WEBVTT - The Supreme Court's Upcoming Term 0:00:03.200 --> 0:00:08.000 This is Bloomberg Law with June Brusso from Bloomberg Radio. 0:00:10.600 --> 0:00:14.600 Honorable the Chief Justice and the Associate Justices of the 0:00:14.600 --> 0:00:18.800 Supreme Court of the United States. Oh yay, oh yay, 0:00:19.360 --> 0:00:22.959 oh yay. All persons having business before the Honorable the 0:00:23.040 --> 0:00:26.280 Supreme Court of the United States are admonished to give 0:00:26.320 --> 0:00:28.440 their attention for the Court is now sitting. 0:00:28.720 --> 0:00:32.400 The Supreme Court's new term begins on Monday, as always, 0:00:32.440 --> 0:00:35.960 the first Monday in October, but unlike other terms, the 0:00:36.240 --> 0:00:38.960 justices are returning to the bench under a cloud of 0:00:39.040 --> 0:00:42.599 ethics controversies and with public opinion of the Court at 0:00:42.600 --> 0:00:46.479 a historic low. According to a Gallup pole released today, 0:00:47.040 --> 0:00:49.879 just forty one percent of Americans say they approve of 0:00:49.920 --> 0:00:52.680 how the Court is handling its job, while fifty eight 0:00:52.720 --> 0:00:56.800 percent disapprove. And the Justices will be diving back into 0:00:56.800 --> 0:01:02.480 the culture wars, tackling controversial issues involving gun rights, voting rights, 0:01:02.560 --> 0:01:06.399 agency power, and social media. My guest is Gregory gar 0:01:06.600 --> 0:01:09.560 former Solicitor General of the United States and now a 0:01:09.560 --> 0:01:13.000 partner at Latham and Watkins. It's great to have you here. Greg. 0:01:13.120 --> 0:01:17.160 Let's start our now annual review of the term with 0:01:17.520 --> 0:01:21.680 one of the most watched and perhaps consequential cases the 0:01:21.680 --> 0:01:25.200 first gun rights dispute the justices have taken up since 0:01:25.319 --> 0:01:29.640 the landmark decision last year establishing a constitutional right to 0:01:29.720 --> 0:01:34.080 carry a handgun in public. Tell Us about United States versus. 0:01:33.760 --> 0:01:37.520 Raheemi, another big Second Amendment case and an opportunity for 0:01:37.600 --> 0:01:41.280 the Court to revisit the historical approach to adopted a 0:01:41.280 --> 0:01:44.440 couple of years ago in the Bruin case involving a 0:01:44.560 --> 0:01:47.400 New York law that restricted the right to carry firearms 0:01:47.440 --> 0:01:51.559 outside of the home. And this case involves a challenge 0:01:51.600 --> 0:01:56.640 to a restraining order that prevents a domestic violence abuser 0:01:56.800 --> 0:02:01.880 from possessing handguns under federal law. And what's interesting about 0:02:01.880 --> 0:02:05.400 this case is beginning with the Heller decision ten years 0:02:05.520 --> 0:02:08.520 or so ago, where they recognized the individual right to 0:02:08.680 --> 0:02:11.200 pair of firearms in the home. The Court had always 0:02:11.320 --> 0:02:15.079 focused on the rights of what it called in Heller 0:02:15.320 --> 0:02:21.520 law abiding responsible citizens to possess and carry firearms. In 0:02:21.560 --> 0:02:26.880 this case, the challenger was convicted of domestic abuse after 0:02:27.360 --> 0:02:30.560 striking his girlfriend and doing other terrible things, and then 0:02:30.840 --> 0:02:34.000 was prohibited under federal law from possession of firearm. And 0:02:34.040 --> 0:02:38.120 he's bringing a second Amendment challenge to that, which, if 0:02:38.160 --> 0:02:41.799 he's successful, would un all likelihood call into question a 0:02:41.880 --> 0:02:45.960 number of other firearm restrictions that apply to dangerous people 0:02:46.160 --> 0:02:49.120 were potentially even mentally ill people. 0:02:49.440 --> 0:02:52.840 The Fifth Circuit said that while Rehimi was hardly a 0:02:52.880 --> 0:02:57.480 model citizen, he was entitled to Second Amendment protections. 0:02:57.160 --> 0:02:59.280 And he looked at it through the lens of the courts. 0:02:59.760 --> 0:03:03.040 His historical analysis established a couple of years ago, which 0:03:03.120 --> 0:03:06.760 requires the courts to go back and line up the 0:03:06.800 --> 0:03:13.000 firearms restriction against historical laws going back to the eighteenth century. 