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

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Speaker 1: Oh yea, oh yea, oh yea. All persons having business

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Speaker 1: before the Honorable the Supreme Court of the United States

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Speaker 1: are admonished to give their attention, for the Court is

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Speaker 1: now sitting. Ever faithful to tradition, the Supreme Court began

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Speaker 1: its term on the first Monday in October with only

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Speaker 1: eight justices and seemingly oblivious to the upcoming battle over

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Speaker 1: the controversial nomination of a new justice. The terms docket

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Speaker 1: already includes a number of significant cases, perhaps the most

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Speaker 1: consequential being the challenge to Obamacare. The docket covers a

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Speaker 1: wide spectrum of issues, religious rights, gay rights, federal agency powers,

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Speaker 1: voting rights, robotexting, and even a suit over looted Nazi art,

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Speaker 1: just to name a few. Joining me to discuss the

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Speaker 1: new term is Gregory gar the global chair of Latham

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Speaker 1: and Watkins Supreme Court and Appellate Practice. He served as

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Speaker 1: the what do you Force Solicitor General of the United States.

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Speaker 1: It's wonderful to have you here. Let's start with the

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Speaker 1: challenge to Obamacare, which is coming up right after the election,

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Speaker 1: in which the Trump administration and Republican led states are

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Speaker 1: arguing to invalidate the law. The decision below seemed like

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Speaker 1: such an outlier, but now the question is will Obamacare

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Speaker 1: survives well. I think the challengers face an uphill battle here,

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Speaker 1: and I really think what's important to understand about the

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Speaker 1: cases there are three separate questions. The first is whether

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Speaker 1: the mandate itself is constitutional now that Congress has been

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Speaker 1: invalidated to financial penalty associated with it. The second is,

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Speaker 1: even if the mandate is unconstitutional, is it severable from

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Speaker 1: the Act? And on that there's a strong majority of

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Speaker 1: the Court that has seemed reluctant to invalidate acts as

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Speaker 1: a whole and instead look for ways to sever the

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Speaker 1: unconstitutional provisions and leave as much of the Act in place.

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Speaker 1: And so I think that's going to be a challenging

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Speaker 1: argument for the challengers here, even if they succeed on

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Speaker 1: the argument that the mandate is no longer constitutional given

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Speaker 1: that the tax associated with it has been validated. And

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Speaker 1: then there's actually a third question which is pretty interesting,

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Speaker 1: which is whether or not the challengers here even have

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Speaker 1: standing given that the mandate no longer applies to the

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Speaker 1: individual plainists and the states themselves aren't directly regulated under

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Speaker 1: the Affordable Care Act. There's a major religious rights case

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Speaker 1: on the docket where religious rights collide with gay rights.

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Speaker 1: The question is whether Catholic Social Services can be excluded

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Speaker 1: from Philadelphia's foster care system because it won't place children

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Speaker 1: with same sex couples. And this case has already gotten

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Speaker 1: a lot of attention the latest class between religion and

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Speaker 1: same sex couples or gay rights. And you know, it's interesting,

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Speaker 1: I mean, both sides take a quite different view of

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Speaker 1: what's going on here. The City of Philadelphia claims that

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Speaker 1: it's simply applying its general policy against discrimination, including discrimination

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Speaker 1: on the basis of sexual orientation, to the private contractor here,

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Speaker 1: which is the Catholic Social Services organization nonprofit organization which

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Speaker 1: helps the place children in the city with foster parents

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Speaker 1: and declines to do so in the case of foster

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Speaker 1: parents who are same sex couples. And so the city

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Speaker 1: argues it is just applying that generally applicable and neutral

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Speaker 1: principle to this particular organization, and the Catholic Social Services

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Speaker 1: and the individual plantiffs claimed that, you know, the city

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Speaker 1: really doesn't have a generally applicable policy here, that it

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Speaker 1: carves out lots of individual exemptions and has discretion to

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Speaker 1: do so with respect to other groups, and it's simply

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Speaker 1: declined to do so in permissively here with respect to

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Speaker 1: the Catholic Social Services, and so the failure to do

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Speaker 1: so to draw an exemption here violates the Catholic Social

