Speaker 1: This is Bloomberg Law with June Brusso from Bloomberg Radio.
Speaker 2: Immigration will no doubt be a top issue in the
Speaker 2: presidential campaign.
Speaker 1: Donald Trump does not care about border security.
Speaker 3: He only cares about himself.
Speaker 2: Vice President Kamala Harris has come out swinging, trying to
Speaker 2: flip the script on former President Donald Trump on his
Speaker 2: favorite issue, blaming Trump for convincing Republicans to tank the
Speaker 2: bipartisan border deal earlier this year. For their part, Republicans
Speaker 2: are blaming Harris for the migrant crisis, calling her a
Speaker 2: failed border czar. GOP Vice presidential candidate JD. Vance went
Speaker 2: down to the southern border last week to make his point.
Speaker 4: They stopped deportations on day one. They stopped construction of
Speaker 4: the border wall on day one. We see the border
Speaker 4: wall sitting here ready to be completed behind us, and
Speaker 4: that can't happen because of Kamala Harris's administration.
Speaker 2: There are seemingly endless court cases around immigration issues, but
Speaker 2: one rule that's been litigated for almost a decade has
Speaker 2: sort of flown under the radar, but now it's withstood
Speaker 2: another federal appeals court challenge. The DC's Circuit Court has
Speaker 2: okay to rule extending employment authorization to spouses of H
Speaker 2: one B visa holders. Joining me is immigration law expertly
Speaker 2: on Fresco, a partner at Holland and knight Lee, and
Speaker 2: I think we need to start with a basic understanding
Speaker 2: of what an H one B visa is and what
Speaker 2: an H four visa is.
Speaker 1: So an H to one B visa is a visa
Speaker 1: that people can obtain in the United States if they
Speaker 1: are providing what it's called high skill labor or what
Speaker 1: is actually in the statute called a specialty occupation, which
Speaker 1: is a job that requires at least a bachelor's degree
Speaker 1: to perform as designated by the Department of Labor, and
Speaker 1: the person has the exact specific degree required to perform
Speaker 1: that job. So each year there's a lottery because there's
Speaker 1: many more companies that want these visas that exist, and
Speaker 1: there's eighty five thousand of these visas per year, and
Speaker 1: so what happens is about seventy percent of them are
Speaker 1: taken by people from India. Because of both the English
Speaker 1: language and the large population and the amount of high
Speaker 1: skilled education and training people from India tend to get.
Speaker 1: This is the largest group of people who get it,
Speaker 1: and so they come to the United States on these
Speaker 1: Age one B visas, their spouses and their children can
Speaker 1: come with them, and the name of their visa is
Speaker 1: called an age four visa. So the principal worker is
Speaker 1: on the H one B, the spouse and the children
Speaker 1: are on the age four visa, And when you arrive,
Speaker 1: the people on age four visas are not allowed to work.
Speaker 1: But what happens is that the people then apply for
Speaker 1: Green cards. And there was a regulation that the Obama
Speaker 1: administration did in twenty fifteen that said that if an
Speaker 1: Indian national and this is really only related to Indian
Speaker 1: nationals at the beginning, Now it's related to a lot
Speaker 1: of other people because what happened was there are only
Speaker 1: one hundred and twenty thousand employment based Green cards that
Speaker 1: are permitted each year, and there are many many more
Speaker 1: people in the pool waiting for green cards than are
Speaker 1: permitted to apply each year. There's about a million people
Speaker 1: in the backlog right now. And what makes it worse
Speaker 1: is there's something called a per country limit on Green cards,
Speaker 1: which means that any one country can only get ninety
Speaker 1: eight hundred of the green cards each year, which means
Speaker 1: that the Indian line is about two hundred years long.
Speaker 1: It's really really long, and someone who gets in the
Speaker 1: line now won't get a Green card. They will be
Speaker 1: stuck here permanently on this quasi H one B status.
Speaker 1: So what the Obama administration said is if you're stuck
Speaker 1: in that status, your spouse can work. So that's what
Speaker 1: this H four EAD case was about, was about this
Speaker 1: Obama regulation from twenty to fifteen that said that the
Speaker 1: spouses of people in this backlog, which is people who've
Speaker 1: been approved for a Green card ostensibly because they meet
Speaker 1: the criteria. They came on an H one B, but
Speaker 1: they've been approved for a Green card as a matter
Speaker 1: of merit, but they cannot receive the green card because
Speaker 1: of the backlog, which is two hundred years long, so
Speaker 1: they will never receive it. That the spouse of this
Speaker 1: person who is an aged four can't work because what
Speaker 1: they didn't want is people just permanently here in flux
Speaker 1: with no rights. Ever, so the Obama administration did a
Speaker 1: regulation that allowed these people to work. And then what
Speaker 1: happens is a restrictionist group who ostensibly designated itself as
Speaker 1: a labor union, but isn't really a labor you it's
Speaker 1: more of an association of members of people who want
Speaker 1: restrictionist trade policies called Safe Jobs USA file the lawsuit
Speaker 1: saying that regulation was illegal.
