1 00:00:02,040 --> 00:00:03,800 Speaker 1: This is Bloomberg Law. 2 00:00:03,920 --> 00:00:06,760 Speaker 2: What does a prosecutor have to prove in order to 3 00:00:06,760 --> 00:00:09,959 Speaker 2: get a rico conviction? Tell us why this Solicitor General 4 00:00:10,000 --> 00:00:12,319 Speaker 2: is sometimes referred to as the tenth Justice. 5 00:00:12,320 --> 00:00:15,520 Speaker 1: Interviews with prominent attorneys in Bloomberg Legal Experts. 6 00:00:15,560 --> 00:00:18,360 Speaker 2: That's Jennifer k for Bloomberg Law. Joining me is former 7 00:00:18,440 --> 00:00:20,160 Speaker 2: federal prosecutor Robert miss. 8 00:00:20,040 --> 00:00:23,200 Speaker 1: And analysis of important legal issues, cases and headlines. 9 00:00:23,239 --> 00:00:27,040 Speaker 2: It's the toughest hurtle for prosecutors proving Trump's intent. Alito 10 00:00:27,120 --> 00:00:30,479 Speaker 2: took on Congress saying Congress has no power to regulate 11 00:00:30,520 --> 00:00:31,360 Speaker 2: the Supreme Court. 12 00:00:31,520 --> 00:00:34,600 Speaker 1: Bloomberg Law with June Grosso from Bloomberg Radio. 13 00:00:37,960 --> 00:00:40,720 Speaker 2: Welcome to a special best of edition of the Bloomberg 14 00:00:40,800 --> 00:00:43,760 Speaker 2: Law Show. Ahead in this hour, the Supreme Court is 15 00:00:43,800 --> 00:00:47,320 Speaker 2: facing a pile of cases from the conservative Fifth Circuit. 16 00:00:47,640 --> 00:00:52,519 Speaker 2: Inside the Supreme Court's second decision allowing Biden's ghost gun regulations, 17 00:00:53,120 --> 00:00:57,600 Speaker 2: and critics call him a patent troll. He prefers modern 18 00:00:57,640 --> 00:01:03,040 Speaker 2: day edison. An outside share of the Supreme Court's biggest 19 00:01:03,080 --> 00:01:06,360 Speaker 2: case is this term will come from the ultra conservative 20 00:01:06,480 --> 00:01:10,440 Speaker 2: Fifth Circuit Court of Appeals, who's far reaching rulings on 21 00:01:10,600 --> 00:01:15,760 Speaker 2: federal regulatory power, guns and social media are proving impossible 22 00:01:15,800 --> 00:01:19,320 Speaker 2: for the Supreme Court to ignore. Here's former US Solicitor 23 00:01:19,400 --> 00:01:22,040 Speaker 2: General Gregory Gar's take on the Fifth Circuit. 24 00:01:22,440 --> 00:01:24,280 Speaker 3: Some people have said it sort of the Supreme Court 25 00:01:24,400 --> 00:01:26,720 Speaker 3: versus the Fifth Circuit. It's interesting, I mean, the Fifth 26 00:01:26,720 --> 00:01:30,720 Speaker 3: Circuit is now the most conservative circuit among the many. 27 00:01:31,319 --> 00:01:33,920 Speaker 3: And you know, the kind of question that all these 28 00:01:33,959 --> 00:01:36,720 Speaker 3: cases present is whether the Fifth Circuit has got out 29 00:01:37,120 --> 00:01:40,399 Speaker 3: ahead of even the US Supreme Court today in terms 30 00:01:40,440 --> 00:01:43,319 Speaker 3: of how conservative it is and whether or not the 31 00:01:43,400 --> 00:01:46,240 Speaker 3: US Supreme Court feels as though it has to rein 32 00:01:46,319 --> 00:01:47,400 Speaker 3: it in a little bit. 33 00:01:47,720 --> 00:01:50,840 Speaker 2: Joining me is Bloomberg New Supreme Court reporter Greg storre 34 00:01:51,160 --> 00:01:53,920 Speaker 2: Greg just how conservative is the Fifth Circuit. 35 00:01:54,480 --> 00:01:58,400 Speaker 4: It's unquestionably the most conservative federal appeals court in the country, 36 00:01:58,680 --> 00:02:00,640 Speaker 4: and it gets an awful lot of care, so we 37 00:02:00,760 --> 00:02:03,880 Speaker 4: notice it even more than other courts. On this court, 38 00:02:03,960 --> 00:02:06,960 Speaker 4: twelve of its full time judges are Republican appointees and 39 00:02:07,000 --> 00:02:10,440 Speaker 4: only four are Democratic appointees. And six of those Republican 40 00:02:10,440 --> 00:02:13,560 Speaker 4: appointees are appointees of Donald Trump. And you know, they 41 00:02:13,600 --> 00:02:15,880 Speaker 4: include some justices who are really trying to make a 42 00:02:15,960 --> 00:02:19,000 Speaker 4: name for themselves with some really far reaching rulings, and 43 00:02:19,040 --> 00:02:22,080 Speaker 4: so it's kind of consistently the place where conservatives go 44 00:02:22,160 --> 00:02:24,079 Speaker 4: when they are looking to push the law in a 45 00:02:24,160 --> 00:02:24,760 Speaker 4: certain direction. 