1 00:00:00,560 --> 00:00:05,320 Speaker 1: This is Bloomberg Law, with June Grasso from Bloomberg Radio. 2 00:00:05,640 --> 00:00:07,840 Speaker 1: In an eight to one decision this week, the Supreme 3 00:00:07,840 --> 00:00:10,840 Speaker 1: Court has blunted one of the Security and Exchange Commission's 4 00:00:10,880 --> 00:00:14,280 Speaker 1: most powerful legal tools for recouping billions of dollars and 5 00:00:14,400 --> 00:00:18,600 Speaker 1: illegal profits from wrongdoers each year. The majority opinion by 6 00:00:18,640 --> 00:00:22,279 Speaker 1: Justice Sonya so to mayor preserve the SEC's power to 7 00:00:22,320 --> 00:00:25,640 Speaker 1: seek discorchement in federal court as long as the money 8 00:00:25,720 --> 00:00:29,280 Speaker 1: doesn't exceed the wrongdoer's net profits and is used to 9 00:00:29,360 --> 00:00:33,680 Speaker 1: reimburse to frauded investors, something so to major question during 10 00:00:33,680 --> 00:00:37,479 Speaker 1: the oral arguments. If the SEC got the money, it 11 00:00:37,560 --> 00:00:40,960 Speaker 1: could then spend it on protecting investors. But if the 12 00:00:41,000 --> 00:00:43,520 Speaker 1: Treasury is getting it and I know you're gonna save 13 00:00:43,560 --> 00:00:46,919 Speaker 1: money is fungiable. But if the Treasury is getting it, 14 00:00:47,040 --> 00:00:51,640 Speaker 1: we don't really know if it's being used to help investor. 15 00:00:51,920 --> 00:00:54,680 Speaker 1: And in this case, a California couple was ordered to 16 00:00:54,720 --> 00:00:58,440 Speaker 1: pay twenty seven million dollars, well beyond the eight million 17 00:00:58,440 --> 00:01:01,520 Speaker 1: the trial judge found they'd from their scheme to defraud 18 00:01:01,560 --> 00:01:05,040 Speaker 1: investors in a cancer treatment center. Joining me is Jill Fish, 19 00:01:05,240 --> 00:01:08,480 Speaker 1: a professor of business law at the University of Pennsylvania 20 00:01:08,560 --> 00:01:12,039 Speaker 1: Law School, Jill. Both the SEC and the couple appealing 21 00:01:12,200 --> 00:01:15,039 Speaker 1: said they were pleased with the decision. So who really 22 00:01:15,080 --> 00:01:17,520 Speaker 1: won here? I could say neither one or I could 23 00:01:17,520 --> 00:01:20,679 Speaker 1: say both one, and either answer would be right, because 24 00:01:20,680 --> 00:01:23,880 Speaker 1: what the Supreme Court did actually is something a little 25 00:01:23,880 --> 00:01:27,319 Speaker 1: bit different from what either party was looking for. And 26 00:01:27,560 --> 00:01:31,800 Speaker 1: I think the Supreme Court's goal was to rein in 27 00:01:32,280 --> 00:01:36,280 Speaker 1: the scope of the SEC's power to seek disgorgement. But 28 00:01:36,360 --> 00:01:41,080 Speaker 1: it's certainly preserved disgorgement as an equitable remedy. So explain 29 00:01:41,280 --> 00:01:46,000 Speaker 1: what equitable remedy means and how that term and the 30 00:01:46,080 --> 00:01:50,840 Speaker 1: concept played in here. So basically, the SEC can seek 31 00:01:51,080 --> 00:01:55,560 Speaker 1: a variety of different kinds of relief. One classic kind 32 00:01:55,600 --> 00:01:59,120 Speaker 1: of relief is imposing a fine on a party that's 33 00:01:59,160 --> 00:02:03,880 Speaker 1: violated the sex charity's laws. Disgorgement is different. Disgorgement is 34 00:02:03,960 --> 00:02:08,760 Speaker 1: usually understood as giving up or giving back your ill 35 00:02:08,840 --> 00:02:13,440 Speaker 1: gotten gains or your unfair profits, whatever profits the parties 36 00:02:13,480 --> 00:02:16,720 Speaker 1: in this case got. The petitioners in this case, we're 37 00:02:16,760 --> 00:02:21,480 Speaker 1: seeking to get foreign nationals to invest in a so 38 00:02:21,560 --> 00:02:25,480 Speaker 