Speaker 2: This has been going on for nearly a decade, since twenty.
Speaker 1: Fifteen, correct, This case has been going on in various iterations.
Speaker 1: What happened was the lawsuit was filed in twenty fifteen,
Speaker 1: it worked its way through the Trump administration. The Trump
Speaker 1: administration was actually going to repeal the Obama regulation, but
Speaker 1: because this lawsuit happened, they decided to just let this
Speaker 1: lawsuit play out. Well, it's very interesting was an immigration
Speaker 1: group called Immigration Voice, who represents the foreign nationals that
Speaker 1: are in this backlog, intervened which prevented the Trump administration
Speaker 1: from reaching a pollusive settlement with the folks who have
Speaker 1: filed the lawsuit, because otherwise the Trump administration would have
Speaker 1: just settled and said, you know what, this is illegal.
Speaker 1: Were taking this away, but they couldn't because there was
Speaker 1: an intervention by a group called Immigration Voice that allowed
Speaker 1: this case to continue. So that group continued the case
Speaker 1: and they kept getting ruling after ruling saying that the
Speaker 1: regulation was lawful, until finally, in a different case called WASHTEC,
Speaker 1: which was about a different policy called optional practical Training,
Speaker 1: which allows people on student visus to work. The Supreme
Speaker 1: Court basically said it is okay to create work permits
Speaker 1: for certain classes of immigrants, meaning that this power has
Speaker 1: been given by Congress to the administration. And because that's
Speaker 1: been given by Congress, there are no several issues, there's
Speaker 1: nothing to interpret. The law is very clear that the
Speaker 1: administration can designate different pathways for work for people who
Speaker 1: are illegally. That's not a question about people who are
Speaker 1: here illegally. But the spy of an H one B
Speaker 1: recipient is here legally, and so the question is can
Speaker 1: they work. And the plaintiffs had said no, they can't
Speaker 1: because there was no statute saying that they could specifically work.
Speaker 1: But the Court held, and has now held many many
Speaker 1: different times, most recently now the DC Circuit yet again,
Speaker 1: after this Washteck case, has held yet again that there
Speaker 1: is no Major Questions doctrine. There's no Chevron doctrine, there's
Speaker 1: nothing here Low or Bride. None of these things apply
Speaker 1: because there's a statue that, even though it doesn't say
Speaker 1: that H four thousands can work, it says that the
Speaker 1: Secretary of Homeland Security can declare any legal immigrant ability
Speaker 1: to work if they issue a regulation doing so, which
Speaker 1: had been indeed done in this case.
Speaker 2: This case seems to be the perfect example of endless
Speaker 2: litigation going in circles. I mean, how does this case
Speaker 2: keep going?
Speaker 1: Well, it keeps going because the Supreme Court itself hasn't
Speaker 1: shut down this specific case. So what happened was this case.
Speaker 1: It was denied on standing, Then the standing case was
Speaker 1: brought back by the DC Circuit back to the district court.
Speaker 1: Then it was granted on the merit. Then the case
Speaker 1: was pending and stayed for the wash Tech case. I
Speaker 1: was in the Supreme Court. Then the wash Tech case
Speaker 1: was decided in favor of the administration's ability to give
Speaker 1: work permits. Then the DC Circuit case was reopened, and
Speaker 1: the plaintiff strikes to say, yeah, but that was just
Speaker 1: this opt that wasn't eighty four, and they didn't consider
Speaker 1: the major questions doctrine, and they didn't consider low per Bride.
Speaker 1: And what the DC Circuit said is, look, we're shutting
Speaker 1: this all down. None of these things have anything to
Speaker 1: do with anything, because what you're saying is that there's
Speaker 1: some interpretation going on, and there isn't. There's a very
Speaker 1: clear statute that's in the Immigration and Nationality Act that
Speaker 1: literally says that the Secretary of Homeland Security has the
Speaker 1: ability by regulation to give any person who's here legally
Speaker 1: a work authorization. And so because of that, there doesn't
Speaker 1: need to be a specific statue that gives a specific
Speaker 1: group of people a work permit. That's not needed because
Speaker 1: the Congress already gave the authority very clearly nothing to
Speaker 1: interpret for a regulation to be issued to give people
Speaker 1: work authorization status.
Speaker 2: And the decision here was written by a very very
Speaker 2: conservative Trump appointee, Justin Walker.
Speaker 1: Yes, I mean, I think the point here is if
Speaker 1: you really just look at the statute and now it's interpreted,
Speaker 1: you could be very angry that Congress wrote that statute,
Speaker 1: which is I think where the plaintiffs were in this case.