0:03:13.040 --> 0:03:16.639 And oftentimes in these cases there's really no perfect analog 0:03:17.320 --> 0:03:21.280 given the way in which guns and restrictions has evolved 0:03:21.360 --> 0:03:23.920 over time. And so, you know, one of the questions 0:03:23.919 --> 0:03:26.079 at the heart of the case is perhaps the court 0:03:26.120 --> 0:03:28.400 will give us some more guidance on how to apply 0:03:28.440 --> 0:03:31.760 that historical analysis. And in this case, the government has 0:03:31.919 --> 0:03:35.320 strenuously argued that this sort of restriction really is in 0:03:35.360 --> 0:03:39.800 line with historical restrictions prohibiting those who are deemed to 0:03:39.840 --> 0:03:43.160 be dangerous from possessing guns. But that's really the numb 0:03:43.160 --> 0:03:46.680 of its due before the court is a historical argument 0:03:46.720 --> 0:03:52.120 about whether this restriction is analogous to eighteenth century restrictions 0:03:52.200 --> 0:03:54.520 on gun possession or not. 0:03:55.120 --> 0:03:57.480 And here you have this listener general saying, well, there 0:03:57.480 --> 0:04:01.279 are some colonial and early state laws that allowed disarming 0:04:01.520 --> 0:04:05.600 dangerous individuals, and Raheemi's lawyers saying that none of those 0:04:05.680 --> 0:04:08.320 laws applied. They seem to want a law exactly on 0:04:08.520 --> 0:04:13.640 point this historical analysis. In this context, where weapons are 0:04:13.680 --> 0:04:16.560 so different and times are so different, the courts have 0:04:16.680 --> 0:04:18.240 really struggled with it, haven't they. 0:04:18.760 --> 0:04:21.320 Yeah, they have, And we've seen a lot of cases 0:04:21.440 --> 0:04:23.520 in the wake of the Brewin decision a couple of 0:04:23.600 --> 0:04:28.080 years ago, cases challenging all sorts of restrictions that seem 0:04:28.120 --> 0:04:31.720 to have survived the Heller decision ten years back, recognizing 0:04:31.760 --> 0:04:35.400 this individual right. And so I think as important as 0:04:35.400 --> 0:04:38.440 this specific issue is in this case, particularly for the 0:04:38.520 --> 0:04:42.239 victims of domestic abuse, I think the focus of the 0:04:42.320 --> 0:04:44.320 court's resolution is going to be to see if they 0:04:44.320 --> 0:04:47.800 can fine tune this historical analysis to give courts more 0:04:47.800 --> 0:04:50.040 guidance and considering. 0:04:49.560 --> 0:04:54.200 These challenges, and this case could affect state laws as well. 0:04:54.480 --> 0:04:57.280 An Illinois led group back in the administration, so that 0:04:57.360 --> 0:05:02.000 almost every state either requires permits courts to limit firearm 0:05:02.080 --> 0:05:05.360 access for people's subject to domestic restraining orders. 0:05:05.880 --> 0:05:08.640 Yeah, that's exactly right. It would apply to state laws, 0:05:08.920 --> 0:05:12.640 local laws, and that's obviously one of the government's arguments. 0:05:12.880 --> 0:05:15.279 And the court took this case right up on the 0:05:15.320 --> 0:05:20.919 government's petition, I think, understanding the general importance of the 0:05:20.960 --> 0:05:23.720 issue and the need to sort of jump back in 0:05:23.760 --> 0:05:26.600 and clarify its law in this area. So this is 0:05:26.720 --> 0:05:29.000 definitely one that we would want to follow. 0:05:29.480 --> 0:05:33.080 Let's turn now to another high profile redistricting case to 0:05:33.120 --> 0:05:37.159 come before the court, Alexander versus South Carolina Conference of 0:05:37.200 --> 0:05:38.360 the NAACP. 