1 00:00:00,560 --> 00:00:05,360 Speaker 1: This is Bloomberg Law with June Grassoe from Bloomberg Radio. 2 00:00:06,160 --> 00:00:10,000 Speaker 1: The prosecution of white collar crimes fell during the Trump administration, 3 00:00:10,320 --> 00:00:13,960 Speaker 1: but experts are anticipating a ramp up in enforcement in 4 00:00:14,000 --> 00:00:17,239 Speaker 1: a Biden Jostice department that would return the government to 5 00:00:17,280 --> 00:00:22,000 Speaker 1: its past practice of scrutinizing corporate wrongdoing. The Trump administration 6 00:00:22,120 --> 00:00:25,640 Speaker 1: professed to being tough on white collar crime. Here's former 7 00:00:25,720 --> 00:00:28,800 Speaker 1: Deputy Attorney General Rod Rosenstein in a speech at n 8 00:00:28,920 --> 00:00:34,239 Speaker 1: y U Law School in Corporate enforcement is an important 9 00:00:34,280 --> 00:00:37,599 Speaker 1: focus of our department's criminal work, as well as our 10 00:00:37,640 --> 00:00:41,959 Speaker 1: civil work. Investigations of corporate fraud and corruption are essential 11 00:00:42,120 --> 00:00:45,240 Speaker 1: to promote the rule of law. People who do business 12 00:00:45,240 --> 00:00:49,360 Speaker 1: in America need to know that our laws will be enforced. However, 13 00:00:49,440 --> 00:00:53,800 Speaker 1: the prosecution of securities fraud, antitrust violations, and other such 14 00:00:53,880 --> 00:00:58,600 Speaker 1: crimes dropped about thirty under President Trump as compared to 15 00:00:58,640 --> 00:01:04,360 Speaker 1: President Obama, according to Syracuse University's Transactional Records Access Clearinghouse. 16 00:01:04,920 --> 00:01:08,000 Speaker 1: My guest is Brandon Garrett, a professor Duke Law School, 17 00:01:08,560 --> 00:01:11,280 Speaker 1: tell us about the prosecution of corporate crime and the 18 00:01:11,319 --> 00:01:15,760 Speaker 1: Trump administration as compared to prior administrations. Joining me is 19 00:01:15,840 --> 00:01:20,360 Speaker 1: Duke University law professor Brandon Garrett tell us about the 20 00:01:20,440 --> 00:01:25,200 Speaker 1: prosecution of white color crime during the Trump administration relatively 21 00:01:25,280 --> 00:01:29,600 Speaker 1: speaking to prior administrations. Over the course of Obama administration, 22 00:01:29,760 --> 00:01:34,000 Speaker 1: corporate prosecutions continued to rise in both number and their 23 00:01:34,040 --> 00:01:36,640 Speaker 1: size and significance. They had been doing that during the W. 24 00:01:36,720 --> 00:01:39,760 Speaker 1: Bush administration, but after the financial crisis, there were just 25 00:01:39,920 --> 00:01:42,640 Speaker 1: enormous number of cases of large ones to bring and 26 00:01:42,880 --> 00:01:45,480 Speaker 1: corporate crime became a bigger and bigger priority at the 27 00:01:45,520 --> 00:01:49,480 Speaker 1: Department of Justice. Tougher guidelines were and adopted, and that 28 00:01:49,720 --> 00:01:53,600 Speaker 1: change was reflected in the multibillion dollar resolutions. The type 29 00:01:53,640 --> 00:01:56,680 Speaker 1: of resolutions and moved from out of court settlements to 30 00:01:56,800 --> 00:01:59,600 Speaker 1: more in court settlements. We saw something really different when 31 00:01:59,600 --> 00:02:02,040 Speaker 1: they change over to the Trump administration occurred in the 32 00:02:02,080 --> 00:02:04,480 Speaker 1: first year. There are some legacy cases from the Obama 33 00:02:04,520 --> 00:02:07,559 Speaker 1: administration that were large that were settled. So once those 34 00:02:07,640 --> 00:02:10,680 Speaker 1: were settled, things became very quiet, very quickly. So there 35 00:02:10,760 --> 00:02:14,200 Speaker 1: was an enormous drop and several penalties really through the present, 36 00:02:14,200 --> 00:02:17,000 Speaker 1: although just recently there's a JP. Morgan and the Goldman 37 00:02:17,080 --> 00:02:20,280 Speaker 1: Stack settlement, which were large settlements, although they weren't much 38 00:02:20,280 --> 00:02:22,280 Speaker 1: smaller than they could have been, and the changes were 39 00:02:22,280 --> 00:02:25,239 Speaker 1: accompanied by changes in policy. It was the practice of 40 00:02:25,280 --> 00:02:27,920 Speaker 1: the Department of Justice under the Trump administration to relax 41 00:02:27,960 --> 00:02:30,280 Speaker 1: some of these rules. They highlighted how they did not 42 00:02:30,400 --> 00:02:33,040 Speaker 1: want to pile on penalties, that they wanted to pursue 43 00:02:33,080 --> 00:02:36,360 Speaker 1: declinations and more leneal settlements of corporations more often. And 44 00:02:36,360 --> 00:02:38,960 Speaker 1: it was largely reflected in the data that we see 45 00:02:39,280 --> 00:02:41,760 Speaker 1: the places where there was more continuity in practice, where 46 00:02:41,760 --> 00:02:44,120 Speaker 1: areas in which the Department of Justice really