1: called cancer treatment center. So they raised a lot of money, 39 00:02:25,560 --> 00:02:28,160 Speaker 1: a lot of money that was not invested in the 40 00:02:28,200 --> 00:02:31,560 Speaker 1: cancer treatment center. And so what the SEC sought in 41 00:02:31,600 --> 00:02:35,160 Speaker 1: this case, in addition to a fine, was to recover 42 00:02:35,600 --> 00:02:40,040 Speaker 1: those unjust profits. And it's the disgorgement of those unjust 43 00:02:40,120 --> 00:02:43,760 Speaker 1: profits that's the remedy that was contested that the Supreme 44 00:02:43,760 --> 00:02:47,920 Speaker 1: Court was evaluating in this case. Justice Sonya Sotomayor wrote 45 00:02:47,919 --> 00:02:51,040 Speaker 1: the majority opinion. Did she give a sort of formula 46 00:02:51,240 --> 00:02:55,800 Speaker 1: that the SEC has to follow in disgorgement cases? Yeah? So. 47 00:02:56,160 --> 00:03:00,440 Speaker 1: Justice Sotomayor's opinion sets out three guide law mines for 48 00:03:00,480 --> 00:03:05,800 Speaker 1: the SEC when it's seeking disgorgement. So the first guideline 49 00:03:06,160 --> 00:03:11,440 Speaker 1: is disgorgement has to be limited to a party's net profits. 50 00:03:11,800 --> 00:03:15,119 Speaker 1: If a party raises a lot of money but has 51 00:03:15,240 --> 00:03:19,720 Speaker 1: legitimate business expenses, is actually sending that money to build 52 00:03:19,720 --> 00:03:23,079 Speaker 1: a cancer treatment center, to purchase equipment and things like that, 53 00:03:23,480 --> 00:03:27,679 Speaker 1: those aren't net profits. That money doesn't have to be disgorged, 54 00:03:27,880 --> 00:03:31,320 Speaker 1: So it's a limitation on the total amount of disgorgement. 55 00:03:31,919 --> 00:03:36,280 Speaker 1: The second limit that the opinion imposes is disgorgement is 56 00:03:36,320 --> 00:03:40,800 Speaker 1: supposed to be like restitution. It's supposed to provide money 57 00:03:40,840 --> 00:03:45,120 Speaker 1: that's going to benefit the defrauded investors. Now, the opinion 58 00:03:45,160 --> 00:03:50,120 Speaker 1: doesn't explain exactly how that money benefits the investors. It 59 00:03:50,160 --> 00:03:53,440 Speaker 1: doesn't actually say the SEC has to give back the 60 00:03:53,480 --> 00:03:57,440 Speaker 1: money or identify everyone who's been defrauded, track them down, 61 00:03:57,720 --> 00:03:59,400 Speaker 1: figure out a way to put the money in their 62 00:03:59,440 --> 00:04:03,000 Speaker 1: bank account, because that issue wasn't before the court. But 63 00:04:03,240 --> 00:04:07,480 Speaker 1: the benefit for defrauded investors is a key limitation. The 64 00:04:07,560 --> 00:04:13,840 Speaker 1: third limitation is disgorgement is limited to an actual party's profit. 65 00:04:14,240 --> 00:04:18,280 Speaker 1: You can't recover disgorgement from one defendant based on the 66 00:04:18,320 --> 00:04:22,200 Speaker 1: wrongdoing or the profits that were obtained by a second defendant. 67 00:04:22,520 --> 00:04:27,120 Speaker 1: Last year, the SEC obtained three point two billion dollars 68 00:04:27,160 --> 00:04:32,040 Speaker 1: in disgorgement. Is this decision going to limit the amount 69 00:04:32,160 --> 00:04:37,000 Speaker 1: that the SEC can get next year? It's definitely going 70 00:04:37,040 --> 00:04:40,039 Speaker 1: to impose some limits for the reasons that I said. 71 00:04:40,480 --> 00:04:44,359 Speaker 1: So one limit is net profits obviously is going to 72 00:04:44,400 --> 00:04:47,839 Speaker 1: be less than growth profits. If somebody raises a billion 73 00:04:47,880 --> 00:04:52,360 Speaker 1: dollars but has some legitimate business expenses, disgorgement will be 74 00:04:52,480 --> 00:04:55,599 Speaker 1: for something less than a billion. So that's one limit. 