46 00:02:25,480 --> 00:02:27,840 Speaker 2: There have been a lot of stories about the Texas 47 00:02:27,919 --> 00:02:31,760 Speaker 2: judges who've become the go to judges, for example, for 48 00:02:32,000 --> 00:02:35,040 Speaker 2: Republican states that want to sue. Tell us about the 49 00:02:35,040 --> 00:02:39,200 Speaker 2: Trump appointees on the Fifth Circuit, because what seems unusual 50 00:02:39,240 --> 00:02:42,280 Speaker 2: about them is they're not only conservative, but several of 51 00:02:42,320 --> 00:02:47,359 Speaker 2: them made statements before they became judges that staked out 52 00:02:47,560 --> 00:02:53,640 Speaker 2: very conservative positions on issues like abortion and gay marriage. Yeah. 53 00:02:53,680 --> 00:02:56,680 Speaker 4: So there's also one who while on the beat, has 54 00:02:56,720 --> 00:02:59,959 Speaker 4: made some really remarkable statements. That's James ho He's a 55 00:03:00,040 --> 00:03:03,680 Speaker 4: Trump appointee. He's described abortion while on the bench as 56 00:03:03,720 --> 00:03:06,480 Speaker 4: a moral tragedy and written that if there's too much 57 00:03:06,520 --> 00:03:10,040 Speaker 4: money in politics, because there's too much government. And then 58 00:03:10,040 --> 00:03:12,200 Speaker 4: there's some other judges that really drew a lot of 59 00:03:12,200 --> 00:03:15,400 Speaker 4: controversy when they were nominated, a guy like Corey Wilson, 60 00:03:15,440 --> 00:03:18,040 Speaker 4: who had written that gay marriage is a pander to 61 00:03:18,120 --> 00:03:23,040 Speaker 4: liberal interest groups. Another judge, Stuart Kyle Duncan, who has 62 00:03:23,080 --> 00:03:26,560 Speaker 4: written a lot of things in opposition to LGBTQ rights. 63 00:03:26,919 --> 00:03:30,079 Speaker 4: And he was a judge who drew that protest at 64 00:03:30,080 --> 00:03:33,400 Speaker 4: Stanford Law School where protesters shut him down, wouldn't let 65 00:03:33,480 --> 00:03:35,400 Speaker 4: him speak. So he's very much a lightning rod. 66 00:03:35,760 --> 00:03:39,520 Speaker 2: The Fifth Circuit hasn't been faring that well at the 67 00:03:39,560 --> 00:03:42,400 Speaker 2: Supreme Court. To me, it's taken the position the Ninth 68 00:03:42,440 --> 00:03:44,520 Speaker 2: Circuit used to take, where it was the most reversed 69 00:03:44,520 --> 00:03:47,480 Speaker 2: circuit for so many years. So tell us how it's 70 00:03:47,560 --> 00:03:49,240 Speaker 2: done in the past year. 71 00:03:49,720 --> 00:03:52,680 Speaker 4: Not very well. So in the last Supreme Court term, 72 00:03:52,960 --> 00:03:55,800 Speaker 4: in seven of nine cases the Court decided if at 73 00:03:55,920 --> 00:04:00,720 Speaker 4: least partially or largely reversed the Fifth Circuit. Say it's different, 74 00:04:00,840 --> 00:04:02,360 Speaker 4: just to go back to the Ninth Circuit. The way 75 00:04:02,360 --> 00:04:04,680 Speaker 4: it's different is the Ninth Circuit, I had a well 76 00:04:04,680 --> 00:04:07,600 Speaker 4: deserved reputation back in the day, is being very very liberal, 77 00:04:07,880 --> 00:04:10,360 Speaker 4: and the Supreme Court, even when it wasn't as conservative 78 00:04:10,400 --> 00:04:13,440 Speaker 4: as this Court is, would say, no, we're not going 79 00:04:13,520 --> 00:04:16,279 Speaker 4: to let you do that. Ninth Circuit. Here, it's a 80 00:04:16,360 --> 00:04:18,600 Speaker 4: case where the Fifth Circuit is trying to sort of 81 00:04:18,880 --> 00:04:21,919 Speaker 4: go beyond where the Supreme Court has gone. It is 82 00:04:21,920 --> 00:04:24,840 Speaker 4: a conservative Supreme Court, and we have the Fifth Circuit 83 00:04:25,000 --> 00:04:27,560 Speaker 4: trying to push the envelope even beyond where the Supreme 84 00:04:27,560 --> 00:04:28,280 Speaker 4: Court has gone. 85 00:04:28,400 --> 00:04:28,479 Speaker 3: Do. 86 00:04:28,560 --> 00:04:31,159 Speaker 2: Some of their decisions seem like decisions that the Supreme 87 00:04:31,200 --> 00:04:34,120 Speaker 2: Court almost has to take or it will allow the 88 00:04:34,200 --> 00:04:37,120 Speaker 2: law to be, you know, even further out or even 89 00:04:37,160 --> 00:04:39,320 Speaker 2: more conservative than the Court envisioned. 90 00:04:39,839 --> 00:04:42,119 Speaker 4: Yeah. So a number of the cases that Supreme Court 91 00:04:42,160 --> 00:04:45,800 Speaker 4: has this term are cases where the Biden administration is 92 00:04:45,839 --> 00:04:49,280 Speaker 4: appealing and there are cases where the Fifth Circuit struck 93 00:04:49,360 --> 00:04:53,840 Speaker 4: down something that either an administrative agency or Congress did. 94 00:04:53,960 --> 00:04:56,880 Speaker 4: So one example, there is a law that says the 95 00:04:56,880 --> 00:04:59,839 Speaker 4: people subject to a domestic violence restraining order can have 96 00:05:00,040 --> 00:05:03,119 Speaker 4: your Second Amendment rights gun rights taken away. The Fifth 97 00:05:03,120 --> 00:05:07,159 Speaker 4: Circuit said, Nope, that law is unconstitutional. The Biden administration 98 00:05:07,240 --> 00:05:09,120 Speaker 4: came up to the Supreme Court, and really, in that 99 00:05:09,160 --> 00:05:12,360 Speaker 4: sort of situation, the Court almost has to take the case. 100 00:05:12,600 --> 00:05:15,680 Speaker 4: So we're going to now see what the Supreme Court 101 00:05:15,680 --> 00:05:18,120 Speaker 4: thinks about that interpretation of the Second Amendment. 