1 00:00:02,759 --> 00:00:07,000 Speaker 1: This is Bloomberg Law with June Grossel from Bloomberg Radio. 2 00:00:08,680 --> 00:00:12,799 Speaker 2: There's been a remarkable showdown between the Trump administration and 3 00:00:12,840 --> 00:00:16,880 Speaker 2: the federal judiciary in a Washington, DC courtroom this week. 4 00:00:17,320 --> 00:00:21,560 Speaker 2: Last Saturday, Judge James Boseburg ordered the government to turn 5 00:00:21,600 --> 00:00:25,680 Speaker 2: around any planes that were flying alleged Venezuelan gang members 6 00:00:25,760 --> 00:00:28,680 Speaker 2: to a prison in l Salvador, based on a law 7 00:00:28,840 --> 00:00:32,879 Speaker 2: used only in wartime. But the planes were not turned around, 8 00:00:33,120 --> 00:00:37,080 Speaker 2: and since Monday, the judge has been demanding information on 9 00:00:37,200 --> 00:00:40,480 Speaker 2: the times of the flights to determine whether his order 10 00:00:40,680 --> 00:00:45,040 Speaker 2: was knowingly violated, but the government has repeatedly refused to 11 00:00:45,040 --> 00:00:49,199 Speaker 2: give him that information. Here's President Trump's response on Friday. 12 00:00:51,280 --> 00:00:54,600 Speaker 3: The authority the power to round up people to support them, 13 00:00:54,680 --> 00:00:57,000 Speaker 3: and then you're under new obligation to a court to 14 00:00:57,080 --> 00:00:57,880 Speaker 3: show the edits. 15 00:01:00,000 --> 00:01:04,440 Speaker 4: That's what our country needs because we were unfortunately, they 16 00:01:04,480 --> 00:01:06,919 Speaker 4: allowed millions of people to come. 17 00:01:06,800 --> 00:01:07,640 Speaker 1: Into our country. 18 00:01:07,880 --> 00:01:12,240 Speaker 2: Perhaps even more stunning, the US Attorney General Pam Bondi 19 00:01:12,600 --> 00:01:16,560 Speaker 2: on Fox this week challenged Judge Boseburg's authority. 20 00:01:17,319 --> 00:01:20,959 Speaker 3: This judge has no right to ask those questions. You 21 00:01:21,040 --> 00:01:26,560 Speaker 3: have one unelected federal judge trying to control foreign policies, 22 00:01:26,840 --> 00:01:30,160 Speaker 3: trying to control the Alien Enemies Act, which they have 23 00:01:30,480 --> 00:01:32,360 Speaker 3: no business presiding over. 24 00:01:32,959 --> 00:01:35,520 Speaker 2: The legal issue at the heart of these hearings is 25 00:01:35,560 --> 00:01:39,720 Speaker 2: Trump's unprecedented use of a law used only three times 26 00:01:39,760 --> 00:01:43,160 Speaker 2: in our history during wars to deport hundreds of alleged 27 00:01:43,200 --> 00:01:47,840 Speaker 2: Venezuelan gang members. My guest is constitutional law expert David super, 28 00:01:48,080 --> 00:01:51,120 Speaker 2: a professor at Georgetown Law. David, I want to put 29 00:01:51,120 --> 00:01:54,960 Speaker 2: Friday's hearing into context. This has been a week long 30 00:01:55,120 --> 00:01:59,320 Speaker 2: struggle by the judge to get some basic information from 31 00:01:59,360 --> 00:02:03,480 Speaker 2: the government about when the flights took off and landed, 32 00:02:03,880 --> 00:02:07,120 Speaker 2: and he's moved the deadline over and over again to 33 00:02:07,200 --> 00:02:10,200 Speaker 2: give them an opportunity to comply with his order, and 34 00:02:10,240 --> 00:02:12,320 Speaker 2: they haven't. What's going on here. 35 00:02:13,160 --> 00:02:16,399 Speaker 5: The only conclusion that I can draw is that they 36 00:02:16,680 --> 00:02:20,440 Speaker 5: violated his order deliberately, and they're trying to avoid revealing 37 00:02:20,480 --> 00:02:24,880 Speaker 5: that the questions being asked are very simple questions, and 38 00:02:25,400 --> 00:02:29,160 Speaker 5: if the answers are not embarrassing, there's no reason not 39 00:02:29,240 --> 00:02:32,720 Speaker 5: to disclose them. No terrorists can harm a flight that 40 00:02:33,120 --> 00:02:36,519 Speaker 5: occurred almost a week ago and is long since returned 41 00:02:36,520 --> 00:02:41,079 Speaker 5: to ground. There's no national security implications here, it appears 42 00:02:41,080 --> 00:02:44,480 Speaker 5: that there's security implications for particular officials who may not 43 00:02:44,600 --> 00:02:45,800 Speaker 5: have acted appropriately. 44 00:02:46,600 --> 00:02:51,200 Speaker 2: The Attorney General, the top law enforcement official in the country, 45 00:02:51,560 --> 00:02:54,760 Speaker 2: said that the judge has no right to be asking 46 00:02:54,840 --> 00:02:57,519 Speaker 2: for specifics in the case in front of him. 47 00:02:57,800 --> 00:03:04,200 Speaker 5: That's very disturbing. Any lawyer understands that judges have a 48 00:03:04,400 --> 00:03:08,880 Speaker 5: right to protect their own jurisdiction. That's true of any 49 00:03:08,960 --> 00:03:12,600 Speaker 5: court worthy of the name. The judge issued an order 50 00:03:12,639 --> 00:03:15,760 Speaker 5: that was not complied with. If it was an accident, 51 00:03:16,560 --> 00:03:19,800 Speaker 5: that's certainly something that judges entitled to know about, and 52 00:03:19,840 --> 00:03:22,520 Speaker 5: if it's deliberate, the judges entitled to know about that. 53 00:03:23,120 --> 00:03:26,880 Speaker 2: At the hearing on Friday, Judge Boseburg started with a 54 00:03:26,960 --> 00:03:29,960 Speaker 2: warning to the government lawyers, telling them they need to 55 00:03:29,960 --> 00:03:33,359 Speaker 2: be careful how they act, cautioning them that their professional 56 00:03:33,440 --> 00:03:37,440 Speaker 2: reputation is the most valuable thing they have. It seemed 57 00:03:37,480 --> 00:03:40,560 Speaker 2: like the tone was very different on Friday. 58 00:03:41,240 --> 00:03:42,120 Speaker 6: Yes it was. 59 00:03:42,440 --> 00:03:47,560 Speaker 5: Judge Bosburg issued an order that he believed to be 60 00:03:47,720 --> 00:03:51,320 Speaker 5: correct on Saturday and assumed, as judges do when they 61 00:03:51,360 --> 00:03:54,680 Speaker 5: issue orders to federal officials, that those officials would follow it. 62 00:03:54,920 --> 00:03:57,720 Speaker 5: The officials did not follow it, and if it was 63 00:03:57,800 --> 00:04:02,080 Speaker 5: an accident or a miscommunicy. They've had the better part 64 00:04:02,080 --> 00:04:04,440 Speaker 5: of a week to show that. The fact that they 65 00:04:04,520 --> 00:04:07,760 Speaker 5: haven't and apparently can't show that it was an accident 66 00:04:08,120 --> 00:04:10,160 Speaker 5: suggests that this is contempt of court. 67 00:04:10,360 --> 00:04:15,120 Speaker 2: You had the age the President an others criticizing Judge Bosberg. 68 00:04:15,440 --> 00:04:18,600 Speaker 2: Trump called him a radical left lunatic of a judge, 69 00:04:18,640 --> 00:04:22,080 Speaker 2: a troublemaker and an agitator, and call for his impeachment. 70 00:04:22,440 --> 00:04:25,320 Speaker 2: And on Friday, the judge seemed to want to set 71 00:04:25,360 --> 00:04:29,039 Speaker 2: the record straight. He actually got the government attorney to 72 00:04:29,200 --> 00:04:34,120 Speaker 2: concede that he understood the judge's verbal order on Saturday 73 00:04:34,440 --> 00:04:37,760 Speaker 2: to turn the planes around. So he specifically got that 74 00:04:37,839 --> 00:04:38,560 Speaker 2: on the record. 