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

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Speaker 2: The liberal city of San Francisco found itself in an

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Speaker 2: unusual position at the Supreme Court this week, taking on

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Speaker 2: the Environmental Protection Agency over sewage discharges into the Pacific

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Speaker 2: Ocean with a ten billion dollar fine on the line.

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Speaker 2: The city's attorney, Tara Steely, argued that the regulations were

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Speaker 2: too vague.

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Speaker 3: They might as well have said, do not violate the

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Speaker 3: Clean Water Act. It doesn't tell us anything.

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Speaker 2: But the liberal justice is pushed back on San Francisco's arguments.

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Speaker 2: Here are Justices Elena Kagan and Sonya So to Mayor.

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Speaker 4: It's prescribing that you have to meet water quality standards, Like,

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Speaker 4: how more clearly could you meet the statutory language than that.

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Speaker 5: What they're asking you is to become responsible for doing

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Speaker 5: what's necessary.

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Speaker 2: The ideological divide was apparent, with conservative justices expressing concerns

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Speaker 2: about the fairness of the city facing billions in fines

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Speaker 2: without knowing what its obligations are under a vague permit.

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Speaker 2: Just as Brett Cavanaugh challenged the EPA's attorney, Frederick lew.

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Speaker 4: You're suing San Francisco separately for a lot of money

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Speaker 4: based on a standard that they had no idea. You know,

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Speaker 4: that's the theory. That's the theory in your position, Your

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Speaker 4: position would allow that.

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Speaker 5: I don't. Yes, I mean the base I complaint is

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Speaker 5: exhibit A for what you said is not going to

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Speaker 5: be true.

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Speaker 2: Joining me is former US Solicitor General Gregory Garr, a

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Speaker 2: partner at Latham and Watkins. Greig tell us about the

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Speaker 2: city's argument here.

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Speaker 6: So, the City of San Francisco is concerned about the

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Speaker 6: lack of fair notice that they have in terms of

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Speaker 6: how to comply with the Clean Water Act as to

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Speaker 6: the sewage discharge that's going into the Pacific Ocean. And

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Speaker 6: their argument is that the Clean Water Act obligates the

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Speaker 6: EPA to set specific effluent limitations on the amount of

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Speaker 6: pollutants coming out of point sources discharges like the pipes

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Speaker 6: going into the ocean, and that instead what the EPA

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Speaker 6: has done here is just issued these vague water quality standards.

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Speaker 6: You have to be sure that the water is a

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Speaker 6: particular color where the sewage is coming out, or you know,

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Speaker 6: it meets other criteria. And the city's argument is that, well,

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Speaker 6: they don't know how to meet those criteria. There's other

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Speaker 6: sources coming in, who's responsible for what? And you know,

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Speaker 6: all this is against the backtop of a suit brought

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Speaker 6: by the EPA in which they're seeking, according to the City,

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Speaker 6: literally ten billion dollars in penalties. So the city feels

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Speaker 6: as though they lacked the fair notice that they were

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Speaker 6: entitled to under the Act up front in terms of

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Speaker 6: what discharges could go into the ocean.

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Speaker 7: Did it seem like.

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Speaker 2: The three liberal justices were pushing back on the city's argument?

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Speaker 6: Definitely. Justice Kagan, Justice Sodamor, and Justice Jackson all leaned

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Speaker 6: in hard against the city on their arguments, and they

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Speaker 6: took a number of different tacks. Most importantly, I think

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Speaker 6: they really wanted to focus the city on the text

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Speaker 6: of the Act and put the city on its heels

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Speaker 6: in terms of identifying a provision of the Act that

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Speaker 6: stripped EPA of the authority to issue these sorts of

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Speaker 6: broader water quality standards. And Justice Jackson in particular went

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Speaker 6: into the language in the Act which says that the

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Speaker 6: EPA could adopt quote any more stringent limitations end quote

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Speaker 6: and argued that, you know, the city was wrong in

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Speaker 6: saying that the limitations were limited to effluent limitations coming out,

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Speaker 6: but justices also had hard questions for the cities about

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Speaker 6: the environmental impact potential environmental impacts of the city's position,

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Speaker 6: which at times got pretty in terms of talking about

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Speaker 6: floating toilet paper and the like. But the city definitely

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Speaker 6: fased a tough crowd from the more liberal end of.

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Speaker 2: The court, and the EPA's attorney faced a tough crowd

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Speaker 2: from the more conservative justices. Tell us about his argument.

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Speaker 6: So his argument was that number one, that the statute

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Speaker 6: did confer this more broader authority on EPA, and that

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Speaker 6: it could be exercise in particular instances, more limited circumstances,

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Speaker 6: and that here he claimed that the problem really was

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Speaker 6: one of San Francisco's own creation, and that he claimed

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Speaker 6: that EPA had asked for specific data from the city

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Speaker 6: about its discharges and the like, and the city never

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Speaker 6: provided it, and so according to the EPA attorney, they

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Speaker 6: had no choice but to issue these more general water

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Speaker 6: quality standards. And you know, really, one of the more

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Speaker 6: interesting dynamics of this oral argument is this was the

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Speaker 6: City of San Francisco, one of the more progressive jurisdictions

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Speaker 6: in the country, facing off again once the Biden administration EPA,

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Speaker 6: and it was clear that there was no love loss

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Speaker 6: between them, at least as to this particular issue.

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Speaker 7: Yeah, well, this is a case where the city's Board

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Speaker 7: of Supervisors voted eight to two last week to urge

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Speaker 7: the city officials to resolve the suit quickly, there being

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Speaker 7: a concern that a Supreme Court ruling in the city's

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Speaker 7: favor could have sweeping implications for curtailing water pollution definitely.

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Speaker 6: And it's unclear how far the court would go even

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Speaker 6: if it ruled for the city in this case. You know,

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Speaker 6: there were justices sort of probing more narrow rulings, and

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Speaker 6: I think even if the Court ruled in favor of

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Speaker 6: the city, it probably would, you know, try to limit

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Speaker 6: the reach of its ruling. But you know, the basic

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Speaker 6: question on the table is whether EPA has the authority

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Speaker 6: to issue these broader water quality standards, which is something

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Speaker 6: that is the Chief Justice pointed out during the oral

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Speaker 6: argument that you know, this is what the prior regime did.

