1 00:00:03,160 --> 00:00:07,960 Speaker 1: This is Bloomberg Law with June Brussel from Bloomberg Radio. 2 00:00:09,160 --> 00:00:12,600 Speaker 1: The Biden administration has been cracking down on threats to 3 00:00:12,680 --> 00:00:16,480 Speaker 1: competition and key industries. It's in line with the President's 4 00:00:16,520 --> 00:00:20,680 Speaker 1: executive order from July of last year directing federal government 5 00:00:20,720 --> 00:00:24,680 Speaker 1: agencies to enforce the antitrust laws. I expect the federal 6 00:00:24,720 --> 00:00:30,920 Speaker 1: agencies and they know this, to help restore competition so 7 00:00:30,960 --> 00:00:34,680 Speaker 1: that we have lower prices, higher wages, more money, more options. 8 00:00:35,400 --> 00:00:38,000 Speaker 1: But it hasn't been going so well in court for 9 00:00:38,120 --> 00:00:42,680 Speaker 1: federal antitrust regulators. The Justice Department lost its bids to 10 00:00:42,720 --> 00:00:46,840 Speaker 1: block United hell from acquiring Change Healthcare and to stop 11 00:00:46,880 --> 00:00:50,519 Speaker 1: a merger between two major US sugar refiners. Now the 12 00:00:50,600 --> 00:00:54,040 Speaker 1: Johnstice Department is taking on the airline industry and court 13 00:00:54,360 --> 00:00:57,720 Speaker 1: suing to break up the partnership between American Airlines and 14 00:00:57,880 --> 00:01:02,360 Speaker 1: Jet Blue Airways. It's you maybe an uphill battle. Joining 15 00:01:02,360 --> 00:01:06,440 Speaker 1: me is Bloomberg in Challengence senior litigation analyst Jennifer Ree. 16 00:01:07,200 --> 00:01:10,440 Speaker 1: This is not a merger, so why is the Justice 17 00:01:10,480 --> 00:01:14,440 Speaker 1: Department trying to stop it? Well, it's not a merger, 18 00:01:14,480 --> 00:01:16,800 Speaker 1: that's truement. That's actually one of the points of the 19 00:01:17,080 --> 00:01:19,840 Speaker 1: defense here that the Justice Department is looking at this 20 00:01:19,959 --> 00:01:23,119 Speaker 1: as though it's a merger when it isn't. But the 21 00:01:23,160 --> 00:01:25,319 Speaker 1: Department of Justice has the right to look at any 22 00:01:25,400 --> 00:01:29,440 Speaker 1: kind of a joint venture or alliance that could harm competitions. 23 00:01:29,640 --> 00:01:32,320 Speaker 1: It's not restricted to just looking at a full merger 24 00:01:32,400 --> 00:01:35,440 Speaker 1: between two companies as a vehicle. You know that they 25 00:01:35,440 --> 00:01:38,360 Speaker 1: can study to understand whether it could cause harm. This 26 00:01:38,480 --> 00:01:41,399 Speaker 1: is called an alliance. That's it's essentially a joint venture, 27 00:01:41,640 --> 00:01:44,000 Speaker 1: and the Department of Justice also has the right under 28 00:01:44,000 --> 00:01:46,399 Speaker 1: the law to look at joint ventures. Let's talk about 29 00:01:46,400 --> 00:01:50,400 Speaker 1: the government's case. They're emphasizing Jet blues role as a 30 00:01:50,480 --> 00:01:55,240 Speaker 1: disruptor and saying this partnership allows the biggest US airline, 31 00:01:55,280 --> 00:01:59,360 Speaker 1: which is American, to take over its most disruptive rival 32 00:02:00,000 --> 00:02:02,480 Speaker 1: at Blue. Tell us more about you know, the government 33 00:02:02,520 --> 00:02:05,040 Speaker 1: why they're doing this right with the way they view 34 00:02:05,120 --> 00:02:07,800 Speaker 1: this now, it's limited to the Northeast because the alliance 35 00:02:07,840 --> 00:02:11,840 Speaker 1: only covers the Northeast really just Boston Logan Airport and 36 00:02:11,840 --> 00:02:14,520 Speaker 1: the airports in the New York City area. And what 37 00:02:14,600 --> 00:02:18,280 Speaker 1: they're saying is that the alliance itself is put together 38 00:02:18,320 --> 00:02:20,800 Speaker 1: in a way that it's essentially in that region, a 39 00:02:20,880 --> 00:02:23,880 Speaker 1: merger that the two companies that once competed with each 40 00:02:23,919 --> 00:02:25,919 Speaker 1: other for these routes in and out of Boston and 41 00:02:26,000 --> 00:02:29,440 Speaker 1: New York have aligned their incentives so they really aren't 42 00:02:29,440 --> 00:02:32,840 Speaker 1: competing anymore. And in that respect, you take a market 43 00:02:32,840 --> 00:02:35,880 Speaker 1: which had four major U S domestic airlines and you 44 00:02:36,000 --> 00:02:39,480 Speaker 1: reduced it down to three. And and it's most important 45 00:02:39,840 --> 00:02:42,640 Speaker 1: um in any deal that the Department or Justice of 46 00:02:42,720 --> 00:02:46,000 Speaker 1: FTC is looking at is when what they consider a 47 00:02:46,040 --> 00:02:49,640 Speaker 1: maverick firm is acquired by like an incumbent or a 48 00:02:49,720 --> 00:02:53,280 Speaker 1: legacy kind of company. They look at a maverick as 49 00:02:53,280 --> 00:02:57,480 Speaker 1: an entity that's disruptive to competition and shakes up competition 50 00:02:57,520 --> 00:03:00,359 Speaker 1: and is pro competitive, drives others to in of eight 51 00:03:00,360 --> 00:03:03,560 Speaker 1: more drives prices down, comes in and kind of does 52 00:03:03,600 --> 00:03:05,799 Speaker 1: their own thing and shakes things up. And they view 53 00:03:05,919 --> 00:03:08,600 Speaker 1: Jet Blue as that kind of an airline. They even 54 00:03:08,600 --> 00:03:11,400 Speaker 1: talk about a Jet Blue effect, and that means they've 55 00:03:11,440 --> 00:03:14,400 Speaker 1: noticed that when Jet Blue enters into a certain route, 56 00:03:14,600 --> 00:03:17,519 Speaker 1: you know, a route between two cities, that the prices 57 00:03:17,680 --> 00:03:20,120 Speaker 1: for that route tend to come down across the board. 58 00:03:20,200 --> 00:03:22,680 Speaker 1: So that's a good thing. And what they believe here 59 00:03:22,800 --> 00:03:26,400 Speaker 1: is that this old legacy airline American, which isn't a 60 00:03:26,400 --> 00:03:31,400 Speaker 1: maverick and isn't really disruptive in that way. By combining 61 00:03:31,440 --> 00:03:35,400 Speaker 1: with Jet Blue in this Northeast alliance and aligning their incentives, 62 00:03:35,440 --> 00:03:40,040 Speaker 1: they basically diminish or neutralize that maverick Jet Blue effect 63 00:03:40,040 --> 00:03:42,760 Speaker 1: that Jet Blue had, at least for those routes. And 64 00:03:42,800 --> 00:03:45,000 Speaker 1: that's really what they talk about when when they focus 65 00:03:45,040 --> 00:03:46,960 Speaker 1: on the fact that Jet Blue has been disruptive and 66 00:03:46,960 --> 00:03:50,600 Speaker 1: so in particular it's problematic to have American combining with 67 00:03:50,720 --> 00:03:54,880 Speaker 1: Jet Blue. Jet Blue and Americans say that this allows 68 00:03:54,920 --> 00:03:57,920 Speaker 1: them to go up against the largest players in the 69 00:03:57,960 --> 00:04:02,280 Speaker 1: Northeast Corrida United in Delta, and they say that it 70 00:04:02,360 --> 00:04:06,320 Speaker 1: has produced hundreds of millions of dollars in consumer benefits. 71 00:04:06,840 --> 00:04:10,680 Speaker 1: It's a game changing solution. What's their argument in more 72 00:04:10,760 --> 00:04:13,400 Speaker 1: depth than do they have any proof about those benefits. 73 00:04:13,880 --> 00:04:16,839 Speaker 1: It's such an interesting situation. It'll be hard for the judge, 74 00:04:16,920 --> 00:04:20,000 Speaker 1: I think, to work this out. This Northeast Alliance has 75 00:04:20,040 --> 00:04:23,560 Speaker 1: already been in operation now since February of two thousand 76 00:04:23,600 --> 00:04:26,479 Speaker 1: twenty one, and what they're saying in terms of those 77 00:04:26,480 --> 00:04:29,840 Speaker 1: benefits is that, hey, since that time, we've increased output. 