0:05:39.200 --> 0:05:42.920 Yeah. So one of the surprises last term was the 0:05:42.920 --> 0:05:46.480 case out of Alabama involving a challenge to a registricting 0:05:46.600 --> 0:05:50.440 plan in which a majority of the court actually agree 0:05:50.480 --> 0:05:53.559 with the lower court that the state had improperly taken 0:05:53.680 --> 0:05:56.440 race into account and drawing the districts. And so here 0:05:56.480 --> 0:05:58.680 we go again. This is a challenge out of South 0:05:58.720 --> 0:06:02.480 Carolina in which our court had found that the state 0:06:02.560 --> 0:06:07.839 improperly used race to draw this district which in order 0:06:07.880 --> 0:06:11.159 to favor Republicans. And what's sort of interesting about this 0:06:11.320 --> 0:06:16.080 case is the interplay between race in politics. There's an 0:06:16.160 --> 0:06:20.640 argument that race was used as a proxy for political 0:06:20.680 --> 0:06:24.560 affiliation here, and that sort of brings into play two 0:06:24.560 --> 0:06:28.640 different doctrines in the Supreme Courts jurisprudence, one in which 0:06:28.680 --> 0:06:33.120 the Court recently held that challenges to redistricting on political grounds, 0:06:33.200 --> 0:06:37.919 so called partisan gerrymanders, actually not justiciable, and the second, 0:06:37.960 --> 0:06:41.520 in which the Court has always considered challenges that race 0:06:41.839 --> 0:06:45.240 was improperly taken into account and drawing district lines. And 0:06:45.279 --> 0:06:48.159 so this case presents an opportunity to quot the court 0:06:48.160 --> 0:06:50.400 to sort of balance those two different inquiries. 0:06:50.920 --> 0:06:54.280 So as you say, Republicans say they were motivated by politics, 0:06:54.279 --> 0:06:57.360 which is permissible, not race, and it seems like it's 0:06:57.400 --> 0:07:01.200 a difficult distinction to make, particularly in this case. 0:07:01.800 --> 0:07:04.400 Yeah, that's exactly right, and that's why I'm sure it's 0:07:04.400 --> 0:07:06.479 one of the reasons that the case is before the 0:07:06.520 --> 0:07:09.280 court now. And again it'll be interesting to see if 0:07:09.279 --> 0:07:11.560 this is one of those cases where maybe the Court 0:07:11.600 --> 0:07:13.680 tacks back to the center, as it did in the 0:07:13.720 --> 0:07:17.120 Alabama case last term. But this will be a difficult one. 0:07:17.200 --> 0:07:20.880 This is obviously delicate issues in the intersection here between 0:07:20.960 --> 0:07:22.320 race and politics. 0:07:23.400 --> 0:07:26.400 That case last term you were talking about, the Alabama 0:07:26.480 --> 0:07:29.960 case came as something of a surprise to many that 0:07:30.080 --> 0:07:33.760 the Court rejected the Republican drawn congressional map in a 0:07:33.960 --> 0:07:37.360 boost to the Voting Rights Act, and some see that 0:07:37.440 --> 0:07:39.720 as a shift in the Court's approach, or at least 0:07:39.760 --> 0:07:42.920 in the two conservative justices who sided with the liberals. 0:07:43.160 --> 0:07:46.880 So will this case show whether that's true or not, 0:07:47.040 --> 0:07:48.120 whether there is a shift. 0:07:48.360 --> 0:07:50.920 It's definitely one to watch June, and I think the 0:07:50.960 --> 0:07:53.320 gun case we just talked about is one as well. 0:07:53.880 --> 0:07:56.960 These are two areas where the more centrist justices in 0:07:57.000 --> 0:07:59.920 the Court, for example, the Chief Justice and Justice cap 0:08:00.040 --> 0:08:02.680 and Awe, have not been as willing to go as 0:08:02.680 --> 0:08:05.600 far as some of the more conservative justices. And that's 0:08:05.600 --> 0:08:08.640 certainly one of the broader themes that we're looking at 0:08:08.680 --> 0:08:12.000 for this term. Is last year we had several decisions 0:08:12.000 --> 0:08:14.320 in which the Court seemed to tack a little bit 0:08:14.680 --> 0:08:17.320 back to the center, and so it'll be interesting to 0:08:17.320 --> 0:08:20.000 see whether that trend follows, or whether the Court will 0:08:20.280 --> 0:08:23.679 proceed on what is otherwise a sort of conservative orbit 0:08:23.800 --> 0:08:24.560 out to the right. 0:08:25.280 --> 0:08:29.040 Next, we have social media meeting the Supreme Court O'Connor, 0:08:29.160 --> 0:08:34.199 Ratcliffe versus. Garnier and Linky versus Freed. Both these cases 0:08:34.240 --> 0:08:40.000 involve public officials blocking constituents who left critical messages on 0:08:40.040 --> 0:08:40.920 their social media. 0:08:41.559 --> 0:08:43.360 Right, so you know, we're seeing more and more of 0:08:43.400 --> 0:08:47.400 these cases where social media intersects with the First Amendment. 0:08:47.960 --> 0:08:51.640 And these are two different cases, one involving two California 0:08:51.679 --> 0:08:55.920 school board members and one involving a city manager in Michigan. 