102 00:05:18,720 --> 00:05:21,640 Speaker 2: Yeah, that's guaranteed to be one of the biggest cases 103 00:05:21,680 --> 00:05:24,840 Speaker 2: of the term. And my favorite line from that really 104 00:05:25,040 --> 00:05:28,240 Speaker 2: was the Fifth Circuit saying that while the defendant there, 105 00:05:28,400 --> 00:05:32,440 Speaker 2: Rahimi was quote hardly a model citizen he was entitled 106 00:05:32,480 --> 00:05:36,320 Speaker 2: to Second Amendment protections. And this is a defendant who 107 00:05:36,320 --> 00:05:39,400 Speaker 2: not only had a restraining order against him by his 108 00:05:39,800 --> 00:05:43,880 Speaker 2: former girlfriend, but also shot his gun in public I 109 00:05:43,920 --> 00:05:48,800 Speaker 2: think five times. So not exactly a model defendant for 110 00:05:48,839 --> 00:05:49,560 Speaker 2: a case like this. 111 00:05:50,320 --> 00:05:52,640 Speaker 4: No, And in fact, if you're a Second Amendment advocate, 112 00:05:52,640 --> 00:05:54,800 Speaker 4: a really bad defended to have in a case like this. 113 00:05:55,320 --> 00:05:58,640 Speaker 4: You have both this law that protects again something that 114 00:05:58,760 --> 00:06:01,560 Speaker 4: is pretty commonly understood to be a very very dangerous 115 00:06:01,600 --> 00:06:05,640 Speaker 4: situation to somebody with domestic violence restraining order having access 116 00:06:05,680 --> 00:06:09,239 Speaker 4: to firearms, and you also have somebody who a judge 117 00:06:09,279 --> 00:06:13,840 Speaker 4: found had engaged in all sorts of criminal violent activity. 118 00:06:14,320 --> 00:06:17,640 Speaker 4: And the confluence of those things make it a case where, 119 00:06:17,920 --> 00:06:20,480 Speaker 4: even with this conservative Supreme Court, it's going to be 120 00:06:20,560 --> 00:06:23,440 Speaker 4: pretty hard for them to explain why mister himI is 121 00:06:23,440 --> 00:06:26,800 Speaker 4: somebody who is entitled to keep his Second Amendment right. 122 00:06:27,120 --> 00:06:30,159 Speaker 2: The Supreme Court has several cases that may allow it 123 00:06:30,240 --> 00:06:33,799 Speaker 2: to expand its attempt to rein in the administrative state, 124 00:06:33,920 --> 00:06:36,919 Speaker 2: and a couple come from the Fifth Circuit oral arguments 125 00:06:36,920 --> 00:06:41,160 Speaker 2: in the Consumer Financial Protection Bureau's funding system. The second 126 00:06:41,200 --> 00:06:44,480 Speaker 2: time I think the CFPB has been before the Court 127 00:06:44,560 --> 00:06:47,120 Speaker 2: So tell us about this Fifth Circuit decision. 128 00:06:47,520 --> 00:06:49,560 Speaker 4: Yeah, it is the second time the CFPB has been 129 00:06:49,640 --> 00:06:52,120 Speaker 4: up before the Supreme Court. This case has to do 130 00:06:52,240 --> 00:06:55,960 Speaker 4: with how the bureau gets its money. It gets its 131 00:06:56,000 --> 00:06:59,680 Speaker 4: money through the Federal Reserve system. It doesn't rely on 132 00:06:59,720 --> 00:07:03,160 Speaker 4: the US year congressional appropriations. And that was a part 133 00:07:03,200 --> 00:07:06,400 Speaker 4: of Congress's design and creating this bureau after the two 134 00:07:06,440 --> 00:07:08,919 Speaker 4: thousand and eight financial crisis. They wanted to give the 135 00:07:08,920 --> 00:07:13,120 Speaker 4: CSPB a certain amount of independence, shielded from the political processes. 136 00:07:13,440 --> 00:07:16,520 Speaker 4: And what the Fifth Circuit said was this system violates 137 00:07:16,640 --> 00:07:19,960 Speaker 4: the constitutional provision that says government spending has to be 138 00:07:20,000 --> 00:07:23,840 Speaker 4: done via a congressional appropriation. Now, in the past, courts 139 00:07:23,880 --> 00:07:27,280 Speaker 4: and concluding the Supreme Court have said that provision is 140 00:07:27,280 --> 00:07:29,920 Speaker 4: something that keeps the executive branch from spending money that 141 00:07:29,960 --> 00:07:33,280 Speaker 4: Congress hasn't authorized to be spent. Courts haven't used it 142 00:07:33,560 --> 00:07:36,200 Speaker 4: to restrict Congress and the way they can set up 143 00:07:36,200 --> 00:07:39,000 Speaker 4: an agency. Well, the this Circuit did in this case. 144 00:07:39,080 --> 00:07:42,520 Speaker 4: So it's a novel constitutional approach. There's not a whole 145 00:07:42,520 --> 00:07:45,000 Speaker 4: lot to go by in terms of precedent, and it's 146 00:07:45,040 --> 00:07:46,920 Speaker 4: going to be very interesting to see how the Supreme 147 00:07:46,960 --> 00:07:49,640 Speaker 4: Court deals with that and then what it decides to 148 00:07:49,640 --> 00:07:53,120 Speaker 4: do if it agrees that the system is unconstitutional. 149 00:07:53,880 --> 00:07:57,640 Speaker 2: There's another case, and it's the SEC and its use 150 00:07:57,680 --> 00:08:01,360 Speaker 2: of in house judges. Another issue that's been before the Court, 151 00:08:01,720 --> 00:08:05,040 Speaker 2: and the Fifth Circuit found three different problems with. 152 00:08:05,080 --> 00:08:07,960 Speaker 5: This, three different. 