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Speaker 1: This is Bloomberg Law with June Grossel from Bloomberg Radio.

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Speaker 1: Obamacare is back at the Supreme Court for the fourth time.

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Speaker 1: The latest case challenges the task force that recommends some

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Speaker 1: of the medical services health insurers must cover free of

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Speaker 1: charge under the Affordable Care Act, for example, cancer screenings,

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Speaker 1: statins to prevent heart disease, and medication to prevent HIV.

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Speaker 1: The ultra conservative Fifth Circuit Court of Appeals found that

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Speaker 1: the structure of that task force is unconstitutional under the

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Speaker 1: appointment's clause. The Biden administration appealed to the Supreme Court,

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Speaker 1: saying that decision jeopardizes the availability of critical preventive care

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Speaker 1: for millions of Americans. Joining me is healthcare attorney Harry

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Speaker 1: Nelson of Leech Tishman Nelson Hardiman Harry, this isn't a

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Speaker 1: threat to the entire law.

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Speaker 2: Tell us what's at stake here in this case, which

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Speaker 2: is called Basera versus Braidwood Management, is a case that's

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Speaker 2: bringing together challenges the constitutionality of several provisions of the

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Speaker 2: Affordable Care Act. It's a little bit of a grab bag.

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Speaker 2: The only scheme that seems to tie all these services

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Speaker 2: is that they are all forms of preventive healthcare. So

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Speaker 2: there are three main issues. One is that the Affordable

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Speaker 2: Care Action requires insurance companies to cover fifty preventive services,

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Speaker 2: including HIV prevention medications, which have become somewhat controversial in

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Speaker 2: certain quarters, vaccinations, cancer screenings, and it does not require

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Speaker 2: patient cost sharing, meaning patients to pay copays and to

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Speaker 2: have to pay any deductibles or any portion of responsibility.

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Speaker 2: That's one provision is this preventive services mandate. And then

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Speaker 2: there's also an argument being made that the various services,

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Speaker 2: particularly the US Preventive Service Task Force, are unconstitutional. That's

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Speaker 2: more of a procedural issue of how the members of

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Speaker 2: that task force are appointed and the fact that they're

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Speaker 2: not appointed by the President or confirmed by the Senate.

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Speaker 2: And finally, there are a series of religious objections being made,

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Speaker 2: particularly on HIV prevention drugs. There's a therapy called PREP

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Speaker 2: which is being funded, and some of the plaintiffs are

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Speaker 2: arguing that it infringes on their religious beliefs to have

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Speaker 2: to be forced to provide this sort of prophylactic treatment

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Speaker 2: that covers the cost of PREP.

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Speaker 1: As you mentioned, the plaintiffs here are Christian businesses suing

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Speaker 1: over Obamacare. Now the Fifth Circuit, it seems like what

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Speaker 1: they upheld is that the structure of the US Preventive

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Speaker 1: Services Task Force is unconstitutional under the appointment's clause. So

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Speaker 1: this is the argument that we've heard before and that

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Speaker 1: has succeeded sometimes about whether or not their principal officers

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Speaker 1: or in fear, what are your officers.

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Speaker 2: First of all, the case was brought by even though

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Speaker 2: it's in the name of a business that was forced

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Speaker 2: to cover people. The case is being funded and initiated

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Speaker 2: by a prominent conservative activist in Texas, doctor Stephen Hotts.

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Speaker 2: And the argument is about this task force and essentially

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Speaker 2: a signing of power to a panel of sixteen volunteer

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Speaker 2: members who are nationally recognized experts in things like preventive medicine,

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Speaker 2: family medicine, pediatrics, epidemiology. They're chosen by a federal agency

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Speaker 2: within the Medicare program called the Agency for Healthcare Research

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Speaker 2: and Quality AHRQ, So it's kind of a technocratic panel.

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Speaker 2: It's not a political appointment. And part of the argument

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Speaker 2: here is that the decisions they're making are political decisions

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Speaker 2: that really should be appointments by the president and confirmations

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Speaker 2: by the Senate, and the argument it seems to be

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Speaker 2: that the task force is really operating without sufficient oversights

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Speaker 2: as a result of sort of the way it was

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Speaker 2: set up in violation of the appointments clause of the Constitution.

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Speaker 1: First of all, this went to Judge Ried O'Connor in Texas,

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Speaker 1: who is the judge notorious for striking down Obamacare in

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Speaker 1: its entirety, and that was overruled, and even the Fifth

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Speaker 1: Circuit narrowed his decision. He had had an injunction nationwide.