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Speaker 6: It issued these general water quality standards instead of specific

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Speaker 6: discharge limitations. And in his view, and this is what

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Speaker 6: the city argued that the Clean Water Act was actually

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Speaker 6: enacted in part to replace that regime. With one which

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Speaker 6: gave the dischargers more notice upfront in terms of the

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Speaker 6: specific limitations that were permissible.

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Speaker 2: And did it seem just as the liberals were taking

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Speaker 2: issue with the city, that the conservatives were taking issue

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Speaker 2: with the EPA.

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Speaker 6: Well, there was a group of them. There was the

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Speaker 6: Chief Justice, Justice Kavanaugh. Justice Corsich pushed back the hardest,

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Speaker 6: I think, and the main concern that sort of unified

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Speaker 6: them was the lack of fair notice to the city

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Speaker 6: and other dischargers in this situation. Where As I mentioned earlier,

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Speaker 6: you know, potentially these jurisdictions are on the hook for

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Speaker 6: significant penalties in this case, you know, literally billions of

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Speaker 6: dollars according to the city, and they don't know exactly

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Speaker 6: The city argues, and the Conservatives sort of picked up

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Speaker 6: on how to complet why with the Clean Water Act

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Speaker 6: in this instance, particularly where there are multiple discharges going

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Speaker 6: into the same place, who's responsible for what in terms

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Speaker 6: of figuring out whether or not the water quality standard

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Speaker 6: is met. But there was some uncertainty at least in

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Speaker 6: terms of where the other justices were. Justice Barrett, who

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Speaker 6: actually joined the more liberal justices in an environmental case

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Speaker 6: last term, Ohio versus EPA, you know, didn't join the

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Speaker 6: stronger attack by the other conservative justices and seemed to

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Speaker 6: be probing a narrower angle and dealing with these challenges

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Speaker 6: under the arbitrary and capricious doctrine. Justice Solito picked up

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Speaker 6: a little bit on the government's argument that in this case,

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Speaker 6: the problem was that San Francisco hadn't provided adequate data

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Speaker 6: to the EPA, leaving it with the predicament that it

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Speaker 6: had to issue these more general standards, and Thomas definitely

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Speaker 6: had some tough questions for the city, although his position

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Speaker 6: was a little bit less clear. So, you know, San

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Speaker 6: Francisco coming out of the argument, I think should feel

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Speaker 6: good about its position, but it's not over yet.

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Speaker 7: Are other cities in the same position as San Francisco

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Speaker 7: have the same problems?

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Speaker 6: So I think that the use of general Walder quality

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Speaker 6: standards is definitely not the norm. But one thing that

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Speaker 6: came up during the oral argument in response to questioning

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Speaker 6: from Justice Kavanaugh was that there was many anikas briefs

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Speaker 6: filed Friends of the Court, from businesses, municipalities, and the

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Speaker 6: like who had serious concerns and reservations and problems with

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Speaker 6: the EPA's approach here and talked about the dangers and

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Speaker 6: lack of fair notice with this sort of more general

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Speaker 6: water quality standard regime, and that was something that resonated

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Speaker 6: with Justice Kavanaugh at least, and probably some of the

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Speaker 6: other justices as well.

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Speaker 2: This is the first case to grapple with federal agency

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Speaker 2: power since Lowe or Bright was decided last June. That's

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Speaker 2: the case that overturned Chevron deference. You hear much about

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Speaker 2: Chevron defference in these oral arguments.

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Speaker 6: No, not a word. EPA certainly didn't ask for it,

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Speaker 6: and you know, it was clear that this is going

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Speaker 6: to come down to what Congress actually said in the

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Speaker 6: statute and the Court's best interpretation of that, which, of

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Speaker 6: course is the way it works after Loperbright, and really

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Speaker 6: the way has worked at the Supreme Court for many

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Speaker 6: years even before Loperbright.

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Speaker 2: Do you think that we're just not going to hear

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Speaker 2: about Chevron difference in future arguments at all or about

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Speaker 2: that concept.

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Speaker 6: We're definitely not going to hear about Chevron difference. I

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Speaker 6: think the more interesting question is will we hear about

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Speaker 6: other types of difference, so called get more difference? You know,

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Speaker 6: how aggressive will the government be in trying to claim

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Speaker 6: some type of difference in other cases and try to

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Speaker 6: push back a little bit. And I think that that'll

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Speaker 6: be an interesting trend to follow on the court this

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Speaker 6: term and beyond.

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Speaker 2: The EPA has faced a string of losses at the

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Speaker 2: Supreme Court in recent years, for example, with the Court

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Speaker 2: curbing its ability to reduce greenhouse gases and to protect wetlands.

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Speaker 2: Does it seem like in some respect it's going to

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Speaker 2: lose in this case as well, whether it's broad or limited.

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Speaker 6: I don't think that that's a certainty at this point.

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Speaker 6: I mean, one of the other questions that came up

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Speaker 6: during the oral argument was whether or not there were

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Speaker 6: some flaws with this case. And maybe the court's just

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Speaker 6: not decided altogether. But you know, I think you're going

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Speaker 6: to feel better about the oral argument coming out of

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Speaker 6: it if you're San Francisco then EPA and I think

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Speaker 6: you know, EPA and the government more generally has been

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Speaker 6: sort of behind the eight ball and these administrative challenge cases,

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Speaker 6: and you know, EPA sort of finds itself in a

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Speaker 6: particularly difficult position when you combined aggressive enforcement of its

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Speaker 6: environmental priorities with broader statutory provisions, which is the area

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Speaker 6: where the Supreme Court has been particularly adamant in demanding

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Speaker 6: the the agency point to more specific authority in the

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Speaker 6: Statute for what it's doing.

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Speaker 2: Thanks so much for coming on again, Greg and sharing

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Speaker 2: those insights with us. That's former US Solicitor General Gregory

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Speaker 2: garr of Latham and Watkins coming up next on The

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Speaker 2: Bloomberg Lawn Show. More than one hundred and sixty five

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Speaker 2: lawsuits filed across the country are already shaping the contours

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Speaker 2: of the presidential election, and more than half are in

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Speaker 2: the seven states critical for an electoral college victory. I'm

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Speaker 2: June Grosso and you're listening to Bloomberg.