staffed up 47 00:02:44,160 --> 00:02:46,560 Speaker 1: under Obama, those groups of lawyers kept doing what they 48 00:02:46,560 --> 00:02:49,040 Speaker 1: were doing more so than others. The best example of 49 00:02:49,040 --> 00:02:51,679 Speaker 1: that is in the foreign corrupt practices area, where there's 50 00:02:51,720 --> 00:02:55,400 Speaker 1: been someone more continuities between administrations. Is it from the top, 51 00:02:55,560 --> 00:02:58,880 Speaker 1: does the Attorney General say this is what we want 52 00:02:58,919 --> 00:03:01,919 Speaker 1: to do? Or is it because they put more resources 53 00:03:01,960 --> 00:03:05,400 Speaker 1: in certain areas? And how does it work? Well, Many 54 00:03:05,440 --> 00:03:08,560 Speaker 1: really important corporate cases are not brought at Main Justice. 55 00:03:08,600 --> 00:03:11,160 Speaker 1: They are brought by the different use attorney's offices, and 56 00:03:11,160 --> 00:03:13,400 Speaker 1: in particular at the Southern District of New York. So 57 00:03:13,440 --> 00:03:15,640 Speaker 1: who is the U S Attorney for the Southern District 58 00:03:15,720 --> 00:03:18,640 Speaker 1: of New York really matters priorities from the tops also matter, 59 00:03:19,040 --> 00:03:21,600 Speaker 1: and the Department of Justice has set a series of 60 00:03:21,680 --> 00:03:25,400 Speaker 1: guidelines for bringing corporate cases. They keep changing. Each administration 61 00:03:25,480 --> 00:03:28,720 Speaker 1: has been changing those practices, and so it's usually not 62 00:03:28,760 --> 00:03:31,600 Speaker 1: the Attorney General, but usually the Deputy Attorney General, the 63 00:03:31,600 --> 00:03:33,600 Speaker 1: head of the Criminal Section, the head of the Criminal 64 00:03:33,600 --> 00:03:36,680 Speaker 1: fraud Section, you know, fairly high up POJ leadership plays 65 00:03:36,680 --> 00:03:39,120 Speaker 1: a big role in ending policies and corporate cases. And 66 00:03:39,120 --> 00:03:42,000 Speaker 1: they also have tone, even if these aren't always cases 67 00:03:42,040 --> 00:03:44,720 Speaker 1: that the Department of Justice itself is handling, but rather 68 00:03:44,720 --> 00:03:46,560 Speaker 1: one of the U S Attorney's offices. So when they 69 00:03:46,640 --> 00:03:48,600 Speaker 1: say we don't want to see Philine on a fine, 70 00:03:48,960 --> 00:03:52,160 Speaker 1: that sends a strong message to the news attorney's offices. 71 00:03:52,480 --> 00:03:55,320 Speaker 1: In addition, the biggest companies tend to get a hearing 72 00:03:55,440 --> 00:03:57,720 Speaker 1: at the highest levels of the Department of Justice. So 73 00:03:57,800 --> 00:03:59,920 Speaker 1: the Use attorney mayweg and when you have a case 74 00:04:00,040 --> 00:04:02,360 Speaker 1: US against the likes of a Wall Street bank, and 75 00:04:02,400 --> 00:04:04,200 Speaker 1: they may weigh in and tell that the local use 76 00:04:04,240 --> 00:04:06,360 Speaker 1: attorney you've gone too far, this fine is too big. 77 00:04:06,600 --> 00:04:08,720 Speaker 1: You know, regular people do not get that kind of 78 00:04:08,720 --> 00:04:11,040 Speaker 1: a hearing normally in their criminal cases. It takes a 79 00:04:11,080 --> 00:04:14,360 Speaker 1: lot of coordination to resolve major corporate cases. If you 80 00:04:14,480 --> 00:04:16,880 Speaker 1: have the Attorney General and other higher ups that Department 81 00:04:16,880 --> 00:04:20,080 Speaker 1: of Justice saying take it easy on corporation, then companies 82 00:04:20,120 --> 00:04:21,720 Speaker 1: will know that there's no reason to set all the 83 00:04:21,800 --> 00:04:24,760 Speaker 1: case until they get away in from the Attorney General. 84 00:04:25,000 --> 00:04:28,640 Speaker 1: In general, the Department of Justice has, as many have reported, 85 00:04:28,680 --> 00:04:31,960 Speaker 1: become more politicized, and local use attorneys have been undermined 86 00:04:32,000 --> 00:04:34,159 Speaker 1: by the Department of Justice, where the Attorney general wills 87 00:04:34,200 --> 00:04:37,400 Speaker 1: have been sometimes an individual cases. There are always politics 88 00:04:37,400 --> 00:04:39,760 Speaker 1: in these appointments, but do you see more of that 89 00:04:40,040 --> 00:04:43,520 Speaker 1: during the Trump administration. There are serious concerns with firings 90 00:04:43,520 --> 00:04:46,120 Speaker 1: of US attorneys under w. Bush, and we've seen much 91 00:04:46,120 --> 00:04:48,200 Speaker 1: more of that. You know, we've also seen the reverse. 92 00:04:48,279 --> 00:04:50,640 Speaker 1: We've seen a failure to fill a lot of really 93 00:04:50,680 --> 00:04:53,560 Speaker 1: important mid level positions at the Department of Justice, which 94 00:04:53,600 --> 00:04:56,200 Speaker 1: has meant less confidence in the middle and a power 95 00:04:56,279 --> 00:04:58,680 Speaker 1: vacuum and more of a role for the Attorney General. 