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Speaker 2: It was clear that the Fifth Circuit was trying to

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Speaker 2: narrow the decision. Judge O'Connor's decision was a very aggressive

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Speaker 2: conservative activist opinion, I think the way most people view it,

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Speaker 2: and while they do take quite seriously the appointment clause issue,

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Speaker 2: I think some of the other arguments about religious freedom

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Speaker 2: are issues that were already tried, you know, for example,

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Speaker 2: in the hobby Lobby case for the Supreme Court more

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Speaker 2: than a few years ago, in the early days Affordable

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Speaker 2: Care Act. And my sense is that the Fifth Circuit

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Speaker 2: wanted to focus attention on the appointments clause argument because

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Speaker 2: that's definitely a very grounded textual argument and a fight

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Speaker 2: that's going on in this country between you know, liberals

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Speaker 2: and conservatives over the authority to make appointments to organizations

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Speaker 2: like this and the extent to which they have to

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Speaker 2: follow the process set out in the Constitution or whether

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Speaker 2: you know, more creative mechanisms can be set out. I

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Speaker 2: don't think when this particular panel has created anyone in

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Speaker 2: vision to be controversy over the particular therapies, whatever with

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Speaker 2: the prep or you know, anything else. But it is

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Speaker 2: clear that these issues are now political, and so I

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Speaker 2: do think that that issue is going to be an

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Speaker 2: interesting one. Sucreme Court it's going to have to tangle

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Speaker 2: with them.

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Speaker 1: So the Solicitor General said that if this decision is

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Speaker 1: a firm that it could affect things like cancer screenings,

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Speaker 1: I mean things that have nothing to do with you know,

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Speaker 1: the religious objections of the plaintiffs.

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Speaker 2: I do believe that the issue around cancer screenings had

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Speaker 2: a political issue. The cancer screenings were particularly for cervical

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Speaker 2: cancer and also were related to screens for mammograms, and

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Speaker 2: I think there were a lot of concerns about sort

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Speaker 2: of women's health and this particular advisory panel, you know,

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Speaker 2: making recommendations that were liberal and a perception that you

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Speaker 2: know that they were supporting sexual activity, for example, when

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Speaker 2: abstinence should be encouraged outside of marriage. There were definitely

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Speaker 2: some other conservative issues beyond the obvious one of prep

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Speaker 2: which has become such an important therapy for HIV prevention.

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Speaker 2: But I do think that's the underlying issue with inclusion

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Speaker 2: of cancer as one of the areas that they were

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Speaker 2: objecting to.

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Speaker 1: So the Biden administration is appealing, but the Trump administration

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Speaker 1: is coming in and it's been consistently hostile to Obamacare.

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Speaker 1: It might not defend the.

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Speaker 2: Law, right, Yeah, it's interesting. The Biden administration was clearly

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Speaker 2: opposing and really arguing that this task force operates as

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Speaker 2: an advisory body rather than as an agency that has

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Speaker 2: final authority, so that it was not triggering an appointment

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Speaker 2: clause issue. But I do suspect that the Trump administration

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Speaker 2: is likely to not defend the law to favor a

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Speaker 2: sort of broad reading of federal power under the appointments clause.

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Speaker 2: And so my sense is that within conservative political activist community,

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Speaker 2: there's a belief that the current court will support that reading.

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Speaker 2: So I do think that both the administration and the

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Speaker 2: Court are receptive to that central argument here.

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Speaker 1: If that happens, this applies so far, this injunction only

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Speaker 1: to the blandiffs here, but that could lead to a

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Speaker 1: lawsuit asking for nationwide relief if the court upholds this.

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Speaker 2: Yeah, absolutely, what's really interesting. And again, if you go

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Speaker 2: back to I don't have the year in front of you,

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Speaker 2: but I think it was twenty fourteen or twenty fifteen,

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Speaker 2: we had the Hobby Lobby decision, which was about conservative

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Speaker 2: religious employers desire not to be forced, you know, to

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Speaker 2: cover certain costs like birth control. What we're seeing here

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Speaker 2: is a broader set of issues being subjected to religious

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Speaker 2: liberty claims. And so I do think that you could

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Speaker 2: see more employers and a broader range of programs potentially

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Speaker 2: following the lead of the plane iff in this case.

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Speaker 2: And so yeah, I do think there is a significant

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Speaker 2: potential impact on access to care and potentially a huge

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Speaker 2: public health backlash. For example, if cancer screenings go down,

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Speaker 2: you know, because I'm sure our employers aren't required to

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Speaker 2: you know, wave cost sharing requirements. I think this could

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Speaker 2: be particularly burdensome for small employers, and it's going to be.

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Speaker 2: It really is kind of awakening religious liberty arguments.

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Speaker 1: Again, the Supreme Court is upheld Obamacare three times. It's

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Speaker 1: a program that people like and need, and there are

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Speaker 1: constant attacks on it. There have been something like two

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Speaker 1: thousand different lawsuits.