153 00:08:09,160 --> 00:08:11,800 Speaker 4: Three different problems. Two of them are sort of connected, 154 00:08:12,000 --> 00:08:14,080 Speaker 4: and that may be kind of the biggest part of 155 00:08:14,120 --> 00:08:17,600 Speaker 4: the case. The Fifth Circuit said that under the Constitution, 156 00:08:18,000 --> 00:08:21,320 Speaker 4: folks hit with an SEC complaint in many cases have 157 00:08:21,400 --> 00:08:24,480 Speaker 4: a right to a jury trial, meaning the SEC cannot 158 00:08:24,560 --> 00:08:28,680 Speaker 4: bring those cases before an administrative law judge at the agency. 159 00:08:29,000 --> 00:08:31,440 Speaker 4: They have to go into federal court. And then the 160 00:08:31,480 --> 00:08:34,680 Speaker 4: related aspect of the ruling is the Fifth Circuit said, 161 00:08:34,840 --> 00:08:37,920 Speaker 4: and Congress did not give clear enough guidance to the SEC, 162 00:08:38,440 --> 00:08:41,160 Speaker 4: clear enough principles to decide which cases it's going to 163 00:08:41,160 --> 00:08:43,920 Speaker 4: take before the administrative law judge and which case is 164 00:08:43,960 --> 00:08:47,160 Speaker 4: going to go to the Supreme Court. The final issue 165 00:08:47,800 --> 00:08:50,960 Speaker 4: is that the Fifth Circuit said that the job protections 166 00:08:51,000 --> 00:08:53,520 Speaker 4: that the administrative law judge is that the SEC have 167 00:08:53,880 --> 00:08:57,040 Speaker 4: will leave them too insulated from presidential control. That's an 168 00:08:57,040 --> 00:08:59,640 Speaker 4: issue the Supreme Court is considered in slightly different context 169 00:08:59,760 --> 00:09:02,880 Speaker 4: before or so if the Supreme Court wants to rule 170 00:09:02,880 --> 00:09:05,320 Speaker 4: against the SEC it's got kind of a menu of 171 00:09:05,360 --> 00:09:06,360 Speaker 4: ways it can do that. 172 00:09:07,480 --> 00:09:11,400 Speaker 2: Two cases involve free speech, the rights of social media companies, 173 00:09:11,440 --> 00:09:14,640 Speaker 2: and a Fifth Circuit decision that clashes with an Eleventh 174 00:09:14,679 --> 00:09:18,000 Speaker 2: Circuit decision. The Eleventh Circuit probably the second most conservative 175 00:09:18,040 --> 00:09:19,000 Speaker 2: circuit in the country. 176 00:09:19,280 --> 00:09:21,640 Speaker 4: These are laws that were put in the place by 177 00:09:22,120 --> 00:09:28,080 Speaker 4: Republican controlled states Texas and Florida, and they basically dictate 178 00:09:28,080 --> 00:09:32,160 Speaker 4: the social media companies how they to go about managing 179 00:09:32,200 --> 00:09:36,960 Speaker 4: content and removing misinformation, and they have rules about what 180 00:09:37,000 --> 00:09:41,080 Speaker 4: they have to say when they take down a post online. 181 00:09:41,640 --> 00:09:45,840 Speaker 4: And the social media industry trade groups sued and said 182 00:09:45,840 --> 00:09:50,240 Speaker 4: that violates our First Amendment rights. The Fifth Circuit upheld 183 00:09:50,280 --> 00:09:54,160 Speaker 4: the Texas law. The Eleventh Circuit struck down much of 184 00:09:54,360 --> 00:09:57,640 Speaker 4: Florida's law. The eleven Circuit devoted much of its focus 185 00:09:57,720 --> 00:10:01,160 Speaker 4: to a provision that requires a detailed explanation every time 186 00:10:01,400 --> 00:10:04,520 Speaker 4: a social media company makes a content management decision. 187 00:10:04,960 --> 00:10:09,120 Speaker 2: These decisions are not just conservative, but their novel. They 188 00:10:09,200 --> 00:10:13,240 Speaker 2: just seem not wedded to precedent. 189 00:10:13,240 --> 00:10:15,760 Speaker 4: You know, some of them are taking on new issues. 190 00:10:15,960 --> 00:10:20,880 Speaker 4: The appropriations clause issue is one that hasn't really been tested, 191 00:10:20,880 --> 00:10:23,760 Speaker 4: at least not recently, and some of them. You look 192 00:10:23,800 --> 00:10:27,400 Speaker 4: at the gun case, for example, the Rehimi case, when 193 00:10:27,400 --> 00:10:30,120 Speaker 4: the Supreme Court ruled on the right to carry a 194 00:10:30,120 --> 00:10:34,600 Speaker 4: gun in twenty twenty two, the court said, the test 195 00:10:34,760 --> 00:10:37,040 Speaker 4: is going to be history and tradition, and you're suppose, judges, 196 00:10:37,080 --> 00:10:39,840 Speaker 4: you're supposed to look and try to find a historical 197 00:10:39,920 --> 00:10:43,560 Speaker 4: analog for some current regulation. And if you can't find 198 00:10:43,559 --> 00:10:46,679 Speaker 4: an historical analog, that's a pretty good sign that this 199 00:10:46,760 --> 00:10:48,480 Speaker 4: provision is unconstitutional. 