75 00:04:39,160 --> 00:04:42,440 Speaker 5: Yes, I think he got a number of very important 76 00:04:42,640 --> 00:04:47,040 Speaker 5: admissions from the Justice Department lawyers on the record that 77 00:04:47,480 --> 00:04:51,039 Speaker 5: undercut things that have been said in the media. The 78 00:04:51,160 --> 00:04:55,400 Speaker 5: Justice Department lawyer admitted that the judge had clearly ordered 79 00:04:55,400 --> 00:04:59,440 Speaker 5: the planes to be turned around well before seven twenty five, 80 00:04:59,560 --> 00:05:03,200 Speaker 5: that even he admitted that this was a mandatory order 81 00:05:03,279 --> 00:05:07,400 Speaker 5: he said he passed along to the relevant officials. This 82 00:05:07,640 --> 00:05:12,440 Speaker 5: makes very clear that the timing that the administration has 83 00:05:12,480 --> 00:05:16,480 Speaker 5: been raising is not correct and that the administration's notion 84 00:05:16,800 --> 00:05:20,080 Speaker 5: that this was somehow a temporary order or an order 85 00:05:20,120 --> 00:05:22,760 Speaker 5: that was superseded is not true. 86 00:05:23,040 --> 00:05:27,600 Speaker 2: The government's language has been defiant at times, and Bosberg 87 00:05:27,680 --> 00:05:32,480 Speaker 2: accused the government lawyer of using intemperate and disrespectful language 88 00:05:32,839 --> 00:05:35,760 Speaker 2: that I can't remember seeing from the United States in 89 00:05:35,880 --> 00:05:38,560 Speaker 2: court filings. And he said he's going to get to 90 00:05:38,600 --> 00:05:41,400 Speaker 2: the bottom of it, whether they violated my word and 91 00:05:41,440 --> 00:05:44,440 Speaker 2: who ordered this. Does it seem like a contempt citation 92 00:05:44,680 --> 00:05:45,520 Speaker 2: is coming? 93 00:05:45,920 --> 00:05:49,080 Speaker 5: Certainly? The judge has two questions he asked to ask 94 00:05:49,279 --> 00:05:54,919 Speaker 5: concerning contempt. First was his order violated? And second by whom? 95 00:05:55,160 --> 00:06:01,279 Speaker 5: He has apparently established that the government understood what his 96 00:06:01,440 --> 00:06:07,080 Speaker 5: order was, and is pressing the government for details about 97 00:06:07,279 --> 00:06:10,760 Speaker 5: exactly what was done that might show that there was 98 00:06:10,839 --> 00:06:15,119 Speaker 5: indeed a violation. But he's also pressing for information about 99 00:06:15,160 --> 00:06:18,640 Speaker 5: who did want which would allow him to identify which 100 00:06:18,720 --> 00:06:22,600 Speaker 5: individuals might be in contempt of court. The lawyer who 101 00:06:22,640 --> 00:06:26,880 Speaker 5: spoke in court insisted that he passed Judge Boseberg's order 102 00:06:26,920 --> 00:06:31,680 Speaker 5: along promptly to immigration officials. I take that to mean 103 00:06:31,760 --> 00:06:33,640 Speaker 5: him saying that he is not the one who is 104 00:06:33,640 --> 00:06:36,440 Speaker 5: in contempt of court. Judge Bosberg who would like to 105 00:06:36,480 --> 00:06:37,000 Speaker 5: know who is. 106 00:06:37,400 --> 00:06:40,839 Speaker 2: The judge has yet to rule on Trump's use of 107 00:06:40,880 --> 00:06:44,839 Speaker 2: the Alien Enemies Act, but he called the Trump administration's 108 00:06:45,080 --> 00:06:48,920 Speaker 2: arguments about the extent of the president's powers under the 109 00:06:48,960 --> 00:06:51,640 Speaker 2: Act a long way from the intent of the law 110 00:06:51,960 --> 00:06:53,279 Speaker 2: and awfully frightening. 111 00:06:54,080 --> 00:06:59,480 Speaker 5: Yes, the plaintiffs submitted affidavits from family members of many 112 00:06:59,520 --> 00:07:02,680 Speaker 5: of the people who were sent to El Salvador, indicating 113 00:07:02,720 --> 00:07:05,240 Speaker 5: that they were not gang members and never had. In 114 00:07:05,279 --> 00:07:09,560 Speaker 5: one instance, the family member described the tattoos that his 115 00:07:09,920 --> 00:07:14,160 Speaker 5: brother had and indicated that these were things that had 116 00:07:14,200 --> 00:07:20,120 Speaker 5: no gang affiliation but were simply decorative. There's no indication 117 00:07:20,280 --> 00:07:23,720 Speaker 5: in the record that this is incorrect, and the administration 118 00:07:23,880 --> 00:07:29,240 Speaker 5: provided no hearing where anyone could correct misunderstandings of these tattoos. 119 00:07:29,600 --> 00:07:33,240 Speaker 5: I believe Judge Bosberg is noting the absence of any 120 00:07:33,320 --> 00:07:37,240 Speaker 5: evidence disputing what the plaintiffs has said, and is coming 121 00:07:37,240 --> 00:07:39,880 Speaker 5: to believe that a lot of innocent people were sent 122 00:07:39,920 --> 00:07:43,200 Speaker 5: to El Salvador, a country with a history of torture. 123 00:07:43,560 --> 00:07:48,640 Speaker 2: The Trump administration maintains that Cabinet secretaries are actively considering 124 00:07:49,080 --> 00:07:53,160 Speaker 2: whether to invoke the state's secrets privilege to prevent turning 125 00:07:53,200 --> 00:07:56,840 Speaker 2: over the information on the flights. The judge gave them 126 00:07:56,880 --> 00:08:00,280 Speaker 2: until March twenty fifth to confirm what it is they'll 127 00:08:00,320 --> 00:08:04,120 Speaker 2: be invoking that, But on what possible basis could they 128 00:08:04,160 --> 00:08:06,119 Speaker 2: invoke the State Secrets Act? 129 00:08:06,480 --> 00:08:10,440 Speaker 5: I can't imagine how. If the judge was asking for 130 00:08:10,560 --> 00:08:15,440 Speaker 5: details of their negotiations with the Salvadoran government or some 131 00:08:15,680 --> 00:08:19,360 Speaker 5: other national government, that could be plausible, But that doesn't 132 00:08:19,360 --> 00:08:22,680 Speaker 5: appear to be what Judge Bosburg is to ask at all. 133 00:08:23,040 --> 00:08:28,600 Speaker 5: He's asked for dates about flights and for communication about 134 00:08:28,640 --> 00:08:32,240 Speaker 5: that flight and his order within the Justice Department. It's 135 00:08:32,280 --> 00:08:35,240 Speaker 5: not a state secret just because it is embarrassing some 136 00:08:35,400 --> 00:08:36,120 Speaker 5: state official. 137 00:08:36,960 --> 00:08:39,920 Speaker 2: The talk has ramped up this week about whether there's 138 00:08:39,960 --> 00:08:45,560 Speaker 2: a constitutional crisis, and you have President Trump saying, you know, 139 00:08:45,600 --> 00:08:48,199 Speaker 2: he's not going to defy a court order, but then 140 00:08:48,280 --> 00:08:51,360 Speaker 2: he says things like, we can't let a judge do that, 141 00:08:51,520 --> 00:08:55,280 Speaker 2: We can't let this happen. Have we reached a constitutional crisis? 142 00:08:55,559 --> 00:08:59,679 Speaker 5: We have because the administration has been violating many court orders, 143 00:08:59,720 --> 00:09:03,800 Speaker 5: not to just this one. And when one branch of 144 00:09:03,880 --> 00:09:07,960 Speaker 5: government declares itself free from the checks of the others, 145 00:09:08,480 --> 00:09:13,040 Speaker 5: that is a constitutional crisis. The president keeps saying that 146 00:09:13,200 --> 00:09:16,880 Speaker 5: he wouldn't violate court orders, but his officials do so. 147 00:09:16,960 --> 00:09:22,320 Speaker 5: Either he's completely incapable as an executive or he is 148 00:09:22,400 --> 00:09:23,040 Speaker 5: allowing his. 149 00:09:23,040 --> 00:09:25,160 Speaker 6: Officials to disregard court orders. 