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Speaker 2: I think we're looking at a very different Supreme Court

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Speaker 2: right now. If you remember back to the original challenges,

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Speaker 2: you know, we saw a court where John Roberts was

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Speaker 2: the center of the court, and his decision to separate

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Speaker 2: from his conservative colleagues at that time, where it was

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Speaker 2: a five to four conservative advantage, swung things. Now with

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Speaker 2: the six to three conservative advantage, john Roberts joining and

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Speaker 2: sort of taking the same position or similar position to

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Speaker 2: the views of the affordable character he took back when

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Speaker 2: we were dealing with this ten plus years ago. Now

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Speaker 2: you're looking at Brett Kavanaugh and at Amy Comy Barrett,

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Speaker 2: and so a very different makeup on the court and

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Speaker 2: potentially a willingness to go and take more aggressive positions.

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Speaker 2: So I do think it's going to be interesting to

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Speaker 2: watch this case because it will be telling that even

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Speaker 2: fairly recent Supreme Court precedent may be you know, up

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Speaker 2: for reevaluation. And yeah, I think that's part of the

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Speaker 2: backdrop in context of this case. A lot of people

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Speaker 2: are going to be watching closely.

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Speaker 1: The PSTF requires insurers to cover more than fifty preventive services.

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Speaker 1: Are those all in jeopardy If the court affirms this decision.

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Speaker 2: The case is challenging the entire validity of the us PPF,

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Speaker 2: of the Prevention Task Force, and it certainly jeopardizes everything

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Speaker 2: that they were doing, and who knows that could lead

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Speaker 2: to a backlash. And I also think, even though this

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Speaker 2: case is only about that task force, that kind of

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Speaker 2: feature of use of clinical specialist advisory, you know, support

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Speaker 2: for the government for government plans was a central part

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Speaker 2: of the affordable character in a number of other respects.

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Speaker 2: And I think this is in some ways an attack

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Speaker 2: on the participation of the healthcare community, the scientific community,

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Speaker 2: on that process without the President and primateur without the

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Speaker 2: Senate confirmation. So I do think that this is essentially

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Speaker 2: a much bigger issue, even though the flashpoint that brought

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Speaker 2: it are these particular issues that drew you know, religious

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Speaker 2: objections from conservative Christians.

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Speaker 1: Harry, Before I let you go, I want to ask

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Speaker 1: a couple of questions about healthcare in the upcoming Trump administration.

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Speaker 1: The abortion pill MiFi pristone is being used in a

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Speaker 1: majority of abortions these days. Could Trump direct the FDA

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Speaker 1: to revoke the approval of MIFA pristone.

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Speaker 2: That's a big question that I've been on my mind

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Speaker 2: since the election and even before. You know, there certainly

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Speaker 2: is a contingency within the conservative activist community who would

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Speaker 2: like him to step in and to direct FDA leadership

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Speaker 2: to re examine the current policies around the pristone, its approval,

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Speaker 2: and all of the guidelines that surround it that were

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Speaker 2: changed to make it much more accessible. I do think

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Speaker 2: that that is a very real possibility. The interesting question

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Speaker 2: here is that President Trump himself has said that he

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Speaker 2: wants this chapter of abortion issues closed. It clearly has

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Speaker 2: been a political loser until this cycle for the Republicans,

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Speaker 2: and so it's interesting because this is an issue where

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Speaker 2: the conservative Christian legal community clearly wants to take this

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Speaker 2: on and to use the FDA itself to pull back

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Speaker 2: on access to MISS pristone and by extension, telemedical abortion,

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Speaker 2: and the President himself may not be so enthusiastic. So

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Speaker 2: it's going to be interesting to watch where that goes.

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Speaker 2: But I think it's certainly a big concern on the

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Speaker 2: mind of the reproductive health access community.

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Speaker 1: There's also a concern about vaccines because of the possibility

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Speaker 1: or probability that Robert F. Kennedy Junior is going to

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Speaker 1: be the HHS secretary. What do you think is the

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Speaker 1: likelihood that he would change federal vaccine recommendations.

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Speaker 2: I do think it's going to be a period under

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Speaker 2: his leadership, assuming he's confirmed, of really heightened scrutiny for

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Speaker 2: both current and future vaccines, and it's going to mean

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Speaker 2: that the process will move lower. And I don't think

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Speaker 2: we're going to see vaccines going away, but I think

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Speaker 2: that mandates and government advisory issuances around vaccines are likely

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Speaker 2: to change. And I think there's just a change in

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Speaker 2: the culture of vaccinations that is certainly negative from the

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Speaker 2: view of most of the public health community. And my

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Speaker 2: only prayer is that we don't see some massive outbreak

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Speaker 2: of a disease that has largely gone away, something like measles,

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Speaker 2: because of this. But there's definitely going to be a

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Speaker 2: change in the culture, you know, around vaccine and a

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Speaker 2: lot more sort of scrutiny and skepticism after a Kennedy FDA.

