricted. It didn't need to change the number of seats,

397
00:21:36,840 --> 00:21:39,359
Speaker 5: but they moved them around in order to improve the

398
00:21:39,440 --> 00:21:42,440
Speaker 5: prospects for the Republican Actually its congress from Nancy Mace,

399
00:21:42,480 --> 00:21:45,400
Speaker 5: who represents the District one near Charleston, and what they

400
00:21:45,400 --> 00:21:49,040
Speaker 5: did is they basically made her district more Republican and

401
00:21:49,119 --> 00:21:52,320
Speaker 5: an adjacent district more democratic, and so doing they moved

402
00:21:52,320 --> 00:21:55,119
Speaker 5: a significant number of black voters from her district to

403
00:21:55,200 --> 00:21:58,280
Speaker 5: the adjacent district, District six. That led to a lawsuit

404
00:21:58,320 --> 00:22:00,800
Speaker 5: that this was a form of racial jerryman, that the

405
00:22:00,880 --> 00:22:04,040
Speaker 5: voters were being moved because of their race. That lawsuit

406
00:22:04,119 --> 00:22:07,159
Speaker 5: was brought and the plaintiffs won that case before a

407
00:22:07,280 --> 00:22:10,439
Speaker 5: free judge court in early twenty twenty three. The judge

408
00:22:10,440 --> 00:22:13,639
Speaker 5: director of the legislature's redistrict legislature has been resisting that

409
00:22:13,680 --> 00:22:16,159
Speaker 5: ever since and has taken appeals, and the case was

410
00:22:16,240 --> 00:22:19,720
Speaker 5: actually argued before the Supreme Court in October, six months ago.

411
00:22:19,760 --> 00:22:23,080
Speaker 5: Now Supreme Court had yet to rule on South Carolina's appeal.

412
00:22:23,359 --> 00:22:25,800
Speaker 5: Many thought that that would be decided much earlier, since

413
00:22:25,800 --> 00:22:28,399
Speaker 5: they heard the case fairly early in the term, with

414
00:22:28,560 --> 00:22:31,160
Speaker 5: the legislature not having redistricted in this case having been

415
00:22:31,160 --> 00:22:33,480
Speaker 5: sitting in the Supreme Court now for quite some time.

416
00:22:33,680 --> 00:22:37,159
Speaker 5: The three judge court basically decided it's too late. The

417
00:22:37,200 --> 00:22:39,960
Speaker 5: period for people filing to become candidates in the primary

418
00:22:40,200 --> 00:22:42,040
Speaker 5: had already opened. In fact, I think it's already closed

419
00:22:42,040 --> 00:22:44,760
Speaker 5: by now. There's soon going to be the deadline sometime

420
00:22:44,800 --> 00:22:48,040
Speaker 5: in April for sending out military and overseas ballots. And

421
00:22:48,119 --> 00:22:50,960
Speaker 5: the fort basically said, although the ideal would be to

422
00:22:51,000 --> 00:22:54,040
Speaker 5: go forth, because they did hold the current lines unlawful,

423
00:22:54,400 --> 00:22:57,320
Speaker 5: going back to the start of twenty twenty three, they said,

424
00:22:57,480 --> 00:23:00,080
Speaker 5: given the fact that the litigation hasn't been resolved the

425
00:23:00,160 --> 00:23:03,320
Speaker 5: Supreme Court, the legilature hasn't done anything yet, it's too

426
00:23:03,440 --> 00:23:05,880
Speaker 5: late for this year. So although we don't like it,

427
00:23:06,200 --> 00:23:09,200
Speaker 5: we are going to allow the elections to go forward

428
00:23:09,280 --> 00:23:11,520
Speaker 5: under the old rules that the Court had said we're

429
00:23:11,600 --> 00:23:13,320
Speaker 5: in constitutionalize as a racial cherry mander.