75 00:04:55,800 --> 00:05:00,120 Speaker 1: Second limit being able to obtain disgorgement only from the 76 00:05:00,200 --> 00:05:04,480 Speaker 1: individual party that has the wrongful profits. The SEC won't 77 00:05:04,480 --> 00:05:08,159 Speaker 1: be able to get disgorgement from defended X based on 78 00:05:08,240 --> 00:05:11,680 Speaker 1: the profits obtained by defendant Y. So if defendant Y 79 00:05:11,839 --> 00:05:15,159 Speaker 1: is bankrupt, if defendant Y is out of the country 80 00:05:15,279 --> 00:05:18,520 Speaker 1: or unavailable, that again is going to limit the scope 81 00:05:18,680 --> 00:05:21,800 Speaker 1: of what the SEC can recover and will it make 82 00:05:21,839 --> 00:05:26,920 Speaker 1: it more complicated for the SEC to prosecute these cases 83 00:05:27,200 --> 00:05:30,280 Speaker 1: at the district court? Well, I wouldn't say more complicated 84 00:05:30,320 --> 00:05:34,040 Speaker 1: to prosecute the cases. The SEC can always seek disgorgement. 85 00:05:34,120 --> 00:05:38,279 Speaker 1: The SEC also can seek civil finds. Interestingly enough, the 86 00:05:38,440 --> 00:05:42,600 Speaker 1: SEC can also seek disgorgement in an administrative proceeding, and 87 00:05:42,640 --> 00:05:46,080 Speaker 1: we can talk about that separately. So what the opinion 88 00:05:46,160 --> 00:05:49,839 Speaker 1: will do is make it more difficult for the SEC 89 00:05:50,160 --> 00:05:54,279 Speaker 1: to recover all of the money that it's recovered in 90 00:05:54,279 --> 00:05:56,680 Speaker 1: the past. So it's going to be a limitation on 91 00:05:56,760 --> 00:06:00,040 Speaker 1: the amount of the SEC's recovery, but not one that 92 00:06:00,160 --> 00:06:02,760 Speaker 1: the SEC is able to recover it all or whether 93 00:06:02,800 --> 00:06:05,760 Speaker 1: the SEC is able to prove its case. So why 94 00:06:05,800 --> 00:06:09,200 Speaker 1: did Justice Thomas dissent and say he would have barred 95 00:06:09,200 --> 00:06:12,839 Speaker 1: the SEC from seeking disgorgement at all in federal court? 96 00:06:14,000 --> 00:06:19,159 Speaker 1: In a nutshell, Justice Thomas's view was that disgorgement is 97 00:06:19,480 --> 00:06:24,920 Speaker 1: a made up concept, a recent innovation in terms of 98 00:06:24,960 --> 00:06:28,200 Speaker 1: a type of remedy, that it was not part of 99 00:06:28,240 --> 00:06:34,320 Speaker 1: a court traditional equitable powers, and therefore the disgorgement remedy 100 00:06:34,440 --> 00:06:38,960 Speaker 1: doesn't fall within the scope of the SEC's statutory authority. 101 00:06:39,440 --> 00:06:42,880 Speaker 1: So Justice Thomas's opinion is based on the text of 102 00:06:42,920 --> 00:06:46,960 Speaker 1: the statute, which is consistent with his standard approach to 103 00:06:47,080 --> 00:06:51,800 Speaker 1: stutory interpretation, and basically Justice Thomas says the SEC went 104 00:06:51,839 --> 00:06:56,280 Speaker 1: beyond what the statute empowered it to do. You mentioned 105 00:06:56,320 --> 00:07:02,159 Speaker 1: that the SEC can also seek disgorgement to administrative proceedings. 106 00:07:02,279 --> 00:07:04,159 Speaker 1: How does it decide whether to go to court or 107 00:07:04,240 --> 00:07:09,120 Speaker 1: whether to go through administrative proceedings. Well, that's actually been 108 00:07:09,560 --> 00:07:14,960 Speaker 1: an ongoing policy debate. So an administrative proceeding is a 109 00:07:15,080 --> 00:07:20,400 Speaker 1: proceeding before an administrative law judge from actually an SEC employee, 110 00:07:20,440 --> 00:07:23,400 Speaker 1: not an Article three judge, not a separate branch of 111 00:07:23,480 --> 00:07:28,360 Speaker 1: the federal government. And so the SEC has been criticized 112 00:07:28,640 --> 00:07:33,160 Speaker 