150 00:09:25,600 --> 00:09:27,160 Speaker 2: So what can be done? 151 00:09:27,520 --> 00:09:32,920 Speaker 5: I expect that the officials who violated the order of 152 00:09:33,120 --> 00:09:36,040 Speaker 5: Judge Bosberg will be asked to appear in court and 153 00:09:36,120 --> 00:09:39,360 Speaker 5: explain themselves, and if they don't have an adequate explanation, 154 00:09:39,840 --> 00:09:43,040 Speaker 5: I expect that they will be charged and very possibly 155 00:09:43,040 --> 00:09:46,400 Speaker 5: convicted of contempt of court. It's very possible that Judge 156 00:09:46,400 --> 00:09:50,280 Speaker 5: Bosberg one also will issue further orders that make it 157 00:09:50,360 --> 00:09:53,720 Speaker 5: more difficult for them to violate his orders in the future. 158 00:09:54,080 --> 00:09:57,600 Speaker 2: We started the week with Chief Justice John Roberts stepping 159 00:09:57,800 --> 00:10:02,240 Speaker 2: into this battle between the Trump administration and the judiciary. 160 00:10:02,800 --> 00:10:07,160 Speaker 2: After Trump called for the impeachment of Judge Bosberg, Roberts 161 00:10:07,200 --> 00:10:11,720 Speaker 2: made a rare public statement saying that impeachment is not 162 00:10:11,880 --> 00:10:17,760 Speaker 2: the appropriate response to disagreements over a judge's decision, looking 163 00:10:17,800 --> 00:10:21,360 Speaker 2: at the escalation since then, did it make any difference 164 00:10:21,400 --> 00:10:24,240 Speaker 2: for the Chief Justice to issue that statement? 165 00:10:24,640 --> 00:10:31,600 Speaker 5: The Chief Justice is using indirect and delicate language to 166 00:10:31,720 --> 00:10:37,120 Speaker 5: avoid provoking a further crisis. Wise people would listen to him. 167 00:10:37,280 --> 00:10:39,960 Speaker 5: So far, we've seen very little evidence of wisdom from 168 00:10:39,960 --> 00:10:40,840 Speaker 5: this administration. 169 00:10:41,480 --> 00:10:44,120 Speaker 2: So there was confusion over the flight times. But now 170 00:10:44,160 --> 00:10:48,160 Speaker 2: there seems to be added confusion because on Friday night, 171 00:10:48,320 --> 00:10:51,400 Speaker 2: President Trump said he wasn't the one who signed the 172 00:10:51,440 --> 00:10:54,880 Speaker 2: proclamation invoking the Alien Enemies Act. 173 00:10:55,200 --> 00:10:57,680 Speaker 7: We want to get criminals out of our country, number one. 174 00:10:57,720 --> 00:10:59,480 Speaker 7: And I don't know when it was signed because I 175 00:10:59,480 --> 00:11:01,160 Speaker 7: didn't sign, and other people handle it. 176 00:11:01,200 --> 00:11:02,720 Speaker 8: But Marco Rubio. 177 00:11:02,440 --> 00:11:05,080 Speaker 1: Has done a great job and he wanted him out, 178 00:11:05,120 --> 00:11:06,360 Speaker 1: and we go along with that. 179 00:11:06,880 --> 00:11:10,680 Speaker 2: So the questions in this case continue, and Judge Bosberg 180 00:11:10,720 --> 00:11:14,160 Speaker 2: has given government lawyers until Tuesday to explain why he 181 00:11:14,200 --> 00:11:17,720 Speaker 2: shouldn't find that they violated his order to turn the 182 00:11:17,720 --> 00:11:20,760 Speaker 2: planes around. And we haven't even gotten to the merits 183 00:11:20,800 --> 00:11:23,880 Speaker 2: of the case yet. Thanks so much for your analysis, David. 184 00:11:24,280 --> 00:11:28,000 Speaker 2: That's Professor David super of Georgetown Law coming up next 185 00:11:28,000 --> 00:11:31,000 Speaker 2: on the Bloomberg Lawn Show. For the first time, a 186 00:11:31,120 --> 00:11:36,679 Speaker 2: judge limits elon Musk's power, finding his dismantling of USAID 187 00:11:37,559 --> 00:11:41,559 Speaker 2: likely unconstitutional. Remember you can always get the latest legal 188 00:11:41,600 --> 00:11:45,160 Speaker 2: news by listening to our Bloomberg Law podcast wherever you 189 00:11:45,240 --> 00:11:48,800 Speaker 2: get your favorite podcasts. I'm June Grosso, and you're listening 190 00:11:48,920 --> 00:11:53,480 Speaker 2: to Bloomberg. The Trump administration is facing more than one 191 00:11:53,559 --> 00:11:57,480 Speaker 2: hundred and fifty cases across the country challenging its actions, 192 00:11:57,760 --> 00:12:01,200 Speaker 2: and many of the cases involve Elon Musk and DOGE, 193 00:12:01,440 --> 00:12:04,560 Speaker 2: which has moved swiftly to fire tens of thousands of 194 00:12:04,640 --> 00:12:09,800 Speaker 2: federal workers, cancel grants and contracts, and generally dismantle the 195 00:12:09,840 --> 00:12:14,360 Speaker 2: federal government. In court, the administration says that Musk isn't 196 00:12:14,400 --> 00:12:17,360 Speaker 2: the head of DOGE and doesn't have authority to give 197 00:12:17,600 --> 00:12:21,560 Speaker 2: orders at agencies. But remember when President Trump gave a 198 00:12:21,679 --> 00:12:24,720 Speaker 2: shout out to Musk during his joint address to Congress 199 00:12:24,800 --> 00:12:25,319 Speaker 2: last month. 200 00:12:25,559 --> 00:12:31,360 Speaker 4: I have created the brand new Department of Government Efficiency Dog. 201 00:12:32,320 --> 00:12:39,480 Speaker 4: Perhaps you've heard of it, perhaps, which is headed by 202 00:12:39,679 --> 00:12:42,600 Speaker 4: Elon Musk, who's in the gallery tonight. 203 00:12:42,840 --> 00:12:46,880 Speaker 2: Well, Federal Judge Theodore Schwang seems to remember, and he 204 00:12:47,040 --> 00:12:50,120 Speaker 2: cited that in the first major ruling to find that 205 00:12:50,240 --> 00:12:56,199 Speaker 2: Musk likely exercised unconstitutional powers in this case by orchestrating 206 00:12:56,240 --> 00:13:00,520 Speaker 2: the shutdown of the US Agency for International Development. Joining 207 00:13:00,520 --> 00:13:03,800 Speaker 2: me is constitutional law expert Michael Dorf, a professor at 208 00:13:03,840 --> 00:13:08,280 Speaker 2: Cornell Law School. Mike usaid was the first agency that 209 00:13:08,400 --> 00:13:12,280 Speaker 2: Musk took his chainsaw to remind us what happened. 210 00:13:12,720 --> 00:13:18,480 Speaker 1: Musk and the Doze people went into USAID and they 211 00:13:19,240 --> 00:13:25,280 Speaker 1: canceled a very large percentage of the contracts that USAID 212 00:13:25,480 --> 00:13:28,360 Speaker 1: had with partner organizations. 213 00:13:27,679 --> 00:13:34,000 Speaker 6: Throughout the world. They also displaced the existing leadership and 214 00:13:34,400 --> 00:13:38,880 Speaker 6: Secretary of State Marco Rubio assumed control of USAID, and 215 00:13:39,040 --> 00:13:40,439 Speaker 6: they gutted the staff. 216 00:13:40,880 --> 00:13:46,400 Speaker 1: Us also actually tweeted that USAID was effectively dead right, 217 00:13:46,440 --> 00:13:50,640 Speaker 1: So this was an effort by Doge who essentially kill 218 00:13:50,720 --> 00:13:52,599 Speaker 1: an agency created by Congress. 219 00:13:52,720 --> 00:13:55,840 Speaker 2: The judge found that Musk and his team likely violate 220 00:13:55,920 --> 00:13:59,640 Speaker 2: the Constitution in multiple ways. Let's talk first about the 221 00:13:59,640 --> 00:14:01,679 Speaker 2: appointment's clause issue. 222 00:14:01,840 --> 00:14:06,560 Speaker 1: The Constitution sets out how officers of the United States 223 00:14:06,559 --> 00:14:10,320 Speaker 1: are appointed so called principal officers, who are people who 224 00:14:10,440 --> 00:14:12,920 Speaker 1: have a whole lot of responsibilities to think about. A 225 00:14:13,120 --> 00:14:17,480 Speaker 1: cabinet level secretary must be nominated by the President and 226 00:14:17,559 --> 00:14:20,760 Speaker 1: it's confirmed by the Senate. There are also what the 227 00:14:20,800 --> 00:14:25,800 Speaker 1: Constitution calls inferior officers who exercise considerable power but under 228 00:14:25,840 --> 00:14:29,280 Speaker 1: the supervision of a principal officer, and they can also 229 00:14:29,360 --> 00:14:33,520 Speaker 1: be appointed via that same mechanism of presidential nomination and 230 00:14:33,560 --> 00:14:34,400 Speaker 1: Senate confirmation. 