430
00:23:13,680 --> 00:23:16,320
Speaker 2: So the Court said they're going to now use the

431
00:23:16,359 --> 00:23:20,439
Speaker 2: maps that were declared unconstitutional. Is there anything else this

432
00:23:20,560 --> 00:23:22,520
Speaker 2: court could have done to avoid that?

433
00:23:23,160 --> 00:23:25,800
Speaker 5: Well, I guess they could have appointed a special master

434
00:23:26,400 --> 00:23:30,240
Speaker 5: and actually drawn the lines themselves. I think their feeling was,

435
00:23:30,600 --> 00:23:33,200
Speaker 5: you know, we will know eventually from the Supreme Court

436
00:23:33,240 --> 00:23:35,000
Speaker 5: whether these are good lines or not. And it is

437
00:23:35,040 --> 00:23:37,120
Speaker 5: beginning to get close to the election. And I think

438
00:23:37,160 --> 00:23:39,600
Speaker 5: the problem is the case began blending its way to

439
00:23:39,640 --> 00:23:42,600
Speaker 5: the Supreme Court about a year ago. They actually had

440
00:23:42,640 --> 00:23:45,359
Speaker 5: that oral argument, as I said, six months ago. It's

441
00:23:45,480 --> 00:23:48,119
Speaker 5: just taken a huge amount of time to move forward,

442
00:23:48,440 --> 00:23:51,119
Speaker 5: and no one really quite understands why it's been delayed

443
00:23:51,160 --> 00:23:53,320
Speaker 5: so long in the Supreme Court, especially since I think

444
00:23:53,359 --> 00:23:56,320
Speaker 5: many observers felt that South Carolina actually did reasonably well,

445
00:23:56,320 --> 00:23:58,720
Speaker 5: in the urga, it's hard to tell the Supreme Court

446
00:23:58,800 --> 00:24:00,760
Speaker 5: is going to affirm the lower court or not, And

447
00:24:00,840 --> 00:24:03,520
Speaker 5: in any event, the state has effectively won, at least

448
00:24:03,520 --> 00:24:06,199
Speaker 5: for this year. Even if the Supreme Court affirms, the

449
00:24:06,240 --> 00:24:09,280
Speaker 5: Court agrees that the lines are un constitutional, those lines

450
00:24:09,320 --> 00:24:11,200
Speaker 5: are going to be used for the twenty twenty four election.

451
00:24:11,600 --> 00:24:13,920
Speaker 2: Both the state and the civil rights groups who were

452
00:24:14,000 --> 00:24:18,080
Speaker 2: challenging the map had asked the Supreme Court to issue

453
00:24:18,080 --> 00:24:20,840
Speaker 2: a decision by January first, so they could prepare for

454
00:24:20,880 --> 00:24:23,359
Speaker 2: the upcoming elections. Is this the first time or have

455
00:24:23,400 --> 00:24:26,120
Speaker 2: there been other times when the Supreme Court has not

456
00:24:26,200 --> 00:24:30,919
Speaker 2: been acting particularly fast and has allowed maps that have

457
00:24:31,000 --> 00:24:33,399
Speaker 2: been declared unconstitutional to be used.

458
00:24:33,920 --> 00:24:36,560
Speaker 5: Well, I think that's what happened actually with the Alabama

459
00:24:36,640 --> 00:24:39,600
Speaker 5: at agation, where the Supreme Court stayed a lower court

460
00:24:39,640 --> 00:24:43,080
Speaker 5: decision holding a plan highlight Soavotian Rights Act. The Supreme

461
00:24:43,080 --> 00:24:46,120
Speaker 5: Court stayed that and then more than a year later,

462
00:24:46,600 --> 00:24:49,240
Speaker 5: finally actually decided the case and actually said that the

463
00:24:49,280 --> 00:24:52,120
Speaker 5: lower court had been correct. At that point, the map

464
00:24:52,240 --> 00:24:54,639
Speaker 5: was changed, but in the meantime an election had been

465
00:24:54,640 --> 00:24:56,600
Speaker 5: held under the map, which the lower court had felt

466
00:24:56,720 --> 00:24:59,960
Speaker 5: was illegal. But the Supreme Court had stayed for consider

467
00:25:00,280 --> 00:25:02,640
Speaker 5: period of time so that they could decide the case,

468
00:25:02,640 --> 00:25:04,439
Speaker 5: so that effectly the twenty twenty two election.