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Speaker 3: Election day is in nineteen days.

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Speaker 2: On Thursday, Vice President Kamala Harris was touting early voting

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Speaker 2: in Wisconsin.

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Speaker 3: Election day is in nineteen days and here in Wisconsin,

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Speaker 3: early voting starts next Tuesday, October twenty.

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Speaker 2: Second, and a record number of voters turned out to

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Speaker 2: vote early on the first day in North Carolina and George,

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Speaker 2: where former President Donald Trump was campaigning on Tuesday.

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Speaker 5: Early mail in voting in your state is now under way,

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Speaker 5: and early in person is under it.

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Speaker 7: But I'll tell you what I'm hearing very good things.

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Speaker 2: As the candidate's battle for votes on a campaign trail,

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Speaker 2: another battle is going on in courtrooms across the country,

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Speaker 2: where judges have already started shaping the contours of the

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Speaker 2: presidential election. They're deciding lawsuits challenging everything from who can

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Speaker 2: vote and how they cast their ballots, to which votes

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Speaker 2: count and how the winner is decided. A Bloomberg analysis

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Speaker 2: has identified at least one hundred and sixty five election

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Speaker 2: lawsuits filed in thirty seven states in the last two years,

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Speaker 2: and more than half of those cases have been filed

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Speaker 2: in a seven states critical for an electoral college victory.

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Speaker 2: Joining me is Bloomberg Senior legal reporter Zoe Tillman, who's

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Speaker 2: crunched the numbers. Zoe, did you look at which side

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Speaker 2: is filing more suits? I know that the Republican National

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Speaker 2: Committee said it had launched an unprecedented legal strategy.

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Speaker 8: We did, and you know, it's interesting. I think the

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Speaker 8: numbers showed that Republicans and Conservatives have been more active

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Speaker 8: in court, you know, more than half, but not overwhelmingly so,

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Speaker 8: and that Democrats and left leaning groups have also been

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Speaker 8: quite active ahead of election day, you know, more typically

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Speaker 8: going in to challenge state laws or practices that they

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Speaker 8: contend are putting up illegal barriers to voting, whereas Republicans

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Speaker 8: and Conservatives have been going into states that they feel

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Speaker 8: a bit too lax on that front.

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Speaker 2: The election is a little over two weeks out and

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Speaker 2: there are new cases still being filed.

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Speaker 8: There are you know, as issues come up on the ground,

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Speaker 8: we're seeing lawyers at the ready to bring litigation.

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Speaker 5: You know.

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Speaker 8: Interestingly, we've seen the Justice Department getting involved. That's sort

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Speaker 8: of the final hour where Alabama and Virginia have announced

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Speaker 8: plans to purge names from their voter wiles based on

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Speaker 8: suspicions that these are not US citizens. And so we've

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Speaker 8: seen not only civil rights groups but the Justice Department

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Speaker 8: filing suit in recent weeks trying to stop that from happening. So,

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Speaker 8: you know, I think the later it gets, judges are

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Speaker 8: going to be wary of making any changes that aren't

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Speaker 8: directly related to a late breaking event. You know, if

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Speaker 8: you're going to court to sue over a lot that's

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Speaker 8: been on the books for two years, I think the

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Speaker 8: odds of getting jugital intervention now are slim, but I

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Speaker 8: think we'll see cases probably being stiled up to the

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Speaker 8: last minute, and then a whole new surge of cases

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Speaker 8: related to what actually happens on election day.

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Speaker 2: In your story, you've divided up the cases into different categories,

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Speaker 2: and nearly a third of the cases focus on who

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Speaker 2: should be allowed to vote.

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Speaker 8: That's where we've seen more of a concentration of activity

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Speaker 8: from Republicans and conservatives. One of the narratives that's emerged

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Speaker 8: this cycle is this idea that states are failing to

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Speaker 8: do enough to purge people from their role who are ineligible,

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Speaker 8: either because they're not US citizens, or they've moved away,

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Speaker 8: or they've passed away. You know, I think it's again

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Speaker 8: worth noting that for things like non US citizen voting,

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Speaker 8: the research has shown that that's rare, very uncommon, but

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Speaker 8: it's sort of a narrative that's cropping up in these cases.

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Speaker 8: And then on the flip side of that, we've seen

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Speaker 8: democrats and left leaning groups going to court to try

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Speaker 8: to defend who is on the roles now or expand eligibility.

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Speaker 8: An example of that would be efforts to re enfranchise

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Speaker 8: people who have convictions on their record. And actually there

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Speaker 8: was a big decision out of the Nebraska Supreme Court

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Speaker 8: ruling that a state law making it possible for people

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Speaker 8: with past felny convictions to vote, that that needs to

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Speaker 8: be enforced.

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Speaker 2: And we should just mention states have different laws about

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Speaker 2: whether people with past felony convictions can vote.

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Speaker 8: That's right, And I think it's sort of a broader

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Speaker 8: theme of this, which is that US elections are dispatchwork

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Speaker 8: of different state rules and laws and practices when it

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Speaker 8: comes to election. So your ability to put your absentee

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Speaker 8: ballot in a drop box in one state might not

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Speaker 8: be the same process as in another. The laws are different,

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Speaker 8: state constitutions are different. So that's always another theme that

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Speaker 8: we see when we look at for this broad landscape

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Speaker 8: of voting location.

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Speaker 2: So now let's go to how Americans vote, and you

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Speaker 2: mentioned ballot drop boxes. Republicans have consistently argued against ballot

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Speaker 2: drop boxes, saying it leads to fraud. I mean, has

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Speaker 2: there been proof that there's fraud from ballot drop boxes?

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Speaker 8: Certainly not in any kind of widespread way. You know,

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Speaker 8: I think instances may crop up of problems in a

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Speaker 8: given place at a given time, but not in the

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Speaker 8: sense that it's like proven to be a source of fraud.