78 00:04:29,960 --> 00:04:32,880 Speaker 1: We've added all sorts of flights for consumers. We've made 79 00:04:32,920 --> 00:04:35,760 Speaker 1: it much easier for consumers. Let's say that live in 80 00:04:35,800 --> 00:04:38,400 Speaker 1: an area where they can't fly let's say, directly to London, 81 00:04:38,640 --> 00:04:41,400 Speaker 1: to more easily book a flight through American and Jet Blue. 82 00:04:41,680 --> 00:04:43,839 Speaker 1: They can take Jet Blue, let's say, from their city 83 00:04:43,880 --> 00:04:46,040 Speaker 1: to New York, and then they can take American from 84 00:04:46,080 --> 00:04:48,120 Speaker 1: New York to London, and they can book it all together, 85 00:04:48,200 --> 00:04:50,719 Speaker 1: and they can share all the points or use either 86 00:04:50,760 --> 00:04:55,680 Speaker 1: airlines points, And that's a huge benefit for consumers, and perfectly, honestly, June, 87 00:04:55,720 --> 00:04:59,160 Speaker 1: it is so far a benefit for consumers. So far, 88 00:04:59,400 --> 00:05:01,760 Speaker 1: what has been shown is that some output has been 89 00:05:01,800 --> 00:05:04,880 Speaker 1: increased and that it's been able to provide more choices, 90 00:05:04,920 --> 00:05:07,760 Speaker 1: in particular for business customers that may not have been 91 00:05:07,800 --> 00:05:09,720 Speaker 1: able to use Jet Blue for any part of their 92 00:05:09,760 --> 00:05:12,880 Speaker 1: trip in the past. But the funny thing about that, 93 00:05:12,960 --> 00:05:15,400 Speaker 1: and I think the difficult or skeptical thing about that, 94 00:05:15,560 --> 00:05:18,600 Speaker 1: is that ever since this alliance started, it's been under scrutiny. 95 00:05:18,839 --> 00:05:21,360 Speaker 1: The Department of Justice has been skeptical and looking at 96 00:05:21,400 --> 00:05:24,600 Speaker 1: it since it started. So of course, since February of 97 00:05:24,600 --> 00:05:27,159 Speaker 1: two twenty one, they were going to be very careful 98 00:05:27,200 --> 00:05:30,600 Speaker 1: about what they do and not raising fares and not 99 00:05:31,000 --> 00:05:33,800 Speaker 1: you know, cutting routes or do anything that the Department 100 00:05:33,839 --> 00:05:37,279 Speaker 1: of Justice believes might ultimately happen. So even though we 101 00:05:37,400 --> 00:05:40,080 Speaker 1: have seen there is a great argument that there's been 102 00:05:40,080 --> 00:05:44,000 Speaker 1: this pro competitive benefit from it, it's shaded by the 103 00:05:44,040 --> 00:05:46,719 Speaker 1: fact that it's been under scrutiny ever since it started. 104 00:05:47,000 --> 00:05:49,880 Speaker 1: The question is what really happens when it's not under 105 00:05:49,880 --> 00:05:52,840 Speaker 1: the microscope and the Justice Department is claiming it will 106 00:05:52,920 --> 00:05:56,760 Speaker 1: cost consumers hundreds of millions in higher fairs every year. 107 00:05:57,200 --> 00:05:59,840 Speaker 1: Where are they getting those numbers from? Right now that 108 00:06:00,200 --> 00:06:03,320 Speaker 1: they look at it is that the alliance allows these 109 00:06:03,320 --> 00:06:06,280 Speaker 1: companies to share revenue. Now, they don't share pricing. They 110 00:06:06,320 --> 00:06:09,440 Speaker 1: still are independent. They make their own pricing decisions. But 111 00:06:09,560 --> 00:06:11,880 Speaker 1: what the Department of Justice says is yes, but they 112 00:06:11,920 --> 00:06:15,520 Speaker 1: share revenue, so it doesn't really matter to them anymore 113 00:06:15,760 --> 00:06:18,920 Speaker 1: whether the passenger books Jet Blue or whether the passenger 114 00:06:18,960 --> 00:06:22,960 Speaker 1: books American. It removes the competition to get that passenger 115 00:06:23,080 --> 00:06:25,480 Speaker 1: on their flight because they're going to share the revenue, 116 00:06:25,680 --> 00:06:29,440 Speaker 1: so whoever gets it, they both benefit. And because of that, 117 00:06:29,520 --> 00:06:33,680 Speaker 1: there's no incentive to compete. There's no incentive to lower fares, 118 00:06:33,839 --> 00:06:36,360 Speaker 1: get into a fair war, and in fact, down the 119 00:06:36,440 --> 00:06:39,200 Speaker 1: road there's an incentive for both of them to increase 120 00:06:39,240 --> 00:06:42,120 Speaker 1: fars because they both benefit if they increase fars. And 121 00:06:42,160 --> 00:06:45,240 Speaker 1: so this is what the government says they believe will 122 00:06:45,279 --> 00:06:47,960 Speaker 1: happen in the future. And the most interesting thing about 123 00:06:48,000 --> 00:06:51,040 Speaker 1: that is that there's also a dispute about whether that's 124 00:06:51,080 --> 00:06:54,480 Speaker 1: even an appropriate thing to prove when you look at 125 00:06:54,480 --> 00:06:56,720 Speaker 1: a merger. When the government looks at a merger, what 126 00:06:56,760 --> 00:06:58,960 Speaker 1: they're trying to do is speculate what will happen in 127 00:06:58,960 --> 00:07:01,400 Speaker 1: the future when the two copanies are emerged, and they 128 00:07:01,440 --> 00:07:04,960 Speaker 1: have to show that there's a potential of substantial harm 129 00:07:05,000 --> 00:07:07,000 Speaker 1: in the market from the merger. And that's what the 130 00:07:07,200 --> 00:07:10,280 Speaker 1: government is trying to do here. But the defendants, the airline, 131 00:07:10,320 --> 00:07:12,680 Speaker 1: say no, no, no, First of all, it's not a merger, 132 00:07:13,040 --> 00:07:15,880 Speaker 1: and second of all, we've already been active since February 133 00:07:15,880 --> 00:07:18,520 Speaker 1: of two thousand twenty one. So what you actually have 134 00:07:18,640 --> 00:07:21,040 Speaker 1: to show is that there's harm to the market now. 135 00:07:21,680 --> 00:07:24,000 Speaker 1: That it's not sufficient to say, hey, there might be 136 00:07:24,040 --> 00:07:26,000 Speaker 1: harm to the market in the future. You have to 137 00:07:26,000 --> 00:07:27,840 Speaker 1: show this harm to the market now. And you know what, 138 00:07:27,920 --> 00:07:30,920 Speaker 1: you can't do that, because what we've done is we've 139 00:07:30,960 --> 00:07:34,840 Speaker 1: increased output, We've increased routes by these airlines. Didn't American 140 00:07:34,920 --> 00:07:38,400 Speaker 1: and Jet Blue have an agreement with the Transportation Department 141 00:07:38,480 --> 00:07:42,880 Speaker 1: during the Trump administration for this alliance? Yes, they did, 142 00:07:43,080 --> 00:07:45,679 Speaker 1: um and the agreement was basically for them to divest 143 00:07:45,760 --> 00:07:48,400 Speaker 1: a few slots, so, in other words, that the entirety 144 00:07:48,400 --> 00:07:51,600 Speaker 1: of the Northeast Alliance as the parties originally envisioned, it 145 00:07:51,600 --> 00:07:54,760 Speaker 1: didn't go forward because the POT basically said no to 146 00:07:54,840 --> 00:07:57,400 Speaker 1: the full alliance, and so they had to divest some 147 00:07:58,120 --> 00:08:01,440 Speaker 1: you know, landing and takeoffs at a couple of airports 148 00:08:01,480 --> 00:08:03,920 Speaker 1: I believe in New York at La Guardia and in 149 00:08:04,200 --> 00:08:07,600 Speaker 1: um Washington, d C. In order to move forward with it. 150 00:08:07,640 --> 00:08:09,960 Speaker 1: And they've also had to be monitored by the Department 151 00:08:10,000 --> 00:08:12,920 Speaker 1: of Transportation. So this is of course another part of 152 00:08:12,960 --> 00:08:15,480 Speaker 1: the airline's defense. Look, we're going to be monitored by 153 00:08:15,520 --> 00:08:19,680 Speaker 1: the Department of Transportation. They know airlines, they understand competition, 154 00:08:19,800 --> 00:08:22,320 Speaker 1: and they cleared this deal. But both d o T 155 00:08:22,600 --> 00:08:25,640 Speaker 1: and Department of Justice when the deal was cleared, was 156 00:08:25,680 --> 00:08:30,000 Speaker 1: still run by representatives from the Trump administration. And now 157 00:08:30,040 --> 00:08:31,880 Speaker 1: what we have is the d o J that has 158 00:08:31,920 --> 00:08:34,760 Speaker 1: Biden's enforcers in place, and they're the ones that decided 159 00:08:34,800 --> 00:08:37,800 Speaker 1: to go after this deal. Did anything stand out to 160 00:08:37,880 --> 00:08:40,920 Speaker 1: you in the opening statements? You know, I think what 161 00:08:41,080 --> 00:08:44,440 Speaker 1: stands out to me in the opening statements is just 162 00:08:44,679 --> 00:08:48,120 Speaker 1: how they're really incompletely and totally opposite ends. I mean, 163 00:08:48,160 --> 00:08:51,280 Speaker 1: to hear the Department of Justice attorney, this is absolutely 164 00:08:51,320 --> 00:08:53,679 Speaker 1: the worst possible thing that could happen. It's going to 165 00:08:53,800 --> 00:08:57,760 Speaker 1: cost millions of dollars. It's a consolidation. It's essentially a 166 00:08:57,800 --> 00:09:00,880 Speaker 1: merger of two airlines in an industry we have terrible 167 00:09:00,920 --> 00:09:06,080 Speaker 1: trouble now, too much consolidation already, far too concentrated, passengers 168 00:09:06,080 --> 00:09:09,040 Speaker 1: that are treated horribly, fares that are going up, and 169 00:09:09,080 --> 00:09:11,040 Speaker 1: this is only going to contribute to that. And then 170 00:09:11,080 --> 00:09:14,480 Speaker 1: to hear the other side, it's wildly pro competitive. It's 171 00:09:14,480 --> 00:09:16,960 Speaker 1: going to be fantastic. We're going to be able to 172 00:09:16,960 --> 00:09:19,760 Speaker 1: compete much better against Delta and United. It's going to 173 00:09:19,840 --> 00:09:22,760 Speaker 1: cause everybody to compete. And then the Department of Justice 174 00:09:22,880 --> 00:09:25,680 Speaker 1: attorney has to ask, American is the biggest airline in 175 00:09:25,720 --> 00:09:29,000 Speaker 1: the United States, possibly in the world, so why does 176 00:09:29,040 --> 00:09:31,400 Speaker 1: it need Jet Blue in order to compete against Delta 177 00:09:31,440 --> 00:09:33,720 Speaker 1: and United and I think, you know, there's a really 178 00:09:33,760 --> 00:09:36,560 Speaker 1: good point there, but they're they're just really wildly at 179 00:09:36,600 --> 00:09:39,679 Speaker 1: opposite ends of what the impact of this alliance is. 180 00:09:40,080 --> 00:09:42,120 Speaker 1: And I think that, you know, the proof is going 181 00:09:42,160 --> 00:09:44,720 Speaker 1: to be in the evidence. I'm really interested to hear 182 00:09:44,760 --> 00:09:47,400 Speaker 1: what the testimony is going to be, what the experts 183 00:09:47,400 --> 00:09:49,600 Speaker 1: are going to say here, and what the documents show. 184 00:09:49,960 --> 00:09:52,040 Speaker 1: Because the other thing June it was interesting is they 185 00:09:52,080 --> 00:09:55,240 Speaker 1: both talked about blurbs and excerpts from documents that they 186 00:09:55,280 --> 00:09:59,840 Speaker 1: had that we're also completely diametrically opposite. You know, you 187 00:10:00,040 --> 00:10:02,800 Speaker 1: had it's the Department of Justice attorney talking about Delta 188 00:10:02,880 --> 00:10:05,000 Speaker 1: documents that says, we don't care about this, we don't 189 00:10:05,000 --> 00:10:07,760 Speaker 1: even think about it, this doesn't bother us. And then 190 00:10:07,800 --> 00:10:09,760 Speaker 1: you have the plaintiff saying, oh no, no. There are 191 00:10:09,760 --> 00:10:12,840 Speaker 1: all sorts of analyzes coming up from Delta about how 192 00:10:12,880 --> 00:10:15,360 Speaker 1: this is gonna be really difficult for US, and this 193 00:10:15,440 --> 00:10:18,160 Speaker 1: is going to increase competition in the Boston and New 194 00:10:18,200 --> 00:10:20,679 Speaker 1: York markets, and you know, this isn't great for US. 195 00:10:21,080 --> 00:10:23,000 Speaker 1: So it'll be really interesting to see what do these 196 00:10:23,040 --> 00:10:24,839 Speaker 1: documents actually say, which is going to come out in 197 00:10:24,880 --> 00:10:27,880 Speaker 1: the next three weeks of trial. American and Jet Blue 198 00:10:28,000 --> 00:10:31,600 Speaker 1: have a year and a half of records to show 199 00:10:31,679 --> 00:10:34,920 Speaker 1: what's happened so far, even though they knew that they 200 00:10:34,920 --> 00:10:37,680 Speaker 1: were under the microscope. But the Justice Department is just 201 00:10:37,800 --> 00:10:41,400 Speaker 1: going to have theory. That's right, that's right, and that's 202 00:10:41,440 --> 00:10:44,560 Speaker 1: absolutely the difficulty of it. Now in every merger case, 203 00:10:44,600 --> 00:10:48,120 Speaker 1: all they really have is theory. Here to some extent, 204 00:10:48,200 --> 00:10:52,240 Speaker 1: they have a presumption of potential anti competitive effects because 205 00:10:52,240 --> 00:10:54,959 Speaker 1: if you just purely look at market shares, and in 206 00:10:55,080 --> 00:10:57,880 Speaker 1: airline deals, market shares are looked at. You know, the 207 00:10:57,920 --> 00:11:00,080 Speaker 1: way they look at them are the different numbers of 208 00:11:00,160 --> 00:11:02,599 Speaker 1: airlines and their share in city the city. So you 209 00:11:02,640 --> 00:11:05,400 Speaker 1: look at a route, let's say it's New York to Miami, Florida. 210 00:11:05,640 --> 00:11:07,640 Speaker 1: You look at that route, you look at the competition 211 00:11:07,679 --> 00:11:09,679 Speaker 1: in the route, and that's how you basically look at 212 00:11:09,679 --> 00:11:12,320 Speaker 1: market shares. So there's this big table and long list 213 00:11:12,360 --> 00:11:16,120 Speaker 1: of market shares, and under the merger guidelines at the 214 00:11:16,160 --> 00:11:19,200 Speaker 1: Department of Justice uses you can do some basic math. 215 00:11:19,640 --> 00:11:24,080 Speaker 1: It's called the Herfandal Hershman index that basically sums the 216 00:11:24,160 --> 00:11:27,199 Speaker 1: square of the shares and looks at those numbers before 217 00:11:27,240 --> 00:11:31,000 Speaker 1: and after a merger and if they go above certain thresholds, 218 00:11:31,040 --> 00:11:34,720 Speaker 1: if the post merger h h I is over and 219 00:11:34,720 --> 00:11:37,920 Speaker 1: the change is over one hundred, the guidelines tell you 220 00:11:38,040 --> 00:11:42,000 Speaker 1: that that's a presumptively harmful deal, and the judges use 221 00:11:42,080 --> 00:11:45,120 Speaker 1: those guidelines and they follow those guidelines. So the DJ 222 00:11:45,280 --> 00:11:47,400 Speaker 1: has I would say just a tinge more than just 223 00:11:47,520 --> 00:11:50,120 Speaker 1: theory going in because they do have some market shares 224 00:11:50,520 --> 00:11:53,640 Speaker 1: that show that these are concentrated markets. That of course 225 00:11:53,679 --> 00:11:56,880 Speaker 1: will rely on or depend on whether the judge actually 226 00:11:56,960 --> 00:11:59,360 Speaker 1: views this as a merger or not. Because the judge 227 00:11:59,400 --> 00:12:01,920 Speaker 1: doesn't view the as a merger and doesn't think the 228 00:12:01,960 --> 00:12:03,960 Speaker 1: analysis should be done the way you would do an 229 00:12:03,960 --> 00:12:06,360 Speaker 1: analysis for a merger, the h h I s might 230 00:12:06,360 --> 00:12:09,720 Speaker 1: not be as important. So Jet Blue is in the 231 00:12:09,800 --> 00:12:15,240 Speaker 1: process of trying to acquire a discount carrier, Spirit Airlines 232 00:12:15,400 --> 00:12:18,479 Speaker 1: for three point eight billion that would create the country's 233 00:12:18,520 --> 00:12:21,800 Speaker 1: fifth largest airline. How does that fit in with this? 234 00:12:22,480 --> 00:12:24,640 Speaker 1: So it doesn't really, I mean, it's very much a 235 00:12:24,679 --> 00:12:27,000 Speaker 1: separate thing, and the judge has to take the market 236 00:12:27,040 --> 00:12:30,000 Speaker 1: as it is today, and today the companies aren't merged, 237 00:12:30,040 --> 00:12:32,720 Speaker 1: and we don't know whether that deal will will get consummated. 238 00:12:32,800 --> 00:12:36,160 Speaker 1: Or not. The defendants have used it to say, Look, 239 00:12:36,160 --> 00:12:38,960 Speaker 1: it shows that jet Blue is still very independent. Jet 240 00:12:38,960 --> 00:12:41,200 Speaker 1: Blue went forward with that deal, had nothing to do 241 00:12:41,240 --> 00:12:43,640 Speaker 1: with American, it didn't talk to American, it didn't need 242 00:12:43,920 --> 00:12:46,400 Speaker 1: americans approval to do it. And it shows this is 243 00:12:46,440 --> 00:12:49,760 Speaker 1: not a merger. These are still independent airlines and that's 244 00:12:49,800 --> 00:12:52,600 Speaker 1: the way they used that deal. Other than that, I 245 00:12:52,640 --> 00:12:55,439 Speaker 1: don't actually think that that deal will be discussed or 246 00:12:55,480 --> 00:12:58,840 Speaker 1: come into this trial very much. Now. As we've discussed before, 247 00:12:59,040 --> 00:13:02,760 Speaker 1: the Justice Departman is taking this hard stance against threats 248 00:13:02,800 --> 00:13:07,360 Speaker 1: to competition in key industries, and so far, I mean recently, 249 00:13:07,679 --> 00:13:10,800 Speaker 1: they haven't had a particularly good record. Now you know, 250 00:13:10,880 --> 00:13:13,560 Speaker 1: it hasn't been good. And it's a funny thing, June. 251 00:13:13,760 --> 00:13:15,880 Speaker 1: I think a year or two ago when a lot 252 00:13:15,920 --> 00:13:18,520 Speaker 1: of the speeches started and I kept thinking to myself, 253 00:13:18,559 --> 