231 00:14:34,560 --> 00:14:36,400 Speaker 6: But the Constitution says that. 232 00:14:36,480 --> 00:14:41,560 Speaker 1: Alternatively, for an inferior officer, Congress confests the authority to 233 00:14:41,560 --> 00:14:45,600 Speaker 1: make appointments either in the president alone the force. 234 00:14:45,360 --> 00:14:47,760 Speaker 6: Of law, or in the heads of departments. 235 00:14:47,920 --> 00:14:52,800 Speaker 1: What the judge said was that Musk is exercising at 236 00:14:52,880 --> 00:14:56,240 Speaker 1: least the power of inferior officer, probably the power of 237 00:14:56,320 --> 00:14:57,520 Speaker 1: a principal officer. 238 00:14:57,760 --> 00:14:59,080 Speaker 6: But it doesn't matter which he. 239 00:14:59,160 --> 00:15:03,360 Speaker 1: Is because he wasn't appointed in conformity with procedures. He 240 00:15:03,400 --> 00:15:06,240 Speaker 1: was not nominated by the president and confirmed by the Senate. 241 00:15:06,560 --> 00:15:10,200 Speaker 1: He was apparently appointed by the president, but the appointment's 242 00:15:10,200 --> 00:15:13,200 Speaker 1: cause says that can only be a mechanism for inferior 243 00:15:13,240 --> 00:15:17,760 Speaker 1: officers if Congress authorizes it, and Congress did not authorize this. 244 00:15:17,880 --> 00:15:21,560 Speaker 1: Congress didn't even create DOZE. DOZE as a creation, Soley 245 00:15:21,640 --> 00:15:23,400 Speaker 1: of President Trump and. 246 00:15:23,360 --> 00:15:26,280 Speaker 2: The administration had said that Musk isn't the real head 247 00:15:26,320 --> 00:15:29,640 Speaker 2: of DOZE and doesn't have the power to make these 248 00:15:29,760 --> 00:15:34,680 Speaker 2: kinds of decisions. But the judge cited Trump's statements about 249 00:15:34,800 --> 00:15:40,520 Speaker 2: Musk and Musk's comments and social media posts to demonstrate 250 00:15:40,600 --> 00:15:43,760 Speaker 2: that quote he has firm control over DOGE. 251 00:15:44,600 --> 00:15:45,080 Speaker 6: That's right. 252 00:15:45,160 --> 00:15:48,760 Speaker 1: It's essentially holding that even though at one point or 253 00:15:48,800 --> 00:15:52,200 Speaker 1: another the administration has tried to claim that Musk is 254 00:15:52,400 --> 00:15:56,920 Speaker 1: just an advisor, he was in fact exercising the power 255 00:15:57,400 --> 00:16:00,760 Speaker 1: of the head of Doge must has claim that he 256 00:16:00,920 --> 00:16:04,240 Speaker 1: is the President in his address to the Joint Session 257 00:16:04,240 --> 00:16:07,080 Speaker 1: of Congress referred to him that way, He's referred to 258 00:16:07,160 --> 00:16:10,480 Speaker 1: him that way in other statements. And so you can't 259 00:16:10,520 --> 00:16:15,120 Speaker 1: just evade the appointment's clause by having somebody the de 260 00:16:15,240 --> 00:16:20,720 Speaker 1: facto principle or inferior officer without triggering the requirements of 261 00:16:20,760 --> 00:16:21,200 Speaker 1: the clause. 262 00:16:21,760 --> 00:16:26,280 Speaker 2: So the judge also found that this push to dismantle USAID, 263 00:16:26,440 --> 00:16:31,160 Speaker 2: which was created by Congress, likely violated the separation of 264 00:16:31,200 --> 00:16:32,359 Speaker 2: powers principles. 265 00:16:33,120 --> 00:16:35,200 Speaker 1: Yeah, so this is the other key point of the 266 00:16:35,200 --> 00:16:41,160 Speaker 1: constitutional ruling. The Constitution refers to agencies, but leads to 267 00:16:41,280 --> 00:16:46,360 Speaker 1: Congress the prerogative to create and destroy agencies, and the 268 00:16:46,440 --> 00:16:49,840 Speaker 1: administration seems to have recognized this. In another context with 269 00:16:49,880 --> 00:16:54,600 Speaker 1: respect to the Department of Education, even Secretary McMahon acknowledges 270 00:16:54,640 --> 00:16:58,200 Speaker 1: that she can't dismantle the Department of Education on her own. 271 00:16:58,200 --> 00:17:01,560 Speaker 1: That would require an Act of Congress. Here, by contrasts 272 00:17:01,880 --> 00:17:05,760 Speaker 1: Musk and to some extent, Trump have effectively said they 273 00:17:05,800 --> 00:17:09,240 Speaker 1: are dismantling USAID and they can't do that, right. It's 274 00:17:09,359 --> 00:17:13,960 Speaker 1: up to Congress to destroy the agencies it creates. They 275 00:17:14,040 --> 00:17:18,639 Speaker 1: haven't literally wiped out USAID. But if Congress creates an 276 00:17:18,640 --> 00:17:23,760 Speaker 1: agency and then the executive branch essentially guts it, that's 277 00:17:23,760 --> 00:17:25,680 Speaker 1: the equivalent. That's how the judge ruled. 278 00:17:25,760 --> 00:17:27,480 Speaker 6: Any event, what is. 279 00:17:27,400 --> 00:17:32,119 Speaker 2: The practical effect of the judge's order when you know, 280 00:17:32,160 --> 00:17:35,400 Speaker 2: as you said, as he said, the USAID has effectively 281 00:17:35,440 --> 00:17:37,400 Speaker 2: been eliminated. 282 00:17:37,119 --> 00:17:40,560 Speaker 1: With respect to the appointment's clause. The judge stayed his 283 00:17:40,760 --> 00:17:46,720 Speaker 1: ruling for a brief period because he acknowledged that if 284 00:17:46,800 --> 00:17:50,879 Speaker 1: the decisions that were effectively taken by Musk are now 285 00:17:51,200 --> 00:17:57,399 Speaker 1: ratified by actual USAID officials, then that would render Musk 286 00:17:57,640 --> 00:18:01,680 Speaker 1: a mere advisor, in which case there would not be 287 00:18:01,760 --> 00:18:04,399 Speaker 1: an appointment's caused violation, or at least not one that 288 00:18:04,640 --> 00:18:08,040 Speaker 1: leads to invalidation of the underlying actions. 289 00:18:07,600 --> 00:18:10,199 Speaker 6: With respect to the separation of powers argument. 290 00:18:10,240 --> 00:18:14,600 Speaker 1: However, one thing he crucially did do was making an 291 00:18:14,720 --> 00:18:18,480 Speaker 1: order that it has an impact agency wise. So the 292 00:18:18,600 --> 00:18:22,439 Speaker 1: short of it is that the administration can't make further 293 00:18:22,520 --> 00:18:23,760 Speaker 1: cuts to USAID. 294 00:18:24,400 --> 00:18:26,200 Speaker 6: Some of the personnel. 295 00:18:25,920 --> 00:18:29,119 Speaker 1: Will be put back in their jobs, but all of this, 296 00:18:29,200 --> 00:18:31,399 Speaker 1: of course, is going to be subject to an appeal, 297 00:18:31,440 --> 00:18:32,960 Speaker 1: which the administration has said it. 298 00:18:32,920 --> 00:18:35,520 Speaker 2: Will take, even if they're put back in their jobs. 299 00:18:35,640 --> 00:18:40,760 Speaker 2: The judge gave Rubio what fourteen days to decide whether 300 00:18:40,840 --> 00:18:43,879 Speaker 2: to permanently close the agency's headquarters. 301 00:18:44,400 --> 00:18:48,720 Speaker 1: Right, so, the President and Secretary of State, where it's 302 00:18:48,840 --> 00:18:53,280 Speaker 1: agency lodge within the State Department, do have considerable discretion 303 00:18:53,960 --> 00:18:59,240 Speaker 1: about how to run and even structure an agency where 304 00:18:59,280 --> 00:19:02,800 Speaker 1: Congress does and say exactly what you have to do. 305 00:19:03,320 --> 00:19:05,919 Speaker 1: And so that's part of what the judge is doing here. 306 00:19:05,960 --> 00:19:07,920 Speaker 6: He's saying that you. 307 00:19:07,920 --> 00:19:11,320 Speaker 1: Can't completely close it, but you do have some considerable discretion, 308 00:19:11,400 --> 00:19:14,560 Speaker 1: and I'm going to wait until you exercise that discretion 309 00:19:14,840 --> 00:19:16,399 Speaker 1: and see, you know, whether you've done so in a 310 00:19:16,400 --> 00:19:19,560 Speaker 1: way that at least preserves the core of what Congress 311 00:19:19,560 --> 00:19:20,000 Speaker 1: set up the. 312 00:19:20,040 --> 00:19:20,760 Speaker 6: Agency to do. 313 00:19:21,040 --> 00:19:25,600 Speaker 2: This decision, obviously is limited to USAID. It's the most 314 00:19:25,600 --> 00:19:30,880 Speaker 2: direct ruling to date that Musk's roll violates the Constitution. 