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Speaker 1: Services free exercise rights. And the case also presents, you know,

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Speaker 1: what could be a hugely consequential question, and that the

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Speaker 1: petitioners here have asked the Court to reconsider it decision

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Speaker 1: and Employment Division versus Smith, And that was the decision

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Speaker 1: written by Justice Scalia, which held that the application of

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Speaker 1: neutral and generally applicable laws against religiously motivated conduct generally

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Speaker 1: does not violate the free exercise rights. The government in

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Speaker 1: the United States in this case claims that that the

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Speaker 1: Court doesn't have to reconsider Smith, that it can simply

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Speaker 1: recognize that the city has carved out these exemptions for

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Speaker 1: other groups and so therefore is violating the free exercise

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Speaker 1: rights of the Classolic Social Services by not allowing an

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Speaker 1: exemption in this case. But the question of whether the

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Speaker 1: Court would revisit Employment Division versus Smith is certainly one

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Speaker 1: that's important to follow. Another factor here is that the

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Speaker 1: Court has been expanding religious liberties. Even last terms. Think

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Speaker 1: there were three cases involving religion, and they ended up

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Speaker 1: with seven to two or five to four votes in

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Speaker 1: favor of expanding religious liberties. So can we expect more

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Speaker 1: of that same kind of expansion in this case? I

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Speaker 1: think you're absolutely right that we've seen in recent terms

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Speaker 1: a court that is more protective of religious liberties. And interestingly,

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Speaker 1: even the more liberal justices like Justice Kagan and Justice

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Speaker 1: Brier have gone along with the conservative justices in protecting

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Speaker 1: religious liberties. So I think that this city here probably

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Speaker 1: does face an uphill battle in persuading the Court to

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Speaker 1: leave the lower court decision in effact. And the fact

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Speaker 1: that the Court agreed to hear this case probably singles

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Speaker 1: at least sound concerned with the challenges free exercise clause

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Speaker 1: claim here. You may remember a case last term when

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Speaker 1: the Supreme Court broadened the federal ban on robocalls to

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Speaker 1: mobile phones, with Chief Justice John Roberts opining that no

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Speaker 1: one likes robocalls, nobody wants to get robocalls on their

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Speaker 1: cell phone. The idea that Congress would embrace that result

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Speaker 1: simply to save this government debt collection. Uh, they'd have

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Speaker 1: to be very anxious to be more unpopular, uh than

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Speaker 1: they otherwise would be. Well, there will be a reprise

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Speaker 1: of sorts this term involving Facebook robotexting. I've been talking

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Speaker 1: to former US Solicitor General Gregory gar a partner at

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Speaker 1: Latham and Watkins, about the Supreme Court's new term. So, Greg,

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Speaker 1: this is a class action lawsuit accusing Facebook of sending

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Speaker 1: unwanted text messages in violation of federal law. And I

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Speaker 1: remember last term during oral arguments that all the justices

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Speaker 1: seem to agree that nobody likes robocalls, So what about this? Now,

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Speaker 1: this is an interesting case. I mean, I think one

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Speaker 1: of the justices referred to as one of the most

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Speaker 1: popular laws that Angress has ever passed. But it's also

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Speaker 1: popular with planeff floors because we've seen a number of

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Speaker 1: class actions that you get a single person who receives

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Speaker 1: an unwanted text message, and then all of a sudden,

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Speaker 1: you've got sort of a multimillion dollar class action in

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Speaker 1: federal court. And the question in this case is sort

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Speaker 1: of a very technical statutory question, but is what device

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Speaker 1: qualifies as an automatic telephone dialing system? Which is the

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Speaker 1: phrase that Congress used in the statute. Is it enough

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Speaker 1: if the device has of the capacity to store numbers

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Speaker 1: and then dial them automatically, which is what the Ninth

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Speaker 1: Circuit held in this case, or does the device also

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Speaker 1: have to use a random or sequential number generated to

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Speaker 1: actually make the calls? Is Facebook argues in this case.

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Speaker 1: And you know, the one thing that Facebook really has

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Speaker 1: going for it here is that if the answer is

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Speaker 1: that the use of a random or sequential number generator

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Speaker 1: is not required, then basically every smartphone in America is

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Speaker 1: an automatic telephone dialing system and any call to a

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Speaker 1: wrong number or text is a t c P A violation.