0:08:56.440 --> 0:09:00.000 And all of them had social media accounts Twitter and 0:09:00.040 --> 0:09:03.319 Facebook and the like, which they used in some instances 0:09:03.440 --> 0:09:06.760 to tweet about their public jobs, and when they got 0:09:06.760 --> 0:09:10.800 some criticism from some constituents, they decided to block them 0:09:10.880 --> 0:09:13.360 on their accounts. And the question is whether or not 0:09:13.440 --> 0:09:17.440 that blocking is subject to scrutiny under the First Amendment, 0:09:17.920 --> 0:09:20.560 which boils down in this case to a question whether 0:09:20.640 --> 0:09:24.360 or not the blocking is actually state action subject to 0:09:24.400 --> 0:09:25.160 the First Amendment. 0:09:25.720 --> 0:09:28.720 And the Sixth and the Ninth Circuits came to different 0:09:28.800 --> 0:09:30.760 conclusions on that right. 0:09:31.080 --> 0:09:34.080 They split on that and the Ninth Circuit held that 0:09:34.120 --> 0:09:37.040 the blocking was state action and a violation of the 0:09:37.040 --> 0:09:40.480 First Amendment, and the Sixth Circuit came out the other way. 0:09:40.559 --> 0:09:43.400 And looks these cases may turn in part on the 0:09:43.440 --> 0:09:47.520 particular factual circumstances. For example, the extent to which the 0:09:47.559 --> 0:09:53.000 public officials used their accounts for public purposes. The officials 0:09:53.080 --> 0:09:55.520 in the cases are arguing that they actually were more 0:09:55.559 --> 0:09:58.760 private than public, and so they shouldn't be considered state action. 0:09:58.960 --> 0:10:03.920 But then you can see social media interacting with politics 0:10:04.040 --> 0:10:07.200 and public life and finance way into the courts, And 0:10:07.240 --> 0:10:09.199 there are other cases out there, and so this is 0:10:09.240 --> 0:10:12.240 something we're going to see more of, is the Supreme 0:10:12.280 --> 0:10:16.400 Court and other courts grapple with the intersection between social 0:10:16.440 --> 0:10:17.480 media and First Amendment. 0:10:17.520 --> 0:10:20.520 Right In twenty twenty one, when the Justice is turned 0:10:20.520 --> 0:10:24.720 down a petition from former President Donald Trump presenting a 0:10:24.760 --> 0:10:28.880 similar issue, Justice Clarence Thomas wrote an opinion saying that 0:10:28.920 --> 0:10:33.319 the case quote highlights the principle legal difficulty that surrounds 0:10:33.400 --> 0:10:38.320 digital platforms, namely that applying old doctrines to new digital 0:10:38.360 --> 0:10:43.640 platforms is rarely straightforward. That struck me coming from Justice Thomas, 0:10:43.640 --> 0:10:46.240 who wrote the decision in the New York gun case 0:10:46.280 --> 0:10:47.760 we were talking about. 0:10:47.760 --> 0:10:50.200 That's exactly right. This is the case where they're looking 0:10:50.280 --> 0:10:53.280 at the future instead of the past and struggling to 0:10:53.320 --> 0:10:56.959 apply these doctrines. And I'm sure that that'll be one 0:10:57.000 --> 0:10:59.360 of the issues at the forefront of this decision. 0:10:59.559 --> 0:11:02.920 Coming up next, I'll continue this conversation with Gregory Garr 0:11:03.080 --> 0:11:06.199 of Latham and Watkins and we'll talk about the court's 0:11:06.200 --> 0:11:09.960 focus on the administrative state this term and some cases 0:11:10.360 --> 0:11:15.120 targeting regulatory agencies. I'm June Grosso and you're listening to Bloomberg. 0:11:15.679 --> 0:11:19.199 Several cases on administrative law coming before the Supreme Court 0:11:19.280 --> 0:11:22.320 this term may seem a little wonky for most people, 0:11:22.600 --> 0:11:26.000 but they could transform the way the federal government operates 0:11:26.040 --> 0:11:30.120 and alter the power dynamics between the branches. The cases 0:11:30.240 --> 0:11:34.360 target the power of regulatory agencies before a conservative court 0:11:34.400 --> 0:11:38.480 whose recent decisions have overridden the authority of agencies and 0:11:38.600 --> 0:11:42.160 reined in the so called administrative state. I've been talking 0:11:42.160 --> 0:11:45.000 to Gregory gar a partner at Latham and Watkins and 0:11:45.040 --> 0:11:48.360 the former US Solicitor General. Greg Now we're onto the 0:11:48.400 --> 0:11:54.320 regulatory area. Let's discuss Loper Bright Enterprises versus Raymondo, where 0:11:54.320 --> 0:11:58.000 a thirty nine year old precedent, the Chevron Doctrine is 0:11:58.120 --> 0:12:00.480 on the line. Will you explain Chevron? 