315 00:19:31,640 --> 00:19:36,280 Speaker 2: Does this decision have any impact outside of USAID? 316 00:19:37,160 --> 00:19:37,400 Speaker 9: Yes. 317 00:19:38,000 --> 00:19:43,200 Speaker 1: The principle that the judge applied would apply to all 318 00:19:43,240 --> 00:19:45,560 Speaker 1: of the things that Musk is doing with respect to, 319 00:19:45,960 --> 00:19:49,400 Speaker 1: you know, the entire federal government. Right, So, there's no 320 00:19:49,480 --> 00:19:55,240 Speaker 1: difference in principle between Musk's unlawful appointment with respect to 321 00:19:55,320 --> 00:19:58,520 Speaker 1: USAID on the one hand, versus all the other agencies 322 00:19:58,600 --> 00:20:01,960 Speaker 1: that he's been in going around and making decisions with 323 00:20:02,080 --> 00:20:06,960 Speaker 1: respect to. But of course other judges might reach a 324 00:20:07,000 --> 00:20:11,720 Speaker 1: different conclusion on the appointment's claus question. And even if 325 00:20:11,760 --> 00:20:14,760 Speaker 1: they reach the same conclusion, there is this pretty big 326 00:20:14,840 --> 00:20:20,480 Speaker 1: loophole that the judge allows for cabinet level officials or 327 00:20:20,520 --> 00:20:25,080 Speaker 1: other personnel within the agencies who are actually properly appointed 328 00:20:25,320 --> 00:20:29,560 Speaker 1: to ratify the decisions that Musk has made, so that 329 00:20:29,760 --> 00:20:33,800 Speaker 1: they can render him advisory in the way that the 330 00:20:33,840 --> 00:20:37,919 Speaker 1: administration has sometimes claimed he is after the fact, and 331 00:20:38,040 --> 00:20:44,800 Speaker 1: thereby avoid the judicial and validation of everything that Musk 332 00:20:45,000 --> 00:20:46,480 Speaker 1: and Doge have done. 333 00:20:47,040 --> 00:20:49,080 Speaker 2: I want to turn for a minute to this concern 334 00:20:49,160 --> 00:20:54,679 Speaker 2: in the legal community about the Trump administration not following judges' orders, 335 00:20:55,000 --> 00:20:57,800 Speaker 2: whether it be with regard to the funding freeze or 336 00:20:57,880 --> 00:21:04,320 Speaker 2: re hiring probationary work, or the Venezuelan deportations. The administration 337 00:21:04,520 --> 00:21:09,760 Speaker 2: seems to be either ignoring or delaying or skirting judicial orders. 338 00:21:10,400 --> 00:21:15,920 Speaker 1: Yeah, and that is a very very serious issue. The administration, 339 00:21:16,040 --> 00:21:18,960 Speaker 1: I think, is playing a little bit of a game. 340 00:21:19,320 --> 00:21:24,720 Speaker 1: That is, in social media posts and elsewhere, they are 341 00:21:24,800 --> 00:21:29,560 Speaker 1: asserting essentially a power to ignore judicial orders. But in 342 00:21:29,680 --> 00:21:34,680 Speaker 1: actual court filings and statements they have almost invariably claimed 343 00:21:34,680 --> 00:21:39,120 Speaker 1: that they are complying, but they do so with you know, 344 00:21:39,600 --> 00:21:43,520 Speaker 1: somewhat flimsy reasons, right, And so to the extent that 345 00:21:43,560 --> 00:21:47,080 Speaker 1: there's like a sliver of a silver lining, I guess 346 00:21:47,160 --> 00:21:51,359 Speaker 1: I'm glad that there at least feel the need to 347 00:21:51,560 --> 00:21:56,359 Speaker 1: pretend to be complying when speaking in open court, because 348 00:21:56,400 --> 00:21:58,680 Speaker 1: it strikes me that we would be in an even 349 00:21:58,840 --> 00:22:04,080 Speaker 1: worse constitutional try if a Department of Justice lawyer stood 350 00:22:04,119 --> 00:22:06,520 Speaker 1: up in open court and said to the judge, make 351 00:22:06,600 --> 00:22:10,440 Speaker 1: me you know, and then the President basically said, well, 352 00:22:10,480 --> 00:22:14,360 Speaker 1: you know, the US marshals who are supposed to enforce 353 00:22:14,600 --> 00:22:18,359 Speaker 1: judicial orders are part of the Justice Department, and I've 354 00:22:18,400 --> 00:22:21,679 Speaker 1: instructed my Attorney general not to have them enforce the 355 00:22:21,720 --> 00:22:22,560 Speaker 1: judicial orders. 356 00:22:23,000 --> 00:22:27,639 Speaker 2: Have other administrations acted like this with court orders, you know, 357 00:22:27,760 --> 00:22:31,359 Speaker 2: not openly defying them, but not really complying with them either. 358 00:22:31,800 --> 00:22:36,600 Speaker 1: You can point to situations in which administrations have not 359 00:22:36,840 --> 00:22:40,600 Speaker 1: exactly bent over backwards to comply with the letter of 360 00:22:40,800 --> 00:22:46,000 Speaker 1: judicial orders. There are certainly cases in which administrations at 361 00:22:46,080 --> 00:22:48,760 Speaker 1: least seem to try to comply but were unable to 362 00:22:48,880 --> 00:22:52,760 Speaker 1: because of resource or time constraints. I can't think of 363 00:22:52,800 --> 00:22:59,919 Speaker 1: an administration that was so uniformly hostile to judicial orders 364 00:23:00,240 --> 00:23:03,920 Speaker 1: and at the same time was asserting that it had 365 00:23:03,960 --> 00:23:07,520 Speaker 1: the power to disregard what the courts told uh to do. 366 00:23:07,840 --> 00:23:10,160 Speaker 1: You know, the events that we think about in this 367 00:23:10,320 --> 00:23:15,400 Speaker 1: context are pretty scary moments in American history. So there's 368 00:23:15,440 --> 00:23:19,360 Speaker 1: the story that's told about President Andrew Jackson, who was 369 00:23:19,880 --> 00:23:24,160 Speaker 1: unhappy with the ruling of the Supreme Court in one 370 00:23:24,200 --> 00:23:29,120 Speaker 1: of the Cherokee removal cases and reportedly said John Marshall, 371 00:23:29,160 --> 00:23:31,520 Speaker 1: meaning the Chief Justice of the United States has made 372 00:23:31,560 --> 00:23:34,480 Speaker 1: his decision. Now let's see him enforce it. By the way, 373 00:23:34,480 --> 00:23:37,439 Speaker 1: he probably never actually said that, but it's a good story. 374 00:23:37,680 --> 00:23:43,760 Speaker 1: Areat But this is a recurring theme in American constitutionalism, 375 00:23:44,000 --> 00:23:48,800 Speaker 1: and it's because, as Alexander Hamilton wrote in Federalist Number 376 00:23:48,840 --> 00:23:53,480 Speaker 1: seventy eight, the judiciary is what he called the least 377 00:23:53,640 --> 00:23:57,240 Speaker 1: dangerous branch, but it's also the least powerful branch, unlike Congress, 378 00:23:57,240 --> 00:23:59,880 Speaker 1: that lacks the power of the purse, and unlike the presidents, 379 00:24:00,119 --> 00:24:03,920 Speaker 1: it lacks the power of the sword. And so ultimately 380 00:24:04,400 --> 00:24:10,520 Speaker 1: compliance with the law depends on good faith efforts by 381 00:24:10,800 --> 00:24:14,080 Speaker 1: those in government who do control believers of power to 382 00:24:14,440 --> 00:24:19,880 Speaker 1: actually accept that there is authority in other branches of government. 