Speaker 1: But you can't deny that that statue was written, and
Speaker 1: so they were trying to get some sort of limitation
Speaker 1: on it. But if you are a strict textualist, you
Speaker 1: really have to read the strict text here, and that
Speaker 1: text does permit the employment authorization to be done as
Speaker 1: long as there's a regulation which does it. And the
Speaker 1: Obama administration did do this regulation. In twenty fifteen, the.
Speaker 2: Attorney for the group Saved Jobs USA said they're going
Speaker 2: to petition the Circuit Court to rehear the case, which
Speaker 2: would be your quest for an on bank hearing. And
Speaker 2: if that fails, to appeal to the Supreme Court. Do
Speaker 2: you think the Circuit Court would take it on bank?
Speaker 2: Do you think the Supreme Court?
Speaker 1: I don't think. I think given the caliber of the
Speaker 1: judges that were on this three judge panel, there's no
Speaker 1: way that the DC Circuit will take this on bank.
Speaker 1: And I think the Supreme Court will do now, based
Speaker 1: off of what it has done in the past, just
Speaker 1: deny sirsiary because in these immigration cases where the government
Speaker 1: doesn't want circiary and you have a bipartisan panel the
Speaker 1: DC Circuit, it's very unlikely that the Supreme Court will
Speaker 1: grant sirchiar area. If they were going to do something,
Speaker 1: they would have done it in the Washtec case, which
Speaker 1: was a case where Justice Kavanaugh had when he was
Speaker 1: a DC Circuit judge, I had actually argued the case
Speaker 1: in front of us Kavanaugh back when he was in
Speaker 1: the DC Circuit. He had thought, well, maybe it's a
Speaker 1: little bit ridiculous, even though there's this statue to give
Speaker 1: work permits to students because they should leave the country
Speaker 1: once they're done being students once. They didn't take that
Speaker 1: one apart, and they let that one say. Then this
Speaker 1: other group, which is much more sympathetic, because they are
Speaker 1: literally people here in limbo until they die, and either
Speaker 1: they'll be allowed to work or not, it's going to
Speaker 1: be much more difficult to take those people's work authorizations away.
Speaker 2: Coming up next, I'll continue this conversation with Leon Fresco.
Speaker 2: A federal judge demands that Texas sanda high ranking lawyer
Speaker 2: in person to a hearing. None of that video conference stuff.
Speaker 2: This is Bloomberg. I've been talking to immigration law expert
Speaker 2: Leon Fresco of Holland and Knight about a DC Circuit
Speaker 2: Court decision that okays the rule allowing spouses of H
Speaker 2: one B visa holders to seek employment. It's a case
Speaker 2: that's been going on for nearly a decade. And Leon,
Speaker 2: how often does the H one B visa have to
Speaker 2: be renewed?
Speaker 1: It has to be renewed every three years. And if
Speaker 1: they want to change employers, they actually have to get
Speaker 1: a new employer to file a whole new petition. So
Speaker 1: a lot of people, you know, compare this program to
Speaker 1: some form of indentured servitude because these people are literally
Speaker 1: only allowed to remain in America so long as they're
Speaker 1: useful to an employer. So when these folks turn seventy
Speaker 1: or eighty, who knows what's going to happen to them?
Speaker 1: Will they be allowed to say or not? Because if
Speaker 1: they're not tied to an employer where they're currently working,
Speaker 1: it's going to be bad luck for them. And so
Speaker 1: this whole program is careening toward human tragedies, but we're
Speaker 1: not quite there yet, but we're getting there as each
Speaker 1: year progresses.
Speaker 2: Well, have these visas been caught up in the debate
Speaker 2: over immigration.
Speaker 1: Absolutely, there's a huge debate over what to do with
Speaker 1: this population because this population keeps getting older and older.
Speaker 1: One of the debate topics is, well, just get rid
Speaker 1: of the per country limit so that at least everybody
Speaker 1: has the same weight tign there isn't a two hundred
Speaker 1: year weight time for Indians and a one year weight
Speaker 1: time for everybody else. That bill has passed the House
Speaker 1: and the Senate, but never in the same year, So
Speaker 1: that's been a human disaster there, and then there's bills
Speaker 1: that try to increase the total amount of green cards
Speaker 1: per year, but those bills have never passed because at
Speaker 1: the moment there's been restrictionists, mostly in the Republican Party,
Speaker 1: who have said they don't want to increase the levels
Speaker 1: of legal immigration. But there's also been opposition in the
Speaker 1: Democratic Party saying you can't just do something unemployment based
Speaker 1: immigration if you're not going to to do something on
Speaker 1: the compassionate side of immigration. And so this is just
Speaker 1: one of these huge messas that exists in the immigration system, Leeann.
Speaker 2: I know that the Czech giants like Apple and Amazon
Speaker 2: and business groups support these visa programs, but the claim
Speaker 2: is that these visa holders take jobs away from Americans.