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Speaker 1: And so you know, particularly since the justicism sells have

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Speaker 1: their own smartphones, I don't think that that result is

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Speaker 1: necessarily going to sit well with them, and it really

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Speaker 1: would be an extraordinary burden for Congress to have created generally,

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Speaker 1: So I think here the argument of the Ninth Circuit

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Speaker 1: simply construed the statute too broadly has a lot of force.

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Speaker 1: So perhaps advantage Facebook there. Let's turn down to a

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Speaker 1: high stakes dispute involving Fannie Mae and Freddie Mack and

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Speaker 1: the hundreds of billions of dollars in their profits that

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Speaker 1: have gone into the U. S. Treasury. This case involves

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Speaker 1: a challenge to the Federal Housing Finance Agency, much like

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Speaker 1: a challenge to the Consumer Financial Protection Bureau less term. Really,

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Speaker 1: this case falls on the heels of the failure Law

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Speaker 1: case last term, in which the Court held that the

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Speaker 1: CFPBS structure, which included having a single director in which

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Speaker 1: this great authority was vested in insulating the president's ability

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Speaker 1: to remove that director, violated the structural protections of the

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Speaker 1: separation of powers. And the Federal Housing Finance Agency it

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Speaker 1: has a very similar structure. It was creating in the

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Speaker 1: wake of the two thousand and eight economic crisis, and

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Speaker 1: they gave you a single head, enormous authority for an

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Speaker 1: independent agency. And so I think, especially in the light

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Speaker 1: of failure Law, it's hard to see how that structure

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Speaker 1: and the fore cause removal provision could survive intact. But

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Speaker 1: then the question again is, Okay, what's the remedy. You

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Speaker 1: just sever the fore cause removal provision or do you

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Speaker 1: take a more drastic approach and invalidate the actual administrative

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Speaker 1: action in this case, which is the focus of the

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Speaker 1: litigation and a massive transfer of economic interest from Fannie

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Speaker 1: Mae and Freddie Mack into the United States Treasury. Could

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Speaker 1: the outcome be different because of the difference between the

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Speaker 1: Consumer or Financial Protection Bureau and what it does and

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Speaker 1: what Fannie May and Freddie Matt do. The history there,

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Speaker 1: the interests of shareholders and investors and some people wanting

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Speaker 1: to unwind them for years. Well, I think it's the

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Speaker 1: particular structure of this new agency doesn't survive because of

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Speaker 1: the absence of the ability to the President to remove

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Speaker 1: the director for reasons that wouldn't qualify as cause. Then

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Speaker 1: I think the agency would have to be altered in

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Speaker 1: that respect, at the least. In terms of the broader

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Speaker 1: implications of the case for Freddie Mack and Fanny May,

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Speaker 1: it's harder to say. I mean, the government in this

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Speaker 1: case is, you know, taking a somewhat different tack and

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Speaker 1: is arguing that the challengers here really can't sue for

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Speaker 1: the relief that they're seeking the invalidation of this transfer

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Speaker 1: under the provisions of the statute, and so you know,

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Speaker 1: that presents another interesting and fairly statute specific question. But

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Speaker 1: I think that's the signal that the government doesn't feel

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Speaker 1: as though its arguments on the structure of the Statute

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Speaker 1: as a whole are as strong. The Court is going

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Speaker 1: to intervene in this long running fight over whether the

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Speaker 1: Federal Communications Commission can loosen ownership restrictions that affect TV

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Speaker 1: stations and newspapers. And the SEC has been trying to

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Speaker 1: do this since two thousand two and has been foiled

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Speaker 1: by the Third Circuit Court of Appeal. So tell us

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Speaker 1: what's that issue here? So this is a seventeen year

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Speaker 1: back and forth epic match between the FCC and the

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Speaker 1: Third Circuit. And basically, this time the Court held that

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Speaker 1: the FEC's new media ownership rules had to be set

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Speaker 1: aside because the FEC had failed adequately to analyze the

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Speaker 1: potential effect of its regulatory changes on female and minority