383 00:24:20,040 --> 00:24:23,840 Speaker 1: I'm not convinced that President Trump or the people working 384 00:24:23,880 --> 00:24:26,679 Speaker 1: for him have that kind of a commitment to the 385 00:24:26,760 --> 00:24:27,359 Speaker 1: rule of law. 386 00:24:27,800 --> 00:24:31,160 Speaker 2: Future cases will tell the tale. Thanks so much, Mike Best. 387 00:24:31,160 --> 00:24:34,639 Speaker 2: Professor Michael Dorff of Cornell Law School. Coming up next, 388 00:24:34,800 --> 00:24:37,959 Speaker 2: tennis players take on their sport. I'm June Grosso and 389 00:24:38,040 --> 00:24:38,919 Speaker 2: this is Bloomberg. 390 00:24:40,000 --> 00:24:41,639 Speaker 9: You know, I think things they have to change, sir. 391 00:24:41,960 --> 00:24:43,520 Speaker 9: It's a big day for tennis, and. 392 00:24:43,440 --> 00:24:46,199 Speaker 2: Not because of a major tournament, but because of a 393 00:24:46,240 --> 00:24:50,280 Speaker 2: major lawsuit. Nick Carrios is one of the named plaintiffs 394 00:24:50,280 --> 00:24:54,159 Speaker 2: suing tennis's governing bodies, accusing them of running a cartel 395 00:24:54,359 --> 00:24:58,560 Speaker 2: that exploits players by capping their prize money, limiting off 396 00:24:58,600 --> 00:25:03,320 Speaker 2: court earnings, restricts in competition from rival tournaments, and forcing 397 00:25:03,400 --> 00:25:07,200 Speaker 2: players to endure a grueling eleven month schedule. Here's how 398 00:25:07,200 --> 00:25:08,800 Speaker 2: he explained it. To Sky News. 399 00:25:09,480 --> 00:25:11,560 Speaker 9: I felt like people knew that something was going on 400 00:25:11,600 --> 00:25:13,520 Speaker 9: behind the scenes for a long time, and I think that, 401 00:25:14,240 --> 00:25:18,639 Speaker 9: you know myself, Paspasil Djokovic, we all wanted to do 402 00:25:18,680 --> 00:25:20,960 Speaker 9: something like this, you know, for the future of tennis. 403 00:25:21,000 --> 00:25:24,360 Speaker 9: You know. I know the players and myself and many 404 00:25:24,359 --> 00:25:26,480 Speaker 9: other players aren't happy with the structures and everything that's 405 00:25:26,520 --> 00:25:27,920 Speaker 9: going on in tennis at the moments. 406 00:25:27,920 --> 00:25:31,119 Speaker 2: And their dissatisfaction is apparent from the one hundred and 407 00:25:31,119 --> 00:25:34,960 Speaker 2: fifty nine page class action anti trust lawsuit filed by 408 00:25:35,080 --> 00:25:39,639 Speaker 2: twelve named players and the Professional Tennis Players Association against 409 00:25:39,680 --> 00:25:44,560 Speaker 2: the ATP and WTA Tours and the International Tennis Federation. 410 00:25:45,040 --> 00:25:49,000 Speaker 2: But conspicuously absent in the list of named players is 411 00:25:49,080 --> 00:25:53,280 Speaker 2: twenty four time Grand Slam winner Novak Djokovic, who co 412 00:25:53,359 --> 00:25:57,600 Speaker 2: founded the PTPA. He's been vocal about higher pay in tennis, 413 00:25:57,800 --> 00:26:00,760 Speaker 2: where the gap in earnings between the top players who 414 00:26:00,800 --> 00:26:04,320 Speaker 2: make millions and the lower ranked players who are barely 415 00:26:04,400 --> 00:26:07,959 Speaker 2: managing to support themselves is the widest in any sport. 416 00:26:08,400 --> 00:26:12,399 Speaker 8: The media is communicating how much does a Grand Slam 417 00:26:12,480 --> 00:26:17,840 Speaker 8: champion win constantly rather than you know, also shining a 418 00:26:17,920 --> 00:26:22,679 Speaker 8: light on the players that are barely make a living, 419 00:26:23,560 --> 00:26:25,120 Speaker 8: barely making a living from tennis. 420 00:26:25,880 --> 00:26:28,800 Speaker 2: My guest is anti trust law professor Harry First, a 421 00:26:28,880 --> 00:26:32,200 Speaker 2: professor at NYU Law School. Harry, can you give us 422 00:26:32,240 --> 00:26:35,800 Speaker 2: the basics of this very long complaint. 423 00:26:36,160 --> 00:26:39,640 Speaker 7: Well, the basic idea is sort of similar to other 424 00:26:39,760 --> 00:26:44,160 Speaker 7: suits that have been brought. Basically players complaining that those 425 00:26:44,680 --> 00:26:49,160 Speaker 7: owners who are running the sport are getting a lot 426 00:26:49,200 --> 00:26:52,160 Speaker 7: of the benefits and they're not getting their due, and 427 00:26:52,920 --> 00:26:58,199 Speaker 7: mainly because the owners are suppressing the market for the 428 00:26:58,320 --> 00:27:02,600 Speaker 7: player's services in various ways, and one of the ways 429 00:27:02,680 --> 00:27:07,719 Speaker 7: being trying to exclude competitors that might be willing to 430 00:27:08,240 --> 00:27:13,359 Speaker 7: hire the talent these players in competing leagues, competing races, 431 00:27:13,680 --> 00:27:18,560 Speaker 7: competing tournaments, things like that. So there's exclusion, there's price fixing, 432 00:27:18,920 --> 00:27:22,359 Speaker 7: and the talent, the players, the laborers, if you will, 433 00:27:22,760 --> 00:27:23,959 Speaker 7: not getting their due. 434 00:27:24,240 --> 00:27:27,400 Speaker 2: They accuse the sports governing bodies of running a cartel 435 00:27:27,960 --> 00:27:31,320 Speaker 2: and say professional tennis players are stuck in a rig game, 436 00:27:31,600 --> 00:27:34,320 Speaker 2: not on the court, but off it, where players are 437 00:27:34,320 --> 00:27:39,000 Speaker 2: forced to endure grueling schedules, capped earnings, abusive and invasive 438 00:27:39,040 --> 00:27:43,360 Speaker 2: investigations and discipline, and have limited control over their own 439 00:27:43,440 --> 00:27:46,480 Speaker 2: careers and brands. Of course, one of the top issues 440 00:27:46,560 --> 00:27:50,360 Speaker 2: is money. In other professional sports, about half the gross 441 00:27:50,520 --> 00:27:54,880 Speaker 2: revenue goes to players, but tennis shares less than twenty percent. 442 00:27:55,200 --> 00:27:57,000 Speaker 2: But is this an anti trust issue? 443 00:27:57,119 --> 00:28:01,720 Speaker 7: Well, that's a really great question. It's sort of a no, yes. 444 00:28:01,320 --> 00:28:03,320 Speaker 2: No, let me think about that. 445 00:28:03,640 --> 00:28:09,080 Speaker 7: Okay, how's that for good wishy washiness. So really low 446 00:28:09,160 --> 00:28:13,240 Speaker 7: prices for the things you are buying, or what economists 447 00:28:13,240 --> 00:28:16,480 Speaker 7: would call the inputs, that in itself, I don't think 448 00:28:16,560 --> 00:28:20,080 Speaker 7: is an any trust violation, just like charging really high 449 00:28:20,160 --> 00:28:23,480 Speaker 7: prices for what you sell is not really an anti 450 00:28:23,560 --> 00:28:27,879 Speaker 7: trust violation. You have to have exclusion of competition for 451 00:28:27,920 --> 00:28:30,960 Speaker 7: there to be an anti trust violation, and an agreement 452 00:28:31,320 --> 00:28:35,280 Speaker 7: among competitors. So sometimes an agreement among competitors to buy 453 00:28:35,320 --> 00:28:37,960 Speaker 7: things for a low price that could be an anti 454 00:28:38,000 --> 00:28:42,440 Speaker 7: trust violation, or an agreement among competitors to sell things 455 00:28:42,480 --> 00:28:45,440 Speaker 7: at a higher price that could be an anti trust 456 00:28:45,480 --> 00:28:49,960 Speaker 7: violation technically, because you have competitors who might otherwise either 457 00:28:50,040 --> 00:28:53,840 Speaker 7: compete the price down if they're sellers, or compete