96 00:04:58,880 --> 00:05:01,159 Speaker 1: It also means that you have less competent and you 97 00:05:01,200 --> 00:05:03,640 Speaker 1: have a hollowing out of the mid level positions. You're 98 00:05:03,680 --> 00:05:06,960 Speaker 1: just not going to have the bureaucratic coordination and bandwidth 99 00:05:07,040 --> 00:05:09,560 Speaker 1: to resolve complicated cases. You know, you have corporations that 100 00:05:09,760 --> 00:05:12,240 Speaker 1: can and do higher entire law firms to represent them, 101 00:05:12,320 --> 00:05:14,640 Speaker 1: and when you have important unfilled positions at the d 102 00:05:14,720 --> 00:05:17,680 Speaker 1: o J, you have corporations that are very well represented. 103 00:05:17,760 --> 00:05:19,880 Speaker 1: And then on the prosecution side, you have no they're 104 00:05:19,920 --> 00:05:22,760 Speaker 1: they're at the higher levels which are needed to finalize 105 00:05:22,839 --> 00:05:26,760 Speaker 1: these complex multiparty deals. How is the prosecution of corporate 106 00:05:26,800 --> 00:05:30,560 Speaker 1: crime likely to change in a Biden administration. There's a 107 00:05:30,960 --> 00:05:34,520 Speaker 1: life cycle to corporate frauds in general. When you have 108 00:05:34,720 --> 00:05:39,159 Speaker 1: criminal acts conducted within an organization, negative information can stay concealed. 109 00:05:39,400 --> 00:05:41,280 Speaker 1: The higher ups in some of these cases in the 110 00:05:41,360 --> 00:05:43,440 Speaker 1: corporation may not know about the crimes. So if they 111 00:05:43,440 --> 00:05:47,080 Speaker 1: have bad compliance, serious misconduct might stay varied within corporation. 112 00:05:47,480 --> 00:05:50,240 Speaker 1: And there hasn't been the same incentive for companies to 113 00:05:50,279 --> 00:05:53,039 Speaker 1: invest in compliance during these Trump years when they know 114 00:05:53,240 --> 00:05:55,960 Speaker 1: that enforcement, whether it's civil or criminal, it was not 115 00:05:56,040 --> 00:05:59,479 Speaker 1: a priority, and so his conduct that was swept under 116 00:05:59,480 --> 00:06:02,440 Speaker 1: the rug are not carefully investigated or not reported to 117 00:06:02,440 --> 00:06:04,920 Speaker 1: the authorities may start to come out of the woodwork. 118 00:06:05,040 --> 00:06:07,800 Speaker 1: And we've seen in the past that during an economic downturn, 119 00:06:07,960 --> 00:06:10,880 Speaker 1: there all of a sudden comes to light wellfeasance as conduct. 120 00:06:10,960 --> 00:06:15,279 Speaker 1: There's already some reporting around fraud problematic applications for relief 121 00:06:15,320 --> 00:06:18,240 Speaker 1: relating to COVID. The economy is suffering because of COVID, 122 00:06:18,360 --> 00:06:21,320 Speaker 1: and when the economy suffers, there can be incentives for 123 00:06:21,400 --> 00:06:25,320 Speaker 1: corporations to disguise how poorly their books are fairing. Nevertheless, 124 00:06:25,320 --> 00:06:28,040 Speaker 1: it may take some time for that conduct to be investigated. 125 00:06:28,200 --> 00:06:30,920 Speaker 1: I suspect that over the next several years some major 126 00:06:30,960 --> 00:06:33,560 Speaker 1: corporate investigation will come to life. There will also be 127 00:06:33,600 --> 00:06:36,160 Speaker 1: more of an incentive for companies to self report to 128 00:06:36,240 --> 00:06:39,360 Speaker 1: a Biden administration because they will be given credit for that. 129 00:06:39,560 --> 00:06:41,400 Speaker 1: And you know, no company wants to be in the 130 00:06:41,400 --> 00:06:43,960 Speaker 1: position of having been caught in the act without having 131 00:06:44,120 --> 00:06:47,400 Speaker 1: been cooperative, without having self reported. So more corporate climate 132 00:06:47,560 --> 00:06:50,000 Speaker 1: come to the d o j's attention once it's clear 133 00:06:50,040 --> 00:06:52,440 Speaker 1: that the d o J takes corporate clip seriously, and 134 00:06:52,480 --> 00:06:55,279 Speaker 1: that was what was happening under the Obama administration, a 135 00:06:55,400 --> 00:06:59,200 Speaker 1: more serious corporate climate approach. What kind of prosecutions might 136 00:06:59,320 --> 00:07:03,039 Speaker 1: be the prior priorities of a Biden Justice Department. There 137 00:07:03,040 --> 00:07:05,200 Speaker 1: are such a wide range of white color crimes, is 138 00:07:05,240 --> 00:07:08,080 Speaker 1: a priority to go after healthcare fraud. It is a 139 00:07:08,120 --> 00:07:11,440 Speaker 1: priority to go after bank related froad securities products and 140 00:07:11,600 --> 00:07:15,640 Speaker 1: to any public company is a priority to target environmental crimes, 141 00:07:15,680 --> 00:07:20,160 Speaker 1: environmental disasters. Pharmaceutical companies have been prosecuted for un savory practices. 