Speaker 2: Is that right grounded in fact?
Speaker 1: Well, I mean, it just depends because here's what happens.
Speaker 1: So oddly enough, the h one B immigrant is a
Speaker 1: person who's tied to a specific employer, but the work
Speaker 1: permit that this person's house gets is actually not tied
Speaker 1: to any employer. So they're just people who go into
Speaker 1: the labor market. And so let's say that right now
Speaker 1: there's about three hundred thousand of these people in the
Speaker 1: workforce depending on what they're doing. If they're doing mostly
Speaker 1: high skilled jobs, the job openings in the high skilled
Speaker 1: area are still much more, much higher than the unemployment
Speaker 1: in that area. If you go on the lower end,
Speaker 1: it might be an argument, but the people who are
Speaker 1: actually making this lawsuit are people who claim to be
Speaker 1: representing people on the higher end. And so that's where
Speaker 1: also this claim didn't really make sense from the perspective
Speaker 1: of the organization challenging the regulation because they were claiming
Speaker 1: that the higher end jobs were being taken away. So
Speaker 1: they were assuming couples where both spouses were doing high
Speaker 1: skilled labor. But the point is, if that were the scenario,
Speaker 1: then three hundred thousand people is a drop in the
Speaker 1: bucket compared to the several million job openings that still
Speaker 1: exist in the high tech area.
Speaker 2: So now let's switch to something that I can't believe
Speaker 2: is still going on, the battle over Texas having put
Speaker 2: those floating buoys in the Rio Grant and the US
Speaker 2: government is suing to have the barriers removed. Didn't the
Speaker 2: Supreme Court already decide this in part? Or is that
Speaker 2: another border dispute with chexas well.
Speaker 1: Was actually brought back? What happened was here's the background.
Speaker 1: So Texas began employing these things and these booies. In
Speaker 1: June of twenty twenty three, Texas spends one hundred and
Speaker 1: fifty thousand dollars on the barrier. They put one thousand
Speaker 1: feet buoys. Then in twenty twenty three, the Justice Department
Speaker 1: sues in federal court and they actually win in the case,
Speaker 1: and then the case goes up to the Fifth Circuit,
Speaker 1: and then it actually does go up to the Supreme Court,
Speaker 1: and it goes back down saying here's some things you
Speaker 1: need to consider. So there wasn't an actual final resolution there,
Speaker 1: and then it goes back down to the district court.
Speaker 1: And in the district court they issue an injunction saying
Speaker 1: that at the end of the day, this is a
Speaker 1: threat to public safety. It needed to be done by
Speaker 1: the Army Corps engineer. It wasn't approved by the Army
Speaker 1: Corps engineer, so they issued an injunction. And then the
Speaker 1: Fifth Circuit had actually also in a panel decision, had
Speaker 1: affirmed that injunction and said you can't have the barriers.
Speaker 1: But now the full unbank Fifth Circuit came back in
Speaker 1: and said, while this case is going to be decided
Speaker 1: on the merit of the federal government's claim. We don't
Speaker 1: think that when this case gets decided on the merits
Speaker 1: that it's likely that the federal government is going to
Speaker 1: win because we don't think that these booies are actually
Speaker 1: in the navigable stretch of the Rio Grand River. So
Speaker 1: that's basically their decision is. They said, had these booies
Speaker 1: been in a navigable stretch of the Rio Grand River,
Speaker 1: then yes, it might have violated federal law. But we
Speaker 1: think that when there's a trial on this, we're going
Speaker 1: to find that the federal government is not likely to
Speaker 1: prove that the barriers are placed in the navigable stretch
Speaker 1: of the Rio grand and hence there's no violation of
Speaker 1: the federal law here. Now we're going to go back
Speaker 1: to the trial and we're going to try to figure
Speaker 1: out who wins on the issue of whether these buoys
Speaker 1: are actually in navigable waters along the Rio Grande.
Speaker 2: There was a hearing and the lawyer for Texas appeared
Speaker 2: by videos, and the judge demanded that Texas send a
Speaker 2: high ranking lawyer in person to the hearing and not
Speaker 2: try to attend remotely. Quote it is clear to this
Speaker 2: court that the State of Texas misunderstands the substance of
Speaker 2: the status conference held in this matter. I mean, does
Speaker 2: it really make a difference if a lawyer appears by
Speaker 2: Zoom for hearings.
Speaker 1: I think that at the end of the day, the
Speaker 1: problem is they want this case to be dealt with
Speaker 1: in the level of seriousness that this case portends to be.
Speaker 1: And so when you're coming in on Zoom, you're essentially
Speaker 1: saying that the State of Texas isn't really willing to
Speaker 1: devote the resources to this case that are necessary, which
Speaker 1: is then well, why are you filing this lawsuit? Then?