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Speaker 1: ownership of broadcast stations. And so basically it sets up

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Speaker 1: a challenge to the deference owed by federal courts to

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Speaker 1: the essentially policy decisions made by agencies in the course

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Speaker 1: of rulemaking. And it come at an interesting time because

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Speaker 1: we've seen in recent cases like the Census case, in

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Speaker 1: the Data case last term that the Court has taken

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Speaker 1: I think a harder look at the reasons that administrative

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Speaker 1: agencies give for their decisions and has generally been willing

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Speaker 1: to scrutinize administrative decisions a little bit more carefully. And

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Speaker 1: here the SEC in the government is arguing straight up

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Speaker 1: for more deference under the arbitrary and capricious standard and

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Speaker 1: arguing that the Third Circuit here, you know, failed reasonably

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Speaker 1: to defer to the agencies, you know, own judgments about

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Speaker 1: how to best serve the statutory purposes. So where do

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Speaker 1: you think the Court might come out, Well, I don't

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Speaker 1: think it will be happy with this sort of back

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Speaker 1: and forth between the Third Circuit and the SEC. And

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Speaker 1: you know, my guest is generally this may be a

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Speaker 1: case where it would be willing to defer and and

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Speaker 1: maybe sort of set out an an outpost of of

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Speaker 1: you know what arbitrary and capricious review means. But it's

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Speaker 1: tough to say. I mean that the Court in recent years,

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Speaker 1: you know, has gotten more receptive to UH challenges that

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Speaker 1: we're not going to defer to agency decision making. So

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Speaker 1: it's it's a new court in that respect. And you know,

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Speaker 1: this case sort of tease up another opportunity to see

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Speaker 1: where the Court is on administrative difference. Generally, the justices

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Speaker 1: are going to consider a case that involves child slavery

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Speaker 1: on Coco farms in the Ivory Coast. Six former child

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Speaker 1: slaves accused Nesley and Cargo of giving Ivory Coast farmers

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Speaker 1: financial assistance in the expectation that Coco prices would stay low,

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Speaker 1: which the companies deny. This case has been moving up

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Speaker 1: and down the federal court system since two thousand five,

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Speaker 1: and the question is whether they can sue that's right.

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Speaker 1: In this case, you know, rises under the one of

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Speaker 1: the country's oldest and really most confounding statutes, the Alien

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Speaker 1: Towards Statute, which gives the federal courts generally juristic action

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Speaker 1: to hear civil actions brought by aliens in a tourt

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Speaker 1: only for violations of international law. And you know, the

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Speaker 1: court generally in recent terms have been scaling back the

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Speaker 1: ability of plaintiffs to bring these claims. You know, it's

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Speaker 1: held that the statute does not apply extra territorially, so

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Speaker 1: that plaintiffs have to show a real connection with the

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Speaker 1: United States. It recently held that foreign corporations could not

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Speaker 1: bring suits under the Alien Towards Statute. And so in

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Speaker 1: this case, the questions are whether or not Number one,

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Speaker 1: you can sue a domestic corporation even though you can't

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Speaker 1: sue foreign corporation under the statute. And number two, if

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Speaker 1: you can do that, is there a domestic aiding and

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Speaker 1: abetting liability for a foreign violation? And does that overcome

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Speaker 1: the Alien Towards Statutes presumption against extra territoriality. Here the

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Speaker 1: claim is that because certain funding decisions were made in

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Speaker 1: the United States headquarters of the defendants that old to

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Speaker 1: we touched upon the overseas violations, that there's a sufficient

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Speaker 1: enough connection for aiding invetding liability. And I think the

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Speaker 1: plane of fear face an uphill battle given that the

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Speaker 1: Court has seemed, you know, concerned about the scope of

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Speaker 1: Alien Towards Statute in prior cases, and the court generally

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Speaker 1: is reluctant to sort of imply or infer private remedies

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Speaker 1: that haven't been expressly created by Congress, which would be

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Speaker 1: the case here if it were to recognize the scope

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Speaker 1: of the action would cover domestic corporations for aiding inbedding liability. Finally,

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Speaker 1: there's a case involving stolen Nazi art. The heirs of