1: for bringing some cases as administrative proceedings rather than going 113 00:07:33,200 --> 00:07:37,640 Speaker 1: to court. And so this case has the potentially anomalous 114 00:07:37,720 --> 00:07:41,840 Speaker 1: effects of encouraging the SEC, at least in some cases 115 00:07:42,200 --> 00:07:47,440 Speaker 1: to use administrative proceedings instead of civil enforcement actions instead 116 00:07:47,480 --> 00:07:51,800 Speaker 1: of actions in federal court. And of course the sec 117 00:07:52,120 --> 00:07:57,320 Speaker 1: is authority to seek disgorgement in administrative proceedings is clear, 118 00:07:57,680 --> 00:08:01,440 Speaker 1: It's in the statute. So a question that a subsequent 119 00:08:01,520 --> 00:08:04,080 Speaker 1: court is going to have to deal with is whether 120 00:08:04,120 --> 00:08:08,400 Speaker 1: the limitations and lou the limitations of Justice Stamer's opinion 121 00:08:08,680 --> 00:08:12,280 Speaker 1: are going to apply in administrative proceedings or not. It 122 00:08:12,280 --> 00:08:15,080 Speaker 1: would be kind of ironic if there were two different 123 00:08:15,120 --> 00:08:19,680 Speaker 1: types or two different analyzes of disgorgements depending on the forum. 124 00:08:20,360 --> 00:08:24,160 Speaker 1: Why would the SEC ever choose to go to court 125 00:08:24,840 --> 00:08:27,600 Speaker 1: when they can go to an administrative law judge in 126 00:08:27,640 --> 00:08:31,840 Speaker 1: their own bailuwith So that depends on a variety of 127 00:08:31,880 --> 00:08:36,080 Speaker 1: different factors. The SEC had been, as I said, criticized 128 00:08:36,440 --> 00:08:41,200 Speaker 1: for bringing some cases in administrative proceedings. People said that 129 00:08:41,360 --> 00:08:44,600 Speaker 1: the SEC was sort of taking advantage of home court 130 00:08:44,640 --> 00:08:48,240 Speaker 1: advantage and that the proceedings were not subject to the 131 00:08:48,320 --> 00:08:51,600 Speaker 1: same level of protection for dependants. You don't have the 132 00:08:51,679 --> 00:08:56,440 Speaker 1: same discovery process in an administrative proceedings. They occur much 133 00:08:56,480 --> 00:08:59,080 Speaker 1: more quickly and so forth. But there are a lot 134 00:08:59,080 --> 00:09:02,920 Speaker 1: of factors that way into the SEC's choice of which 135 00:09:03,080 --> 00:09:07,239 Speaker 1: avenue to pursue and the type of relief that's available 136 00:09:07,480 --> 00:09:11,920 Speaker 1: probably isn't the best factor to drive that decision. Will 137 00:09:12,000 --> 00:09:15,800 Speaker 1: this affect any other agencies? I read that this decision 138 00:09:15,880 --> 00:09:20,000 Speaker 1: might affect the ftc uh. That's what I read as well. 139 00:09:20,040 --> 00:09:23,520 Speaker 1: I'm not an expert on the SEC, but my understanding 140 00:09:23,800 --> 00:09:27,720 Speaker 1: is that this decision does have consequences in other areas. 141 00:09:27,760 --> 00:09:30,360 Speaker 1: Antitrust is one of those areas. So I think it's 142 00:09:30,400 --> 00:09:33,880 Speaker 1: important beyond this federal securities laws, How has the Court 143 00:09:34,520 --> 00:09:39,680 Speaker 1: in recent years been policing the SEC or not policing 144 00:09:39,720 --> 00:09:45,400 Speaker 1: the SEC. The Court has been policing the SEC pretty carefully. 