the 458 00:28:53,920 --> 00:28:57,280 Speaker 7: price up if they're buyers, like buyers of labor. If 459 00:28:57,320 --> 00:29:00,800 Speaker 7: they were acting independently, you might have different prices, different 460 00:29:00,840 --> 00:29:05,360 Speaker 7: outcomes better for the party that's selling their goods or 461 00:29:05,400 --> 00:29:08,680 Speaker 7: services or better for us consumers who are buying them. So, 462 00:29:09,160 --> 00:29:12,720 Speaker 7: in a technical sense, no, as an individual seller setting 463 00:29:12,760 --> 00:29:16,200 Speaker 7: your price, that's okay, it's bad if you do it 464 00:29:16,280 --> 00:29:19,680 Speaker 7: in collusion, or a more graphic way is to call 465 00:29:19,720 --> 00:29:23,560 Speaker 7: them a cartel, that's bad. And then there's a slight 466 00:29:23,720 --> 00:29:27,120 Speaker 7: sort of twist on it, although it is not bad 467 00:29:27,280 --> 00:29:30,320 Speaker 7: in itself. If you're a single seller, to pay too 468 00:29:30,440 --> 00:29:33,200 Speaker 7: much or pay too little, that's often a sign that 469 00:29:33,240 --> 00:29:36,320 Speaker 7: you do have monopoly power. And so in a lot 470 00:29:36,360 --> 00:29:39,800 Speaker 7: of cases that we're seeing, the parties are litigating the 471 00:29:40,120 --> 00:29:42,800 Speaker 7: idea that prices are either too high or in the 472 00:29:42,840 --> 00:29:45,720 Speaker 7: case of labor, too low, and it will form the 473 00:29:45,760 --> 00:29:47,560 Speaker 7: basis for a damage's claim. 474 00:29:47,840 --> 00:29:51,000 Speaker 2: So Harry, there's a price fixing claim. And according to 475 00:29:51,040 --> 00:29:54,000 Speaker 2: the lawsuit, a key method used by the tennis governing 476 00:29:54,040 --> 00:29:57,280 Speaker 2: bodies to keep player pay low is locking them into 477 00:29:57,280 --> 00:30:01,600 Speaker 2: this closed system of tournaments. And Larry Ellison, the billionaire, 478 00:30:01,840 --> 00:30:05,360 Speaker 2: wanted to increase the total prize money at his tournament 479 00:30:05,400 --> 00:30:09,040 Speaker 2: by one point six million dollars, but the ATP and 480 00:30:09,120 --> 00:30:14,280 Speaker 2: the WTA wouldn't allow that because they didn't want one 481 00:30:14,480 --> 00:30:17,320 Speaker 2: event to be paying more prize money than the sports 482 00:30:17,520 --> 00:30:21,760 Speaker 2: for marquee Grand Slam events. That does sound like price fixing. 483 00:30:22,120 --> 00:30:25,880 Speaker 7: Well, it's sort of a colorful example because it shows 484 00:30:26,160 --> 00:30:29,800 Speaker 7: what price fixers who agree on what they will pay 485 00:30:30,160 --> 00:30:33,520 Speaker 7: for labor can affect the price of labor. You know, 486 00:30:33,560 --> 00:30:37,960 Speaker 7: here's even Larry Ellison can't pay what he thinks is 487 00:30:38,000 --> 00:30:41,920 Speaker 7: a market price to attract talent to his tournament and 488 00:30:41,960 --> 00:30:45,360 Speaker 7: compete in other tournaments. So that sounds really bad. A 489 00:30:45,360 --> 00:30:47,720 Speaker 7: little problem with that is what year was that? Does 490 00:30:47,720 --> 00:30:48,200 Speaker 7: that occur? 491 00:30:48,720 --> 00:30:51,160 Speaker 2: Twenty twelve? A while ago? 492 00:30:51,440 --> 00:30:57,360 Speaker 7: Oh a while ago? Outside the statute of limitations technically, 493 00:30:57,480 --> 00:31:00,920 Speaker 7: so it's nice to put in a complaint. Whether this 494 00:31:01,120 --> 00:31:05,160 Speaker 7: is going to be even admissible a trial as another story, 495 00:31:05,360 --> 00:31:07,960 Speaker 7: but it is an example. I sort of wish they 496 00:31:08,000 --> 00:31:12,000 Speaker 7: had more recent examples. But presumably their argument is the 497 00:31:12,080 --> 00:31:15,680 Speaker 7: tournament operators are actually sort of happy with this. You know, 498 00:31:15,920 --> 00:31:19,240 Speaker 7: they're not Larry Ellison, They're not. Well, actually, some of 499 00:31:19,280 --> 00:31:22,320 Speaker 7: the tournaments operators are the equivalent. But you know, they 500 00:31:22,360 --> 00:31:25,680 Speaker 7: would just as soon pay the players less and rake 501 00:31:25,760 --> 00:31:28,760 Speaker 7: in the money more and not find themselves in the 502 00:31:28,800 --> 00:31:33,440 Speaker 7: position of other wealthy owners of teams or in this case, 503 00:31:33,680 --> 00:31:37,720 Speaker 7: tournaments that actually have to compete to put together the best. 504 00:31:38,080 --> 00:31:41,040 Speaker 7: So the fact that we don't see more recent examples 505 00:31:41,240 --> 00:31:44,880 Speaker 7: doesn't show that there isn't price fixing. But on the 506 00:31:44,880 --> 00:31:47,840 Speaker 7: other hand, you don't have a nice example like you 507 00:31:47,960 --> 00:31:51,400 Speaker 7: have in that case of a tournament operator that was 508 00:31:51,440 --> 00:31:53,800 Speaker 7: trying to compete this way but couldn't. 509 00:31:54,080 --> 00:31:58,400 Speaker 2: The players also complain about this eleven month grueling schedule, 510 00:31:58,640 --> 00:32:02,400 Speaker 2: which they say damages players' bodies and prevents them from 511 00:32:02,440 --> 00:32:04,160 Speaker 2: competing in other events. 512 00:32:04,400 --> 00:32:07,880 Speaker 7: Well, I'm not sure this is any trust violation. Sounded 513 00:32:08,000 --> 00:32:10,880 Speaker 7: more like a labor law complaint to me in a way. 514 00:32:11,280 --> 00:32:13,560 Speaker 7: You know. I think it goes in there to show 515 00:32:13,640 --> 00:32:17,800 Speaker 7: that what the public may see as sort of privileged, 516 00:32:17,880 --> 00:32:21,960 Speaker 7: high class athletes turns out to be a rather grueling job. 517 00:32:22,040 --> 00:32:25,720 Speaker 7: I mean, they're not coal miners. But there's an aspect 518 00:32:25,760 --> 00:32:27,880 Speaker 7: to this that the public doesn't see. And I can 519 00:32:28,000 --> 00:32:31,479 Speaker 7: understand the plaintiffs wanting to get that in front of 520 00:32:31,680 --> 00:32:35,640 Speaker 7: the judge and eventually in front of a jury if 521 00:32:35,680 --> 00:32:39,320 Speaker 7: they can. But whether this is actually an anti trust violation, 522 00:32:40,160 --> 00:32:41,040 Speaker 7: I'm not so sure. 523 00:32:41,280 --> 00:32:44,959 Speaker 2: So what do you think is the strongest antitrust claim 524 00:32:45,040 --> 00:32:45,880 Speaker 2: in the lawsuit. 525 00:32:46,320 --> 00:32:48,880 Speaker 7: Well, I think the strongest claim is the collusion or 526 00:32:48,920 --> 00:32:54,320 Speaker 7: cartel claim that these are you know, competing parties, various 527 00:32:54,360 --> 00:32:59,800 Speaker 7: tournaments that have gotten together to divide up markets geographically, 528 00:33:00,360 --> 00:33:05,600 Speaker 7: to control the sport, to control the mobility of other tournaments, 529 00:33:05,640 --> 00:33:08,760 Speaker 7: to enter and compete for talents, to control what they 530 00:33:08,760 --> 00:33:12,040 Speaker 7: have to pay the talent, and you know, to run 531 00:33:12,080 --> 00:33:13,920 Speaker 7: the sport in their favor. And there are a lot 532 00:33:13,960 --> 00:33:18,560 Speaker 7: of competing tournament amongst the defendants. You know, usually competitors 533 00:33:18,640 --> 00:33:22,200 Speaker 7: have a problem when they get together and agree. Now 534 00:33:22,240 --> 00:33:25,560 Speaker 7: there's a little different maybe for sports where there's an 535 00:33:25,640 --> 00:33:27,880 Speaker 7: idea of a circuit or a league. You know, that's 536 00:33:27,880 --> 00:33:30,600 Speaker 7: how you get fan interest. Everything's not a one off. 537 00:33:30,840 --> 00:33:33,640 Speaker 7: But the basic idea that this is a cartel and 538 00:33:33,680 --> 00:33:36,920 Speaker 7: a cartel with power in the market because they've excluded 539 00:33:36,960 --> 00:33:40,600 Speaker 7: other tournaments very hard to become a sanctioned tournament. So, 540 00:33:41,080 --> 00:33:43,920 Speaker 7: you know, that core of the case I think certainly 541 00:33:43,960 --> 00:33:48,000 Speaker 7: will survive any effort to dismiss the case outright. But 542 00:33:48,080 --> 00:33:51,600 Speaker 7: then we'll see what the justifications might be and of 543 00:33:51,640 --> 00:33:54,720 Speaker 7: course what the defendant's response is, because they have yet 544 00:33:54,760 --> 00:33:57,880 Speaker 7: to file anything in this litigation, right, so. 545 00:33:58,080 --> 00:34:03,320 Speaker 2: They've disputed the claims they work to expand compensation for players. 