469
00:25:04,760 --> 00:25:07,760
Speaker 2: It just boggles the mind that in a case like

470
00:25:07,800 --> 00:25:11,040
Speaker 2: this they can't get a decision out. Although I mean,

471
00:25:11,080 --> 00:25:14,040
Speaker 2: the Supreme Court has been handing out decisions more slowly

472
00:25:14,680 --> 00:25:15,640
Speaker 2: as of late.

473
00:25:15,680 --> 00:25:17,840
Speaker 5: This does seem to have been one of the slowest years.

474
00:25:17,960 --> 00:25:19,680
Speaker 5: The people who keep track of this and have said

475
00:25:19,680 --> 00:25:22,240
Speaker 5: that they got off to the slowest start of any

476
00:25:22,320 --> 00:25:24,800
Speaker 5: year in a very long time, and they've still issued

477
00:25:24,840 --> 00:25:26,040
Speaker 5: relatively few opinions.

478
00:25:26,119 --> 00:25:29,840
Speaker 2: So we had the Alabama case where the Court came

479
00:25:29,880 --> 00:25:33,399
Speaker 2: out with a ruling that was favorable to the challengers,

480
00:25:33,600 --> 00:25:35,800
Speaker 2: but yet, as you say, in the oral arguments, it

481
00:25:35,880 --> 00:25:40,679
Speaker 2: seemed like it was going against the challengers in South Carolina.

482
00:25:40,880 --> 00:25:43,120
Speaker 2: Explain the difference between the two cases.

483
00:25:43,640 --> 00:25:46,720
Speaker 5: The issue in this case really has more to do

484
00:25:46,760 --> 00:25:51,120
Speaker 5: with how do you disentangle racial jerry mandering from partisan jerrymandering.

485
00:25:51,280 --> 00:25:54,159
Speaker 5: Kind of the central issue in this case is the

486
00:25:54,200 --> 00:25:57,399
Speaker 5: publican legislature in South Carolina is happy to say that

487
00:25:57,440 --> 00:26:00,280
Speaker 5: what they did was a partisan jerrymander because even the

488
00:26:00,280 --> 00:26:03,680
Speaker 5: Supreme Court's decision a few years ago. Partisan jerrymandering cannot

489
00:26:03,720 --> 00:26:06,919
Speaker 5: be challenged. It's non justiciable. It's not on constitutional, according

490
00:26:06,920 --> 00:26:09,720
Speaker 5: to the Supreme Court. But racial jerry mannering is, and

491
00:26:09,840 --> 00:26:11,960
Speaker 5: all fund the two were closely connected. If you're moving

492
00:26:11,960 --> 00:26:14,560
Speaker 5: a big block of black voters who happened to be Democrats,

493
00:26:14,640 --> 00:26:16,800
Speaker 5: or Democratic voters who happened to be black, there's a

494
00:26:16,840 --> 00:26:18,960
Speaker 5: debate as to what exactly the state is doing. The

495
00:26:18,960 --> 00:26:21,560
Speaker 5: Low Court here concluded that, based on a variety of factors,

496
00:26:21,640 --> 00:26:24,240
Speaker 5: it was better characterized as a racial gerry mander. The

497
00:26:24,320 --> 00:26:28,040
Speaker 5: issue in Alabama was differently complicated in that there the

498
00:26:28,080 --> 00:26:31,320
Speaker 5: state was using a basic configuration of how to draw

499
00:26:31,440 --> 00:26:33,800
Speaker 5: districts in the state that they've been using for some time.