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Speaker 1: We'll have to wait and see how he does in

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Speaker 1: those confirmation hearings coming up. Thanks so much, Harry. That's

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Speaker 1: Harry Nelson, a partner at leech Tishman Nelson Hardiman. US

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Speaker 1: Soccer and Major League Soccer will face off against the

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Speaker 1: now defunct North American Soccer League in an anti trust

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Speaker 1: trial in Brooklyn Federal Court. The NASL claims that US

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Speaker 1: Soccer and MLS colluded to eliminate it from the upper

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Speaker 1: tiers of US men's professional soccer, and NASL is seeking

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Speaker 1: treble damages of more than five hundred million dollars. Joining

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Speaker 1: me is anti trust expert Peter Carstensen, a professor at

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Speaker 1: the University of Wisconsin Law School. The NASL is blaming

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Speaker 1: US Soccer and MLS for driving it out of business.

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Speaker 1: What's the main question in the case.

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Speaker 3: As best I can tell, the key question is going

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Speaker 3: to be whether the decisions that the Soccer Federation made

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Speaker 3: were relatively disinterested judgments on the merits of whether or

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Speaker 3: not a particular league should be allowed to participate at

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Speaker 3: a particular level, or alternatively, whether these decisions were made

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Speaker 3: with a goal of excluding a otherwise reasonable competitive alternative

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Speaker 3: from access to the market. And what you're looking at

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Speaker 3: is a regulator and the question is how did that

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Speaker 3: regulator make decisions, what went into that decision, and what

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Speaker 3: kind of review might there have been of the decision.

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Speaker 3: So if the decision was the product of some kind

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Speaker 3: of an understanding agreement with the existing upper level leagues

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Speaker 3: that there shouldn't be any more comparable leagues allowed in,

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Speaker 3: then that's going to look like an anti trust violation.

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Speaker 3: Is going to look like using that power over access

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Speaker 3: to exclude competition. That's an agreement and restraint of trade.

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Speaker 3: That's illegal. On the other hand, you need some kind

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Speaker 3: of a decision maker about who gets to play at

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Speaker 3: what level. That's the first thing that is really kind

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Speaker 3: of common ground here, as best I can tell. Somebody

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Speaker 3: has to make these decisions, they need to have criteria

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Speaker 3: standards for making that decision. If the decision is one

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Speaker 3: on the merits, No, your league does not merit participation

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Speaker 3: at either Division one or Division two level, but only

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Speaker 3: at a Division three level, then that's not a restraint

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Speaker 3: of trade in that it's a legitimate I'd call it

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Speaker 3: regulatory about the credentials of that particular league. This is

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Speaker 3: a very confusing area of anti trust law because anti

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Speaker 3: trust law doesn't recognize these the facto market regulators as

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Speaker 3: being a special case that needs to be looked at

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Speaker 3: in a distinct kind of way. Some of us have

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Speaker 3: tried to say, hey, understand what you're really dealing with.

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Speaker 3: Here's how it can be made more sensible in terms

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Speaker 3: of coherent standards. Everybody knows what the rules are likely

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Speaker 3: to be, but so far no core has really articulated

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Speaker 3: that kind of vision. It's the big issue in the

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Speaker 3: NCAA litigation really as well.

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Speaker 1: US Soccer said it rejected the NSL in twenty sixteen

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Speaker 1: because it didn't meet the minimum standards that it was

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Speaker 1: objectively applying, such as minimum stadium seating capacity of fifteen thousand,

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Speaker 1: number of teams, time zone coverage in other benchmarks. But

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Speaker 1: the federal judge who greenlighted the lawsuit to go ahead

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Speaker 1: said that US Soccer in twenty seventeen waived twenty one

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Speaker 1: standards for second Division and Favored League USL, but denied

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Speaker 1: two waiver requests for NASL. So would that sort of

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Speaker 1: discrimination and treatment demonstrate something.

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Speaker 3: Yeah, exactly. That seems to me to be central to

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Speaker 3: why the judge allowed this case to go forward. This

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Speaker 3: is a tricky thing because in theory, once there it's

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Speaker 3: a factual dispute, it's supposed to be decided by the jury.

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Speaker 3: In anti trust cases, judges are more proactive. They've got

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Speaker 3: to decide that a reasonable jury would find this claim

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Speaker 3: sufficiently plausible, that it could reach a verdict of liability

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Speaker 3: that the judge would feel comfortable upholding. The judge is

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Speaker 3: actually doing some weighing of the evidence, even though the

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Speaker 3: constitutional law since no judge you can't do that. In fact,

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Speaker 3: they do it. And so what he's saying here, as

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Speaker 3: best I can tell you, is this doesn't look quite right.

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Speaker 3: This is the kind of thing, at least until there's

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Speaker 3: much more explanation by the Federation of why these cases

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Speaker 3: were treated similarly. And even though it was two waivers,

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Speaker 3: those were two really important waivers, whereas the twenty one

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Speaker 3: waivers were relatively minor bookkeeping matters or whatever. But that's

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Speaker 3: going to be for the jury to decide. But what

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Speaker 3: the judge was saying, this looks sufficiently suspicious, but I'm

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Speaker 3: gonna let it go to a jury. Now, these have

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Speaker 3: gone to juries with mixed results in some of the

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Speaker 3: other sporting cases, and in some other cases judges have

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Speaker 3: said no, I'm going to decide that it's sufficiently unlikely

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Speaker 3: that you can prove your claim. You know, I'm not

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Speaker 3: convinced that a jury should be convinced by this evidence.