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Speaker 8: And we've heard from bipartisan state election officials that this

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Speaker 8: is a time tested, secure way to vote. But you know,

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Speaker 8: the pandemic resulted in just an explosion of voting by

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Speaker 8: mail and voting absentee and states have tried to respond

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Speaker 8: to that, and I think in the past four years

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Speaker 8: tried to clarify the rules, but there have still been

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Speaker 8: sites over It's not so much can there be drop boxes,

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Speaker 8: but it might be what kind of monitoring does there

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Speaker 8: need to be? Does there need to be a physical

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Speaker 8: a person sitting there watching when people put their ballots in?

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Speaker 8: Can there be cameras? Where can they be placed? They

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Speaker 8: need to be had, an official government building, all sorts

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Speaker 8: of minutia. But that make a difference.

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Speaker 2: Wisconsin, which is of course one of those seven swing states.

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Speaker 2: What's happening there over the ballot drop boxes?

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Speaker 8: Ian Wisconsin was a really fascinating example where a few

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Speaker 8: years ago the state Supreme Court had ruled that drop

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Speaker 8: boxes were not allowed under the state's constitution and state laws,

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Speaker 8: and then there was an election, the ideological balance of

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Speaker 8: the state Supreme Court changed, where it went from sort

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Speaker 8: of more conservatives to the more left leaning majority. Another

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Speaker 8: case came up saying, you know, we think that that

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Speaker 8: earlier decision was wrong, and asking the court to take

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Speaker 8: another look. And the court then reversed itself and said,

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Speaker 8: we agree. We think that the previous majority got it

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Speaker 8: wrong and dropboxes were in fact permitted in the state.

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Speaker 8: So that's now the status quo and Wisconsin heading into

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Speaker 8: the selection cycle.

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Speaker 2: Republicans are often trying to make it harder to vote

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Speaker 2: by pushing things like voter IDs. Tell us about the

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Speaker 2: recent case in North Carolina.

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Speaker 8: The R and C went to court to challenge the

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Speaker 8: ability of students and employees at the University of North

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Speaker 8: Carolina Chapel Hill, who now have digital ID cards on

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Speaker 8: their phones, basically to say that it needs to be

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Speaker 8: a physical hard copy of an ID. A lower court

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Speaker 8: judge disagreed with the rn C and said that the

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Speaker 8: digital ideas would be fine. There was a round of

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Speaker 8: snooz coverage of that headlines saying this would be permitted,

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Speaker 8: and then a week later the Court of Appeal stepped

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Speaker 8: in and said no and reversed. And you know, I

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Speaker 8: think that was a good illustration of how much power

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Speaker 8: courts have not just to decide how people vote and

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Speaker 8: sort of what the rules are, but also how much

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Speaker 8: you know, last minute preparation and changes election officials have

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Speaker 8: to be prepared to contend with as these cases get

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Speaker 8: decided in the final weeks, when election offices have been

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Speaker 8: preparing for months or years for an election to take place.

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Speaker 2: And also how confusing for voters who think they're going

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Speaker 2: to go to the polls with their student ideas and

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Speaker 2: then find that they can't right.

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Speaker 8: And this is always that big concern among judges as

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Speaker 8: they handle cases, especially in the final weeks and months,

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Speaker 8: and the US Supreme Court has urged federal judges in

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Speaker 8: particular to be quite wary of intervening at the last minute.

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Speaker 8: You know, the risk of voter confusion as well as

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Speaker 8: chaos among the people running the elections. But courts have

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Speaker 8: had to grapple with if you know something is illegal

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Speaker 8: or unconstitutional, how do you weigh not acting against the

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Speaker 8: considerations of confusion and chaos.

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Speaker 2: Let's turn out to which ballots count, And of course

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Speaker 2: we know that the vote count is not final on

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Speaker 2: election night, so for example, when voters make mistakes on

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Speaker 2: their absentee ballots. States have different ways of dealing with it.

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Speaker 8: States have the ability to decide, you know, if you

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Speaker 8: send in a ballot that doesn't quite comply with the rules.

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Speaker 8: Do you get noticed, Do you have an opportunity to

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Speaker 8: fix the issue? Can you instead come to the polls

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Speaker 8: on election day to cast a provisional ballot? And that's

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Speaker 8: a fight that we've seen play out this cycle, especially

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Speaker 8: in Pennsylvania, which has laws saying basically, if you send

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Speaker 8: in a mail ballot and you don't put a date

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Speaker 8: on the envelope, or you put a date that is

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Speaker 8: clearly wrong, you know, you write your birthday, that that

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Speaker 8: ballot isn't counted even if it arrives by election day.

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Speaker 8: And there's been a lot of over that, including the

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Speaker 8: federal level, which is still pending. But you know, there

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Speaker 8: was another round of state court litigation. We saw lower

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Speaker 8: court blocking that law from being enforced. But then the

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Speaker 8: state Supreme Court has come in in several cases and

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Speaker 8: tossed those cases out, which means that for this election,

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Speaker 8: at least, the expectation is that those undated or misstated

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Speaker 8: ballots won't count. There's a potential for some very last

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Speaker 8: minute litigation to change that, but as of now, that's

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Speaker 8: the status quo. So I think again, you know, another

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Speaker 8: example of these rules that on paper might seem very

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Speaker 8: technical or in the weeds, but and end up affecting

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Speaker 8: you know, thousands of ballots which can really make the

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Speaker 8: difference in a swing state like Pennsylvania.

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Speaker 2: More than half of all states except at least some

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Speaker 2: absentee ballots that arrive after November fifth. So yes, probably

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Speaker 2: more fights to come on that. Now we'll move to

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Speaker 2: this area. How the election is finalized and certification of

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Speaker 2: the vote, I mean, was never anything that was talked

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Speaker 2: about before the last presidential election.

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Speaker 5: That's right.

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Speaker 8: It's long been considered sort of a ministerial role where

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Speaker 8: you know, as long as the number of ballots that

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Speaker 8: come in match in some reasonable way the number of

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Speaker 8: people who are eligible to vote in that precinct, that

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Speaker 8: they then move on to the next phase of things.