00:13:21,040 Speaker 1: you know, if in fact the d o J and 254 00:13:21,120 --> 00:13:24,520 Speaker 1: FTC sue to try to block these mergers rather than 255 00:13:24,520 --> 00:13:27,199 Speaker 1: settle them with remedies like they say they plan to, 256 00:13:27,400 --> 00:13:30,520 Speaker 1: they're going to have loss after loss after loss, because 257 00:13:30,840 --> 00:13:34,360 Speaker 1: sometimes the remedies are sufficient, and I think a judge 258 00:13:34,400 --> 00:13:36,720 Speaker 1: is going to look at those remedies today in a 259 00:13:36,840 --> 00:13:39,800 Speaker 1: very different way than the Department of Justice is looking 260 00:13:39,800 --> 00:13:42,120 Speaker 1: at those remedies, and that, in fact is exactly what 261 00:13:42,240 --> 00:13:44,679 Speaker 1: happened in the recent loss by the d o J 262 00:13:44,960 --> 00:13:48,520 Speaker 1: in challenging United Healths acquisition of Change Healthcare. You know, 263 00:13:48,559 --> 00:13:52,320 Speaker 1: the companies did have some competitive problems, but they went 264 00:13:52,320 --> 00:13:55,480 Speaker 1: into merger with a divestiture, which I thought was a 265 00:13:55,480 --> 00:13:58,439 Speaker 1: pretty good divestiture to sell off part of the businesses 266 00:13:58,480 --> 00:14:02,560 Speaker 1: that competed, and also to firewall off a piece of 267 00:14:02,600 --> 00:14:06,240 Speaker 1: the business to prevent United from getting certain data and 268 00:14:06,280 --> 00:14:09,920 Speaker 1: competitively sensitive information on its rivals. And the d o 269 00:14:10,000 --> 00:14:11,720 Speaker 1: J did what it said it was going to do. 270 00:14:11,880 --> 00:14:14,040 Speaker 1: It said, it's a problematic merger, We're not going to 271 00:14:14,080 --> 00:14:16,800 Speaker 1: accept the remedy. We're gonna sue. They did that, and 272 00:14:16,840 --> 00:14:20,120 Speaker 1: the judge said, but there's this remedy, and obviously the 273 00:14:20,200 --> 00:14:23,320 Speaker 1: judge decided the remedy would be sufficient to fix whatever 274 00:14:23,400 --> 00:14:25,520 Speaker 1: problems there were, and that's part of the reason that 275 00:14:25,520 --> 00:14:28,320 Speaker 1: that deal went through. And I think that this is 276 00:14:28,760 --> 00:14:30,840 Speaker 1: part of the problem the d o J has in 277 00:14:30,840 --> 00:14:34,080 Speaker 1: the FTC with kind of drawing that sort of line 278 00:14:34,120 --> 00:14:37,239 Speaker 1: in the sand and saying, hey, if it deals problematic, 279 00:14:37,440 --> 00:14:39,640 Speaker 1: we're not going to settle anymore, we're going to sue 280 00:14:40,040 --> 00:14:43,520 Speaker 1: because those settlements can be fine. And I think the 281 00:14:43,560 --> 00:14:46,680 Speaker 1: other thing June it's happening is that it's the other 282 00:14:46,720 --> 00:14:48,560 Speaker 1: thing I think that will lead to more losses in 283 00:14:48,680 --> 00:14:51,400 Speaker 1: court is that there's a lot of remorse right now 284 00:14:51,480 --> 00:14:53,560 Speaker 1: by the FTC and d o J for what happened 285 00:14:53,560 --> 00:14:56,000 Speaker 1: in the past. There's on the do o J side, 286 00:14:56,000 --> 00:14:59,200 Speaker 1: I think there's remorse for so much consolidation that happened 287 00:14:59,240 --> 00:15:02,000 Speaker 1: over the last twenty five years in the airline industry 288 00:15:02,040 --> 00:15:04,680 Speaker 1: to leave us with what we have today, essentially just 289 00:15:05,120 --> 00:15:09,720 Speaker 1: for big you know, national domestic carriers. And then you 290 00:15:09,760 --> 00:15:12,960 Speaker 1: have the FTC that really regrets many of the tech 291 00:15:13,040 --> 00:15:16,600 Speaker 1: and platform deals that they reviewed and allowed to close, 292 00:15:16,960 --> 00:15:20,520 Speaker 1: such as Facebook, Instagram and Facebook, What's App, Google double 293 00:15:20,520 --> 00:15:23,480 Speaker 1: Click deals like that, and now they're kind of trying 294 00:15:23,480 --> 00:15:25,920 Speaker 1: to play catch up. So here you see the d 295 00:15:26,040 --> 00:15:28,560 Speaker 1: o J going after this deal, and I have no 296 00:15:28,640 --> 00:15:31,400 Speaker 1: doubt it's probably going to go after the Spirit Jet 297 00:15:31,400 --> 00:15:34,120 Speaker 1: Blue merger as well down the road. And you have 298 00:15:34,200 --> 00:15:37,720 Speaker 1: the FTC making similar moves trying to block Facebook from 299 00:15:37,760 --> 00:15:40,800 Speaker 1: buying a company called Within, which makes virtual reality apps. 300 00:15:41,000 --> 00:15:43,320 Speaker 1: And I think it all comes out of that remorse 301 00:15:43,400 --> 00:15:45,280 Speaker 1: for what happened in the past and trying to make 302 00:15:45,360 --> 00:15:47,800 Speaker 1: up for it, and I don't know that that's going 303 00:15:47,840 --> 00:15:50,480 Speaker 1: to be successful. So you think this is an uphill 304 00:15:50,520 --> 00:15:54,280 Speaker 1: battle for justice, you know, I do? You know, I'd 305 00:15:54,480 --> 00:15:57,080 Speaker 1: I'd like to sort of reserve my judgment on this 306 00:15:57,200 --> 00:15:59,440 Speaker 1: until I've seen the evidence, because, as I said in 307 00:15:59,440 --> 00:16:01,920 Speaker 1: the opening statements, the picture that was depicted of the 308 00:16:01,960 --> 00:16:04,360 Speaker 1: evidence that's going to come out and trial was quite 309 00:16:04,360 --> 00:16:06,560 Speaker 1: different by either side, and I want to see what 310 00:16:06,680 --> 00:16:09,520 Speaker 1: that testimony really is and what those documents really look like, 311 00:16:09,800 --> 00:16:12,040 Speaker 1: I think before I come out on this, because I 312 00:16:12,080 --> 00:16:16,480 Speaker 1: think this one's very close. But um, generally I do 313 00:16:16,600 --> 00:16:18,800 Speaker 1: say the d O J even though maybe they can 314 00:16:18,840 --> 00:16:20,760 Speaker 1: win this if the evidence on their side, they have 315 00:16:20,840 --> 00:16:23,920 Speaker 1: an uphill battle yet. So how much sin is this 316 00:16:24,000 --> 00:16:28,320 Speaker 1: a test for you know, Biden's Justice Department to prove 317 00:16:28,440 --> 00:16:33,840 Speaker 1: that it's hardline stance is working or effective. I think 318 00:16:33,880 --> 00:16:35,680 Speaker 1: the jury is a little bit still out on that 319 00:16:35,760 --> 00:16:37,680 Speaker 1: because I think that they just have to bring the 320 00:16:37,800 --> 00:16:41,760 Speaker 1: right challenges the right deals. If they bring the challenges 321 00:16:41,840 --> 00:16:44,880 Speaker 1: to the right deals, I think they'll win. Um. So, 322 00:16:44,960 --> 00:16:47,600 Speaker 1: for instance, we're waiting on a verdict in the DJ's 323 00:16:47,680 --> 00:16:50,560 Speaker 1: challenge of the merger of Penguin Random House with Simon 324 00:16:50,560 --> 00:16:53,440 Speaker 1: and Schuster. I actually read the transcript from that trial. 325 00:16:53,480 --> 00:16:54,960 Speaker 1: I didn't listen to it, and I think the d 326 00:16:55,040 --> 00:16:57,200 Speaker 1: o J did a great job and I think they 327 00:16:57,240 --> 00:16:59,320 Speaker 1: have a good shot of winning that one. So that 328 00:16:59,440 --> 00:17:02,040 Speaker 1: will be and win, you know, one check mark on 329 00:17:02,080 --> 00:17:03,560 Speaker 1: the side of a win for the d o J. 330 00:17:04,480 --> 00:17:07,240 Speaker 1: I also think that what isn't in the press is 331 00:17:07,240 --> 00:17:10,600 Speaker 1: that the FTC has managed to get a lot of 332 00:17:10,640 --> 00:17:14,320 Speaker 1: abandonments and that's a success. It means they decide they're 333 00:17:14,320 --> 00:17:16,720 Speaker 1: going to challenge a deal and rather than litigating the 334 00:17:16,720 --> 00:17:20,080 Speaker 1: company's walk away. They've had quite a few in the 335 00:17:20,160 --> 00:17:23,359 Speaker 1: last year and a half and those are successes too. 336 00:17:23,400 --> 00:17:26,639 Speaker 1: So I kind of feel like it's sort of even 337 00:17:26,960 --> 00:17:29,240 Speaker 1: and we need to see what the next two years brings. 338 00:17:29,560 --> 00:17:34,520 Speaker 1: Thanks Jen. That's Bloomberg Intelligence Senior litigation analyst, Jennifer Ree. 339 00:17:35,920 --> 00:17:40,360 Speaker 1: These were folks who got the transport that Biden totally abandoned. 