0:12:00.960 --> 0:12:04.120 Sure? So. Chevron doctrine is one of the most important 0:12:04.360 --> 0:12:08.240 doctrines of administrative law that has been around since nineteen 0:12:08.320 --> 0:12:11.760 eighty four, and basically what it says, is that where 0:12:11.800 --> 0:12:14.880 you have a statute that is ambiguous and doesn't speak 0:12:14.920 --> 0:12:19.839 directly to an issue, that the courts would give deference 0:12:20.000 --> 0:12:24.720 to the administrative agencies interpretation of the statute. So this 0:12:24.880 --> 0:12:28.960 case involves a law that requires fishing boats in the 0:12:29.000 --> 0:12:33.400 North Atlantic to have observers to collect data and the like. 0:12:33.880 --> 0:12:36.360 And the question is whether the fishing boats or the 0:12:36.360 --> 0:12:39.679 government has to pay for those observers. And the statute 0:12:39.720 --> 0:12:44.000 doesn't address that question, but the agency, the National Marine 0:12:44.000 --> 0:12:48.320 Fisheries Service, interpreted it to require the fishing boats to 0:12:48.800 --> 0:12:52.080 pay for these observers, and the lower court said that 0:12:52.280 --> 0:12:54.920 was a reasonable interpretation. So the courts would refer to 0:12:54.960 --> 0:12:58.520 it under Chevron. And the Chevron doctrine has come under 0:12:58.559 --> 0:13:03.080 assault by the Conservatives as being contrary to the longstanding 0:13:03.240 --> 0:13:06.160 central principle that it's the duty of the courts to 0:13:06.240 --> 0:13:08.720 say what the law is. And so there's a great 0:13:08.760 --> 0:13:11.520 concern that they've sort of dedicated that task to the 0:13:11.559 --> 0:13:15.360 administrative agencies. And there have been many justice maybe five 0:13:15.400 --> 0:13:18.520 in this case, who'd be willing to overturn the Chevron 0:13:18.600 --> 0:13:21.679 doctor and then give the courts the sort of frontline 0:13:21.760 --> 0:13:25.559 role in interpreting what statutes mean without administrative difference. 0:13:26.000 --> 0:13:29.439 So has the Supreme Court been chipping away at Chevron 0:13:29.520 --> 0:13:33.600 in recent years? So some say if they overturned Chevron, 0:13:33.640 --> 0:13:34.960 it wouldn't be that big a deal. 0:13:35.559 --> 0:13:38.320 It would be a big deal doc trintally, But you're 0:13:38.360 --> 0:13:41.280 exactly right. They've been chipping away at it, and then 0:13:41.400 --> 0:13:44.640 you know someone interestingly, they've actually just been ignoring it, 0:13:44.800 --> 0:13:47.400 giving the cold shoulder the last few years, where they 0:13:47.440 --> 0:13:49.760 won't even cite it in cases where it really is 0:13:49.800 --> 0:13:53.240 directly implicated. So, in that sense, doing away with the 0:13:53.280 --> 0:13:56.640 doctrine wouldn't make a big practical shift, but doctrinally it 0:13:56.679 --> 0:13:59.360 would be a big shift, and in line with one 0:13:59.400 --> 0:14:02.200 of the I think big things we see from this 0:14:02.280 --> 0:14:06.840 conservative court, which is reconsidering the relationship among the branches 0:14:06.880 --> 0:14:10.280 with respect to the administrative state and scaling back on 0:14:10.559 --> 0:14:13.960 different doctrines that has empowered the administrative state. 0:14:14.679 --> 0:14:18.200 I believe it's been four times since twenty nineteen that 0:14:18.280 --> 0:14:23.520 the Court has been asked to revisit Chevron and hasn't done. 0:14:23.560 --> 0:14:26.280 So do you think it will reverse Chevron in this case? 0:14:26.360 --> 0:14:29.720 You mentioned that there are perhaps five justices willing to 0:14:29.760 --> 0:14:32.320 do that, So this case feels different. 