145 00:09:45,440 --> 00:09:49,080 Speaker 1: There have been a number of areas in which the 146 00:09:49,280 --> 00:09:54,840 Speaker 1: Court has suggested that the SEC is too aggressive, that 147 00:09:54,960 --> 00:09:59,120 Speaker 1: the SEC is acting beyond the scope of its statutory authority, 148 00:09:59,559 --> 00:10:03,480 Speaker 1: and the Court has cautioned the SEC to sort of 149 00:10:03,520 --> 00:10:07,319 Speaker 1: pull things back a little bit. Can the SEC put 150 00:10:07,520 --> 00:10:15,160 Speaker 1: disgorged profits into the treasuries coffers after this decision? The 151 00:10:15,200 --> 00:10:18,480 Speaker 1: answer to that is, we don't know. That's a question 152 00:10:18,920 --> 00:10:24,040 Speaker 1: the Supreme Court expressly declined to answer because that issue 153 00:10:24,120 --> 00:10:28,640 Speaker 1: wasn't really presented to it. The SEC hadn't presented to 154 00:10:28,720 --> 00:10:31,960 Speaker 1: the court a plan of distribution, so the court said, 155 00:10:31,960 --> 00:10:33,880 Speaker 1: we're going to leave that issue for the lower court. 156 00:10:34,320 --> 00:10:37,640 Speaker 1: So it's not clear. There are certainly some cases in 157 00:10:37,679 --> 00:10:42,040 Speaker 1: which distributing the funds to defrauded investors is going to 158 00:10:42,040 --> 00:10:46,160 Speaker 1: be expensive or difficult. It may be the case to 159 00:10:46,240 --> 00:10:49,440 Speaker 1: the lower court finds it acceptable if the money goes 160 00:10:49,480 --> 00:10:53,320 Speaker 1: into some general pool that's available to make investors hole 161 00:10:53,840 --> 00:10:57,040 Speaker 1: in fraud cases overall, But we don't know the answer 162 00:10:57,040 --> 00:11:00,280 Speaker 1: to that question. So now they've sent this case Act 163 00:11:00,360 --> 00:11:03,200 Speaker 1: to the District Court, and the district Court will apply 164 00:11:03,480 --> 00:11:07,160 Speaker 1: what the Supreme Court has said here. Yes, the district 165 00:11:07,160 --> 00:11:12,520 Speaker 1: Court did not calculate the disgorgement remedy based on net profits. 166 00:11:12,559 --> 00:11:15,360 Speaker 1: So at a minimum, the district Court is going to 167 00:11:15,440 --> 00:11:19,920 Speaker 1: have to look at the expenses that the defendants claim 168 00:11:20,240 --> 00:11:24,440 Speaker 1: as legitimate expenses and subtract any legitimate expenses from the 169 00:11:24,480 --> 00:11:27,200 Speaker 1: amount of us disgorgement. So that's one change that we 170 00:11:27,240 --> 00:11:30,280 Speaker 1: know is going to happen. Beyond that, the sec is 171 00:11:30,280 --> 00:11:32,200 Speaker 1: going to have to come up with a plan what 172 00:11:32,320 --> 00:11:35,640 Speaker 1: it intends to do with the money. If it's possible 173 00:11:35,679 --> 00:11:39,000 Speaker 1: to distribute the money in this case, to foreign nationals. 174 00:11:39,040 --> 00:11:41,440 Speaker 1: I guess the SEC will put forth some sort of plan, 175 00:11:41,920 --> 00:11:45,280 Speaker 1: or the SEC will propose something else like a segregated 176 00:11:45,320 --> 00:11:48,880 Speaker 1: fund and investor compensation fund, which may or may not 177 00:11:48,920 --> 00:11:51,880 Speaker 1: pass scrutiny. The one thing I did want to say 178 00:11:52,000 --> 00:11:57,920 Speaker 1: is the analysis in justice Sodomoyer's opinion draws very heavily 179 00:11:58,080 --> 00:12:01,319 Speaker 1: on an aniquest brief that was filed by a law professor, 180 00:12:01,800 --> 00:12:06,000 Speaker 1: Professor Doug Lacock uh Laycock, Professor Doug Laycock of the 181 00:12:06,040 --> 00:12:09,319 Speaker 1: University of Virginia. And if you look at the reasoning 182 00:12:09,360 --> 00:12:14,480 Speaker 1: in this opinion, the analysis of disgorgement as an equitable 183 00:12:14,520 --> 00:12:18,600 Speaker 1: remedy and what that means, and the precise limitations that 184 00:12:18,840 --> 00:12:22,640 Speaker 1: just a sutor puts on the disgorgement remedy, it's very 185 00:12:22,679 --> 00:12:25,199 Speaker 1: influenced by the reasoning and that and make it's brief. 