142 00:07:20,480 --> 00:07:24,240 Speaker 1: Sure there will be investigations relating to efforts to profit 143 00:07:24,360 --> 00:07:27,320 Speaker 1: from COVID test or vaccines. There was on savory conduct, 144 00:07:27,400 --> 00:07:30,120 Speaker 1: corn bribery, money laundering has been a big priority. They're 145 00:07:30,160 --> 00:07:32,320 Speaker 1: just a host of priority areas that have been somewhat 146 00:07:32,320 --> 00:07:34,640 Speaker 1: neglected in recent years. There's a lot of work for 147 00:07:34,840 --> 00:07:36,520 Speaker 1: a lot of prosecutors to do, and a lot of 148 00:07:36,520 --> 00:07:40,440 Speaker 1: that work also depends on investigations and referrals by administrative 149 00:07:40,440 --> 00:07:43,680 Speaker 1: agencies like the SEC, like the Environmental Protection AGC, like 150 00:07:43,680 --> 00:07:47,160 Speaker 1: Ocean so where you similarly had a following out of 151 00:07:47,320 --> 00:07:50,360 Speaker 1: enforcement at a range of administrative agencies. If enforcement of 152 00:07:50,440 --> 00:07:54,440 Speaker 1: those agencies become small, robust pipelines to prosecutors will also 153 00:07:54,520 --> 00:07:59,320 Speaker 1: be robust. That's Brandon Garrett of do Law School. Harvard 154 00:07:59,360 --> 00:08:02,600 Speaker 1: can continue to consider race and its admissions decisions after 155 00:08:02,640 --> 00:08:06,400 Speaker 1: a federal appeals court rule that the university isn't intentionally 156 00:08:06,400 --> 00:08:11,240 Speaker 1: discriminating against Asian Americans and the policy doesn't violate the Constitution. 157 00:08:11,600 --> 00:08:13,960 Speaker 1: But the case is not over yet, and the battle 158 00:08:14,040 --> 00:08:17,880 Speaker 1: over affirmative action continues in other courts. Joining me is 159 00:08:17,880 --> 00:08:21,240 Speaker 1: Audrey Anderson, who heads the higher education practice at bass 160 00:08:21,280 --> 00:08:25,440 Speaker 1: Baryan Sims. Audrey tell us the main points of the decision. 161 00:08:25,880 --> 00:08:30,240 Speaker 1: While the First Circuit Court of Appeals upheld the District 162 00:08:30,240 --> 00:08:35,800 Speaker 1: Court's finding that Harvard's affirmative action policy complies with the 163 00:08:35,920 --> 00:08:39,439 Speaker 1: legal standards. So this is a victory for Harvard and 164 00:08:39,559 --> 00:08:44,360 Speaker 1: being able to use race in considering applications to Harvard 165 00:08:44,440 --> 00:08:47,360 Speaker 1: College when it admits you. In making that finding, the 166 00:08:47,440 --> 00:08:51,240 Speaker 1: court found that Harvard has a compelling interest in using 167 00:08:51,400 --> 00:08:55,040 Speaker 1: race in terms of certain educational goals. It's trying to 168 00:08:55,360 --> 00:08:59,520 Speaker 1: further in educating students. And it also found that Harvard's 169 00:08:59,559 --> 00:09:03,800 Speaker 1: use of race is narrowly tailored to meeting those goals. 170 00:09:03,880 --> 00:09:07,040 Speaker 1: Those are the two basic standards at the Supreme Court 171 00:09:07,080 --> 00:09:11,640 Speaker 1: has set. The Court said that Harvard doesn't use quotas 172 00:09:11,760 --> 00:09:15,400 Speaker 1: or engage in racial balancing. What does that mean and 173 00:09:15,640 --> 00:09:19,240 Speaker 1: what does Harvard do? What that goes to, June is 174 00:09:19,400 --> 00:09:23,400 Speaker 1: the narrow tailoring. If a college university is going to 175 00:09:23,520 --> 00:09:26,240 Speaker 1: use race, it has to do so in a way 176 00:09:26,280 --> 00:09:29,160 Speaker 1: that is narrowly tailored to its goals. So that means 177 00:09:29,440 --> 00:09:32,800 Speaker 1: that you can't just set a quota for any racial 178 00:09:32,920 --> 00:09:35,800 Speaker 1: group and say we are going to admit x per 179 00:09:35,840 --> 00:09:40,839 Speaker 1: cent of African American students or Hispanic students or white students. 180 00:09:40,840 --> 00:09:43,360 Speaker 1: The Court has said that you can use race as 181 00:09:43,480 --> 00:09:48,120 Speaker 1: one factor among many in determining the students that will 182 00:09:48,160 --> 00:09:52,760 Speaker 1: be admitted and trying to obtain a diverse students body. 183 00:09:53,080 --> 00:09:57,800 Speaker 1: So what Harvard does is its admissions officers have access 184 00:09:57,920 --> 00:10:02,319 Speaker 1: to information about the race of applicants if applicants choose 185 00:10:02,480 --> 00:10:08,200 Speaker 1: to provide that information, and in giving applicants the overall rating, 186 00:10:08,320 --> 00:10:12,880 Speaker 1: which is one factor that the admissions committee considers, the 187 00:10:12,880 --> 00:10:17,360 Speaker 1: readers of applications can consider race. It's also possible in 188 00:10:17,400 --> 00:10:20,760 Speaker 1: the Harvard system. Harvard has a series of what they 189 00:10:20,800 --> 00:10:25,080 Speaker 1: call tips for special considerations that applicants can be