0:14:32.560 --> 0:14:35.440 The court granted curcherari and the question of whether or 0:14:35.480 --> 0:14:38.880 not Chevron should be overruled. If you connect the dots, 0:14:38.920 --> 0:14:41.240 over the last few years, it seems as though the 0:14:41.240 --> 0:14:46.320 Court has tilting towards the direction of actually overruling Chevron, 0:14:46.720 --> 0:14:48.800 but it remains to be seen whether or not they 0:14:48.840 --> 0:14:52.360 take that step. And that the broader question of stereodcisis 0:14:52.400 --> 0:14:55.440 is something that we've seen over the last several years, 0:14:55.520 --> 0:14:59.320 and the justices have very strongly held in different views 0:14:59.360 --> 0:15:02.720 about when or whether it's appropriate to overrule a case. 0:15:03.000 --> 0:15:05.280 But in this case, it does seem as the Chevron 0:15:05.400 --> 0:15:06.480 is on the shopping block. 0:15:06.720 --> 0:15:09.120 I wonder if they were struggling with that while they 0:15:09.160 --> 0:15:11.960 were deciding whether to take the case or not. Because 0:15:12.360 --> 0:15:14.640 it took a long time to decide how to handle 0:15:14.680 --> 0:15:17.520 the case. They scheduled it for potential discussion at five 0:15:17.600 --> 0:15:21.880 private conferences before announcing that they would take the case. 0:15:22.080 --> 0:15:25.520 So that's exactly right. You know. Obviously the decision to 0:15:25.920 --> 0:15:28.040 take the case was not a good one for the 0:15:28.040 --> 0:15:31.200 government ultimately, but the court does have the fallback option 0:15:31.320 --> 0:15:34.520 of just saying that the agency's interpretation is unreasonable. In 0:15:34.520 --> 0:15:37.120 this case, but really the focus is on the broader 0:15:37.240 --> 0:15:39.680 question of whether or not the Chevron doctrine is really 0:15:39.720 --> 0:15:42.520 consistent with our legal principles in practice. 0:15:42.760 --> 0:15:45.960 Do you agree with this that critics of big government 0:15:46.000 --> 0:15:50.200 have targeted the Chevron doctrine much as anti abortion groups 0:15:50.600 --> 0:15:52.040 targeted Roe v. Wade. 0:15:52.280 --> 0:15:55.080 I think that's a fair analogy, June. I mean, it's 0:15:55.120 --> 0:15:57.840 really on the short list of cases that you know 0:15:57.880 --> 0:16:01.120 would be on a wish list that this more conservative 0:16:01.160 --> 0:16:04.880 court would overrule. And it's in line again with a 0:16:04.960 --> 0:16:08.000 trend that we've seen in the last few years where 0:16:08.000 --> 0:16:11.520 the Court has been willing to reconsider doctrines to have 0:16:12.360 --> 0:16:16.560 balanced favored the administrative state. So this is one where 0:16:16.720 --> 0:16:19.000 the Court took this step that would be certainly in 0:16:19.000 --> 0:16:21.520 line with decisions we've seen in recent years. 0:16:21.720 --> 0:16:25.920 Another agency, the Consumer Financial Protection Bureau, is before the 0:16:25.960 --> 0:16:29.520 Court again. The oral arguments in this case are actually 0:16:29.600 --> 0:16:36.480 next week. It's CFPB versus Community Financial Services Association, And. 0:16:36.400 --> 0:16:39.320 This is in line with our assault in the administrative state. 0:16:39.400 --> 0:16:41.880 So in this case, though it's a really interesting challenge, 0:16:42.040 --> 0:16:45.680 it's a challenge to the funding mechanism for this agency. 0:16:45.800 --> 0:16:50.160 So usually when Congress passes in appropriation it specifies a 0:16:50.200 --> 0:16:54.240 specific amount that goes to the agency, typically on an 0:16:54.280 --> 0:16:58.120 annual basis. And in this case, what Congress did in 0:16:58.160 --> 0:17:02.120 setting up the Consumer Finds Protection Bureau is it's said, 0:17:02.120 --> 0:17:05.040 we're not going to have annual appropriations of a specific amount. 0:17:05.520 --> 0:17:08.720 You're going to get your funding from services and fees 0:17:08.920 --> 0:17:13.360 generated by the Federal Reserve. There's no requirement to go 0:17:13.480 --> 0:17:15.560 back to Congress every year. This is sort of an 0:17:15.560 --> 0:17:20.840 indefinite appropriation, and it's up to an amount that you 0:17:20.880 --> 0:17:24.359 can just sort of dip into that the agency hasn't 0:17:24.400 --> 0:17:27.600 come close to dipping into. So as a practical matter, 0:17:27.840 --> 0:17:32.480 it's basically an unlimited funding mechanism for the agency, which 0:17:32.520 --> 0:17:36.040 gives it greater independence from the legislative branch. 