186 00:12:25,480 --> 00:12:29,559 Speaker 1: So I just wanted to uh flag that UM showing 187 00:12:29,640 --> 00:12:35,240 Speaker 1: both I think the importance of understanding uh HIT the 188 00:12:35,320 --> 00:12:40,439 Speaker 1: historical basis of remedial relief and how influential and amicus 189 00:12:40,480 --> 00:12:42,560 Speaker 1: brief could be in this case because the arguments that 190 00:12:42,600 --> 00:12:45,320 Speaker 1: are in this opinion, we're not arguments that were raised 191 00:12:45,320 --> 00:12:48,160 Speaker 1: by either of the parties. Finally, Joe, what was the 192 00:12:48,240 --> 00:12:52,120 Speaker 1: general reaction to this decision? I do think that everybody 193 00:12:52,200 --> 00:12:55,320 Speaker 1: looked at this opinion with a sigh of relief, because 194 00:12:55,360 --> 00:12:59,400 Speaker 1: even though the opinion imposes some tactical requirements on disgorgements, 195 00:12:59,600 --> 00:13:03,560 Speaker 1: it does and eliminate discouragement. It doesn't say discouragement is 196 00:13:03,640 --> 00:13:07,120 Speaker 1: not an equitable remedy, and it doesn't really limit the 197 00:13:07,360 --> 00:13:12,400 Speaker 1: SEC's power to seek equitable relief. And from an enforcement perspective, 198 00:13:12,720 --> 00:13:17,240 Speaker 1: the SEC's power to do that is tremendously important. Thanks Jill. 199 00:13:17,679 --> 00:13:21,320 Speaker 1: That's Jill Fish, professor at the University of Pennsylvania School 200 00:13:21,320 --> 00:13:25,439 Speaker 1: of Law. In a seven to two decision on Thursday, 201 00:13:25,679 --> 00:13:29,680 Speaker 1: the Supreme Court reinforced the Trump administration's ability to quickly 202 00:13:29,720 --> 00:13:33,680 Speaker 1: deport people who enter the country without documentation. Joining me 203 00:13:33,760 --> 00:13:36,920 Speaker 1: is Leon Fresco, a partner at Hollandon Night formerly the 204 00:13:36,960 --> 00:13:40,720 Speaker 1: head of the Justice Department's Office of Immigration Litigation. Leon 205 00:13:40,840 --> 00:13:44,040 Speaker 1: explained what the Court did here. So, what the Supreme 206 00:13:44,080 --> 00:13:46,880 Speaker 1: Court has said is that during the process that is 207 00:13:46,920 --> 00:13:51,040 Speaker 1: known as expedited removal, which is a program that Congress 208 00:13:51,040 --> 00:13:55,600 Speaker 1: past that said, if people from outside the country arrived 209 00:13:55,640 --> 00:13:59,280 Speaker 1: in the United States without any paperwork, they could be 210 00:13:59,360 --> 00:14:03,840 Speaker 1: summarily deported back to where they originally arrived from. What 211 00:14:03,960 --> 00:14:06,480 Speaker 1: the Supreme Court said is that in the situations where 212 00:14:06,480 --> 00:14:10,840 Speaker 1: the people who are arriving claim asylum, there isn't review 213 00:14:11,160 --> 00:14:14,960 Speaker 1: that is available in the federal court for those denials 214 00:14:15,040 --> 00:14:19,480 Speaker 1: that the CDP and men the immigration court is doing 215 00:14:19,640 --> 00:14:23,000 Speaker 1: on those asylum claims. So what happens is from now on, 216 00:14:23,280 --> 00:14:26,360 Speaker 1: there will only be a CBP slash U S c 217 00:14:26,480 --> 00:14:29,400 Speaker 1: I S officer who makes some initial screening as to 218 00:14:29,440 --> 00:14:32,840 Speaker 1: whether the asylum claim is credible, and if that's denied, 219 00:14:32,880 --> 00:14:37,040 Speaker 1: there's an immigration judge who makes a final administrative determination 220 00:14:37,080 --> 00:14:40,240 Speaker 1: and that's it. There is no federal court review as 221 00:14:40,280 --> 00:14:43,960 Speaker 1: to whether those decisions were incorrect and whether that person 222 00:14:44,000 --> 00:14:47,800 Speaker 1: should be allowed to apply for asylum. The