500
00:26:33,880 --> 00:26:36,879
Speaker 5: They may just minor changes from one the census to

501
00:26:36,920 --> 00:26:39,600
Speaker 5: the next, but was not a conscious or an obvious

502
00:26:39,600 --> 00:26:42,399
Speaker 5: effort in the twenty twenty redistricting. But the plainters were

503
00:26:42,440 --> 00:26:45,320
Speaker 5: able to show that the district things structure that the

504
00:26:45,320 --> 00:26:48,359
Speaker 5: state had been using for several decades discriminated against black

505
00:26:48,440 --> 00:26:50,960
Speaker 5: voters because of the way the districts were drawn, and

506
00:26:51,000 --> 00:26:53,480
Speaker 5: although you couldn't show that the state intended to do this,

507
00:26:53,640 --> 00:26:56,479
Speaker 5: they were able to present alternative maps which were just

508
00:26:56,560 --> 00:27:00,399
Speaker 5: as straightforward, you know, no more convoluted, no more you know,

509
00:27:00,480 --> 00:27:03,240
Speaker 5: odd shapes than the map being used. We should provide

510
00:27:03,359 --> 00:27:06,439
Speaker 5: fair representation for black voters. So that case was very

511
00:27:06,520 --> 00:27:10,840
Speaker 5: much about what does fair representation require for minority voters?

512
00:27:11,000 --> 00:27:12,960
Speaker 5: And this case was really about whether or not the

513
00:27:12,960 --> 00:27:15,480
Speaker 5: discrimination going on here was racial or partisan.

514
00:27:16,320 --> 00:27:19,480
Speaker 2: So this ruling came a day after a different federal

515
00:27:19,560 --> 00:27:24,800
Speaker 2: court upheld a congressional map in Florida that favors Republicans

516
00:27:24,880 --> 00:27:28,399
Speaker 2: and raises a seat held by a black Democrat. Just

517
00:27:28,560 --> 00:27:29,919
Speaker 2: explain what happened there.

518
00:27:30,040 --> 00:27:32,200
Speaker 5: Again, I think it was a similar question of whether

519
00:27:32,320 --> 00:27:34,600
Speaker 5: or not this was race or party, and they concluded

520
00:27:34,680 --> 00:27:37,320
Speaker 5: it was party, and when it's party, it's you know,

521
00:27:37,400 --> 00:27:40,280
Speaker 5: this may sound really weird to people. First, the whole

522
00:27:40,280 --> 00:27:43,439
Speaker 5: idea of race versus party, that they're different and that

523
00:27:43,520 --> 00:27:47,840
Speaker 5: they can be disentangled, but that partisan gerry mandering can't

524
00:27:47,840 --> 00:27:50,399
Speaker 5: be challenged and racial gerry mandering can be. And so

525
00:27:50,520 --> 00:27:54,040
Speaker 5: much turns on how you're going to characterize what exactly happened.

526
00:27:54,080 --> 00:27:56,679
Speaker 5: And you know, those can be hard questions as to

527
00:27:56,680 --> 00:27:59,920
Speaker 5: whether or not it's racer party, even that they're often connected.

528
00:28:00,200 --> 00:28:05,119
Speaker 2: Often it seems like they're inextricable, but so Also on Thursday,

529
00:28:05,359 --> 00:28:08,359
Speaker 2: a federal appeals court issued a ruling that all but

530
00:28:08,480 --> 00:28:12,720
Speaker 2: insures North Carolina will use state legislative maps this fall

531
00:28:12,880 --> 00:28:13,960
Speaker 2: that have been challenged.