0:17:36.880 --> 0:17:41.000 This is a Fifth Circuit decision that it's being appealed from. 0:17:41.640 --> 0:17:44.080 Is this a novel theory that they came up with. 0:17:44.880 --> 0:17:48.720 It's the first time in history that an appellate court 0:17:48.840 --> 0:17:54.520 has invoked the appropriations clause to invalidate a statute, So 0:17:54.760 --> 0:17:58.720 it is certainly novel in that respect. That said, the CFPB, 0:17:58.920 --> 0:18:02.520 the agency here is itself novel, and this is something 0:18:02.560 --> 0:18:05.440 that sort of haunted the agency a few years ago. 0:18:05.480 --> 0:18:08.439 In a different case, it involved a removal provision of 0:18:08.520 --> 0:18:12.000 the head of the agency, and Congress set this agency 0:18:12.080 --> 0:18:15.000 up to be different. But because it did so, it 0:18:15.119 --> 0:18:18.000 sort of made it vulnerable to these different lines of 0:18:18.080 --> 0:18:19.800 constitutional attacks that we're seeing. 0:18:20.080 --> 0:18:22.600 And this listener General said, the ruling of the Fifth 0:18:22.600 --> 0:18:26.960 Circuit threatens the validity of virtually all past CFPP actions, 0:18:27.400 --> 0:18:30.560 including numerous regulations that are critical to consumers in the 0:18:30.560 --> 0:18:33.439 financial industry. But the court refused to put it on 0:18:33.480 --> 0:18:36.879 an expedited schedule. Does that say anything to you? 0:18:37.200 --> 0:18:39.560 I don't think the decision not to expedite it. But 0:18:39.840 --> 0:18:42.240 the government is right in this sense that if the 0:18:42.320 --> 0:18:46.320 court were to hold that the funding mechanism is unconstitutional, 0:18:47.040 --> 0:18:49.800 then you know, a logical step might be to say, well, 0:18:49.840 --> 0:18:52.520 then that everything that it did with that funding should 0:18:52.600 --> 0:18:55.320 be set aside. And that really sort of tees up 0:18:55.640 --> 0:18:58.400 the second question in the case, which may be even 0:18:58.440 --> 0:19:02.320 more difficult, which is the court does adopt this novel 0:19:02.359 --> 0:19:06.320 appropriations theory, then what's the remedy. And the parties are 0:19:06.800 --> 0:19:09.240 very strenuously divided on that. I mean, the government says 0:19:09.280 --> 0:19:12.840 that the remedy should just be forward looking, or that 0:19:12.880 --> 0:19:15.120 you could go back and just sever a particular part 0:19:15.119 --> 0:19:17.959 of the law that you wouldn't say that everything that 0:19:18.000 --> 0:19:21.720 the agency has done in administrative actions or by rule 0:19:22.359 --> 0:19:23.119 is invalid. 0:19:23.600 --> 0:19:27.320 So there's been this momentum to reign in the administrative state. 0:19:27.960 --> 0:19:30.280 Will this case be a test of just how far 0:19:30.400 --> 0:19:33.080 the justices are willing to go in that direction? 0:19:34.080 --> 0:19:36.200 Yes, I think it will be, you know, in part 0:19:36.320 --> 0:19:39.720 just because this is a relatively novel theory, and in 0:19:39.800 --> 0:19:43.560 part because of the implications of this theory. And so 0:19:43.720 --> 0:19:45.800 the area that we're seeing sort of an insult on 0:19:46.320 --> 0:19:49.919 is power given to the administrative state. But in some sense, 0:19:50.200 --> 0:19:52.399 the branch that is, you know, at the heart of 0:19:52.440 --> 0:19:57.080 the dispute here is Congress, and adopting this theory would 0:19:57.119 --> 0:20:01.240 sort of place the restriction on the appropration power adopted 0:20:01.280 --> 0:20:04.200 by Congress that we haven't seen in our constitutional history. 0:20:04.400 --> 0:20:07.760 But again, the specific appropriations law here, if you think 0:20:07.760 --> 0:20:11.040 of that way, really is unprecedented, and that you've given 0:20:11.080 --> 0:20:16.080 an agency an indefinite amount of money or pool within 0:20:16.160 --> 0:20:18.560 which to dip in order to carry out its operations. 0:20:18.760 --> 0:20:20.919 And we just haven't seen anything like that in this 0:20:21.080 --> 0:20:22.720 forum in over two hundred years. 