340 00:17:40,359 --> 00:17:42,879 Speaker 1: They were homeless, they were hungry, so they hit the 341 00:17:42,960 --> 00:17:46,320 Speaker 1: jackpot to be able to be in the wealthiest sanctuary 342 00:17:46,440 --> 00:17:51,240 Speaker 1: jurisdiction in the world. But those venezuel and migrants don't 343 00:17:51,240 --> 00:17:55,080 Speaker 1: agree with Florida Governor Rhonda Santis. They say they were 344 00:17:55,200 --> 00:17:59,240 Speaker 1: duped with false promises and used as political pawns when 345 00:17:59,280 --> 00:18:02,880 Speaker 1: De santist with them on flights from Texas to Martha's Vineyard. 346 00:18:03,119 --> 00:18:06,480 Speaker 1: And they're suing him for the violation of their constitutional 347 00:18:06,520 --> 00:18:10,200 Speaker 1: and civil rights. And there is also a criminal investigation 348 00:18:10,359 --> 00:18:14,520 Speaker 1: by the Sheriff of San Antonio, Texas. What infuriates me 349 00:18:14,560 --> 00:18:17,320 Speaker 1: the most about this case is that here we have 350 00:18:17,400 --> 00:18:20,000 Speaker 1: forty eight people that are already on on hard times. 351 00:18:20,560 --> 00:18:24,000 Speaker 1: Right they are here legally in our country at that point, 352 00:18:24,000 --> 00:18:26,760 Speaker 1: they have every right to be where they are. And 353 00:18:26,800 --> 00:18:29,240 Speaker 1: I believe that they were preyed upon. Somebody came from 354 00:18:29,240 --> 00:18:33,160 Speaker 1: out of state, preyed upon these people, um lured them 355 00:18:33,160 --> 00:18:35,600 Speaker 1: with promises of a better life, which is what they 356 00:18:35,600 --> 00:18:39,119 Speaker 1: were absolutely looking for. My guest is a. Laura Moker, 357 00:18:39,200 --> 00:18:43,320 Speaker 1: j Director of Columbia Law Schools Immigrants Rights Clinic, tell 358 00:18:43,400 --> 00:18:47,480 Speaker 1: us about this lawsuit. So, this lawsuit was filed on Tuesday, 359 00:18:47,680 --> 00:18:52,680 Speaker 1: just days after Governor Destantus of Florida transported about fifty 360 00:18:53,240 --> 00:18:57,520 Speaker 1: asylum seekers and migrants, almost all from Venezuela and left 361 00:18:57,600 --> 00:19:00,680 Speaker 1: them stranded on Martha's Vineyard without so much as a 362 00:19:00,760 --> 00:19:04,199 Speaker 1: phone call to let island residents know that people with 363 00:19:04,280 --> 00:19:09,320 Speaker 1: needs were coming. So the plaintiffs include three individuals who 364 00:19:09,400 --> 00:19:16,400 Speaker 1: were lured without proper consent from Texas to Martha's Vineyard, 365 00:19:16,600 --> 00:19:20,040 Speaker 1: and the plaintiffs alleged that Governor to Santis and other 366 00:19:20,080 --> 00:19:26,000 Speaker 1: Florida officials violated the Constitution, federal laws, and state laws 367 00:19:26,080 --> 00:19:32,760 Speaker 1: by inappropriately luring migrants from Texas to Martha's Vineyard without 368 00:19:32,840 --> 00:19:36,200 Speaker 1: their knowledge or consent. Will you explain how they were 369 00:19:36,320 --> 00:19:41,480 Speaker 1: lured and what they were promised? So, according to both 370 00:19:41,640 --> 00:19:45,119 Speaker 1: reports that we've all heard, as well as the lawsuit itself, 371 00:19:45,720 --> 00:19:48,960 Speaker 1: it appears that there were a number of individuals who 372 00:19:48,960 --> 00:19:54,639 Speaker 1: were using false names, who spoke Spanish, who approached asylum 373 00:19:54,680 --> 00:19:58,280 Speaker 1: seekers and other migrants at shelters in Texas in the 374 00:19:58,320 --> 00:20:04,320 Speaker 1: San Antonio area and promised the asylum seekers a range 375 00:20:04,480 --> 00:20:09,640 Speaker 1: of things if they got onto these planes, including housing, employment, 376 00:20:09,760 --> 00:20:14,840 Speaker 1: immigration support services. Basically, if individuals got on the planes, 377 00:20:14,960 --> 00:20:19,520 Speaker 1: they would have a better life. The unknown individuals promised 378 00:20:19,680 --> 00:20:24,800 Speaker 1: that the asylum seekers would be taken to a sanctuary jurisdiction. 379 00:20:25,200 --> 00:20:28,639 Speaker 1: The names that were specifically mentioned for Washington d C 380 00:20:29,119 --> 00:20:32,600 Speaker 1: or Boston, and the plaintiffs in this case did not 381 00:20:32,800 --> 00:20:37,000 Speaker 1: know that they were being transported to Martha's Vineyard. Let's 382 00:20:37,000 --> 00:20:41,840 Speaker 1: talk about Florida's response. A spokeswoman for De Santis said 383 00:20:41,920 --> 00:20:45,879 Speaker 1: that the complaint was political theater and the transportation of 384 00:20:45,880 --> 00:20:49,240 Speaker 1: the immigrants to Martha's Vineyard was done on a voluntary basis. 385 00:20:49,560 --> 00:20:54,480 Speaker 1: The immigrants were homeless, hungry, and abandoned. It's particularly ironic 386 00:20:54,560 --> 00:20:59,520 Speaker 1: about a Florida spokesperson is calling this lawsuits political theater, 387 00:20:59,640 --> 00:21:03,320 Speaker 1: since is exactly what Governor the Santists has engaged in 388 00:21:03,720 --> 00:21:08,080 Speaker 1: by dropping asylum seekers and others who are very vulnerable 389 00:21:08,520 --> 00:21:13,399 Speaker 1: to Martha's Vineyard without providing them with any care or attention. 390 00:21:13,960 --> 00:21:17,720 Speaker 1: You know, the Florida officials here have engaged in a 391 00:21:17,760 --> 00:21:21,760 Speaker 1: cruel political ploy, one that is designed to gain as 392 00:21:21,840 --> 00:21:25,960 Speaker 1: much media attention as possible. As the Stantists is building 393 00:21:26,000 --> 00:21:29,520 Speaker 1: a campaign to be our next president, his political stunts 394 00:21:29,720 --> 00:21:33,560 Speaker 1: is advancing an anti immigrant agenda and trying to instill 395 00:21:33,680 --> 00:21:37,920 Speaker 1: fear and he tred toward immigrant nationwide. It is cruel 396 00:21:38,200 --> 00:21:43,280 Speaker 1: and an American talking about their damages. Apparently, when they 397 00:21:43,280 --> 00:21:47,840 Speaker 1: got to Martha's Vineyard, they were welcomed and sheltered and helped. 398 00:21:48,440 --> 00:21:51,920 Speaker 1: So some might say, well, they were better off being 399 00:21:52,000 --> 00:21:55,960 Speaker 1: welcomed in Martha's Vineyard than being stuck in San Antonio, Texas. 400 00:21:56,760 --> 00:22:01,520 Speaker 1: You know, I hear you on the war welcome that 401 00:22:02,160 --> 00:22:06,840 Speaker 1: individuals at Martha's Vineyard provided to these asylum seekers. And 402 00:22:06,880 --> 00:22:11,240 Speaker 1: I'm grateful for everything everyone did to help these asylum 403 00:22:11,320 --> 00:22:16,280 Speaker 1: seekers feel like dignified human beings who were welcome in 404 00:22:16,320 --> 00:22:22,000 Speaker 1: our country. Now that said the individual plaintiffs in this lawsuit, 405 00:22:23,040 --> 00:22:25,400 Speaker 1: and and now I can quote from the complaint they 406 00:22:25,480 --> 00:22:29,920 Speaker 1: felt helpless, defrauded, desperate, They were crying, They felt anxious 407 00:22:29,960 --> 00:22:33,600 Speaker 1: and confused. They suffered from lack of sleep and vertigo. 408 00:22:34,119 --> 00:22:38,880 Speaker 1: These are very vulnerable individuals who are seeking asylum, who 409 00:22:39,000 --> 00:22:43,920 Speaker 1: suffered untold harm in their home countries already, and then 410 00:22:44,000 --> 00:22:48,240 Speaker 1: to be tricked and brought to a destination that they 411 00:22:48,280 --> 00:22:51,760 Speaker 1: didn't expect by a person who they trusted, who turned 412 00:22:51,760 --> 00:22:54,520 Speaker 1: out to be a fraud. That can really undermine a 413 00:22:54,600 --> 00:22:59,280 Speaker 1: person's sense of stability and trust. It seems like De 414 00:22:59,400 --> 00:23:03,960 Speaker 1: santis is stunt got a lot of attention, but Governor 415 00:23:04,000 --> 00:23:07,720 Speaker 1: Greg Abbott has been sending bus loads of migrants to 416 00:23:07,840 --> 00:23:12,440 Speaker 1: New York and d C. And Chicago and overloading their 417 00:23:12,480 --> 00:23:17,760 Speaker 1: systems for quite some time. Has anyone sued him as 418 00:23:17,760 --> 00:23:22,280 Speaker 1: far as I know, no, not yet. Do you think 419 00:23:22,320 --> 00:23:26,320 Speaker 1: that what they're doing is illegal in any sense? Not 420 00:23:26,480 --> 00:23:29,639 Speaker 1: this case, but I mean just the bussing and taking 421 00:23:29,680 --> 00:23:33,480 Speaker 1: migrants from one place and putting them in sanctuary cities 422 00:23:33,560 --> 00:23:39,160 Speaker 1: or states. Right, this is a real open legal question. 