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Speaker 3: We've had litigation on tennis, on swimming, soccer, and it's

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Speaker 3: all very similar. That is, there's a gatekeeper, and the

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Speaker 3: question is whether the gatekeeper has behaved in a reasonably

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Speaker 3: legitimate fashion. And that distinction between the twenty one waivers

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Speaker 3: on one side and two waiver requests rejected on the other,

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Speaker 3: that's the kind of thing that judge looks at and says, ah, hey,

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Speaker 3: that could be a problem.

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Speaker 1: Nas'll have to show there was an agreement between US

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Speaker 1: Soccer and Major League Soccer.

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Speaker 3: Ah. Yes, at least my impression is that this is

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Speaker 3: a Section one conspiracy case, not a Section two monopolization case.

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Speaker 3: It may be a conspiracy to monopolized, but it appears

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Speaker 3: that the center piece of the plaintiffs case is that

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Speaker 3: there was an agreement, an understanding of some sort between

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Speaker 3: the established leagues and the regulator, the goal of which

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Speaker 3: was to exclude this potential third rival league. So that

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Speaker 3: requires evidence of some kind of an understanding. Now, anti

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Speaker 3: trust does not require a written contract. It requires that

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Speaker 3: there be some kind of an understanding between the parties. Again,

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Speaker 3: this is where it gets complicated in terms of what

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Speaker 3: does the evidence show. Sort of on one extreme, the

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Speaker 3: evidence could show that there were no communications from these

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Speaker 3: two legs to the federation, but that the leaders of

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Speaker 3: the Federation felt that in terms of the best interests

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Speaker 3: of soccer, they really needed to limit the number of

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Speaker 3: leagues playing in Divisions one and two, so that they

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Speaker 3: acted perhaps eighty competitively, but they did so without any

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Speaker 3: kind of agreement or any overt understanding with the two leagues.

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Speaker 3: And then you start going over to communications from these

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Speaker 3: two leagues, Hey, we really think this is going to

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Speaker 3: create a problem. You need to keep them from coming

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Speaker 3: in regardless of their merit. Now that sounds a lot

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Speaker 3: like lobbying to me, But what are their relationships. There's

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Speaker 3: a joint marketing and so one of the things I

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Speaker 3: would look for is, first of all, there's an economic

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Speaker 3: interest on the part of the federation potentially to limit

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Speaker 3: competition that could reduce the value of the promotion the

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Speaker 3: revenues that come in. The more you could show an

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Speaker 3: economic interest in doing what they did and lobbying, the

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Speaker 3: more it begins to look like, yeah, there came to

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Speaker 3: be an understanding that they would do whatever was necessary

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Speaker 3: to exclude. But that's why you have a trial. These

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Speaker 3: things are challenging sometimes to establish what the facts are,

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Speaker 3: what the communications were, what emails were sent to whom,

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Speaker 3: what was their economic interest? And that's going to be

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Speaker 3: I think central here. If you move it over from

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Speaker 3: section one, which it requires the conspiracy, to section two,

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Speaker 3: that is monopolization. You could make a different argument, which

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Speaker 3: is if you could show that the federation's economic interests

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Speaker 3: were to exclude competition at divisions one and two. That's

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Speaker 3: not what it is supposed to be doing. It's supposed

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Speaker 3: to be making decisions about who's qualified to play. But

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Speaker 3: because it's got an economic relationship with one or two leagues,

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Speaker 3: it comes to have an economic interest that causes it

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Speaker 3: to use its monopoly power. And the monopoly power here

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Speaker 3: is in some way unavoidable because somebody has to make

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Speaker 3: these decisions and they're going to control access to professional soccer.

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Speaker 3: But if they're doing it to protect their economic interests

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Speaker 3: rather than in the best interests of the overall program

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Speaker 3: of soccer, that would also create an anti trust problem.

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Speaker 1: And this trial is expected to take two weeks coming up.

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Speaker 1: Could there be a settlement?

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Speaker 4: This is bloomber.

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Speaker 1: I've been talking to anti trust expert Peter Carstonsen other

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Speaker 1: University of Wisconsin Law School about US Soccer and Major

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Speaker 1: League Soccer facing off against the now defunct North American

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Speaker 1: Soccer League in an anti trust trial in Brooklyn Federal Court. Peterborough,

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Speaker 1: US Soccer stripped in ASL even of its original Division

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Speaker 1: two status. I understand why they didn't want it to

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Speaker 1: be Division one, but why did they strip it of

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Speaker 1: even Division two?