credible fear interview, 223 00:14:47,880 --> 00:14:52,000 Speaker 1: that first interview isn't that a very low bar for 224 00:14:52,320 --> 00:14:55,920 Speaker 1: most immigrants. It is intended by the statute to be 225 00:14:55,960 --> 00:14:58,560 Speaker 1: a low bar. The way it works is this, in 226 00:14:58,680 --> 00:15:01,520 Speaker 1: order to simply get a asylum to win your case, 227 00:15:02,000 --> 00:15:05,720 Speaker 1: you have to have what's known as a ten percent 228 00:15:05,920 --> 00:15:09,400 Speaker 1: chance that you will be persecuted in your home country 229 00:15:09,440 --> 00:15:13,120 Speaker 1: on the basis of your race, religion, national origin, political opinion, 230 00:15:13,240 --> 00:15:16,360 Speaker 1: or social group. It's called well founded fear, and that's 231 00:15:16,360 --> 00:15:19,760 Speaker 1: ten percent. In order to get credible fear, which is 232 00:15:19,800 --> 00:15:22,800 Speaker 1: the upfront initial screening that allows you to remain in 233 00:15:22,840 --> 00:15:26,840 Speaker 1: the country while you're asylum case despending, you have to 234 00:15:26,880 --> 00:15:31,600 Speaker 1: have a significant possibility of having a ten percent chance. 235 00:15:32,080 --> 00:15:35,960 Speaker 1: So it's considered a very low threshold, and in the 236 00:15:35,960 --> 00:15:41,120 Speaker 1: Obama administration there was something like people would clear the 237 00:15:41,240 --> 00:15:44,400 Speaker 1: credible fear screening. That's gone down to the mid eighties 238 00:15:44,720 --> 00:15:48,160 Speaker 1: in the Trump administration, and so there's a belief that 239 00:15:48,320 --> 00:15:51,560 Speaker 1: maybe those screenings are being done in a way that 240 00:15:51,760 --> 00:15:56,080 Speaker 1: is more stringent and hence need more federal review. But 241 00:15:56,280 --> 00:15:59,920 Speaker 1: that argument obviously did not prevail with the Supreme Court. 242 00:16:00,280 --> 00:16:04,160 Speaker 1: The reasoning of the seven justices in the majority was split. 243 00:16:04,720 --> 00:16:07,640 Speaker 1: Explain that split, well, there were two issues that were raised, 244 00:16:08,200 --> 00:16:11,840 Speaker 1: and what the two concurring justices Brian and Ginsburg, who 245 00:16:11,920 --> 00:16:14,760 Speaker 1: usually vote with the liberals, said is we don't need 246 00:16:14,800 --> 00:16:19,080 Speaker 1: to resolve the issue of the level of rights that 247 00:16:19,240 --> 00:16:22,400 Speaker 1: people who crossed the border illegally have in the country. 248 00:16:22,720 --> 00:16:26,280 Speaker 1: What we can simply say is that the kind of 249 00:16:26,400 --> 00:16:29,760 Speaker 1: review that the people in this case were asking for 250 00:16:30,680 --> 00:16:34,840 Speaker 1: was review of factual questions, and that kind of review 251 00:16:35,000 --> 00:16:37,960 Speaker 1: is not available in what's called the Avias court of 252 00:16:38,080 --> 00:16:42,000 Speaker 1: jurisdiction because habeas corpus jurisdiction is about whether you are 253 00:16:42,200 --> 00:16:47,800 Speaker 1: legally held in custody without your legal rights. It's about 254 00:16:47,800 --> 00:16:51,320 Speaker 1: whether the law was improperly just in your case. So 255 00:16:51,400 --> 00:16:54,160 Speaker 1: they would have limited it to that, but the five 256 00:16:54,280 --> 00:16:59,600 Speaker 1: conservative justices went further and they said, not only is 257 00:16:59,680 --> 00:17:03,320 Speaker 1: that the issue, but the issue more largely is people 258 00:17:03,400 --> 00:17:08,040 Speaker 1: who want relief from removal are not trying to actually 259 00:17:08,080 --> 00:17:11,840 Speaker 1: get out of custody. They want something different than getting 260 