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Speaker 8: And there are ways to challenge ballot counts after the

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Speaker 8: certification process, but that was never really seen as sort

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Speaker 8: of a flashpoint in this process. That changed in twenty

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Speaker 8: twenty when after the election, Donald Trump and his supporters

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Speaker 8: looked for ways to overturn results in states where it

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Speaker 8: appeared he was set to lose, and you know, pressure

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Speaker 8: campaigns on state lawmakers to intervene, and then eventually on

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Speaker 8: Congress to intervene, But it really put new attention on

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Speaker 8: this phase of the certification process at the county and

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Speaker 8: state level as a potential pressure point and a place

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Speaker 8: for supporters of one candidate or another to use their

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Speaker 8: power in a way that it hadn't been used before

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Speaker 8: to intercede if it looked like a preferred candidate is

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Speaker 8: going to lose.

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Speaker 2: And a judge decided one of these cases in Georgia

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Speaker 2: on Tuesday.

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Speaker 8: There's a member of the Fulton County Election Board, Julie Adams,

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Speaker 8: who is Republican Trump supporter and in May had refused

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Speaker 8: to certify the results of a presidential primary on the

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Speaker 8: ground that she hadn't gotten all of the information that

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Speaker 8: she felt she needed to confirm that the results were

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Speaker 8: accurate and that the election went off as it should have,

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Speaker 8: and the board overruled her. She was outvoted. But it

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Speaker 8: raises question of you know what happens if a county

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Speaker 8: board does vote to not certify. So Julie Adams went

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Speaker 8: to court and said, I want a judge to tell

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Speaker 8: me that I do have the power to do this,

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Speaker 8: and this week the judge said, no, you don't, that

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Speaker 8: it's a mandatory duty, and so far Julie Adams lawyers

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Speaker 8: have indicated they're not going to appeal this, that they

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Speaker 8: expect this to continue to be sort of a live

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Speaker 8: issue with Tooey sees what other local officials do when

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Speaker 8: it's time to cast the folks.

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Speaker 2: We'll have to see what other decisions come down in

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Speaker 2: the next few weeks that might prevent problems on election day.

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Speaker 2: Thanks so much, Zoe. That's Bloomberg, Zoe Tillman. Coming up next.

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Speaker 2: A truck driver wants to use the Rico Statute to

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Speaker 2: sue over a failed drug test. I'm June Grosso and

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Speaker 2: you're listening to Bloomberg. The Supreme Court seemed divided this

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Speaker 2: week over whether a truck driver can use a federal

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Speaker 2: racketeering law to sue the maker of a CBD hemp

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Speaker 2: oil he says cost him his job. Rico, the Racketeer

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Speaker 2: Influenced and Corrupt Organizations Act, is a federal law that

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Speaker 2: was designed to fight organized crime. The question before the

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Speaker 2: Court was a narrow one. Did his case satisfy Rico's

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Speaker 2: requirement that his business or property had been injured? Just

442
00:24:55,240 --> 00:24:59,040
Speaker 2: as Clarence Thomas questioned, the driver's lawyer isha anund.

443
00:24:59,400 --> 00:25:02,920
Speaker 3: So the here is we were fired. That's the injury

444
00:25:02,960 --> 00:25:06,120
Speaker 3: to our business. Now, as a measure of compensation for that,

445
00:25:06,320 --> 00:25:09,080
Speaker 3: the damages we claim are an amount equal to the

446
00:25:09,160 --> 00:25:12,080
Speaker 3: salary we would have made and the other economic benefits

447
00:25:12,080 --> 00:25:14,520
Speaker 3: that we would have gotten had we remained employed.

448
00:25:14,960 --> 00:25:17,320
Speaker 8: But medical marijuana did not fire you.

449
00:25:17,560 --> 00:25:21,359
Speaker 2: The liberal justices like Elena Kagan, said a plane reading

450
00:25:21,440 --> 00:25:24,679
Speaker 2: of the law would allow the driver to sue under RICO.

451
00:25:25,160 --> 00:25:27,960
Speaker 2: If you're harmed when you lose a job, then you've

452
00:25:27,960 --> 00:25:31,119
Speaker 2: been injured in your business, haven't you. But some of

453
00:25:31,160 --> 00:25:36,520
Speaker 2: the court's conservatives, including Justice Brett Cavanaugh, expressed concern about

454
00:25:36,560 --> 00:25:39,320
Speaker 2: opening the floodgates to RICO lawsuits.

455
00:25:39,640 --> 00:25:42,280
Speaker 4: I think you're saying, yes, the damages from personal injuries

456
00:25:42,280 --> 00:25:45,199
Speaker 4: can be characterized as injuries to business or property. Therefore

457
00:25:45,200 --> 00:25:48,080
Speaker 4: you can just bring them under RICO. That would mean

458
00:25:48,160 --> 00:25:52,320
Speaker 4: that every state toward personal injury suit in which you're

459
00:25:52,359 --> 00:25:55,600
Speaker 4: seeking lost wages or medical expenses can be now brought

460
00:25:56,200 --> 00:25:59,280
Speaker 4: under RICO and seek troubled damages.

461
00:25:59,760 --> 00:26:03,600
Speaker 2: The trial judge dismissed the driver's lawsuit, saying his injury

462
00:26:03,720 --> 00:26:07,080
Speaker 2: was personal and didn't fit RICO, but the Second Circuit

463
00:26:07,119 --> 00:26:10,840
Speaker 2: Court of appeals reversed, and why bring a case under rico.

464
00:26:11,320 --> 00:26:15,439
Speaker 2: If you win, you can get triple damages plus attorney's fees.

465
00:26:16,000 --> 00:26:19,280
Speaker 2: Joining me is Brian Wolfman, a professor at Georgetown Law,

466
00:26:19,720 --> 00:26:22,200
Speaker 2: tell us about the truck driver's allegations here.

467
00:26:22,600 --> 00:26:26,399
Speaker 1: So what mister Horn argues is quite simple that this

468
00:26:26,440 --> 00:26:30,639
Speaker 1: outfit Medical Marijuana was marketing a product They claimed it

469
00:26:30,640 --> 00:26:35,639
Speaker 1: had no psychoactive effect and did not contain any THCHC,

470
00:26:36,160 --> 00:26:39,720
Speaker 1: which is an active ingredient as you may know in marijuana.