Speaker 1: So I guess that's the perspective. I mean, at the
Speaker 1: end of the day, everybody can have a different take
Speaker 1: on this. I mean, obviously you don't want the trial
Speaker 1: to be done by Zoom, but you know, it does
Speaker 1: pose an interesting question at the end of the day
Speaker 1: about where we're going as a legal profession, and is
Speaker 1: Zoom going to just be inexorably part of this going
Speaker 1: forward or do we revert back to where we were originally,
Speaker 1: which is, hey, look, when you have court hearings, you
Speaker 1: go to court. That's the whole point of court. It
Speaker 1: is you go to court, and if you don't want
Speaker 1: to go to court, don't have a case here, And
Speaker 1: so it's an interesting question.
Speaker 2: Well, we'll see what happens. I assume that the state
Speaker 2: of Texas will send a high ranking lawyer as the
Speaker 2: judge requested. And looking at the big picture here, leon,
Speaker 2: does Kamala Harris have the same view on immigration that
Speaker 2: Biden does?
Speaker 1: Well, I do know, because I've actually been in conversations
Speaker 1: with some folks in that group that they are looking
Speaker 1: to create some policies that they are going to be
Speaker 1: rolling out during the campaign that will be sort of
Speaker 1: prospective twenty twenty five through twenty twenty eight policies. I
Speaker 1: don't know which ones of the ideas that they were
Speaker 1: soliciting they're going to actually move forward for, but I
Speaker 1: can I guess maybe break some news I don't know
Speaker 1: whatever you would call this, that they are planning a
Speaker 1: rollout of a twenty twenty five through twenty twenty eight
Speaker 1: immigration agenda that would have different policies in it, both
Speaker 1: on the enforcement side and on what they will do
Speaker 1: about people coming in the country, So both kinds of things,
Speaker 1: how they add to the enforcement platform and how they
Speaker 1: change the current platforms by which people come in here
Speaker 1: legally and receive benefits. And so from that perspective, they
Speaker 1: will be rolling that out, but I don't know when,
Speaker 1: and I don't know which policies specifically of the ones
Speaker 1: that were being discussed are they going to pick to
Speaker 1: do that. But yet they will plan that.
Speaker 2: Republicans are calling Harris the failed borders are. Do you
Speaker 2: think she got a bad rap over her handling of immigration?
Speaker 1: Well, so this is a tough question because the assignment
Speaker 1: was not clear that was given to her, and quite frankly,
Speaker 1: the assignment was a little bit strange always in my view,
Speaker 1: from the first place, which was she was supposed to
Speaker 1: solve the quote unquote root causes of why people from
Speaker 1: specifically Alsavador, Honduras, and Guatemala want to come to the
Speaker 1: United States. So that was technically her assignment. You know,
Speaker 1: there's this words borders are and these other things, and
Speaker 1: there was always a dispute about the wording. But even
Speaker 1: the assignment as it is cast in a like most
Speaker 1: favorably to her, didn't seem to make a lot of
Speaker 1: sense to me from the perspective of you know, the GDPs,
Speaker 1: those three countries are much much lower than even the
Speaker 1: GDP in Mexico, much less the GDP in the United States,
Speaker 1: And so to ever get to a point where anyone
Speaker 1: in any of those countries would view remaining there as
Speaker 1: a suitable alternative rather than coming to the US, it's
Speaker 1: just not realistic. That would have taken hundreds of billions
Speaker 1: of dollars of investment. But having said that, what can
Speaker 1: be argued, and it's not clear you know which part
Speaker 1: of who did what caused it, is that the numbers
Speaker 1: from those three countries coming across the border are now
Speaker 1: lower than they have been, so that part is good.
Speaker 1: And where the problems exist are in countries we can't
Speaker 1: deport people back to, which are Cuba, eighty, Nicaragua, Venezuela.
Speaker 1: Those are where the numbers continue to be challenging because
Speaker 1: those countries do not accept people who're trying to deport
Speaker 1: them back to. But the numbers coming in at the
Speaker 1: moment from El Salvador, Guatemala, and Honduras are indeed lower
Speaker 1: than they were when he was first appointed to address
Speaker 1: issues related to those countries, So at LEAs from that perspective,
Speaker 1: there's that one could argue the numbers are lower. You
Speaker 1: decide whether he made them lower or not.
Speaker 2: We are going to hear a lot of talk about
Speaker 2: this until November. Thanks so much, Leon, As always, it's
Speaker 2: a pleasure to have you on. That's Leon Fresco, a
Speaker 2: partner at Hollanden Knight. Coming up next on the Bloomberg
Speaker 2: Lawn Show, we'll take a look at which circuit courts
Speaker 2: could be in play depending on who wins the presidency
Speaker 2: and some of the issues that will be coming up
Speaker 2: at the Supreme Court next term. You're listening to Bloomberg.