546 00:34:03,640 --> 00:34:05,560 Speaker 2: I mean, do you see what the defense might be. 547 00:34:06,160 --> 00:34:09,120 Speaker 7: I think that you know, their basic defense is the 548 00:34:09,200 --> 00:34:12,479 Speaker 7: defense of all these organized sports. You know, we can't 549 00:34:12,480 --> 00:34:16,560 Speaker 7: play tennis individually. You know, you need competitors, and that 550 00:34:16,680 --> 00:34:19,759 Speaker 7: means you have to deal with others. So to put 551 00:34:19,800 --> 00:34:23,680 Speaker 7: together a league, a circuit, tournaments to appeal to fans 552 00:34:24,239 --> 00:34:27,880 Speaker 7: requires some joint effort. And remember a lot of this 553 00:34:27,960 --> 00:34:31,040 Speaker 7: money is broadcasting money. People don't have to watch tennis, 554 00:34:31,080 --> 00:34:34,000 Speaker 7: they watch golf. They always argue that there are lots 555 00:34:34,000 --> 00:34:36,440 Speaker 7: of substitutes. Not sure that's a great argument, but they'll 556 00:34:36,520 --> 00:34:40,160 Speaker 7: argue that. But basically they'll argue there are good justifications 557 00:34:40,200 --> 00:34:43,560 Speaker 7: for what they do, for how they come together, and 558 00:34:43,600 --> 00:34:48,040 Speaker 7: that gives them certain ability to manage the sport in 559 00:34:48,080 --> 00:34:52,879 Speaker 7: a way that attracts capital, that serves the fans consumers. 560 00:34:52,960 --> 00:34:56,960 Speaker 7: After all's consumer interests, and also is in the interest 561 00:34:57,080 --> 00:35:01,120 Speaker 7: of the players, except for the two hundred and fifty 562 00:35:01,200 --> 00:35:04,560 Speaker 7: is claimed players who don't seem to like what's going 563 00:35:04,600 --> 00:35:06,440 Speaker 7: on or just simply want more money. 564 00:35:07,120 --> 00:35:09,839 Speaker 2: Does it make a difference that the top players in 565 00:35:09,880 --> 00:35:13,160 Speaker 2: the sport are not among the plaintiffs. 566 00:35:13,480 --> 00:35:16,239 Speaker 7: Yeah, that's very interesting. I mean, legally it doesn't make 567 00:35:16,280 --> 00:35:18,920 Speaker 7: a difference. This is a suit. It's styles as a 568 00:35:18,960 --> 00:35:22,560 Speaker 7: class action, meaning they're bringing on behalf of all tennis players, 569 00:35:22,760 --> 00:35:25,920 Speaker 7: which they claim are sort of similarly situated. So in 570 00:35:25,960 --> 00:35:29,360 Speaker 7: that sense, it really doesn't matter. On the optics of it, 571 00:35:29,360 --> 00:35:31,560 Speaker 7: it's sort of good and bad. I mean, it does 572 00:35:31,840 --> 00:35:36,880 Speaker 7: serve to highlight the disparities in this sport between the 573 00:35:37,000 --> 00:35:40,600 Speaker 7: very top people who are pretty well paid and the 574 00:35:40,680 --> 00:35:43,840 Speaker 7: majority of people you know, who they claim are living 575 00:35:43,840 --> 00:35:46,280 Speaker 7: out of their cars. On the other hand, the public 576 00:35:46,360 --> 00:35:50,640 Speaker 7: loves to see the names they know behind this, so 577 00:35:51,239 --> 00:35:55,400 Speaker 7: Michael Jordan's name features prominently, and you know all the 578 00:35:55,440 --> 00:35:58,680 Speaker 7: stories about the NASCAR litigation. So I don't think it's 579 00:35:58,680 --> 00:36:01,520 Speaker 7: going to matter legally, but I think, you know, in 580 00:36:01,640 --> 00:36:05,720 Speaker 7: terms of the dynamics of litigation, it may make some difference. 581 00:36:05,920 --> 00:36:08,040 Speaker 2: They're seeking a jury trial. Do you think that this 582 00:36:08,120 --> 00:36:11,279 Speaker 2: will get to trial or you know, they'll negotiate, There'll 583 00:36:11,320 --> 00:36:12,000 Speaker 2: be a settlement. 584 00:36:12,360 --> 00:36:16,440 Speaker 7: So most cases settle, Most lawsuits, and certainly most lawsuits 585 00:36:16,440 --> 00:36:19,960 Speaker 7: in federal courts settle. So if you want to predict 586 00:36:19,960 --> 00:36:23,359 Speaker 7: in an actuarial sense, you would predict settlement. Whether this 587 00:36:23,440 --> 00:36:26,920 Speaker 7: case will settle, I have no real idea, but certainly 588 00:36:26,960 --> 00:36:29,360 Speaker 7: it might in the sense that I'm not sure the 589 00:36:29,440 --> 00:36:34,200 Speaker 7: players want to blow up the system because I'm not 590 00:36:34,239 --> 00:36:37,560 Speaker 7: sure what would really be in its place. They do 591 00:36:37,640 --> 00:36:42,040 Speaker 7: benefit from not having every tournament be a one off. 592 00:36:42,120 --> 00:36:46,560 Speaker 7: I think, you know, if there's some ATP tournament, some 593 00:36:46,600 --> 00:36:49,680 Speaker 7: sort of circuit that you build up points that you know, 594 00:36:49,960 --> 00:36:52,720 Speaker 7: everything's not individual. So I'm not sure that they would 595 00:36:52,800 --> 00:36:55,600 Speaker 7: want to blow this up. So that might indicate that 596 00:36:55,920 --> 00:36:59,680 Speaker 7: some sort of settlement would be what the plaintiffs might like. 597 00:36:59,760 --> 00:37:03,399 Speaker 7: But you know, now as a class action, well we're 598 00:37:03,440 --> 00:37:05,239 Speaker 7: a long way from that. So how we say, if 599 00:37:05,239 --> 00:37:08,839 Speaker 7: it is certified by the judge as a class then 600 00:37:08,880 --> 00:37:11,600 Speaker 7: they have to have a settlement that the judge approves 601 00:37:12,000 --> 00:37:13,759 Speaker 7: as being in the interest of the class. So it 602 00:37:13,800 --> 00:37:15,120 Speaker 7: becomes a little more. 603 00:37:14,960 --> 00:37:19,400 Speaker 2: Complicated it always does. Thanks so much, Harry. That's Professor 604 00:37:19,440 --> 00:37:22,640 Speaker 2: Harry First of NYU Law School, and that's it for 605 00:37:22,680 --> 00:37:25,279 Speaker 2: this edition of the Bloomberg Law Show. Remember you can 606 00:37:25,320 --> 00:37:28,560 Speaker 2: always get the latest legal news on our Bloomberg Law Podcast. 607 00:37:28,840 --> 00:37:31,879 Speaker 2: You can find them on Apple Podcasts, Spotify, and at 608 00:37:32,040 --> 00:37:37,080 Speaker 2: www dot Bloomberg dot com, slash podcast Slash Law, and 609 00:37:37,120 --> 00:37:40,200 Speaker 2: remember to tune into the Bloomberg Law Show every weeknight 610 00:37:40,280 --> 00:37:43,719 Speaker 2: at ten pm Wall Street Time. I'm June Grosso and 611 00:37:43,800 --> 00:37:45,239 Speaker 2: you're listening to Bloomberg