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Speaker 3: Indeed, is that a really interesting question, because you move

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Speaker 3: them down to three, as best I can tell, you

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Speaker 3: essentially make them a really low level farm league. And

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Speaker 3: that's not going to attract audience. It's not going to

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Speaker 3: attract good players. So it's it's a way of killing

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Speaker 3: the enterprise, which effectively they did. Because this is a

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Speaker 3: damage case, not an injunction case.

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Speaker 1: At this point, speaking of damages, they're asking for treble damages,

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Speaker 1: which you get under anti trust law. Do you know

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Speaker 1: how they're estimating their damages?

387
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Speaker 3: I'd say creatively. There's a whole special business of economists

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Speaker 3: who work for plaintiffs figuring out how to estimate the loss.

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Speaker 3: I guess they were for a while the vision two,

390
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Speaker 3: so they've got some kind of a track record. So

391
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Speaker 3: you take that, you look at what the other leagues

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Speaker 3: had by way of audience and more specifically revenue, and

393
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Speaker 3: then you create an economic model that predicts what revenues

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Speaker 3: there would have been if they have been allowed either

395
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Speaker 3: to remain as two or been allowed to move up

396
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Speaker 3: to one, based on both their own track record and

397
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Speaker 3: the performance of these other leagues in the United States.

398
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Speaker 3: They may well have taken performance information from the various

399
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Speaker 3: leagues in Europe and then compared those to the comparable

400
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Speaker 3: American experience, and then again use this to draw an inference.

401
00:27:02,280 --> 00:27:06,480
Speaker 3: If these foreign leagues when they moved from two to one,

402
00:27:06,640 --> 00:27:11,960
Speaker 3: got a thirty percent increase in revenue, and we see

403
00:27:12,000 --> 00:27:14,960
Speaker 3: the kind of distinction in the United States between the

404
00:27:15,080 --> 00:27:19,560
Speaker 3: division two and the division of one, we can now

405
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Speaker 3: begin to make an estimate. I don't do this, so

406
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Speaker 3: I am permitted I think to be a little cynical.

407
00:27:27,560 --> 00:27:30,119
Speaker 3: My object as an economist is to come up with

408
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Speaker 3: the biggest plausible number I can. I worked for years

409
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Speaker 3: with an economist co teaching a class on anti trust

410
00:27:39,200 --> 00:27:41,880
Speaker 3: law and economics and he did a lot of expert work.

411
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Speaker 3: He once told me that he tried to be pretty

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Speaker 3: careful about how he did it. So, moving away from

413
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Speaker 3: my cynicism about economists to an economist I had worked

414
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Speaker 3: with and respected greatly, and he'd always try to find,

415
00:27:54,560 --> 00:27:58,080
Speaker 3: he said, at least two and maybe three ways to

416
00:27:58,280 --> 00:28:03,480
Speaker 3: estimate an economic loss for purposes of damages. He would

417
00:28:03,600 --> 00:28:07,840
Speaker 3: choose the lowest of the three results. He testified all

418
00:28:07,880 --> 00:28:12,159
Speaker 3: three using this model. I get three X using this model,

419
00:28:12,160 --> 00:28:15,240
Speaker 3: I get two X. Using this model, I get X.

420
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Speaker 3: So the thing I'm surest about is that the loss

421
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Speaker 3: is at least X. Yeah, you think about it, that's

422
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Speaker 3: not a bad strategy. Each measure involves an enormous number

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Speaker 3: of assumptions, relationships that you assume. It's very tenuous in

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Speaker 3: that way. I know the judge expressed skepticism about the

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Speaker 3: damage estimates, and that was partly. I think that he'd

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Speaker 3: really like these guys to settle this not for five

427
00:28:46,840 --> 00:28:50,720
Speaker 3: hundred million, but man all one hundredred and fifty two

428
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Speaker 3: hundred million somewhere in there. He doesn't really want to

429
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Speaker 3: have a two week trial in any trust case.

430
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Speaker 1: But this has been going on for about eight years.

431
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Speaker 1: Wouldn't they have settled already if they were going to No.

432
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Speaker 3: No, First of all, the defense lawyer's interest. They're getting

433
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Speaker 3: paid one thousand dollars an hour. They've got no incentive

434
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Speaker 3: to tell their client that settle And until the judge

435
00:29:15,200 --> 00:29:18,320
Speaker 3: ruled as he did only fairly recently, as I understand

436
00:29:18,360 --> 00:29:21,719
Speaker 3: it on the summer judgment motion. Up to that, there

437
00:29:21,720 --> 00:29:25,360
Speaker 3: are three steps here. First step is you file the complaint.