200 00:10:48,760 --> 00:10:52,480 Speaker 2: That's Bloomberg New Supreme Court reporter Greg Store. Coming up 201 00:10:52,520 --> 00:10:55,480 Speaker 2: next on the Bloomberg Law Show. It's a Supreme Court 202 00:10:55,520 --> 00:10:59,440 Speaker 2: decision about regulations on ghost guns. But the justices seem 203 00:10:59,520 --> 00:11:02,760 Speaker 2: to be said a strong message to the Fifth Circuit 204 00:11:02,840 --> 00:11:06,240 Speaker 2: and a Texas judge. I'm June Grosso and you're listening 205 00:11:06,320 --> 00:11:07,000 Speaker 2: to Bloomberg. 206 00:11:15,000 --> 00:11:19,720 Speaker 6: This is Bloomberg Law with June Grosso from Bloomberg Radio. 207 00:11:20,880 --> 00:11:23,480 Speaker 2: You're listening to a special best of edition of the 208 00:11:23,520 --> 00:11:27,360 Speaker 2: Bloomberg Law Show. In September, New York City Mayor Eric 209 00:11:27,400 --> 00:11:30,760 Speaker 2: Adams announced that in a search of a private daycare 210 00:11:30,840 --> 00:11:35,400 Speaker 2: in Harlem police recovered drugs, ghost guns and the three 211 00:11:35,480 --> 00:11:37,080 Speaker 2: D printer used to make them. 212 00:11:37,400 --> 00:11:41,439 Speaker 5: Who would have thought that we must add to our 213 00:11:41,559 --> 00:11:46,720 Speaker 5: list of inspections of do we have three D printers 214 00:11:46,760 --> 00:11:47,800 Speaker 5: that can print guns? 215 00:11:48,679 --> 00:11:52,680 Speaker 2: The Biden administration has issued regulations on these ghost guns, 216 00:11:53,000 --> 00:11:56,720 Speaker 2: which are assembled from kits without the usual serial numbers 217 00:11:56,760 --> 00:12:00,360 Speaker 2: and background checks on purchasers, making them a track active 218 00:12:00,440 --> 00:12:04,360 Speaker 2: to teenagers and those with criminal records. The Supreme Court 219 00:12:04,400 --> 00:12:10,240 Speaker 2: has reinstated those regulations, blocking a second nationwide injunction issued 220 00:12:10,280 --> 00:12:14,280 Speaker 2: by Texas Federal Judge Ried O'Connor and okayed by the 221 00:12:14,280 --> 00:12:17,440 Speaker 2: Fifth Circuit. Does this mean the Supreme Court is telling 222 00:12:17,480 --> 00:12:20,760 Speaker 2: the judge and the Fifth Circuit no? Means no? Or 223 00:12:20,760 --> 00:12:24,600 Speaker 2: does it mean something more substantive about ghost gun regulations? 224 00:12:25,480 --> 00:12:29,040 Speaker 2: Joining me? Is Heidi Lee Feldman, a professor at Georgetown Law. 225 00:12:29,600 --> 00:12:32,880 Speaker 2: So let's go back to the August decision where the 226 00:12:32,920 --> 00:12:37,839 Speaker 2: Supreme Court blocked a nationwide injunction by Judge rit O'Connor 227 00:12:38,200 --> 00:12:41,640 Speaker 2: and allowed the government to keep enforcing the regulations on 228 00:12:41,800 --> 00:12:44,640 Speaker 2: ghost guns. Should that have been the end of this 229 00:12:44,920 --> 00:12:47,920 Speaker 2: until the case was fully litigated. 230 00:12:47,520 --> 00:12:50,520 Speaker 7: One would have thought so, And that's certainly Ultimately the 231 00:12:50,559 --> 00:12:54,840 Speaker 7: position the government took it was very peculiar that they 232 00:12:54,960 --> 00:12:58,840 Speaker 7: sought an injunction pending appeal. That is an alteration in 233 00:12:58,880 --> 00:13:02,440 Speaker 7: the procedural posts rush of the case. They didn't give 234 00:13:02,559 --> 00:13:07,160 Speaker 7: any new reason for seeking an injunction while the case 235 00:13:07,280 --> 00:13:10,800 Speaker 7: was pending, and that was I think the really controversial thing. 236 00:13:11,160 --> 00:13:14,640 Speaker 7: Nothing had changed in the facts or the law that 237 00:13:14,720 --> 00:13:18,720 Speaker 7: would be relevant to granting an injunction. So ordinarily, if 238 00:13:18,760 --> 00:13:21,959 Speaker 7: a party did that, the judge would just deny it 239 00:13:22,080 --> 00:13:26,160 Speaker 7: because they had just had an injunction overturned by the 240 00:13:26,200 --> 00:13:30,960 Speaker 7: Supreme Court. Of course, in this case, Judge O'Connor granted 241 00:13:30,960 --> 00:13:34,720 Speaker 7: the injunction and didn't give any new reasons, and the 242 00:13:34,720 --> 00:13:38,800 Speaker 7: court really just put the kebash on that and said no, no. 243 00:13:39,520 --> 00:13:42,360 Speaker 2: Also, the Fifth Circuit upheld his order. 