423 00:23:40,000 --> 00:23:44,560 Speaker 1: The leading Supreme Court case on this is about ten 424 00:23:44,640 --> 00:23:48,399 Speaker 1: years old. It's Arizona versus United States from June of 425 00:23:48,520 --> 00:23:51,920 Speaker 1: two thousand twelve. In that case, through a law called 426 00:23:52,000 --> 00:23:58,280 Speaker 1: Senate Bill ten seventy, Arizona was trying to criminalize undocumented 427 00:23:58,320 --> 00:24:03,760 Speaker 1: immigration status in Arizona through state criminal penalties and charges. 428 00:24:04,560 --> 00:24:08,560 Speaker 1: In a five three decisions, the Supreme Court held that 429 00:24:08,840 --> 00:24:13,800 Speaker 1: was impermissible. The Supreme Court held that Arizona's actions in 430 00:24:13,840 --> 00:24:19,400 Speaker 1: that case violated the Supremacy Clause of the Constitution, which 431 00:24:19,440 --> 00:24:24,359 Speaker 1: granted Congress and not the state's plenary powers to regulate 432 00:24:24,440 --> 00:24:29,240 Speaker 1: immigration enforcements. Now, what we're seeing today with bus loads 433 00:24:29,280 --> 00:24:32,920 Speaker 1: of migrants and immigrants and asylum seekers being brought from 434 00:24:32,960 --> 00:24:36,880 Speaker 1: border states to other parts of the countries isn't exactly 435 00:24:36,920 --> 00:24:41,119 Speaker 1: what Arizona was doing ten years ago. But it is 436 00:24:41,840 --> 00:24:47,080 Speaker 1: an analogous situation, and there are real questions about whether 437 00:24:47,320 --> 00:24:51,640 Speaker 1: or not the Border States actions here violate the Constitution. 438 00:24:52,440 --> 00:24:55,760 Speaker 1: I'm curious about one thing. If it's proven that they 439 00:24:55,960 --> 00:24:59,560 Speaker 1: that these migrants were the victims of a fraud, would 440 00:24:59,600 --> 00:25:03,240 Speaker 1: they be eligible for a special visa? I think it's 441 00:25:03,240 --> 00:25:09,080 Speaker 1: a you visa. You visas are available to immigrants to 442 00:25:09,119 --> 00:25:12,919 Speaker 1: the United States who have suffered a crime while on 443 00:25:13,119 --> 00:25:16,040 Speaker 1: US soil if the immigrant can prove that they have 444 00:25:16,160 --> 00:25:21,800 Speaker 1: suffered substantial physical or mental harm. This type of visa 445 00:25:22,000 --> 00:25:25,320 Speaker 1: is extremely difficult to get because a person can't just 446 00:25:25,359 --> 00:25:28,359 Speaker 1: apply for it and get it. In the first instance, 447 00:25:28,480 --> 00:25:31,560 Speaker 1: a migrant an immigrant would need what's called a law 448 00:25:31,680 --> 00:25:35,879 Speaker 1: enforcement certification, So a law enforcement official would need to 449 00:25:35,920 --> 00:25:39,720 Speaker 1: sign off on a forum saying that each individual immigrant, 450 00:25:39,760 --> 00:25:42,879 Speaker 1: migrant asylum speaker who has been the victim of the 451 00:25:42,920 --> 00:25:47,000 Speaker 1: crime in the United States provided substantial assistance in the 452 00:25:47,080 --> 00:25:51,399 Speaker 1: investigation or prosecution of that crime. So it is a 453 00:25:51,520 --> 00:25:55,639 Speaker 1: law process from here to point B, which is trying 454 00:25:55,640 --> 00:26:00,200 Speaker 1: to get a law enforcement certification, to points see, which 455 00:26:00,200 --> 00:26:03,200 Speaker 1: is actually getting a U visa. That process can easily 456 00:26:03,280 --> 00:26:05,480 Speaker 1: take more than ten years and I want to ask 457 00:26:05,480 --> 00:26:10,040 Speaker 1: you a general question. So the immigrants from Venezuela, I 458 00:26:10,119 --> 00:26:14,520 Speaker 1: assume are seeking asylum here, how long is that process 459 00:26:14,560 --> 00:26:20,320 Speaker 1: and how likely is the ending for them? The process 460 00:26:20,359 --> 00:26:24,760 Speaker 1: for seeking asylum can take a very long time. It 461 00:26:24,920 --> 00:26:29,120 Speaker 1: is a symptom of our broken immigration system. So depending 462 00:26:29,160 --> 00:26:32,679 Speaker 1: on which jurisdiction you're looking at in the country, it 463 00:26:32,760 --> 00:26:36,280 Speaker 1: can take as long as an average of seven years 464 00:26:36,480 --> 00:26:40,320 Speaker 1: for a person's case to be heard by an immigration judge, 465 00:26:40,320 --> 00:26:43,000 Speaker 1: for the asylum seeker to have a day in court 466 00:26:43,440 --> 00:26:46,040 Speaker 1: and explain to a judge why they fear returning to 467 00:26:46,080 --> 00:26:50,280 Speaker 1: their home country. There were rumors that De Santis was 468 00:26:50,359 --> 00:26:55,840 Speaker 1: going to send migrants to Delaware, President Joe Biden's home state. 469 00:26:56,080 --> 00:26:59,760 Speaker 1: Biden's response was something to the effect of, you can come, 470 00:27:00,080 --> 00:27:04,160 Speaker 1: is it we have a beautiful shoreline? Immigration is under 471 00:27:04,200 --> 00:27:07,840 Speaker 1: the executive branch. Should the federal government be stepping in here? 472 00:27:08,200 --> 00:27:12,000 Speaker 1: What we're seeing is a broken immigration system. What we 473 00:27:12,080 --> 00:27:17,399 Speaker 1: need is comprehensive immigration reform that would allow for the orderly, 474 00:27:17,680 --> 00:27:22,760 Speaker 1: systematic processing of asylum seekers and other immigrants and migrants 475 00:27:22,840 --> 00:27:25,959 Speaker 1: into the United States on a case by case basis, 476 00:27:26,000 --> 00:27:29,880 Speaker 1: in a way that his humane and dignified and there 477 00:27:29,880 --> 00:27:34,320 Speaker 1: should be a more robust, coordinated federal response to what 478 00:27:34,359 --> 00:27:36,800 Speaker 1: we're seeing. Thanks so much for being on the show 479 00:27:36,800 --> 00:27:40,399 Speaker 1: of Laura. That's a Laura Mokeergy. She's the director of 480 00:27:40,440 --> 00:27:46,800 Speaker 1: Columbia Law School's Immigrant Rights Clinic. Johnson and Johnson faced 481 00:27:46,800 --> 00:27:50,600 Speaker 1: tough questions from federal appellate judges about whether it was 482 00:27:50,720 --> 00:27:53,840 Speaker 1: legitimate to place a unit in bankruptcy to deal with 483 00:27:53,880 --> 00:27:57,760 Speaker 1: the more than forty thou cancer lawsuits over its baby powder. 484 00:27:58,119 --> 00:28:01,480 Speaker 1: The Third Circuit will descide that the bankruptcy case was 485 00:28:01,560 --> 00:28:04,800 Speaker 1: filed in good faith or should be thrown out because 486 00:28:04,920 --> 00:28:08,879 Speaker 1: J and J and its units don't face immediate financial distress. 487 00:28:09,400 --> 00:28:12,960 Speaker 1: Joining me is bankruptcy law expert Jonathan past Knack of 488 00:28:13,080 --> 00:28:17,080 Speaker 1: David of Hutcher and Citron explain J and Jay's legal 489 00:28:17,119 --> 00:28:20,080 Speaker 1: maneuver here, which is known as the Texas two step. 490 00:28:20,520 --> 00:28:25,800 Speaker 1: This scheme that was created goes something like this, UH 491 00:28:25,960 --> 00:28:31,280 Speaker 1: company and manufacturer pharmaceutical creates a product that results in 492 00:28:31,320 --> 00:28:36,760 Speaker 1: a product liability claim. Thousands of claims come in from 493 00:28:36,800 --> 00:28:42,200 Speaker 1: a private individuals and then eventually governmental agencies and the 494 00:28:42,320 --> 00:28:46,360 Speaker 1: like very much what happened with Perdue Pharma. What happened 495 00:28:46,400 --> 00:28:49,440 Speaker 1: to Purdue Pharma with the you know, with the onslaught 496 00:28:49,520 --> 00:28:52,800 Speaker 1: of litigation and lawsuits which were all directed at the 497 00:28:52,840 --> 00:28:58,600 Speaker 1: actual operating entity, forced Perdue to go into a direct 498 00:28:58,720 --> 00:29:02,840 Speaker 1: chapter eleven and you don't risk everything. Um, as we know, 499 00:29:03,000 --> 00:29:05,640 Speaker 1: chapter eleven is an uncertain process that can end up 500 00:29:05,640 --> 00:29:08,840 Speaker 1: in a in a forced liquidation or you know, a 501 00:29:08,960 --> 00:29:13,320 Speaker 1: forced shutdown or what have you. And meanwhile, you know, 502 00:29:13,360 --> 00:29:17,000 Speaker 1: you still have to negotiate with your creditors, and