438
00:29:25,880 --> 00:29:28,880
Speaker 3: The defendant makes the motion to dismiss that the complaint

439
00:29:28,880 --> 00:29:31,600
Speaker 3: does not state the claim. Judge rejects that. Then you

440
00:29:31,680 --> 00:29:37,520
Speaker 3: go to discovery, your expert reports, et cetera. If the

441
00:29:37,600 --> 00:29:40,800
Speaker 3: issue is clear. And I've seen this in a case

442
00:29:41,160 --> 00:29:46,280
Speaker 3: involving conspiracy among meat packers to fix wages of workers,

443
00:29:46,880 --> 00:29:51,800
Speaker 3: the judge said, hey, this is a plausible cause of action. Oop, hey, platives,

444
00:29:51,800 --> 00:29:54,840
Speaker 3: can we settle this right now? So No, they knew

445
00:29:54,880 --> 00:29:59,240
Speaker 3: that they were in deep, deep trouble and they wanted

446
00:29:59,280 --> 00:30:01,480
Speaker 3: to settle it. Once the judge said, we're going to

447
00:30:01,520 --> 00:30:05,400
Speaker 3: go forward other cases. You know, the judge's going to say, no,

448
00:30:05,520 --> 00:30:09,600
Speaker 3: this state's a claim. There's some issues here. Can you

449
00:30:09,720 --> 00:30:13,200
Speaker 3: do the discovery? And when that's all done, when you've

450
00:30:13,200 --> 00:30:16,920
Speaker 3: got the expert reports, everything on the table. Then comes

451
00:30:17,000 --> 00:30:21,360
Speaker 3: the motion for summary judgment. The defendant says, this case

452
00:30:21,680 --> 00:30:27,160
Speaker 3: is not plausible. A jury could not plausibly find in

453
00:30:27,160 --> 00:30:31,120
Speaker 3: favor of the plaintiff for the following ten thousand reasons.

454
00:30:31,520 --> 00:30:34,640
Speaker 3: Defendants prevail in an awful lot of those cases, especially

455
00:30:34,680 --> 00:30:38,760
Speaker 3: in complex cases like this one. The judge says, well, yeah,

456
00:30:39,080 --> 00:30:43,080
Speaker 3: you know, it's a possibility, but it's not sufficiently plausible

457
00:30:43,200 --> 00:30:45,680
Speaker 3: given the evidence for me to allow it to go

458
00:30:45,720 --> 00:30:49,680
Speaker 3: to a jury. So it makes sense, especially in a

459
00:30:49,720 --> 00:30:53,520
Speaker 3: case like this, which has got a lot of complexity,

460
00:30:53,560 --> 00:30:57,200
Speaker 3: as we've already talked about, for the parties to hang

461
00:30:57,320 --> 00:31:02,480
Speaker 3: in and get to the summary judgment decision. Now that

462
00:31:02,560 --> 00:31:05,960
Speaker 3: they've lost that, do they want to go to trial.

463
00:31:05,840 --> 00:31:10,240
Speaker 1: Or not, well, I believe they're starting with jury selection.

464
00:31:11,160 --> 00:31:16,400
Speaker 3: Then they're probably also having some last minute, fairly serious discussions,

465
00:31:17,160 --> 00:31:21,600
Speaker 3: and it is quite possible that a number of offers

466
00:31:21,600 --> 00:31:26,840
Speaker 3: have been made. The plaintiffs want substantially more dollars than

467
00:31:26,880 --> 00:31:30,560
Speaker 3: the defendants are prepared to put up, and both sides

468
00:31:30,560 --> 00:31:33,280
Speaker 3: of them looking at this in terms of probabilities, how

469
00:31:33,320 --> 00:31:35,840
Speaker 3: probable is it that the jury would find the violation,

470
00:31:37,000 --> 00:31:40,040
Speaker 3: and how probable is it that, having found a violation,

471
00:31:40,600 --> 00:31:45,160
Speaker 3: the jury will award something approximating the five hundred million,

472
00:31:45,880 --> 00:31:49,640
Speaker 3: And given the judge of skepticism about the dollar value,

473
00:31:50,240 --> 00:31:54,320
Speaker 3: this could wind up like the famous American Football League

474
00:31:54,360 --> 00:31:58,920
Speaker 3: versus National Football League anti trust case, where there was

475
00:31:59,040 --> 00:32:01,760
Speaker 3: so much other evidence is that the American Football League

476
00:32:01,880 --> 00:32:05,120
Speaker 3: was in serious trouble. One of the key team owners

477
00:32:05,160 --> 00:32:09,200
Speaker 3: was a guy named Donald Trump, who screwed things up terribly.

478
00:32:09,600 --> 00:32:12,200
Speaker 3: But that's the only team owner whose name I would

479
00:32:12,200 --> 00:32:14,840
Speaker 3: now recall. So the end of the day, the jury

480
00:32:14,880 --> 00:32:20,000
Speaker 3: found that there was a lawful monopolization and or conspiracy

481
00:32:20,040 --> 00:32:24,600
Speaker 3: to monopolized by the NFL, but almost all the damage

482
00:32:25,680 --> 00:32:31,240
Speaker 3: was caused by bad business decisions by the American Football League.