244 00:13:42,720 --> 00:13:47,080 Speaker 7: Yeah. Look, there's several very contested matters that are driving 245 00:13:47,080 --> 00:13:51,000 Speaker 7: this litigation. Ghost gun manufacturers come in and say, we 246 00:13:51,080 --> 00:13:56,200 Speaker 7: object to this ATF rule making, which seems to require 247 00:13:56,320 --> 00:13:59,840 Speaker 7: us to take all sorts of steps that people who 248 00:13:59,840 --> 00:14:04,959 Speaker 7: may firearms have to take. We're arguing we're not firearms manufacturers, 249 00:14:04,960 --> 00:14:09,880 Speaker 7: we're parts suppliers. So that whole dynamic introduces guns into 250 00:14:09,920 --> 00:14:13,920 Speaker 7: the mix. Then we have a federal agency atf which 251 00:14:13,960 --> 00:14:18,239 Speaker 7: has its own long complicated history. Then we have a judiciary, 252 00:14:18,760 --> 00:14:23,440 Speaker 7: certainly O'Connor and the Fifth Circuit that's very keen to 253 00:14:23,560 --> 00:14:28,640 Speaker 7: invalidate agency rulemaking. So I think the Fifth Circuit as 254 00:14:28,640 --> 00:14:32,920 Speaker 7: a whole was very moved by that agenda, and so 255 00:14:32,960 --> 00:14:36,640 Speaker 7: they do uphold O'Connor's order, and so ultimately, of course, 256 00:14:36,680 --> 00:14:40,120 Speaker 7: the Supreme Court is rejecting the Fifth Circuits position as 257 00:14:40,160 --> 00:14:43,440 Speaker 7: well as O'Connor's position on the injunction. But the fact 258 00:14:43,480 --> 00:14:46,560 Speaker 7: that the Supreme Court took that position isn't an indication 259 00:14:46,680 --> 00:14:49,240 Speaker 7: of how they would ultimately rule on the merits as 260 00:14:49,320 --> 00:14:51,920 Speaker 7: much as I think it was a rejection of the 261 00:14:52,040 --> 00:14:55,000 Speaker 7: challenge to the authority of their earlier ruling. 262 00:14:55,400 --> 00:14:58,160 Speaker 2: So the Court's August order was a five to four 263 00:14:58,280 --> 00:15:02,320 Speaker 2: decision where Chief Justice Roberts and Justice amy Cony Barrett 264 00:15:02,400 --> 00:15:05,960 Speaker 2: joined the Court's three liberals. So there were four descents 265 00:15:06,000 --> 00:15:11,240 Speaker 2: in August, but no justice publicly dissented from this order 266 00:15:11,280 --> 00:15:14,160 Speaker 2: that was handed down. Does that mean the justices are 267 00:15:14,200 --> 00:15:16,760 Speaker 2: telling the judge in the Fifth Circuit no means no? 268 00:15:17,320 --> 00:15:21,800 Speaker 2: Or does it mean something more substantive about ghost gun regulations. 269 00:15:22,280 --> 00:15:26,440 Speaker 7: It's very hard to read tea leaves from these orders 270 00:15:26,440 --> 00:15:30,720 Speaker 7: that are issued without opinions, and these are orders that 271 00:15:30,880 --> 00:15:34,680 Speaker 7: relate to not the final merits on the case. So 272 00:15:35,080 --> 00:15:37,680 Speaker 7: I want to sound a note of caution. I think 273 00:15:37,760 --> 00:15:41,080 Speaker 7: that there are justices on the Court who may be 274 00:15:41,480 --> 00:15:46,200 Speaker 7: very unsympathetic to the ATF rulemaking related to ghost guns, 275 00:15:46,560 --> 00:15:51,560 Speaker 7: who realize that you simply cannot operate our system of 276 00:15:51,760 --> 00:15:56,600 Speaker 7: litigating cases case by case and letting different courts reach 277 00:15:56,680 --> 00:16:01,200 Speaker 7: different conclusions if they disagree and see what emerges up 278 00:16:01,200 --> 00:16:03,880 Speaker 7: through the process, and what rit O'Connor and the Fifth 279 00:16:03,880 --> 00:16:08,040 Speaker 7: Circuit wanted to do absolutely disrupts that process. It also 280 00:16:08,120 --> 00:16:11,440 Speaker 7: wastes the Supreme Court's time. I mean, they do not 281 00:16:11,720 --> 00:16:17,320 Speaker 7: want to have to keep issuing redundant interlocutory orders. That's 282 00:16:17,440 --> 00:16:21,560 Speaker 7: just completely inefficient for them. So I think you could 283 00:16:21,600 --> 00:16:26,000 Speaker 7: have justices who may be less sympathetic to the idea 284 00:16:26,040 --> 00:16:29,720 Speaker 7: of letting the ATF rule making stand or more sympathetic 285 00:16:29,840 --> 00:16:36,360 Speaker 7: to relatively unfettered sales of ghost guns, who nevertheless see 286 00:16:36,640 --> 00:16:41,680 Speaker 7: procedural chaos from what the Fifth Circuit and Judge O'Connor did. 287 00:16:42,160 --> 00:16:45,760 Speaker 2: The Fifth Circuit last term lost I think seven out 288 00:16:45,760 --> 00:16:48,240 Speaker 2: of a cases at the Supreme Court, and they have 289 00:16:48,960 --> 00:16:51,800 Speaker 2: a lot of cases before the court this year, and 290 00:16:52,040 --> 00:16:56,200 Speaker 2: many of them are from judges in Texas like rit 291 00:16:56,240 --> 00:16:59,880 Speaker 2: O'Connor that seem to have novels, shall we say, no 292 00:17:00,600 --> 00:17:02,360 Speaker 2: legal reasoning and their decisions. 293 00:17:02,720 --> 00:17:04,040 Speaker 7: I mean, do you think we have to I think 294 00:17:04,040 --> 00:17:06,080 Speaker 7: we have to be as a stronger word than novel. 