471
00:26:39,800 --> 00:26:44,399
Speaker 1: So mister Horn saw advertisements on the internet for Medical

472
00:26:44,400 --> 00:26:47,840
Speaker 1: Marijuana's product. He himself was a truck driver who way

473
00:26:47,880 --> 00:26:51,480
Speaker 1: back in twenty twelve had suffered a serious injury and

474
00:26:51,560 --> 00:26:54,840
Speaker 1: had continuing back pain that he was never able to tackle.

475
00:26:54,960 --> 00:26:57,480
Speaker 1: And he was still a truck driver and really wanted

476
00:26:57,520 --> 00:27:00,480
Speaker 1: to do something to deal with his pain. And he said, well, look,

477
00:27:00,520 --> 00:27:02,600
Speaker 1: if this has no THC in it, I'm going to

478
00:27:02,640 --> 00:27:04,760
Speaker 1: give it a try. Now, why was he worried about

479
00:27:04,960 --> 00:27:08,480
Speaker 1: ingesting something that had the active ingredient in marijuana, Because

480
00:27:08,480 --> 00:27:12,080
Speaker 1: he's a truck driver and he is periodically screened for

481
00:27:12,440 --> 00:27:16,120
Speaker 1: the possibility that he might be using unlawful drugs. So

482
00:27:16,320 --> 00:27:20,200
Speaker 1: he purchases the product based on the representation made by

483
00:27:20,200 --> 00:27:24,160
Speaker 1: the sellers that it contains no THC. Long behold. Mister

484
00:27:24,280 --> 00:27:28,639
Speaker 1: Horn argues, apparently it did contain THCHC, and he goes

485
00:27:28,680 --> 00:27:32,760
Speaker 1: through shortly thereafter a periodic screening by his employer. It

486
00:27:32,840 --> 00:27:36,520
Speaker 1: detects THC in his body and he is immediately fired,

487
00:27:37,000 --> 00:27:40,000
Speaker 1: And of course that's very distressing. He suffers great harm,

488
00:27:40,359 --> 00:27:44,800
Speaker 1: I'm sure, both emotional and obviously financial, because this is

489
00:27:44,840 --> 00:27:48,320
Speaker 1: his sole means of livelihood and he has now lost

490
00:27:48,359 --> 00:27:52,080
Speaker 1: his job that can be traced to an alleged fraud

491
00:27:52,440 --> 00:27:53,920
Speaker 1: committed by this company.

492
00:27:54,119 --> 00:27:57,840
Speaker 2: Most people think of the Rico Statute as it was

493
00:27:58,080 --> 00:28:02,520
Speaker 2: enacted in order to combat organized crime. So he sues,

494
00:28:03,320 --> 00:28:04,840
Speaker 2: why is he suing under RICO.

495
00:28:05,560 --> 00:28:08,239
Speaker 1: Well, he's suing under RICO because for many years now,

496
00:28:08,320 --> 00:28:12,080
Speaker 1: and this goes back for decades now. Yes, RICO was

497
00:28:12,160 --> 00:28:16,399
Speaker 1: an attempt both criminally and civilly to get at organized crime.

498
00:28:16,480 --> 00:28:20,359
Speaker 1: It's called the Racketeer, Influence and Corrupt Organization Act. But

499
00:28:20,480 --> 00:28:24,280
Speaker 1: its words, you'll cast its web far more broadly, and

500
00:28:24,359 --> 00:28:27,040
Speaker 1: I think that was within the intention of Congress. And

501
00:28:27,119 --> 00:28:30,160
Speaker 1: in any event, its words are much broader, and they

502
00:28:30,280 --> 00:28:35,119
Speaker 1: encompass civil conspiracies where there is a predicate act, a

503
00:28:35,240 --> 00:28:40,440
Speaker 1: predicate violation of law that is conducted among numerous people,

504
00:28:40,520 --> 00:28:47,360
Speaker 1: a conspiracy that imposes intentional harms on individuals, and what

505
00:28:47,480 --> 00:28:49,400
Speaker 1: it says, And I think I want to point to

506
00:28:49,440 --> 00:28:51,960
Speaker 1: the part of the statute that said issue in this case,

507
00:28:52,480 --> 00:28:57,040
Speaker 1: RICO permits any person injured in his business or property

508
00:28:57,120 --> 00:29:02,200
Speaker 1: by reason of racketeering activity to bring a civil lawsuit

509
00:29:02,520 --> 00:29:07,000
Speaker 1: for three times the damages he sustained. So let me

510
00:29:07,040 --> 00:29:10,960
Speaker 1: focus on the keywords, any person injured in his business

511
00:29:11,040 --> 00:29:14,760
Speaker 1: or property by reason of unlawful activity under this law.

512
00:29:15,000 --> 00:29:18,480
Speaker 1: And so what mister Horn argues is quite simple that

513
00:29:18,880 --> 00:29:24,480
Speaker 1: the economic harms resulting from the injuries he sustained are

514
00:29:24,720 --> 00:29:29,000
Speaker 1: injuries to his business or property by reason of the

515
00:29:29,080 --> 00:29:33,040
Speaker 1: defendants violations of RICO. And the reason we know that

516
00:29:33,480 --> 00:29:38,280
Speaker 1: is because his business was his truck driving business. One's

517
00:29:38,320 --> 00:29:42,440
Speaker 1: employment is one's business. So his argument is very simple.

518
00:29:42,880 --> 00:29:45,719
Speaker 1: The Second Circuit Court of Appeals, which is headquartered in

519
00:29:45,760 --> 00:29:48,840
Speaker 1: New York, agreed with him, and the Supreme Court took

520
00:29:48,880 --> 00:29:51,800
Speaker 1: this case on because it's thought that the courts of

521
00:29:51,840 --> 00:29:55,200
Speaker 1: appeals around the country had disagreed on this subject tell.

522
00:29:55,120 --> 00:29:59,200
Speaker 2: Us about the argument of the defendants here medical marijuana.