given 190 00:10:25,200 --> 00:10:28,760 Speaker 1: for athletic ability or if they have a parent that 191 00:10:28,880 --> 00:10:32,000 Speaker 1: works at Harvard or has donated a lot of money 192 00:10:32,000 --> 00:10:35,760 Speaker 1: to Harvard. One of those tips is race, so you 193 00:10:35,800 --> 00:10:39,000 Speaker 1: can also get a tip for your racial background. So 194 00:10:39,160 --> 00:10:44,520 Speaker 1: parents making large donations is actually recognized as part of 195 00:10:44,520 --> 00:10:47,599 Speaker 1: the rating for the applicant Yeah, and the plane of 196 00:10:47,760 --> 00:10:51,560 Speaker 1: your students for care admissions said that one of the 197 00:10:51,600 --> 00:10:56,240 Speaker 1: reasons that Harvard system was unconstitutional or didn't meet the 198 00:10:56,480 --> 00:11:00,440 Speaker 1: appropriate standards was that Harvard should be forced to give 199 00:11:00,559 --> 00:11:03,040 Speaker 1: up some of those other tips and also give up 200 00:11:03,080 --> 00:11:05,680 Speaker 1: the use of rights. If Harvard gave up the tips 201 00:11:05,720 --> 00:11:09,320 Speaker 1: for children of large donors, maybe it wouldn't have to 202 00:11:09,400 --> 00:11:12,600 Speaker 1: consider race and it could still get a diverse skin body. 203 00:11:12,960 --> 00:11:16,800 Speaker 1: And the court said that Harvard is allowed to pursue 204 00:11:16,800 --> 00:11:23,720 Speaker 1: diversity with race conscious means and also pursue other educational goals, 205 00:11:23,960 --> 00:11:26,800 Speaker 1: and it said that one of those goals can be 206 00:11:27,240 --> 00:11:33,040 Speaker 1: to give special consideration to some children of large donors 207 00:11:33,120 --> 00:11:37,720 Speaker 1: in order to encourage donations to the college. According to 208 00:11:38,000 --> 00:11:42,200 Speaker 1: the court's opinion, the share of admitted Asian American applicants 209 00:11:42,280 --> 00:11:48,280 Speaker 1: co varies almost perfectly with the share of Asian American applicants, 210 00:11:48,320 --> 00:11:52,800 Speaker 1: So the percentages are equal basically of those who are 211 00:11:52,800 --> 00:11:56,080 Speaker 1: admitted in those who applied who are Asian Americans. So 212 00:11:56,120 --> 00:12:00,160 Speaker 1: what was the problem that the plaintiffs saw here? One 213 00:12:00,240 --> 00:12:04,319 Speaker 1: problem that they saw was one of the ratings that 214 00:12:04,480 --> 00:12:08,200 Speaker 1: applicants to Harvard get is called a personal ratings and 215 00:12:08,240 --> 00:12:13,160 Speaker 1: the personal ratings for Asian American students were with certain 216 00:12:13,200 --> 00:12:19,200 Speaker 1: statistical analyzes shown to be lower than for other students. 217 00:12:19,200 --> 00:12:22,160 Speaker 1: So the plaintiffs argued that the only reason you would 218 00:12:22,160 --> 00:12:27,080 Speaker 1: have a personal ratings that was lower for Asian American 219 00:12:27,160 --> 00:12:31,560 Speaker 1: students would be based on stereotypes about Asian Americans that 220 00:12:31,640 --> 00:12:35,680 Speaker 1: were impermissible. They also complained about the fact that on 221 00:12:36,120 --> 00:12:39,480 Speaker 1: what the plaintiffs like to call objective measures and the 222 00:12:39,559 --> 00:12:43,080 Speaker 1: academic ratings that have to do with class ranking and 223 00:12:43,480 --> 00:12:47,840 Speaker 1: performance on standardized tests, the Asian American students tended to 224 00:12:47,880 --> 00:12:51,720 Speaker 1: do better. So the students who had high marks on 225 00:12:51,840 --> 00:12:56,400 Speaker 1: those standards were admitted at lower rates than even white 226 00:12:56,440 --> 00:13:00,440 Speaker 1: students who scored at those same measures did. That that 227 00:13:00,520 --> 00:13:03,040 Speaker 1: leads to people making arguments like, you know, if you 228 00:13:03,080 --> 00:13:05,680 Speaker 1: get a really high score on the standardized test, you 229 00:13:05,720 --> 00:13:07,840 Speaker 1: have to get even a higher score if you're Asian 230 00:13:08,200 --> 00:13:10,680 Speaker 1: in order to get into Harvard. Now that's a very 231 00:13:10,720 --> 00:13:13,440 Speaker 1: hard argument to make at Harvard, because Harvard can fill 232 00:13:13,520 --> 00:13:18,080 Speaker 1: up its entering class many times over. The court pointed 233 00:13:18,080 --> 00:13:22,079 Speaker 1: out that the plaintiffs hadn't presented a single Asian American 234 00:13:22,160 --> 00:13:26,080 Speaker 1: applicant who claimed Harvard discriminated against them. How could that 235 00:13:26,120 --> 00:13:29,680 Speaker 1: be aren't those the plaintiffs in the case. So the 236 00:13:29,760 --> 00:13:35,319 Speaker 1: plaintiff here, June is an association, Students for Fair Admission, 237 00:13:35,640 --> 00:13:42,280 Speaker 1: and they did have members who were who are Asian 238 