of 503 00:29:17,040 --> 00:29:21,000 Speaker 1: course the process becomes extremely expensive, you know, the more 504 00:29:21,200 --> 00:29:26,680 Speaker 1: sophisticated in detailed your your operations are. So somebody came 505 00:29:26,760 --> 00:29:29,560 Speaker 1: up with the brilliant idea of said, hey, let's create 506 00:29:29,640 --> 00:29:34,000 Speaker 1: a bankruptcy remote entity. We call them commonly sp s. 507 00:29:34,320 --> 00:29:38,240 Speaker 1: You know that they're often created part of financial transactions 508 00:29:38,280 --> 00:29:42,120 Speaker 1: so that you know, lenders and investors can more easily 509 00:29:42,480 --> 00:29:47,000 Speaker 1: isolate an asset and a bankruptcy down the road. So 510 00:29:47,400 --> 00:29:50,040 Speaker 1: that's kind of what they did here. So Jay and 511 00:29:50,160 --> 00:29:55,000 Speaker 1: Ja created a new entity, call it Entity two, and 512 00:29:55,440 --> 00:29:59,120 Speaker 1: they came up with an idea where the new company 513 00:29:59,240 --> 00:30:02,680 Speaker 1: would whom all of the liabilities of the old copy. 514 00:30:02,680 --> 00:30:06,000 Speaker 1: You can't assign liabilities, okay, as we all know, you 515 00:30:06,040 --> 00:30:10,680 Speaker 1: can transfer, you can assign assets to another entity, but 516 00:30:10,760 --> 00:30:14,280 Speaker 1: you can't really assign a liability you were. The liability 517 00:30:14,320 --> 00:30:16,880 Speaker 1: remains with the company, by the way, So J and 518 00:30:16,960 --> 00:30:19,720 Speaker 1: J is still on the hook with all these lawsuits, 519 00:30:20,120 --> 00:30:24,280 Speaker 1: all these claims related to the talent. But what they 520 00:30:24,320 --> 00:30:26,640 Speaker 1: did is they said, hey, let's create a separate entity 521 00:30:26,640 --> 00:30:31,440 Speaker 1: who will also assume the liability and therefore claim the 522 00:30:31,480 --> 00:30:35,840 Speaker 1: liabilities as as their own or jointly and severally with 523 00:30:36,080 --> 00:30:39,160 Speaker 1: J and J. But we won't put any assets in 524 00:30:39,280 --> 00:30:45,840 Speaker 1: that entity. It's really like a depository, a liability depository. 525 00:30:45,920 --> 00:30:48,720 Speaker 1: So we can have all of the claims. We can argue, 526 00:30:48,720 --> 00:30:51,120 Speaker 1: oh yeah, well this company's on the hook for the 527 00:30:51,160 --> 00:30:54,920 Speaker 1: claims too. And guess what, We're gonna file that asset 528 00:30:55,000 --> 00:30:59,000 Speaker 1: list entity into bankruptcy so that they could take advantage 529 00:30:59,000 --> 00:31:02,680 Speaker 1: of the automatic stay. Because the only way Jay and 530 00:31:02,760 --> 00:31:06,200 Speaker 1: Jay could stop all the list lawsuits otherwise is if 531 00:31:06,280 --> 00:31:09,280 Speaker 1: Jay and Jay went into bankruptcy itself, which obviously it's 532 00:31:09,320 --> 00:31:12,520 Speaker 1: looking to avoid. And where's the Texas part of this 533 00:31:12,640 --> 00:31:17,640 Speaker 1: two step? So it creates this bankruptcyial remote throws it 534 00:31:17,680 --> 00:31:20,880 Speaker 1: down into Texas, which you know has the history of 535 00:31:21,240 --> 00:31:24,160 Speaker 1: let's just say more debt or friendly venue, and at 536 00:31:24,200 --> 00:31:27,920 Speaker 1: least it's perceived that way. You know, it's kind of 537 00:31:27,960 --> 00:31:31,120 Speaker 1: a successor to Delaware, and that you might have heard 538 00:31:31,160 --> 00:31:34,560 Speaker 1: over the years with many you know, public companies and 539 00:31:34,640 --> 00:31:39,200 Speaker 1: mega corporations when they file, they found Delaware because it's 540 00:31:39,240 --> 00:31:43,600 Speaker 1: perceived anyway as a debtor friendly venue or forum. So 541 00:31:44,560 --> 00:31:50,240 Speaker 1: they essentially forum shop by setting up this corporation in 542 00:31:50,360 --> 00:31:53,680 Speaker 1: Texas and then file in whatever the southern district of 543 00:31:53,800 --> 00:31:59,960 Speaker 1: Texas and technically it creates or arguably creates an autom 544 00:32:00,000 --> 00:32:04,200 Speaker 1: out of stay of all the lawsuits. Now that automatically 545 00:32:04,240 --> 00:32:08,800 Speaker 1: raised a lot of contention because doesn't really create an 546 00:32:08,800 --> 00:32:12,880 Speaker 1: automatic stay if that new entity is not named in 547 00:32:13,000 --> 00:32:17,040 Speaker 1: any of these lawsuits, just by virtue of them assuming 548 00:32:17,080 --> 00:32:23,160 Speaker 1: the liability, does that mean that they have the right 549 00:32:23,240 --> 00:32:27,080 Speaker 1: to stay all of those lawsuits? So, I mean, we 550 00:32:27,200 --> 00:32:30,040 Speaker 1: know why they tried to do it, so that they 551 00:32:30,080 --> 00:32:32,920 Speaker 1: could try and argue that all the lawsuits are staying 552 00:32:32,960 --> 00:32:36,880 Speaker 1: and then said, hey, you know, come down to bankruptcy Corps. 553 00:32:36,920 --> 00:32:40,160 Speaker 1: We'll get a mediation going and we'll get a big 554 00:32:40,240 --> 00:32:43,400 Speaker 1: class settlement. You know, along the lines of John Spanville 555 00:32:43,440 --> 00:32:47,560 Speaker 1: and another famous product liability bankruptcies that have occurred over 556 00:32:47,600 --> 00:32:50,960 Speaker 1: the years. That's what the Texas two stepped. What was 557 00:32:51,040 --> 00:32:54,600 Speaker 1: the question before the appeals court. Well, again, you know, 558 00:32:54,720 --> 00:32:59,680 Speaker 1: the whole premise of this bankruptcy was challenged from the 559 00:32:59,760 --> 00:33:02,240 Speaker 1: get go as a bad faith pilot we would call it, 560 00:33:02,680 --> 00:33:07,520 Speaker 1: so that you know, the company has no ability to reorganize, 561 00:33:07,560 --> 00:33:11,720 Speaker 1: does have any assets, just as liabilities. There's a variety 562 00:33:11,760 --> 00:33:15,680 Speaker 1: of reasons creditors moved to dismissed bankruptcy and they fall 563 00:33:15,720 --> 00:33:17,880 Speaker 1: into this purview of what they call the bad faith 564 00:33:17,920 --> 00:33:21,440 Speaker 1: filing world. So it could be where you're trying to 565 00:33:21,600 --> 00:33:25,959 Speaker 1: avoid a particular venue. We call that a forum shop, 566 00:33:26,000 --> 00:33:28,360 Speaker 1: you know, to bring it down to Texas. This happened 567 00:33:28,360 --> 00:33:31,120 Speaker 1: in the end Ron case where the case was actually 568 00:33:31,480 --> 00:33:35,000 Speaker 1: steered away from Houston to New York because there were 569 00:33:35,000 --> 00:33:37,640 Speaker 1: a lot of employee anger and you have those types 570 00:33:37,720 --> 00:33:40,440 Speaker 1: of arguments. Here. I can assure you that there were 571 00:33:40,520 --> 00:33:43,680 Speaker 1: motions made out of the box to dismiss the bankruptcy, 572 00:33:43,880 --> 00:33:46,320 Speaker 1: you know, as a sham bankruptcy. And one of the 573 00:33:46,440 --> 00:33:49,920 Speaker 1: judges during the Pellette hearing says, the timing really suggests 574 00:33:49,920 --> 00:33:54,280 Speaker 1: you to this for litigation advantage. The lawyer for the 575 00:33:54,360 --> 00:33:57,600 Speaker 1: J and J unit. Neil cart y'all said, there's an 576 00:33:57,600 --> 00:34:04,880 Speaker 1: advantage to bankruptcy. It's incident to it isn't the reason right? Again, 577 00:34:04,920 --> 00:34:08,480 Speaker 1: this gets back to the standards that courts must apply 578 00:34:09,360 --> 00:34:13,920 Speaker 1: to whether to grant drastic relief like you know, dismissing 579 00:34:13,920 --> 00:34:16,920 Speaker 1: a bankruptcy, you know, and throwing the debtor out of 580 00:34:16,960 --> 00:34:20,240 Speaker 1: bankruptcy court. And you have to be able to prove 581 00:34:20,360 --> 00:34:23,160 Speaker 1: by well, it's only a preponderance of the evidence on 582 00:34:23,239 --> 00:34:27,840 Speaker 1: this standard that there was a bad faith purpose, and 583 00:34:27,880 --> 00:34:31,640 Speaker 1: it could be a litigation tactic is considered a bad 584 00:34:31,680 --> 00:34:34,880 Speaker 1: faith purpose. You know. A lot of the cases revolve 585 00:34:34,960 --> 00:34:39,320 Speaker 1: around whether there's just one big creditor and one debtor 586 00:34:39,400 --> 00:34:42,200 Speaker 1: and they call that the single party dispute. You certainly 587 00:34:42,239 --> 00:34:45,239 