523
00:30:00,080 --> 00:30:04,560
Speaker 1: Argument is that this statue doesn't cover harms that have

524
00:30:04,800 --> 00:30:10,280
Speaker 1: its origins in personal injuries and here because the personal

525
00:30:10,400 --> 00:30:14,960
Speaker 1: injury or the first in time injury was the ingestion

526
00:30:15,320 --> 00:30:19,640
Speaker 1: of this product that contained THC. Even if the ultimate

527
00:30:19,760 --> 00:30:24,360
Speaker 1: harm is in part a harm to one's business or property,

528
00:30:24,360 --> 00:30:26,480
Speaker 1: in this case, the business of being employed as a

529
00:30:26,520 --> 00:30:31,000
Speaker 1: truck driver, it doesn't count under RICO because it has

530
00:30:31,040 --> 00:30:34,600
Speaker 1: its origins and personal injuries and personal injuries arms are

531
00:30:34,640 --> 00:30:37,800
Speaker 1: not covered by the statue. The problem with that, and

532
00:30:37,840 --> 00:30:40,440
Speaker 1: I think this is mister Horn's argument. The problem with

533
00:30:40,480 --> 00:30:43,200
Speaker 1: that is that's not what the statue says. The statue

534
00:30:43,200 --> 00:30:47,000
Speaker 1: says any person injured in his business or property should

535
00:30:47,040 --> 00:30:51,080
Speaker 1: recover three times its damages. And the injury here in

536
00:30:51,120 --> 00:30:54,560
Speaker 1: his business again I'm repeating myself, is the injury in

537
00:30:55,360 --> 00:30:58,560
Speaker 1: his employment, in fact, losing all his wages because he

538
00:30:58,720 --> 00:31:01,840
Speaker 1: was fired as soon as it was discovered that he

539
00:31:01,920 --> 00:31:03,520
Speaker 1: had THC in his system.

540
00:31:03,840 --> 00:31:08,560
Speaker 2: Several of the Conservative justices seemed to be leaning away

541
00:31:08,640 --> 00:31:13,720
Speaker 2: from the truck driver's interpretation. Here's the Chief Justice, John

542
00:31:13,800 --> 00:31:15,120
Speaker 2: Roberts Council.

543
00:31:15,200 --> 00:31:19,560
Speaker 5: I understood the business or property limitation as having been

544
00:31:19,560 --> 00:31:24,320
Speaker 5: intended to be a significant limitation on the reach of RICO.

545
00:31:25,080 --> 00:31:28,440
Speaker 5: Your friend said that your position would make every slip

546
00:31:28,440 --> 00:31:31,720
Speaker 5: and fall a RICO violation. Why isn't that the case?

547
00:31:32,400 --> 00:31:37,640
Speaker 2: And Justice Brett Cavanaugh also spent some time talking about

548
00:31:37,920 --> 00:31:40,000
Speaker 2: the fact that there could be sort of an explosion

549
00:31:40,040 --> 00:31:40,920
Speaker 2: of cases here.

550
00:31:41,480 --> 00:31:44,480
Speaker 1: Yes, I mean that was a concern. Let me explain

551
00:31:44,600 --> 00:31:47,720
Speaker 1: I think the counters to that position that were put

552
00:31:47,840 --> 00:31:52,320
Speaker 1: forth by mister Horn's council. The first is if that's true,

553
00:31:52,840 --> 00:31:55,960
Speaker 1: that is that there are more cases that could now

554
00:31:56,000 --> 00:31:59,280
Speaker 1: be brought under civil rico. One answer is, this is

555
00:31:59,320 --> 00:32:03,040
Speaker 1: the statute that Congress route, and if Congress wishes to

556
00:32:03,160 --> 00:32:08,600
Speaker 1: narrow the statute and exclude certain violations that are said

557
00:32:08,640 --> 00:32:12,040
Speaker 1: to have origins and a personal injury, like the injury

558
00:32:12,040 --> 00:32:15,280
Speaker 1: from ingesting a drug product, then Congress can do so.

559
00:32:15,640 --> 00:32:18,560
Speaker 1: But I think also the argument is this is not

560
00:32:18,880 --> 00:32:21,240
Speaker 1: like any slip and fall, because the slip and fall,

561
00:32:21,360 --> 00:32:23,880
Speaker 1: say you know, a slip and fall outside of building

562
00:32:23,960 --> 00:32:28,440
Speaker 1: or at the local supermarket, just involves the negligence, for instance,

563
00:32:28,480 --> 00:32:30,960
Speaker 1: of a worker at the supermarket not to clean up

564
00:32:31,000 --> 00:32:33,880
Speaker 1: the floor, so they slipped and they fell. But RICO

565
00:32:34,040 --> 00:32:37,920
Speaker 1: requires much more. First of all, and it requires intentionality,

566
00:32:38,040 --> 00:32:41,000
Speaker 1: not just negligence. Second of all, it requires, as I

567
00:32:41,040 --> 00:32:44,360
Speaker 1: said at the beginning, a predicate violation, So not simply

568
00:32:44,640 --> 00:32:46,960
Speaker 1: that there was the slip and fall the negligence, but

569
00:32:47,000 --> 00:32:50,200
Speaker 1: there have to be some predicate wrong. And here the

570
00:32:50,240 --> 00:32:54,800
Speaker 1: predicate wrong was an alleged mail fraud to perpetrate this wrong,

571
00:32:54,880 --> 00:32:57,920
Speaker 1: which is a separate federal violation that would not be

572
00:32:58,040 --> 00:33:01,000
Speaker 1: true in the slip and fall situation. And there are

573
00:33:01,000 --> 00:33:04,680
Speaker 1: a number others what we're referred to as guardrails on

574
00:33:04,960 --> 00:33:07,240
Speaker 1: seeing this case as just a slip and fall. Let

575
00:33:07,240 --> 00:33:10,240
Speaker 1: me give you one other guardrail. It's well understood that

576
00:33:10,320 --> 00:33:13,960
Speaker 1: an injury in one's business or property does not include

577
00:33:14,280 --> 00:33:17,320
Speaker 1: emotional harms what are known in the law as non

578
00:33:17,400 --> 00:33:23,800
Speaker 1: pecuniary harms like emotional harm, pain and suffering, humiliation. All

579
00:33:23,880 --> 00:33:27,400
Speaker 1: of those things would be recoverable in a typical tort

580
00:33:27,480 --> 00:33:30,400
Speaker 1: action in a typical slip and fall, and in fact,

581
00:33:30,600 --> 00:33:35,200
Speaker 1: in modern American tort law, much of the recoveries in

582
00:33:35,720 --> 00:33:39,320
Speaker 1: a slip and fall or other kinds of personal injury cases,

583
00:33:39,800 --> 00:33:44,400
Speaker 1: much of the recovery are those kinds of non pecuniary damages.