00:13:42,280 --> 00:13:47,440 Speaker 1: Americans who put forward affidavits saying that they had applied 239 00:13:47,480 --> 00:13:52,319 Speaker 1: to Harvard and not been admitted. They did not identify themselves, 240 00:13:52,400 --> 00:13:56,160 Speaker 1: and they did not come forward and give testimony. So 241 00:13:56,559 --> 00:14:02,120 Speaker 1: courts have allowed associations like Students for Fare Admissions to 242 00:14:02,480 --> 00:14:06,000 Speaker 1: have standing to bring a lawsuit on behalf of their 243 00:14:06,080 --> 00:14:09,120 Speaker 1: members if they can show that they have a member 244 00:14:09,600 --> 00:14:13,560 Speaker 1: who was harmed. So that you think about the N 245 00:14:13,559 --> 00:14:17,600 Speaker 1: double A c P often steps forward and brings lawsuits 246 00:14:17,679 --> 00:14:21,720 Speaker 1: on behalf of their members who are harmed by discrimination. 247 00:14:22,160 --> 00:14:25,880 Speaker 1: So Students for Fare Admissions would say, it's just like 248 00:14:26,320 --> 00:14:29,480 Speaker 1: the N double A c P. Now, Harvard made an 249 00:14:29,600 --> 00:14:33,160 Speaker 1: argument to say that the f f f A should 250 00:14:33,160 --> 00:14:36,680 Speaker 1: not be allowed to bring this lawsuit because the court 251 00:14:36,760 --> 00:14:40,680 Speaker 1: should have looked further to see if s f f 252 00:14:40,680 --> 00:14:45,480 Speaker 1: A was really truly further in the interests of the 253 00:14:45,520 --> 00:14:50,720 Speaker 1: Asian American students it claimed to be representing. And that 254 00:14:50,880 --> 00:14:53,040 Speaker 1: was a win for f f f A because the 255 00:14:53,680 --> 00:14:59,120 Speaker 1: First Circuit examined that argument of Harvards and said, look 256 00:14:59,280 --> 00:15:01,680 Speaker 1: a f f f A does not have to meet 257 00:15:01,760 --> 00:15:06,280 Speaker 1: that special test that Harvard your arguing they need to meet. 258 00:15:06,960 --> 00:15:10,840 Speaker 1: They've met the standards for associational standing and that they 259 00:15:10,840 --> 00:15:13,400 Speaker 1: have shown that they have members who alleged that they 260 00:15:13,440 --> 00:15:16,840 Speaker 1: have been harmed in this way, and they can go forward. 261 00:15:16,880 --> 00:15:19,960 Speaker 1: We are not going to dig below that and make 262 00:15:20,040 --> 00:15:24,760 Speaker 1: them prove that their real purpose is to help Asian Americans. 263 00:15:25,560 --> 00:15:29,000 Speaker 1: So the plaintiffs, the anti affirmative action groups Students for 264 00:15:29,080 --> 00:15:32,720 Speaker 1: Fair Admissions, says the lawsuit is now on track to 265 00:15:32,800 --> 00:15:35,640 Speaker 1: go up to the Supreme Court. Tell us about the group. 266 00:15:36,320 --> 00:15:39,600 Speaker 1: F f f A is headed by Edward Blum and 267 00:15:39,840 --> 00:15:43,280 Speaker 1: appears to be funded by Edward Blum, and he has 268 00:15:43,320 --> 00:15:48,240 Speaker 1: brought other cases where Asian American students were not the plaintiffs, 269 00:15:48,240 --> 00:15:50,640 Speaker 1: and it seems that his real goal here is just 270 00:15:50,760 --> 00:15:54,520 Speaker 1: to end affirmative action. So I don't know that Blum 271 00:15:54,600 --> 00:15:58,800 Speaker 1: ever expected to win this case up until this point. 272 00:15:59,280 --> 00:16:03,160 Speaker 1: I think that one's purpose here is to get the 273 00:16:03,280 --> 00:16:08,840 Speaker 1: United States Supreme Court to overturn its current rulings that 274 00:16:08,920 --> 00:16:13,200 Speaker 1: allow colleges and universities to use race as one factor 275 00:16:13,600 --> 00:16:17,160 Speaker 1: in admitting students. So what he has done is he 276 00:16:17,200 --> 00:16:21,160 Speaker 1: has brought several suits across the country and is hoping 277 00:16:21,200 --> 00:16:25,200 Speaker 1: that one of them will be accepted by the Supreme Court, 278 00:16:25,480 --> 00:16:29,040 Speaker 1: and through that suit, the new membership of the Court 279 00:16:29,560 --> 00:16:32,640 Speaker 1: knew since the last one of these cases was decided, 280 00:16:33,000 --> 00:16:37,080 Speaker 1: will overturn the prior president and hold that colleges and 281 00:16:37,240 --> 00:16:42,840 Speaker 1: universities may not use race as a factor in admitting students. 282 00:16:43,240 --> 00:16:46,040 Speaker 1: The group has also brought a lawsuit against the University 283 00:16:46,040 --> 00:16:49,760 Speaker 1: of North Carolina. Will it help them if that verdict 284 00:16:49,800 --> 00:16:53,320 Speaker 1: conflicts with the Harvard verdict? Exactly, You are exactly right. 