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Speaker 1: Jewish art dealers say their ancestors were forced to sell

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Speaker 1: a collection of religious art to the Nazi government in

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Speaker 1: ninety five for a fraction of its value. Those forty

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Speaker 1: two pieces are now on display in a museum in

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Speaker 1: Berlin and are estimated to be worth nearly a quarter

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Speaker 1: of a billion dollars. The museum says the deal was

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Speaker 1: legal and fair. Will this case go forward. The basic

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Speaker 1: question in this case is that the scope of immunity

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Speaker 1: that foreign countries enjoined the Foreign Sovereign Immunities Act. As

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Speaker 1: you mentioned, I mean the plans here are areas of

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Speaker 1: Jewish art dealers who lived in Germany and the nineteen

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Speaker 1: thirties and who claimed that the Nazi regime stole art

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Speaker 1: from them, and they're seeking, like you know, others in

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Speaker 1: their position have to sue in the United States court

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Speaker 1: to reclaim the art, and the DC certain in this

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Speaker 1: case allowed the case to proceed. And it comes down

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Speaker 1: to a technical question about the scope of the expropriation

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Speaker 1: exception under the Foreign Sovereign Immunities Act, and in particular

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Speaker 1: whether or not when the claim is that a foreign

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Speaker 1: government took its own citizens property, as the claim is

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Speaker 1: here with respect to the Nazi regime, that that can

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Speaker 1: invoke the exception, even though as the government argues in

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Speaker 1: this case that a claim that a foreign government took

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Speaker 1: its own citizens property in general, he doesn't violate international law.

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Speaker 1: And so here importantly, while the United States goes out

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Speaker 1: of its way to condemned the deplorable atrocities committed by

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Speaker 1: the Nazi regime, it says that the DC Circuit had

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Speaker 1: aired in allowing the suit to proceed, and that instead

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Speaker 1: the foreign government, the Federal Republic of Germany, should have

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Speaker 1: been entitled to sovereign immunity. So these are, you know,

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Speaker 1: obviously very challenging cases and invoke strong emotions. So I

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Speaker 1: think they're difficult ones for the justices to resolve. Certainly

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Speaker 1: one that will be interesting to follow. This case is

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Speaker 1: likely going to draw a lot of attention. There have

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Speaker 1: been so many movies and documentaries about stolen Nazi art,

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Speaker 1: and there's such a sympathy factor here. Could that affect

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Speaker 1: this decision in any way? I mean, look, I mean

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Speaker 1: India and Jones said basically nobody likes Nazis, so and

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Speaker 1: you know, I'm sure that goes for the justice too.

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Speaker 1: But look, they will be deciding technical legal questions here

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Speaker 1: about the meaning of a statute, and that's what they

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Speaker 1: do all the time, and I'm sure that they'll do

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Speaker 1: their best to resolve this statutory question. Does it seem

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Speaker 1: as if this term there are less hot button issues,

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Speaker 1: less divisive issues that the Court is taken up than

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Speaker 1: in prior terms then last term. I think that's definitely

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Speaker 1: right that this term, you know, at the beginning and

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Speaker 1: there's a lot that lies ahead, you wouldn't say it

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Speaker 1: has the sort of blockbuster potential that we've seen in

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Speaker 1: the Court in recent terms. But that can change really quickly,

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Speaker 1: particularly with the presidential election less than a month away

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Speaker 1: and only about probably about the courts docket filled. So

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Speaker 1: as it's true, and you know, almost every term, the

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Speaker 1: beginning of the term only provides a brief glimpse of

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Speaker 1: what's going to be on the Court's docket, and we

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Speaker 1: certainly could see consequential cases getting up to the court

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Speaker 1: before the end of the term. Thanks for being on

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Speaker 1: the Bloomberg Law Show. Greg that's former Solicitor General Gregory

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Speaker 1: gar a partner at Latham and Walking. And that's it

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Speaker 1: for the edition of the Bloomberg Law Show. I'm June Grasso.

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Speaker 1: Thanks so much for listening, and remember to tune to

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Speaker 1: the Bloomberg Law Show every weeknight at ten p m.

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Speaker 1: Eastern right here on Bloomberg Radio.