00:17:11,840 --> 00:17:15,359 Speaker 1: out of custody. They want release from removal. So those 261 00:17:15,400 --> 00:17:19,560 Speaker 1: people can never come to court with habeas corpus jurisdiction, 262 00:17:19,680 --> 00:17:24,240 Speaker 1: meaning you're asking the government to release you. Because the 263 00:17:24,240 --> 00:17:27,160 Speaker 1: theory was, even though not being released from physical custody, 264 00:17:27,400 --> 00:17:30,080 Speaker 1: I still am asking to be released from immigration custody, 265 00:17:30,080 --> 00:17:32,800 Speaker 1: which is the custody that I has to deport me. 266 00:17:33,160 --> 00:17:36,560 Speaker 1: And they said, no, no, no, that's not cognizable in 267 00:17:36,840 --> 00:17:39,840 Speaker 1: habeas corpus jurisdiction, so you can't even make that claim. 268 00:17:40,040 --> 00:17:42,920 Speaker 1: And then to add more to this, just as a leado, 269 00:17:43,040 --> 00:17:45,480 Speaker 1: he decided an issue that didn't need to be decided, 270 00:17:45,640 --> 00:17:49,360 Speaker 1: and he said that people who cross the border illegally 271 00:17:49,400 --> 00:17:52,800 Speaker 1: have no due process right. They're just like people who 272 00:17:53,160 --> 00:17:56,520 Speaker 1: are outside the country. So you don't get any special 273 00:17:57,040 --> 00:18:00,680 Speaker 1: increased level of right if you cross the border. Two 274 00:18:00,720 --> 00:18:05,480 Speaker 1: justices dissented, Justices Sonya Soto Mayor and Elena Kagan. They're 275 00:18:05,520 --> 00:18:09,960 Speaker 1: the senses that they view that these rights were always 276 00:18:10,000 --> 00:18:14,200 Speaker 1: allowed in the sense that habeas again needs that your 277 00:18:14,320 --> 00:18:17,080 Speaker 1: body is in the custody of the government, whether it 278 00:18:17,200 --> 00:18:20,919 Speaker 1: be for physical custody or removal custody purposes, and that 279 00:18:21,080 --> 00:18:25,399 Speaker 1: even though this didn't exist at the time of the founding, 280 00:18:26,119 --> 00:18:29,359 Speaker 1: that doesn't matter because there was no emmigration law at 281 00:18:29,359 --> 00:18:31,800 Speaker 1: the time of the founding. If the founders have had 282 00:18:32,040 --> 00:18:34,320 Speaker 1: some knowledge as to what we'd be doing with the 283 00:18:34,320 --> 00:18:37,760 Speaker 1: immigration law, they would have allowed this kind of hadea 284 00:18:37,800 --> 00:18:40,760 Speaker 1: of corpus jurisdiction. Can you see the difference between this 285 00:18:40,880 --> 00:18:44,639 Speaker 1: case and the data case that the administration lost? Sure, 286 00:18:44,720 --> 00:18:46,919 Speaker 1: I think this is again the themes we've been talking 287 00:18:46,920 --> 00:18:49,200 Speaker 1: about in the past. If you're going to really try 288 00:18:49,240 --> 00:18:52,280 Speaker 1: to make a way to carve your way through these things, 289 00:18:52,359 --> 00:18:55,080 Speaker 1: you continue to see two things going on. At the 290 00:18:55,119 --> 00:18:58,400 Speaker 1: same time, people who are here who have some interest 291 00:18:58,440 --> 00:19:01,720 Speaker 1: in America seemed to get treated by the courts better 292 00:19:02,160 --> 00:19:04,159 Speaker 1: than people who are either not here and have been 293 00:19:04,280 --> 00:19:07,920 Speaker 1: travel band or people who have just barely arrived seconds ago. 294 00:19:08,520 --> 00:19:11,720 Speaker 1: And that thread continues to seem to work its way 295 00:19:11,720 --> 00:19:15,800 Speaker 1: through the courts in all of these Thanks. That's Leon Cresco, 296 00:19:15,920 --> 00:19:18,359 Speaker 1: a partner at Hollan didn't night. I'm John Basso, and 297 00:19:18,440 --> 00:19:19,280 Speaker 1: this is Jim Burg.