Speaker 1: don't have that here, So that wighs in favor of 588 00:34:45,400 --> 00:34:50,080 Speaker 1: the debtor's case being sustained in bankruptcy. But the big 589 00:34:50,120 --> 00:34:53,759 Speaker 1: bugaboo here is, you know, did you just mentioninate the 590 00:34:53,760 --> 00:34:59,200 Speaker 1: whole process to invoke an automatic stay or to wrestle 591 00:35:00,080 --> 00:35:05,279 Speaker 1: jurisdiction away from the other courts around the country into 592 00:35:05,360 --> 00:35:08,920 Speaker 1: Texas bankruptcy Court. So one thing that caught you out, 593 00:35:09,280 --> 00:35:12,160 Speaker 1: argued that seemed to make sense to me, is about 594 00:35:12,200 --> 00:35:16,319 Speaker 1: the lottery style home runs of verdicts here. I mean, 595 00:35:16,320 --> 00:35:19,160 Speaker 1: there was a four point seven billion dollar award in 596 00:35:19,239 --> 00:35:24,040 Speaker 1: two about twenty women who blame their cancer on J 597 00:35:24,200 --> 00:35:27,440 Speaker 1: and Jay's talc and J and J ended up paying 598 00:35:27,480 --> 00:35:30,719 Speaker 1: out two and a half billion dollars. So J and 599 00:35:30,800 --> 00:35:33,640 Speaker 1: J is saying that by putting it all here in 600 00:35:33,719 --> 00:35:37,920 Speaker 1: this unit, it ensures that there will be some fair 601 00:35:37,960 --> 00:35:42,400 Speaker 1: payouts right uniform of the settlement. Again, this is the 602 00:35:42,480 --> 00:35:47,560 Speaker 1: Johns Manville playbook, where you know you have asbestos claims 603 00:35:47,680 --> 00:35:51,920 Speaker 1: all over the country before bankruptcy you have you know, 604 00:35:52,160 --> 00:35:57,120 Speaker 1: you have a variety of different settlements that are not uniform. 605 00:35:57,280 --> 00:36:00,279 Speaker 1: And the argument that the debt or man aches to 606 00:36:00,360 --> 00:36:02,359 Speaker 1: the court is a good one that you know, this 607 00:36:02,440 --> 00:36:08,080 Speaker 1: will ensure uniformity of justice so to speak, everybody can 608 00:36:08,160 --> 00:36:12,200 Speaker 1: participate and a fund will be created. I mean, it 609 00:36:12,360 --> 00:36:16,120 Speaker 1: is a classic mass towards bankruptcy since the you know, 610 00:36:16,200 --> 00:36:19,640 Speaker 1: what they've done is this Texas to Steppen, and that 611 00:36:19,920 --> 00:36:25,480 Speaker 1: I think has made things more difficult forgetting this mass 612 00:36:25,520 --> 00:36:31,160 Speaker 1: towards settlement implemented. The bankruptcy judge ruled that this was 613 00:36:31,320 --> 00:36:35,160 Speaker 1: legitimate and a better solution than continuing to have the 614 00:36:35,239 --> 00:36:39,279 Speaker 1: jury's way claims across the nation, across the country right 615 00:36:39,320 --> 00:36:43,240 Speaker 1: where you have these you know, lottery style verdicts, inconsistency 616 00:36:43,280 --> 00:36:46,880 Speaker 1: of verdicts. I mean, that's another factor in the courts 617 00:36:46,880 --> 00:36:50,960 Speaker 1: can weigh you know, will this ensure you know, uniformative 618 00:36:50,960 --> 00:36:55,200 Speaker 1: of justice, But that of course is weighed against individual 619 00:36:55,280 --> 00:37:00,960 Speaker 1: defendants having rights to bring you know, actions where where 620 00:37:01,000 --> 00:37:03,680 Speaker 1: they you know, where they live or where that it's 621 00:37:03,719 --> 00:37:08,200 Speaker 1: more uh an appropriate venue than forcing them down. You know, 622 00:37:08,320 --> 00:37:11,520 Speaker 1: some lady up in Washington State now you know, has 623 00:37:11,520 --> 00:37:15,839 Speaker 1: their case being mediated or uh, you know, litigated down 624 00:37:15,880 --> 00:37:19,360 Speaker 1: in Texas. So, uh, it's it's a push and a 625 00:37:19,440 --> 00:37:21,880 Speaker 1: pull here. Um, it'll be interesting to see how the 626 00:37:21,920 --> 00:37:27,320 Speaker 1: circuit court comes down. And really, could you know, either 627 00:37:27,560 --> 00:37:32,520 Speaker 1: make this a model for future mass tort claims resolution 628 00:37:32,840 --> 00:37:37,240 Speaker 1: or it could you know, it could push back on 629 00:37:37,239 --> 00:37:39,719 Speaker 1: on this kind of Texas to step and you know, 630 00:37:39,800 --> 00:37:43,680 Speaker 1: which is obviously designed to protect you know, the parent 631 00:37:43,719 --> 00:37:48,960 Speaker 1: company from utter chaos and destruction. This isn't the first 632 00:37:49,760 --> 00:37:54,680 Speaker 1: company who has done this Texas to Step, No, certainly not, 633 00:37:55,920 --> 00:37:57,879 Speaker 1: I take it since this is the first to reach 634 00:37:57,920 --> 00:38:03,040 Speaker 1: an appeals court they've been allowed to go through before. Yeah, again, 635 00:38:03,080 --> 00:38:08,320 Speaker 1: there are any number of cases. You know, the southern 636 00:38:08,320 --> 00:38:10,879 Speaker 1: district of Texas got very hot a couple of years 637 00:38:10,920 --> 00:38:14,800 Speaker 1: ago and we had during one of so many cats 638 00:38:14,800 --> 00:38:21,560 Speaker 1: and oil collapses and became a very favorable pew um 639 00:38:21,600 --> 00:38:26,680 Speaker 1: away from Justo Delaware. And you know, so corporations have 640 00:38:26,880 --> 00:38:29,759 Speaker 1: taken advantage of filing in Texas for many years. But 641 00:38:30,160 --> 00:38:35,120 Speaker 1: again that's it's really a venue shopping issue on that point, 642 00:38:35,200 --> 00:38:39,480 Speaker 1: whether it's Texas or Delaware. But um, yeah, I mean 643 00:38:39,560 --> 00:38:42,240 Speaker 1: this is we're all waiting to see what happens again. 644 00:38:42,719 --> 00:38:48,560 Speaker 1: Bankruptcy is Uh, it's an evolving area of the law. 645 00:38:48,760 --> 00:38:53,400 Speaker 1: It's it's it involves a lot of creativity and flexibility 646 00:38:54,120 --> 00:38:58,799 Speaker 1: and you know, and sometimes it really works. So you know, 647 00:38:58,880 --> 00:39:01,120 Speaker 1: there's been a whole I mean, if you've been following 648 00:39:01,120 --> 00:39:03,960 Speaker 1: the produce case up here in White Plain, you know, 649 00:39:04,080 --> 00:39:07,120 Speaker 1: they thought they had come up with a global resolution 650 00:39:07,960 --> 00:39:11,040 Speaker 1: and then um and Judge dray and approved it, and 651 00:39:11,120 --> 00:39:15,920 Speaker 1: it included personal releases of the Sackler family and they 652 00:39:16,120 --> 00:39:19,640 Speaker 1: just did not so well with any number of you know, 653 00:39:20,200 --> 00:39:24,719 Speaker 1: state constituents and and and sure enough it was overturned 654 00:39:24,719 --> 00:39:27,040 Speaker 1: on appeal at the settlement and they all had to 655 00:39:27,080 --> 00:39:29,879 Speaker 1: go back to the drawing board. But we have seen 656 00:39:30,000 --> 00:39:35,040 Speaker 1: historically that you know, bankruptcy is not necessarily a bad 657 00:39:35,040 --> 00:39:39,359 Speaker 1: tool for for solving these mass tort litigations and you know, 658 00:39:39,480 --> 00:39:42,360 Speaker 1: permitting you know, some of the biggest companies in America 659 00:39:42,440 --> 00:39:47,279 Speaker 1: to continue or not. So, um, it'll be interesting to 660 00:39:47,320 --> 00:39:51,200 Speaker 1: see if this case survives or not. Uh and what 661 00:39:51,360 --> 00:39:55,080 Speaker 1: that the impact could be, you know, really devastating or 662 00:39:55,160 --> 00:39:58,319 Speaker 1: material on the future of Johnson and Johnson. Thanks for 663 00:39:58,360 --> 00:40:01,840 Speaker 1: being on the show. John that's bankrupty attorney Jonathan Pastrinak 664 00:40:02,200 --> 00:40:05,120 Speaker 1: of David Off, Hutcher and Citron. And that's it for 665 00:40:05,120 --> 00:40:07,759 Speaker 1: this edition of The Bloomberg Law Show. Remember you can 666 00:40:07,760 --> 00:40:11,000 Speaker 1: always get the latest legal news on our Bloomberg Law Podcast. 667 00:40:11,280 --> 00:40:14,319 Speaker 1: You can find them on Apple Podcasts, Spotify, and at 668 00:40:14,480 --> 00:40:19,520 Speaker 1: www dot Bloomberg dot com, slash podcast, Slash Law, And 669 00:40:19,560 --> 00:40:22,319 Speaker 1: remember to tune into The Bloomberg Law Show every week 670 00:40:22,440 --> 00:40:25,960 Speaker 1: night at ten pm Wall Street Time. I'm June Grosso 671 00:40:26,120 --> 00:40:27,719 Speaker 1: and you're listening to Bloomberg