Speaker 2: As we've learned by now, the presidential election will determine
Speaker 2: who sits on federal courts, and if either political party wins,
Speaker 2: both the White House and the Senate, key appellate courts
Speaker 2: could flip. Joining me to discuss which circuits are in
Speaker 2: play is Matthew Shettenhelm, Bloomberg intelligence litigation analyst. So, Matt,
Speaker 2: tell us right now, which circuits tilt Republican, which tilt democratic?
Speaker 3: So right now, there's one circuit. If you're talking about
Speaker 3: non senior judges. The first circuit is all Democrat judges,
Speaker 3: six Democrat appointed judges and zero Republican appointed judges. But
Speaker 3: it very much is the exception. A number of courts
Speaker 3: are are fairly evenly split. But then on the other
Speaker 3: extreme you have the Fifth Circuit, which has twelve Republican
Speaker 3: appointed judges and five Democrat appointed judges, and the eighth Circuit,
Speaker 3: which has ten Republican appointed judges and just one Democrat
Speaker 3: appointed judge. And so those two circuits have really loomed
Speaker 3: large in recent litigation about regulation. Companies have been really
Speaker 3: successful in getting cases placed in those circuits, the fifth
Speaker 3: and A's circuits, and so to me, though standout is
Speaker 3: particularly significant in the election in terms of potential changes
Speaker 3: to the courts going forward.
Speaker 2: The term is flip, so which circuits might flip from
Speaker 2: Democratic to Republican if Trump wins.
Speaker 3: So it's like the Second Circuit, the Third Circuit, the
Speaker 3: Fourth Circuit, the seventh Circuit, the tenth, the eleventh Circuit,
Speaker 3: all of those circuit courts the margin is two judges.
Speaker 3: And when you're looking at appointed by Democrats or appointed
Speaker 3: by Republicans. So aside from those courts that I mentioned
Speaker 3: earlier that are tilted in one direction, a number of
Speaker 3: our federal courts of appeals are fairly evenly split. I
Speaker 3: think most of them tilt Republican right now, but the
Speaker 3: margin is small, and so the stakes are really high
Speaker 3: for the next president because there's the potential to turn
Speaker 3: the majority on a number of those courts. And that
Speaker 3: matters because every Court of Appeals decision could potentially be
Speaker 3: petitioned for rehearing by the full panel of judges at
Speaker 3: that court on bank and so control of the court
Speaker 3: is significant.
Speaker 2: Yeah, I think people don't pay enough attention to the
Speaker 2: circuit courts. They always talk about the Supreme Court, but
Speaker 2: the Supreme Court here is only about sixty cases a term,
Speaker 2: and it's less and less as time goes on. So
Speaker 2: so major decisions are really made in these circuit courts,
Speaker 2: right has the Second Circuit, which is in New York,
Speaker 2: has that ever tilted Republican?
Speaker 3: That goes past my knowledge. I don't know the whole
Speaker 3: history of it right now, but yet that is on
Speaker 3: the list of you know, one judge separating the two party,
Speaker 3: seven judges nominated by Democrats, six nominated by Republicans. So
Speaker 3: the margin's really really thin right there. And so that's
Speaker 3: the sort of example where you could see a change
Speaker 3: going forward based on the results of who wins the
Speaker 3: presidency who wins control of the Senate, and that court is.
Speaker 2: Very important as far as business cases in Wall Street.
Speaker 3: Absolutely, yes, absolutely, a number of business cases are decided
Speaker 3: in that court.
Speaker 2: This was a year that we saw the Supreme Court
Speaker 2: basically attack the administrative state a lot of decisions on regulation.
Speaker 2: And do you see more of that continuing next year?
Speaker 2: Are they going to switch to something else?
Speaker 3: Yes, It's unlikely that the conservative majority at the Court
Speaker 3: is going to change in the next four years. Right now,
Speaker 3: we have a six to three majority of justices that
Speaker 3: were appointed by Republican presidents, and as you said, they
Speaker 3: have really been aggressive in sort of pro business decisions,
Speaker 3: very skeptical of regulatory overreach, and I really don't think
Speaker 3: that's going to change. I guess in one sense there's
Speaker 3: a chance for slight changes. And the two oldest justices
Speaker 3: at the Supreme Court, Justice Clarence Thomas and Justice Samuel Alito,
Speaker 3: are two Republican appointed justices who are very skeptical of
Speaker 3: regulatory overreach, have supported the decisions on do the Chevron doctrine,
Speaker 3: for example. They are the two oldest and so I
Speaker 3: think both parties would be interested in replacing them. A
Speaker 3: Republican president with younger versions of themselves, a Democrat president
Speaker 3: with very different justices. But even if you did replace
Speaker 3: those by a Democrat president, still a six to three margin.