532
00:28:14,359 --> 00:28:18,199
Speaker 5: They basically again decided, following a lower court decision, that

533
00:28:18,280 --> 00:28:20,960
Speaker 5: they would not block the maps. Those were maps that

534
00:28:21,000 --> 00:28:24,119
Speaker 5: were adopted by the Republican legislature in the fall and

535
00:28:24,600 --> 00:28:27,160
Speaker 5: a Voting Rights Act claim was brought. And I think

536
00:28:27,359 --> 00:28:29,760
Speaker 5: in some ways what's happened is that they basically decided

537
00:28:29,800 --> 00:28:32,080
Speaker 5: they wouldn't block it for now. You again, some of

538
00:28:32,080 --> 00:28:34,639
Speaker 5: these things come up on motions for conjunctions. In other words,

539
00:28:34,800 --> 00:28:37,680
Speaker 5: given that the election is coming soon, flink just want

540
00:28:37,720 --> 00:28:40,080
Speaker 5: to stop the new law from taking effect and then

541
00:28:40,120 --> 00:28:42,680
Speaker 5: hold the trial. And the state is saying, well, no,

542
00:28:42,800 --> 00:28:44,200
Speaker 5: the law. Ca'm going to think you can have a

543
00:28:44,240 --> 00:28:46,600
Speaker 5: trial later. Then we can change it later if you

544
00:28:46,720 --> 00:28:47,760
Speaker 5: find it's unlawful.

545
00:28:48,400 --> 00:28:52,000
Speaker 2: And voting rights advocates say that's too late, because you

546
00:28:52,040 --> 00:28:53,360
Speaker 2: can't change the vote.

547
00:28:53,640 --> 00:28:55,960
Speaker 5: There is this thing known as the per Cell principle,

548
00:28:56,280 --> 00:28:59,120
Speaker 5: the idea that you shouldn't be changing the rules governing

549
00:28:59,120 --> 00:29:02,040
Speaker 5: an election too to the election. No one knows when

550
00:29:02,160 --> 00:29:04,720
Speaker 5: is it too close to an election, But we're probably

551
00:29:04,760 --> 00:29:07,680
Speaker 5: being to get there at least for primaries, even if

552
00:29:07,880 --> 00:29:10,080
Speaker 5: some of the earlier action in a case they have

553
00:29:10,120 --> 00:29:12,800
Speaker 5: taken place months ago. You know. I think in this case,

554
00:29:12,840 --> 00:29:15,760
Speaker 5: in the North Carolina case, there was a decision going

555
00:29:15,800 --> 00:29:18,280
Speaker 5: back to January twenty three. It's just took you a

556
00:29:18,320 --> 00:29:20,600
Speaker 5: long time for it to kind of prokly through the system.

557
00:29:21,000 --> 00:29:24,280
Speaker 2: Are states here basically trying to run out the clock?

558
00:29:24,960 --> 00:29:28,120
Speaker 5: I think they often do. I mean they often basically say, well,

559
00:29:28,360 --> 00:29:32,640
Speaker 5: no preliminary injunction, no emergency motions please, And then as

560
00:29:32,680 --> 00:29:36,120
Speaker 5: they continue to bring appeals that will delay things, there

561
00:29:36,160 --> 00:29:38,959
Speaker 5: may eventually be a trial, and then there may eventually

562
00:29:39,000 --> 00:29:40,560
Speaker 5: be an appeal to a trial, and the appeal may

563
00:29:40,560 --> 00:29:43,240
Speaker 5: actually get decided. And that's kind of what happened in Alabama.

564
00:29:43,360 --> 00:29:45,720
Speaker 5: But just sometimes they do seem to be stretching it

565
00:29:45,760 --> 00:29:47,600
Speaker 5: all out in delay and delay and delay.

566
00:29:48,280 --> 00:29:52,160
Speaker 2: So these decisions, along with others in recent months, does

567
00:29:52,160 --> 00:29:55,600
Speaker 2: that mean that the congressional maps for twenty twenty four

568
00:29:55,720 --> 00:29:56,840
Speaker 2: are largely set?