295 00:17:06,320 --> 00:17:11,960 Speaker 7: Look in sophisticated litigation in federal courts, advocates and courts 296 00:17:12,240 --> 00:17:16,800 Speaker 7: are advancing the law, so there's often something novel in 297 00:17:17,000 --> 00:17:21,720 Speaker 7: what they argue, in what courts hold. That's neither unexpected 298 00:17:21,760 --> 00:17:25,560 Speaker 7: nor unusual. What is problematic is when you have a 299 00:17:25,760 --> 00:17:30,080 Speaker 7: court and the federal judiciary in Texas, the district court 300 00:17:30,200 --> 00:17:33,119 Speaker 7: level is like this, and the fifth Circuit is like this, 301 00:17:33,720 --> 00:17:40,120 Speaker 7: that is receptive to extreme arguments. They're not just creative 302 00:17:40,400 --> 00:17:45,399 Speaker 7: novel they are highly contentious. Now, if you have a 303 00:17:45,480 --> 00:17:48,720 Speaker 7: court that is receptive to that, maybe some of those 304 00:17:48,800 --> 00:17:53,960 Speaker 7: highly contentious and highly extreme arguments will ultimately be vindicated. 305 00:17:54,320 --> 00:17:58,120 Speaker 7: But the more extreme the substance is of a position 306 00:17:58,200 --> 00:18:02,359 Speaker 7: that's being taken, the more cuts. Generally, courts are in 307 00:18:02,440 --> 00:18:08,920 Speaker 7: composing big procedural consequences until those big arguments and positions 308 00:18:09,080 --> 00:18:13,600 Speaker 7: go through the appellate process of review. So I think 309 00:18:13,680 --> 00:18:17,320 Speaker 7: that the Fifth Circuit and the Texas District courts in 310 00:18:17,400 --> 00:18:22,560 Speaker 7: general generate a lot of extreme positions. What we saw 311 00:18:22,720 --> 00:18:28,639 Speaker 7: here was this intersection of extreme positions and willingness first 312 00:18:29,240 --> 00:18:32,720 Speaker 7: to issue a very sweeping injunction on the basis of 313 00:18:32,760 --> 00:18:37,240 Speaker 7: the extreme position nationwide injunction, and then to sort of 314 00:18:37,280 --> 00:18:39,800 Speaker 7: double down on that after the Supreme Court said it 315 00:18:39,880 --> 00:18:45,919 Speaker 7: wasn't appropriate. The combination of extreme positions and aggressiveness about 316 00:18:45,920 --> 00:18:51,360 Speaker 7: imposing consequences before the appellate process has played out thoroughly 317 00:18:51,720 --> 00:18:54,320 Speaker 7: is a way of really throwing a spanner in the 318 00:18:54,840 --> 00:18:58,960 Speaker 7: gears of adjudication, as the Federal Court understands it, and 319 00:18:59,280 --> 00:19:00,600 Speaker 7: they're just not going to tolerate that. 320 00:19:01,200 --> 00:19:04,280 Speaker 2: So frame for us the message the Supreme Court is 321 00:19:04,359 --> 00:19:07,760 Speaker 2: sending to the Fifth Circuit and Judge O'Connor. 322 00:19:07,960 --> 00:19:11,920 Speaker 7: They're saying, don't play games with us about procedure. If 323 00:19:11,960 --> 00:19:15,760 Speaker 7: you have very good reason to believe that we've taken 324 00:19:15,920 --> 00:19:19,600 Speaker 7: a given position, don't pretend we haven't taken that position 325 00:19:20,040 --> 00:19:23,640 Speaker 7: and act contrary to what we already said. I mean, 326 00:19:23,680 --> 00:19:27,600 Speaker 7: in some ways, what they're saying is you cannot pretend 327 00:19:27,960 --> 00:19:30,359 Speaker 7: that we haven't spoken. I mean, in some sense, it 328 00:19:30,400 --> 00:19:34,040 Speaker 7: sounds so simple. When you have a judicial system that's 329 00:19:34,080 --> 00:19:38,120 Speaker 7: founded on the idea of appellet review, lower courts are 330 00:19:38,200 --> 00:19:42,200 Speaker 7: answerable to higher courts in that system. So in some 331 00:19:42,280 --> 00:19:45,560 Speaker 7: sense it's very bizarre for the High Court to have 332 00:19:45,600 --> 00:19:48,320 Speaker 7: to issue an order that I think is basically saying 333 00:19:48,600 --> 00:19:52,720 Speaker 7: you are totally acting way outside of your job. You 334 00:19:52,880 --> 00:19:56,720 Speaker 7: are flouting your role. That's what I think they were saying. 335 00:19:56,960 --> 00:19:59,400 Speaker 2: And we'll see if the Fifth Circuit and Judge O'Connor 336 00:19:59,760 --> 00:20:03,520 Speaker 2: have that message. Thanks so much. That's Professor Heidi Lee 337 00:20:03,600 --> 00:20:07,639 Speaker 2: Feldman of Georgetown Law. A note. Michael Bloomberg, the founder 338 00:20:07,680 --> 00:20:10,639 Speaker 2: and majority owner of Bloomberg LP, the parent company of 339 00:20:10,680 --> 00:20:14,800 Speaker 2: Bloomberg Radio, is a donor to groups that support gun control, 340 00:20:15,119 --> 00:20:18,320 Speaker 2: including every Town for Guns Safety coming up next on 341 00:20:18,320 --> 00:20:21,800 Speaker 2: the Bloomberg Law Show. Critics call him a patent troll. 342 00:20:22,280 --> 00:20:25,880 Speaker 2: He prefers modern day edison. I'm June Grosso. When you're 343 00:20:25,960 --> 00:20:35,640 Speaker 2: listening to Bloomberg, this. 344 00:20:35,840 --> 00:20:40,040 Speaker 6: Is Bloomberg Law with June Grosso from Bloomberg Radio. 