Speaker 3: So I think you're not going to see the trend
Speaker 3: in the court's overall change. It's at least pretty unlikely
Speaker 3: over the next four years.
Speaker 2: There are several key disputes involving the financial sector that
Speaker 2: may reach the Supreme Court.
Speaker 3: Yes, my colleague Elliott Stein has really highlighted these cases.
Speaker 3: Cases involving coinbase have been percolating through the lower courts,
Speaker 3: a case involving CFPB credit card late fees. There is
Speaker 3: the potential for a number of regulatory cases to reach
Speaker 3: the High Court.
Speaker 2: Do you see many tech cases going to the Supreme Court?
Speaker 1: Yeah?
Speaker 3: I mean, we just came off a term where the
Speaker 3: Supreme Court decided a pretty significant First Amendment case about
Speaker 3: whether Texas and Florida can force social media platforms to
Speaker 3: be neutral. And the Court said no, that the First
Speaker 3: Amendment does give these companies some rights to block regulation
Speaker 3: like that, But the Court said very little about exactly
Speaker 3: how and how broadly the First Amendment blocks regulation. And
Speaker 3: this is a huge question right now as the federal
Speaker 3: government is looking at regulating tech companies as states are
Speaker 3: looking at doing it, and the companies are responding saying no,
Speaker 3: the First Amendment blocks.
Speaker 1: All of that.
Speaker 3: The question is is that really right? And this is
Speaker 3: a question the Supreme Court didn't quite answer this term.
Speaker 3: It started to answer it, But there are so many
Speaker 3: unanswered questions about how far the first Moment goes, how
Speaker 3: much regulation is okay? And it's going to be our
Speaker 3: Supreme Court in the next four years that answers those
Speaker 3: questions and resolves how far can regulators go in addressing
Speaker 3: harms that are linked to the Internet.
Speaker 2: What about chech media and telecom regulation?
Speaker 3: Yeah, so, I mean that's another area where I think
Speaker 3: the FCC there's been a fight for the past twenty
Speaker 3: years about can the FCC regulate broadband service or not?
Speaker 3: This is the most important products that AT and T
Speaker 3: and Comcast and Verizon Charter they offer today. Is that
Speaker 3: subject to federal regulation at all? And I think with
Speaker 3: this Supreme Court, you saw the Chevron decision earlier and
Speaker 3: just building on that, it's going to be so difficult,
Speaker 3: I think for companies to be regulated in ways that
Speaker 3: Congress hasn't clearly said are appropriate. The broadband companies are
Speaker 3: a great again example of that. And so as long
Speaker 3: as the control of the Supreme Court remains as it
Speaker 3: is with a six to three very business friendly majority,
Speaker 3: I think it's very good news for companies like these
Speaker 3: broadband companies that could otherwise face substantial federal regulation. It's
Speaker 3: just not going to happen with this Supreme Court in place.
Speaker 3: Unless Congress stepped in and Congress really struggles to reach
Speaker 3: consensus on any sort of aggressive regulation like this.
Speaker 2: Would there be a big difference if Republicans take control
Speaker 2: of the FCC.
Speaker 3: I think that would sort of just speed up what
Speaker 3: the courts are already doing. So, you know, to take
Speaker 3: the net neutrality of rules for example, that the Biden
Speaker 3: FCC has tried to restore broadband regulation. Aggressive federal broadband
Speaker 3: regulation that's in the courts right now. In the Sixth
Speaker 3: Circuit is one of those conservative leaning courts. I think
Speaker 3: it's going to face a lot of trouble getting through
Speaker 3: the Sixth Circuit and then you know, probably the US
Speaker 3: Supreme Court. But if the Republicans win the White House
Speaker 3: and thus control of the FCC, they'll just undo it themselves.
Speaker 3: They don't even have to wait for the courts, and
Speaker 3: so it's just another way that businesses that are concerned
Speaker 3: about regulation can benefit in the near term. I think
Speaker 3: if they don't win in the courts, a Republican controlled
Speaker 3: the FCC will usher in the win itself.
Speaker 2: Let's talk about TikTok because I think it's so interesting
Speaker 2: because of the difference that it might see between a
Speaker 2: democratic and a Republican president. So, first of all, explain
Speaker 2: where we stand with TikTok, the bill that Biden signed.
Speaker 3: Yeah, absolutely so. Earlier this year, both chambers of Congress
Speaker 3: passed a law that effectively bans TikTok as of January
Speaker 3: nineteenth next year, unless the company divests to someone else,
Speaker 3: and the companies saying, look, we're not going to do that,
Speaker 3: and there's no way we can practically do that. So
Speaker 3: the only way that TikTok remains viable in the United
Speaker 3: States after January nineteenth is if Tiko wins this court
Speaker 3: case it's brought to challenge the law, and TikTok says
Speaker 3: that it's a violation of the First Amendments what Congress
Speaker 3: did to force it to divest the company, and we're
Speaker 3: going to get a decision this year from the DC
Speaker 3: Circuit and maybe from the US Supreme Court on whether
Speaker 3: TikTok's right or whether Congress can ban the company unless
Speaker 3: it divests former President Trump.