584
00:33:44,920 --> 00:33:48,440
Speaker 1: They are not recoverable under Rico, So in some sense

585
00:33:49,040 --> 00:33:51,360
Speaker 1: we go gives, but in other ways it takes away.

586
00:33:51,760 --> 00:33:54,080
Speaker 1: So I think all those things should be taken into account.

587
00:33:54,080 --> 00:33:55,920
Speaker 1: But I want to come back to the first point.

588
00:33:56,160 --> 00:33:59,000
Speaker 1: If the Court rules here in favor of mister Horne,

589
00:33:59,080 --> 00:34:01,920
Speaker 1: which it may well, do you know Congress is free

590
00:34:01,960 --> 00:34:04,840
Speaker 1: to amend the statute to narrow in a way that

591
00:34:05,000 --> 00:34:08,279
Speaker 1: it views is appropriate, or even that it views as

592
00:34:08,360 --> 00:34:10,120
Speaker 1: consistent with its original intent.

593
00:34:11,040 --> 00:34:15,839
Speaker 2: You obviously feel that Horn's argument is the better one here,

594
00:34:16,360 --> 00:34:19,680
Speaker 2: But after listening to the oral arguments, I mean, do

595
00:34:19,719 --> 00:34:23,520
Speaker 2: you think that justice is were divided or leaning towards Horn.

596
00:34:24,160 --> 00:34:27,600
Speaker 1: I don't know the answer to that. It's always difficult

597
00:34:27,800 --> 00:34:31,440
Speaker 1: to predict for a number of reasons. One reason can

598
00:34:31,480 --> 00:34:35,560
Speaker 1: be that the judges are just truly looking to answer

599
00:34:35,680 --> 00:34:38,680
Speaker 1: questions that they're not certain about, and just because they're

600
00:34:38,719 --> 00:34:42,399
Speaker 1: asking a question from one angle or another doesn't necessarily

601
00:34:42,560 --> 00:34:47,000
Speaker 1: meet their leaning one way or another. Sometimes a question

602
00:34:47,280 --> 00:34:49,760
Speaker 1: that looks like it's coming from a place a concern

603
00:34:50,400 --> 00:34:55,440
Speaker 1: is looking just for a potential way to narrow the ruling,

604
00:34:55,680 --> 00:34:59,400
Speaker 1: If it doesn't necessarily mean that that Justice is planning

605
00:34:59,440 --> 00:35:02,440
Speaker 1: to rule it against this party or that party. So

606
00:35:02,520 --> 00:35:04,640
Speaker 1: I think it's just very hard to tell. And I

607
00:35:04,680 --> 00:35:09,279
Speaker 1: think that the Court is truly I wouldn't say undecided,

608
00:35:09,320 --> 00:35:13,760
Speaker 1: but truly looking for a way to fully understand this case.

609
00:35:13,840 --> 00:35:16,960
Speaker 1: And I did not take anything one way or other

610
00:35:17,440 --> 00:35:21,160
Speaker 1: from the questioning. And you mentioned the concerns coming from

611
00:35:21,280 --> 00:35:24,520
Speaker 1: the Chief Justice or Justice Kavanaugh, and I did not

612
00:35:24,680 --> 00:35:29,600
Speaker 1: take them as necessarily leaning against mister Horn, but expressing

613
00:35:29,719 --> 00:35:34,319
Speaker 1: some concern over the kind of litigation a ruling in

614
00:35:34,360 --> 00:35:38,440
Speaker 1: favor of mister Horn might lead to, and wondering whether

615
00:35:38,560 --> 00:35:42,680
Speaker 1: there are any guard wails that might mitigate to some

616
00:35:42,800 --> 00:35:46,040
Speaker 1: degree a ruling in favor of mister Horn.

617
00:35:46,239 --> 00:35:49,880
Speaker 2: An interesting case of statutory interpretation. Thanks so much for

618
00:35:49,920 --> 00:35:53,800
Speaker 2: being on the show. That's Professor Brian Wolfman of Georgetown Law.

619
00:35:54,280 --> 00:35:57,160
Speaker 2: In other Supreme Court news this week, the Court has

620
00:35:57,200 --> 00:36:00,640
Speaker 2: released the calendar for its December arguments, which will feature

621
00:36:00,680 --> 00:36:04,640
Speaker 2: eight cases over six days. On December fourth, the Court

622
00:36:04,680 --> 00:36:07,319
Speaker 2: will hear one of the highest profile cases of the

623
00:36:07,440 --> 00:36:12,480
Speaker 2: term involving transgender rights. The justices will decide whether states

624
00:36:12,520 --> 00:36:16,200
Speaker 2: can outlaw gender affirming care for minors, taking up what

625
00:36:16,239 --> 00:36:20,680
Speaker 2: has become a politically polarizing issue across the country. On

626
00:36:20,719 --> 00:36:23,279
Speaker 2: December second, the Court will hear a case over the

627
00:36:23,280 --> 00:36:27,600
Speaker 2: Food and Drug Administration's efforts to ban flavored e cigarettes.

628
00:36:28,360 --> 00:36:31,040
Speaker 2: And that's it for this edition of the Bloomberg Law Podcast.

629
00:36:31,360 --> 00:36:33,759
Speaker 2: Remember you can always get the latest legal news by

630
00:36:33,800 --> 00:36:37,640
Speaker 2: subscribing and listening to the show on Apple Podcasts, Spotify,

631
00:36:37,920 --> 00:36:41,759
Speaker 2: and at Bloomberg dot com, slash podcast, slash Law. I'm

632
00:36:41,840 --> 00:36:44,279
Speaker 2: June Grosso and this is Bloomberg