483
00:32:31,600 --> 00:32:36,440
Speaker 3: They nevertheless awarded the magnificent sum of one dollar trebled.

484
00:32:36,800 --> 00:32:40,120
Speaker 4: That doesn't go very far, does it, No, But then

485
00:32:40,840 --> 00:32:43,840
Speaker 4: the other thing that's in that statute is not only

486
00:32:44,160 --> 00:32:47,440
Speaker 4: treble damages, but a reasonable attorney's fee.

487
00:32:47,520 --> 00:32:50,400
Speaker 3: And so the lawyer said, well, we won. We didn't

488
00:32:50,440 --> 00:32:53,160
Speaker 3: get very much, but we want what six in my

489
00:32:53,240 --> 00:32:56,120
Speaker 3: mind is twenty million, but it could have been fifty million.

490
00:32:56,160 --> 00:32:58,560
Speaker 3: It could have been only ten million. But they wanted

491
00:32:58,800 --> 00:33:01,479
Speaker 3: something in the millions. They're reasonable attorneys fee, and they

492
00:33:01,520 --> 00:33:05,160
Speaker 3: had their hours, all their records, and the judge said,

493
00:33:05,360 --> 00:33:08,240
Speaker 3: that's what the statue says. You're entitled to your money.

494
00:33:08,240 --> 00:33:11,200
Speaker 3: And well, they appealed to the Third Circuit saying, hey,

495
00:33:11,280 --> 00:33:14,120
Speaker 3: wait a minute, you can't do this to us. It

496
00:33:14,240 --> 00:33:18,120
Speaker 3: was only a dollar troubled damages. Then the Third Circuit said, no,

497
00:33:18,240 --> 00:33:20,960
Speaker 3: the statue sais, if you filate d any trust laws,

498
00:33:21,800 --> 00:33:24,000
Speaker 3: you've got to pay a reasonable attorneys fee as well.

499
00:33:24,240 --> 00:33:29,000
Speaker 3: So my guess, and I don't know how active the judges.

500
00:33:29,080 --> 00:33:32,880
Speaker 3: Some judges can be very demanding, if you will. That

501
00:33:33,120 --> 00:33:36,200
Speaker 3: is saying to the parties, you really should settle this.

502
00:33:37,560 --> 00:33:40,400
Speaker 3: I was involved in a case many many years ago

503
00:33:40,560 --> 00:33:43,360
Speaker 3: where the judge basically said you're going to go into

504
00:33:43,400 --> 00:33:45,560
Speaker 3: that room and you're not to come out until you've

505
00:33:45,560 --> 00:33:49,120
Speaker 3: got this settled. Now, judges can't do I'm supposed to

506
00:33:49,160 --> 00:33:51,920
Speaker 3: do that, but the judge, the judge did, and the

507
00:33:51,920 --> 00:33:55,360
Speaker 3: parties they settled it. That comment about damages looked to

508
00:33:55,400 --> 00:33:59,240
Speaker 3: me to be a clear flag. The judge is saying,

509
00:33:59,320 --> 00:34:02,520
Speaker 3: I think there's a really good anti trust case here.

510
00:34:02,840 --> 00:34:06,080
Speaker 3: I think the damages are exaggerated. Why don't you guys

511
00:34:06,080 --> 00:34:11,680
Speaker 3: settle and egos get involved, It would not surprise me. However,

512
00:34:12,120 --> 00:34:17,040
Speaker 3: as they start selecting jurors, somebody says, you know, we

513
00:34:17,200 --> 00:34:21,280
Speaker 3: really may want to settle list for X one hundred

514
00:34:21,280 --> 00:34:24,520
Speaker 3: millions rather than letting a jury make a decision.

515
00:34:25,120 --> 00:34:27,759
Speaker 1: The joys of trying a case. Thanks so much for

516
00:34:27,800 --> 00:34:31,640
Speaker 1: being on the show, Peter. That's Peter Carstensen, a professor

517
00:34:31,640 --> 00:34:35,080
Speaker 1: at the University of Wisconsin Law School. And that's it

518
00:34:35,120 --> 00:34:37,719
Speaker 1: for this edition of The Bloomberg Law Show. Remember you

519
00:34:37,719 --> 00:34:40,200
Speaker 1: can always get the latest legal news on our Bloomberg

520
00:34:40,280 --> 00:34:43,920
Speaker 1: Law Podcast. You can find them on Apple Podcasts, Spotify,

521
00:34:44,080 --> 00:34:49,120
Speaker 1: and at www dot Bloomberg dot com, slash podcast slash Law,

522
00:34:49,520 --> 00:34:52,120
Speaker 1: and remember to tune into The Bloomberg Law Show every

523
00:34:52,160 --> 00:34:56,080
Speaker 1: weeknight at ten pm Wall Street Time. I'm June Grosso

524
00:34:56,200 --> 00:34:57,800
Speaker 1: and you're listening to Bloomberg