Speaker 2: He was against TikTok when he was president, now he's
Speaker 2: for TikTok. What kind of change could his becoming president
Speaker 2: mean for TikTok outside of the court case.
Speaker 3: Yeah, it's a great question. So I think it's unlikely
Speaker 3: that President Trump, if he wins the White House, is
Speaker 3: going to convince Congress to make a new law and
Speaker 3: undo the ban that it already did. So I don't
Speaker 3: think he would change it in that sense. This law
Speaker 3: is already on the books. It passed by overwhelming majorities
Speaker 3: in both the House and the Senate with Republican and
Speaker 3: Democrats support, and so this is done, I think unless
Speaker 3: TikTok wins in court. If TikTok wins in court by
Speaker 3: January nineteenth, and the DC Circuit or the Supreme Court
Speaker 3: sends it back to Congress and says, no, the First
Speaker 3: Amendment problems here, try again, that's when President Trump being
Speaker 3: the president really matters, because then if Congress goes to
Speaker 3: try again and fix the problems, that the courts identify,
Speaker 3: President Trump doesn't have to sign that law, and so
Speaker 3: that's where it could end up getting tripped up. Whereas
Speaker 3: if it's the Democrats that control the White House. President
Speaker 3: Biden was a strong advocate for this TikTok bill, and
Speaker 3: it seems very likely that a President Kamala Harris would
Speaker 3: be as well. I at least have no reason to
Speaker 3: think she would depart from President Biden's view on this.
Speaker 3: So in that sense, if TikTok can win this first
Speaker 3: round of the case, having President Trump in the white House,
Speaker 3: maybe it's best chance to avoid a band in the
Speaker 3: US going forward.
Speaker 2: It seems like TikTok has some pretty good arguments in
Speaker 2: its case. Have you looked at who has the better
Speaker 2: side of that case?
Speaker 3: Yeah, it's a really fascinating case, and I think it's
Speaker 3: a really close case. TikTok says, Look, Congress has never
Speaker 3: done anything like this, spanning a popular app used by
Speaker 3: one hundred and fifty million Americans. So this is a
Speaker 3: violation of our free speech rights as a company, It's
Speaker 3: a violation of the free speech rights of all the
Speaker 3: users on our platform. And basically arguing that the Congress
Speaker 3: burdened much more speech than was necessary. It could have
Speaker 3: done something much less disruptive than an effective ban. It
Speaker 3: could have regulated, it could have entered into an agreement
Speaker 3: with TikTok to mitigate the risk, but instead it took
Speaker 3: sort of what the company casts as a very extreme step.
Speaker 3: On the other side, that the government comes back and says, no,
Speaker 3: this is a national security threat. TikTok's parent is located
Speaker 3: in China, and China can access anything from a company
Speaker 3: that's that's located, and this company has all sorts of
Speaker 3: data about Americans, and it can control what Americans can see.
Speaker 3: That's a national security threat. Courts don't like to get
Speaker 3: in the middle of national security issues, so both sides
Speaker 3: have really strong argument. My take on it is that
Speaker 3: I think the courts are going to force Congress to
Speaker 3: try again on this. I think they're going to say, look,
Speaker 3: you went pretty fast on this, and I think you
Speaker 3: should take a harder look to make sure you didn't
Speaker 3: burden more speech than necessary. Ultimately, I think the government
Speaker 3: can win this case, but I think the courts are
Speaker 3: going to want to go a little more slowly here.
Speaker 3: Even though it's a national security threat. The government admitted
Speaker 3: in its brief that there isn't evidence that China has
Speaker 3: actually surveiled this data or manipulated but there's a risk,
Speaker 3: and so I think that creates an opportunity for the
Speaker 3: court to kind of slow this down a little bit
Speaker 3: and make sure the First Amendment is honored. But I
Speaker 3: think ultimately the government can win this. I think there
Speaker 3: are real risks to TikTok going forward. I just think
Speaker 3: it might win this first round of the case and
Speaker 3: duck this January nineteenth deadline that's coming pretty quickly.
Speaker 2: Now, a lot to watch in the upcoming months. Thanks
Speaker 2: so much, Matt. That's Bloomberg Intelligence Litigation analyst Matthew Shettenhelm.
Speaker 2: And that's it for this edition of the Bloomberg Law Podcast.
Speaker 2: Remember you can always get the latest legal news by
Speaker 2: subscribing and listening to the show on Apple Podcasts, Spotify,
Speaker 2: and at Bloomberg dot com, slash podcast, Slash Law. I'm
Speaker 2: June Grosso, and this is Bloomberg