285 00:16:53,320 --> 00:16:56,040 Speaker 1: So the case against the University of North Carolina Chapel 286 00:16:56,120 --> 00:16:59,880 Speaker 1: Hill is being tried right now in the Middle District 287 00:17:00,000 --> 00:17:04,640 Speaker 1: of North Carolina, so it will be appealed. Whoever loses 288 00:17:04,760 --> 00:17:07,119 Speaker 1: in the district court will appeal that case to the 289 00:17:07,200 --> 00:17:11,080 Speaker 1: Fourth Circuit Court of Appeals. In the Fourth Circuit will 290 00:17:11,119 --> 00:17:16,000 Speaker 1: issue a ruling. The Supreme Court kind of standard for 291 00:17:16,080 --> 00:17:18,960 Speaker 1: granting review in a case is when there is a 292 00:17:19,119 --> 00:17:24,840 Speaker 1: split in authority between between the courts of appeals. However, 293 00:17:25,359 --> 00:17:29,320 Speaker 1: the Supreme Court has shown an interest in granting review 294 00:17:29,960 --> 00:17:34,760 Speaker 1: of cases where the courts of appeals have considered affirmative 295 00:17:34,840 --> 00:17:39,040 Speaker 1: action in college admissions even when there is no split 296 00:17:39,160 --> 00:17:44,200 Speaker 1: in authority. So the Supreme Court reviewed the Fisher case 297 00:17:44,640 --> 00:17:48,280 Speaker 1: which was against the University of Texas at Austin. They 298 00:17:48,320 --> 00:17:53,000 Speaker 1: reviewed that case even without a split in authority. So 299 00:17:53,080 --> 00:17:57,440 Speaker 1: the Court may choose to review this case from Harvard, 300 00:17:57,960 --> 00:18:01,120 Speaker 1: even though right now there is no what an authority, 301 00:18:01,440 --> 00:18:05,960 Speaker 1: but to kind of bolster his chances. Blum or s 302 00:18:06,119 --> 00:18:09,880 Speaker 1: f f A has the case in North Carolina that's 303 00:18:09,920 --> 00:18:12,560 Speaker 1: in trial right now. They also have two other cases, 304 00:18:13,280 --> 00:18:16,600 Speaker 1: or at least one other case. They filed suit again 305 00:18:16,760 --> 00:18:20,760 Speaker 1: against the University of Texas in Austin, and if that 306 00:18:20,920 --> 00:18:23,520 Speaker 1: case is appeal, that will go to the Fifth Circuit. 307 00:18:23,840 --> 00:18:26,280 Speaker 1: And then there's a case that was originally filed by 308 00:18:26,320 --> 00:18:31,280 Speaker 1: the United States against Yale University, and s f f 309 00:18:31,359 --> 00:18:34,879 Speaker 1: A has recently filed a motion to be allowed to 310 00:18:35,119 --> 00:18:39,200 Speaker 1: enter that case as a plaintiff against Yale. So Blum 311 00:18:39,280 --> 00:18:41,640 Speaker 1: has four k or s f f A has four 312 00:18:41,680 --> 00:18:46,159 Speaker 1: cases going on right now if it does go to 313 00:18:46,200 --> 00:18:49,679 Speaker 1: the Supreme Court, just as Kennedy I believe was the 314 00:18:49,800 --> 00:18:53,840 Speaker 1: key to allowing affirmative action to continue. So how might 315 00:18:53,880 --> 00:18:57,840 Speaker 1: this new more conservative Supreme Court look at a case 316 00:18:57,880 --> 00:19:03,160 Speaker 1: on affirmative action, So June, there are actually four members 317 00:19:03,200 --> 00:19:07,240 Speaker 1: of the current Court who have not had occasion to 318 00:19:07,400 --> 00:19:10,879 Speaker 1: rule at Supreme Court justices on the question of race 319 00:19:10,960 --> 00:19:15,440 Speaker 1: conscious college admissions programs. One of them is Justice Kagan. 320 00:19:16,040 --> 00:19:19,399 Speaker 1: She was on the Court when the Court last considered 321 00:19:19,960 --> 00:19:24,080 Speaker 1: um affirmative action in the Fisher case, but she refused herself. 322 00:19:24,600 --> 00:19:28,680 Speaker 1: We can expect that Justice Kagan will agree with Justices 323 00:19:28,800 --> 00:19:32,600 Speaker 1: Bryer and so do Mayor and find that race can 324 00:19:32,640 --> 00:19:35,720 Speaker 1: be used if the college proves they have a compelling 325 00:19:35,800 --> 00:19:38,879 Speaker 1: interest and if it's narrowly tailor, so that gets you 326 00:19:38,960 --> 00:19:42,840 Speaker 1: three votes. But then you have Justices Gorsuch, Kavanaugh, and 327 00:19:42,960 --> 00:19:45,600 Speaker 1: Barritt that you don't know what they'll do. You have 328 00:19:45,760 --> 00:19:48,359 Speaker 1: to expect that they're going to rule more in line 329 00:19:48,400 --> 00:19:52,000 Speaker 1: with Chief Justice Roberts and the Justices Thomas and Alito. 