0:20:22.840 --> 0:20:26.080 So this case have implications for the Federal Reserve Board, 0:20:26.400 --> 0:20:29.399 the FDIC, and the Controller of the Currency. 0:20:29.840 --> 0:20:34.560 It's conceivable. I mean, those agencies do have different funding mechanisms. 0:20:34.920 --> 0:20:38.240 But what's different about this case is this is a 0:20:38.240 --> 0:20:42.960 more conventional executive agency that's involved in sort of classic 0:20:43.119 --> 0:20:48.280 executive enforcement powers, and the funding mechanism here, although it 0:20:48.400 --> 0:20:51.679 draws from the Federal Reserve Board, is really different. So 0:20:51.960 --> 0:20:55.400 I think that if the Court were to find this 0:20:55.480 --> 0:20:59.560 to be constitutionally problematic, it's ruling as a practical matter 0:20:59.680 --> 0:21:02.639 really would probably be limited to the unusual alignment of 0:21:02.680 --> 0:21:03.720 circumstances here. 0:21:04.520 --> 0:21:09.879 Finally, Securities and Exchange Commission versus Jarkasy, I could swear 0:21:09.920 --> 0:21:13.240 we had a case life before about the in house 0:21:13.320 --> 0:21:17.080 judges used by the Securities and Exchange Commissions, So tell 0:21:17.119 --> 0:21:18.439 us about this case. 0:21:18.880 --> 0:21:21.160 Yeah, this is sort of dejev who all over again. 0:21:21.359 --> 0:21:24.440 Last year, the question was whether or not individuals sort 0:21:24.440 --> 0:21:27.480 of stock in these administrative enforcement proceedings could go to 0:21:27.520 --> 0:21:31.040 a federal core and bring constitutional challenges to the federal 0:21:31.040 --> 0:21:34.639 decision maker. In this case, which involves another individual who 0:21:34.680 --> 0:21:38.760 had gone through enforcement proceedings before the SEC the Securities 0:21:38.760 --> 0:21:42.960 and Exchange Commission, it's actually the merits of the constitutional challenge, 0:21:43.080 --> 0:21:46.040 and it's again another case which sort of puts the 0:21:46.119 --> 0:21:50.600 administrative state in the crosshairers. And here, you know, there 0:21:50.600 --> 0:21:53.399 are several different questions, but the one that seems have 0:21:53.400 --> 0:21:56.800 gotten more emphasis is the question of whether individuals who 0:21:56.840 --> 0:22:01.080 are brought before administrative agencies and and sorts of civil 0:22:01.240 --> 0:22:04.119 enforcement proceedings have a right to a jury trial in 0:22:04.160 --> 0:22:05.120 those proceedings. 0:22:05.400 --> 0:22:08.000 And his lawyer said that he was quote put to 0:22:08.080 --> 0:22:12.199 trial before a captive agency judge sitting unconstitutionally with no 0:22:12.359 --> 0:22:14.960 right to a jury and no way to escape to court. 0:22:15.240 --> 0:22:17.159 Does it seem as if the SEC has been a 0:22:17.240 --> 0:22:22.080 target for critics of federal agencies, the SEC in particular, Well, 0:22:22.080 --> 0:22:22.320 it's a. 0:22:22.320 --> 0:22:24.600 Little bit of a product of its own doing, in 0:22:24.600 --> 0:22:28.280 the sense that the SEC has the option of bringing 0:22:28.400 --> 0:22:32.640 these enforcement actions in federal court or before its own 0:22:32.720 --> 0:22:36.960 in house decision makers. And looking back, it's in most 0:22:36.960 --> 0:22:39.280 of the cases opted for in house proceedings, and in 0:22:39.359 --> 0:22:43.280 these proceedings is basically you know, home rule. It prevails 0:22:43.280 --> 0:22:45.760 in you know, more than ninety percent of the proceedings. 0:22:46.119 --> 0:22:50.160 The decisions are made by an administrative law judge who's basically, 0:22:50.480 --> 0:22:53.639 you know, within the administrative framework of the SEC. And 0:22:53.680 --> 0:22:57.760 so it's a fundamentally different dynamic, and for individuals stuck 0:22:57.800 --> 0:23:01.240 in that situation, it really can seem as though they've 0:23:01.240 --> 0:23:03.960 got no hope. You know, It's very different than being 0:23:04.080 --> 0:23:07.320 in a federal court before an independent decision maker. And 0:23:07.400 --> 0:23:10.440 one of those differences is that when the SEC brings 0:23:10.480 --> 0:23:13.920 the exact same action in a federal court, then the 0:23:13.920 --> 0:23:17.480