569
00:29:57,440 --> 00:30:00,400
Speaker 5: I think that's right. I think that the litigate is

570
00:30:00,440 --> 00:30:04,360
Speaker 5: now just about done. We are into April. Many states

571
00:30:04,440 --> 00:30:07,640
Speaker 5: already had their primaries. I think there are probably no

572
00:30:07,720 --> 00:30:10,600
Speaker 5: primaries later than June, or at least not many. I

573
00:30:10,600 --> 00:30:12,800
Speaker 5: think we're getting very late in the season and we're

574
00:30:12,800 --> 00:30:13,560
Speaker 5: probably done.

575
00:30:13,720 --> 00:30:16,680
Speaker 2: I want to get your reaction to a political article

576
00:30:17,240 --> 00:30:20,320
Speaker 2: that said that Republicans came out ahead in the battle

577
00:30:20,320 --> 00:30:23,080
Speaker 2: to control the House in twenty twenty four thanks to

578
00:30:23,160 --> 00:30:27,760
Speaker 2: the redistricting aggression of North Carolina Republicans and the timidity

579
00:30:28,120 --> 00:30:29,440
Speaker 2: of New York Democrats.

580
00:30:30,120 --> 00:30:30,360
Speaker 3: Yeah.

581
00:30:30,520 --> 00:30:32,120
Speaker 5: I think there's a lot to be said for that.

582
00:30:32,280 --> 00:30:34,440
Speaker 5: Maybe a little defensive of the New York Democrats. They

583
00:30:34,440 --> 00:30:37,440
Speaker 5: had a tough situation, but yes, North Carolina did a

584
00:30:37,600 --> 00:30:40,560
Speaker 5: very sharp gerry mander and basically moved three seats from

585
00:30:40,560 --> 00:30:42,960
Speaker 5: the Democratic to the Republican column, which is huge. The

586
00:30:43,000 --> 00:30:44,960
Speaker 5: problem in New York is that New York does have

587
00:30:45,000 --> 00:30:49,000
Speaker 5: this independent redistricting Commission and this redistricting process that the

588
00:30:49,040 --> 00:30:52,640
Speaker 5: state adopted in the twenty tens and which was used

589
00:30:52,640 --> 00:30:55,560
Speaker 5: for the first time in twenty twenty two, and the

590
00:30:55,600 --> 00:30:57,680
Speaker 5: state failed to do it right, according to the New

591
00:30:57,760 --> 00:30:59,880
Speaker 5: York State's highest court, leading to the appointment of the

592
00:30:59,880 --> 00:31:01,920
Speaker 5: Special Master, who came up with a plan that was

593
00:31:01,920 --> 00:31:04,880
Speaker 5: fairly favorable to Republicans. The Democrats got a second shot

594
00:31:04,880 --> 00:31:06,640
Speaker 5: of this by persuading the quart of Appeals that they

595
00:31:06,640 --> 00:31:08,239
Speaker 5: had a right to try again. But I think they

596
00:31:08,240 --> 00:31:10,480
Speaker 5: were a kind of gun shy based on what happened

597
00:31:10,520 --> 00:31:12,720
Speaker 5: the first time, and they did not want to make

598
00:31:12,800 --> 00:31:16,480
Speaker 5: an aggressive move to seriously change what was done in

599
00:31:16,720 --> 00:31:21,680
Speaker 5: twenty twenty two, so they tinkered. And my understanding from

600
00:31:21,760 --> 00:31:26,120
Speaker 5: the more political people is probably mostly might have affected

601
00:31:26,120 --> 00:31:28,720
Speaker 5: the outcome in one district. Mostly it seems to me

602
00:31:28,800 --> 00:31:31,320
Speaker 5: that they were kind of protecting Democrats who were in

603
00:31:31,520 --> 00:31:35,520
Speaker 5: vulnerable districts, and they have recalculated one of the districts

604
00:31:35,520 --> 00:31:37,760
Speaker 5: that which went narrowly Republican last time in a way

605
00:31:37,800 --> 00:31:40,520
Speaker 5: that makes it even more truly even. But it seems