330 00:19:52,520 --> 00:19:56,360 Speaker 1: The three of them, Roberts, Thomas, and Alito are all 331 00:19:56,440 --> 00:19:59,320 Speaker 1: on the record as saying that they don't believe the 332 00:19:59,359 --> 00:20:04,800 Speaker 1: Constitution s allows colleges and universities to use race in 333 00:20:04,920 --> 00:20:09,679 Speaker 1: colleges missions. They do not believe that race can be 334 00:20:10,680 --> 00:20:13,399 Speaker 1: used as a compelling interest. The colleges do not have 335 00:20:13,520 --> 00:20:18,119 Speaker 1: a compelling interest in pursuing the educational benefits of a 336 00:20:18,160 --> 00:20:22,320 Speaker 1: diverse student body. So, based on the other things we 337 00:20:22,359 --> 00:20:26,640 Speaker 1: know about Corsach, Kavanaugh and Barrett, one would expect them 338 00:20:27,000 --> 00:20:32,400 Speaker 1: to join the views of Roberts, Thomas, and Eledo. However, 339 00:20:33,040 --> 00:20:35,200 Speaker 1: let's say they agree with with with them on this, 340 00:20:35,400 --> 00:20:38,600 Speaker 1: then you have to answer the question of wealth. The 341 00:20:38,680 --> 00:20:44,800 Speaker 1: court has this precedence in Grutter the case from the 342 00:20:44,880 --> 00:20:48,159 Speaker 1: University of Michigan from the early two thousand's and the 343 00:20:48,200 --> 00:20:52,560 Speaker 1: Fisher case. So then if for sich, Kavanaugh and Barrett say, well, 344 00:20:52,600 --> 00:20:55,399 Speaker 1: if this came to me in the first instance, I 345 00:20:55,400 --> 00:20:58,440 Speaker 1: would say there is no compelling interests in using race 346 00:20:58,480 --> 00:21:01,879 Speaker 1: for the educational benefits of aversity. However, now I have 347 00:21:02,000 --> 00:21:06,040 Speaker 1: to consider whether we are going to overrule the courts 348 00:21:06,080 --> 00:21:11,720 Speaker 1: prior President the Trump administration joined the plaintiffs in the 349 00:21:11,800 --> 00:21:16,080 Speaker 1: Harvard suit, and the Trump administration sued Yale. One of 350 00:21:16,119 --> 00:21:20,040 Speaker 1: the highest profile actions by the Civil Rights Division during 351 00:21:20,040 --> 00:21:24,280 Speaker 1: the Trump administration was that lawsuit against Yale. Will it 352 00:21:24,359 --> 00:21:29,040 Speaker 1: change to the Biden administration? Change things? May? Might they 353 00:21:29,119 --> 00:21:32,680 Speaker 1: drop that lawsuit against Yale? Is that why Blum wants 354 00:21:32,720 --> 00:21:36,480 Speaker 1: to join it. Maybe you got that exactly right. I'm 355 00:21:36,480 --> 00:21:41,160 Speaker 1: the Biden administration could very well drop the lawsuit against 356 00:21:41,320 --> 00:21:44,080 Speaker 1: Yale or try to find a way to settle it, 357 00:21:44,160 --> 00:21:48,240 Speaker 1: except that Blum has now moved to become a poaintiff, 358 00:21:48,880 --> 00:21:51,960 Speaker 1: And if the court allows f f F A to 359 00:21:52,080 --> 00:21:56,160 Speaker 1: become a poaintiff in that Yale suit, it doesn't really 360 00:21:56,240 --> 00:22:00,240 Speaker 1: matter what what the government does. I mean it earth, 361 00:22:00,359 --> 00:22:03,800 Speaker 1: but not nearly as much I will. I expect that 362 00:22:03,880 --> 00:22:09,439 Speaker 1: the Biden administration UH Department of Justice will switch sides 363 00:22:09,880 --> 00:22:15,199 Speaker 1: in these cases and support the use of affirmative action 364 00:22:15,359 --> 00:22:18,600 Speaker 1: and college admissions. I think that they may have already 365 00:22:18,640 --> 00:22:21,240 Speaker 1: said that. There was a guidance document that was put 366 00:22:21,240 --> 00:22:25,720 Speaker 1: out during the Obama administration about ways that colleges and 367 00:22:25,840 --> 00:22:32,719 Speaker 1: universities could, consistent with the constitution, use race in college 368 00:22:32,720 --> 00:22:37,560 Speaker 1: admissions and other actions. The Trump administration revoked that guidance, 369 00:22:37,600 --> 00:22:40,240 Speaker 1: and I'm pretty sure that the Biden administration has said 370 00:22:40,240 --> 00:22:42,159 Speaker 1: that one of the actions is going to take is 371 00:22:42,200 --> 00:22:45,000 Speaker 1: to put that guidence back in place. So that's a 372 00:22:45,080 --> 00:22:49,760 Speaker 1: really good marker of what they will do UM once 373 00:22:49,800 --> 00:22:53,280 Speaker 1: there in place. But if f f F A UM 374 00:22:53,359 --> 00:22:55,040 Speaker 1: is allowed to be a plaint if in the Yale case, 375 00:22:55,080 --> 00:22:57,920 Speaker 1: it doesn't really matter. You will have to fight against 376 00:22:57,960 --> 00:23:00,880 Speaker 1: the private point of than for being in the Bloomberg 377 00:23:00,960 --> 00:23:03,840 Speaker 1: Last Show, Audrey, that's Audrey Anderson, who has the higher 378 00:23:03,920 --> 00:23:07,440 Speaker 1: education practice at Bassbarian SIMS. And that's it for the 379 00:23:07,480 --> 00:23:10,800 Speaker 1: sedition of the Bloomberg Law Show. I'm June Grasso. Thanks 380 00:23:10,840 --> 00:23:13,399 Speaker 1: so much for listening. Remember you can always get the 381 00:23:13,480 --> 00:23:16,160 Speaker 1: latest legal news on our Bloomberg Law Podcast. You can 382 00:23:16,200 --> 00:23:20,440 Speaker 1: find them on iTunes, SoundCloud, or at www dot bloomberg 383 00:23:20,480 --> 00:23:24,680 Speaker 1: dot com slash podcast Slash Law. Thanks so much for listening, 384 00:23:24,960 --> 00:23:27,439 Speaker 1: and please tune into the Bloomberg Laws Show every evening 385 00:23:27,440 --> 00:23:30,000 Speaker 1: at ten pm Eastern right here on Bloomberg Radio.