606
00:31:40,560 --> 00:31:43,040
Speaker 5: as though it's, you know that based on redistricting, it's

607
00:31:43,040 --> 00:31:45,560
Speaker 5: not clearly with the any Democratic pickups in New York

608
00:31:45,680 --> 00:31:47,680
Speaker 5: or at most one. At one point Democrats were thinking

609
00:31:47,680 --> 00:31:50,400
Speaker 5: optimistically they could be three, four or five. So there

610
00:31:50,440 --> 00:31:52,960
Speaker 5: was definitely a loss of three seats in North Carolina,

611
00:31:53,600 --> 00:31:55,680
Speaker 5: not clear that there was any game in New York.

612
00:31:56,080 --> 00:32:00,280
Speaker 5: The Alabama was probably a pickup because of the redistricting there. Again,

613
00:32:00,320 --> 00:32:03,280
Speaker 5: so if we're just talking about maps, I think the

614
00:32:03,360 --> 00:32:06,320
Speaker 5: remapping was marginally pro Republican.

615
00:32:06,560 --> 00:32:11,280
Speaker 2: Adam Kinkaid, the executive director of the National Republican Redistricting Trust,

616
00:32:11,360 --> 00:32:15,240
Speaker 2: toll Politico. It's a marginally more favorable map in twenty

617
00:32:15,280 --> 00:32:17,240
Speaker 2: four than we even had in twenty two.

618
00:32:17,880 --> 00:32:21,200
Speaker 5: That sounds about right, That sounds about right now. Of course,

619
00:32:21,800 --> 00:32:24,040
Speaker 5: twenty two was an election where many people thought the

620
00:32:24,040 --> 00:32:26,880
Speaker 5: Republicans were going to do really well, and although they

621
00:32:26,920 --> 00:32:29,640
Speaker 5: did take the House, they took it much more narrowly

622
00:32:29,720 --> 00:32:32,240
Speaker 5: than had been predicted. Much will turn on, of course,

623
00:32:32,280 --> 00:32:35,440
Speaker 5: the presidential election. You know, we're's still six months out

624
00:32:35,440 --> 00:32:37,680
Speaker 5: from that or more so. No one knows how that's

625
00:32:37,680 --> 00:32:40,880
Speaker 5: going to go. And turnout us often different in presidential

626
00:32:40,960 --> 00:32:44,080
Speaker 5: election years than in off years. So the Republicans, I think,

627
00:32:44,080 --> 00:32:46,600
Speaker 5: were hoping for a lot in twenty two. They won,

628
00:32:46,760 --> 00:32:49,479
Speaker 5: but they'd won more narrowly than people had expected. They

629
00:32:49,480 --> 00:32:52,160
Speaker 5: may be slightly better off now, but the presidential election

630
00:32:52,200 --> 00:32:54,320
Speaker 5: will matter for a lot, and maybe the kind of

631
00:32:54,320 --> 00:32:57,280
Speaker 5: the messiness of the Republican Congress will matter for something too.

632
00:32:57,720 --> 00:33:01,040
Speaker 2: It's going to be a long seven months, that's for sure.

633
00:33:01,280 --> 00:33:04,760
Speaker 2: Thanks so much, rich that's Professor Richard Ruffald of Columbia

634
00:33:04,840 --> 00:33:07,400
Speaker 2: Law School. And that's it for this edition of the

635
00:33:07,440 --> 00:33:10,760
Speaker 2: Bloomberg Law Podcast. Remember you can always get the latest

636
00:33:10,800 --> 00:33:13,640
Speaker 2: legal news by subscribing and listening to the show on

637
00:33:13,760 --> 00:33:18,120
Speaker 2: Apple Podcasts, Spotify, and at Bloomberg dot com, slash podcast,

638
00:33:18,160 --> 00:33:22,080
Speaker 2: slash Law. I'm June Grosso and this is Bloomberg