345 00:20:40,800 --> 00:20:43,399 Speaker 2: You're listening to a special best of edition of the 346 00:20:43,440 --> 00:20:48,000 Speaker 2: Bloomberg Law Show. Is Lee Rothschild among the most prolific 347 00:20:48,080 --> 00:20:51,879 Speaker 2: inventors of his generation as he sees himself, or is 348 00:20:51,920 --> 00:20:55,760 Speaker 2: he a patent troll as his critics see him. Rothschild 349 00:20:55,800 --> 00:20:58,440 Speaker 2: is listed as the sole inventor of more than one 350 00:20:58,520 --> 00:21:02,200 Speaker 2: hundred and thirty patents, but his network of companies don't 351 00:21:02,240 --> 00:21:06,600 Speaker 2: make any products. He readily admits his entire business model 352 00:21:06,720 --> 00:21:12,400 Speaker 2: is built around monetizing his intellectual property through litigation and licensing, 353 00:21:12,800 --> 00:21:17,320 Speaker 2: and there appears to be more litigation than licensing. Joining 354 00:21:17,359 --> 00:21:20,919 Speaker 2: me is Laurel Culkins, Bloomberg Law reporter who's interviewed and 355 00:21:20,960 --> 00:21:25,800 Speaker 2: written about Rothschild. Laurel tell us what Lee Rothschild has invented? 356 00:21:26,320 --> 00:21:28,280 Speaker 8: Well, first of all, you have to understand that Lee 357 00:21:28,440 --> 00:21:33,600 Speaker 8: Rothschild is in a handful of unique individuals in the country, 358 00:21:33,640 --> 00:21:36,480 Speaker 8: and that he's both a bona fide inventor and a 359 00:21:36,520 --> 00:21:40,080 Speaker 8: patent troll. And if you don't know what patent troll means, 360 00:21:40,119 --> 00:21:44,679 Speaker 8: it's a derogatory flur that high tech companies slap onto 361 00:21:44,720 --> 00:21:49,000 Speaker 8: litigants who show up in court with sometimes basic patents 362 00:21:49,040 --> 00:21:52,800 Speaker 8: for generic technology, and then they try to extract a 363 00:21:52,880 --> 00:21:56,240 Speaker 8: nuisance settlement that's cheaper than the cost of going to trial. Well, 364 00:21:56,480 --> 00:21:59,320 Speaker 8: Rothschild's in a different camp. He is an actual inventor. 365 00:21:59,359 --> 00:22:02,720 Speaker 8: He has one hundred thirty patents solely in his name. 366 00:22:03,040 --> 00:22:05,480 Speaker 8: He started when he was twenty. He's now seventy one, 367 00:22:06,080 --> 00:22:08,960 Speaker 8: and he's invented some wild things. His very first invention 368 00:22:09,080 --> 00:22:11,919 Speaker 8: when he was in his teens was quadrophonic stereo if 369 00:22:11,920 --> 00:22:14,960 Speaker 8: you remember back that far. And the things he's got 370 00:22:14,960 --> 00:22:20,240 Speaker 8: patents on now are like virtual reality exercise machines QR 371 00:22:20,320 --> 00:22:23,479 Speaker 8: codes connected to the Internet. He had a public company 372 00:22:23,520 --> 00:22:25,959 Speaker 8: for a while in the nineties that was all about barcodes. 373 00:22:26,040 --> 00:22:29,399 Speaker 8: He was a pioneer in barcode technology. So he actually 374 00:22:29,480 --> 00:22:32,280 Speaker 8: had the legit patent portfolio, which puts him in a 375 00:22:32,280 --> 00:22:34,280 Speaker 8: different camp. And that's why he has this kind of 376 00:22:34,800 --> 00:22:38,640 Speaker 8: love hate relationship with the term patent troll. He says, yeah, 377 00:22:38,760 --> 00:22:41,600 Speaker 8: classic patent troll is somebody who takes a crappy patent 378 00:22:42,000 --> 00:22:44,159 Speaker 8: and goes and files a newsman's lawsuit, you know, to 379 00:22:44,200 --> 00:22:45,120 Speaker 8: extract a settlement. 380 00:22:45,359 --> 00:22:45,720 Speaker 4: He goes. 381 00:22:45,720 --> 00:22:47,800 Speaker 8: But if you want to put me in the camp 382 00:22:47,920 --> 00:22:51,359 Speaker 8: of legit inventors like the Wright brothers and Alexander Graham 383 00:22:51,440 --> 00:22:55,600 Speaker 8: Bell and Thomas Edison who had groundbreaking inventions but had 384 00:22:55,600 --> 00:22:57,879 Speaker 8: to go to court to defend them with supporting evidence. 385 00:22:57,920 --> 00:22:59,119 Speaker 8: He goes, Yeah, if you want to put me in 386 00:22:59,160 --> 00:22:59,960 Speaker 8: that camp. 387 00:23:00,119 --> 00:23:02,760 Speaker 2: Patent troll, can you explain in a little more depth 388 00:23:02,920 --> 00:23:05,160 Speaker 2: what makes a patent troll? 389 00:23:05,200 --> 00:23:07,920 Speaker 8: Like I said, it's a derogatory slur that high tech 390 00:23:07,960 --> 00:23:12,600 Speaker 8: companies apply to people who own a patent and go 391 00:23:12,680 --> 00:23:14,520 Speaker 8: to defend it in court and say, you're using my 392 00:23:14,600 --> 00:23:17,520 Speaker 8: technology without taking a license, so you've copied my idea 393 00:23:17,520 --> 00:23:19,879 Speaker 8: and you owe me money for it. Well, the problem 394 00:23:19,960 --> 00:23:22,600 Speaker 8: is most patent trolls actually don't have any operations or 395 00:23:22,640 --> 00:23:26,640 Speaker 8: what's called nonpracticing entities, and all they do is litigation. 396 00:23:26,720 --> 00:23:28,959 Speaker 8: They just go around sue people, and sometimes their patents 397 00:23:28,960 --> 00:23:32,640 Speaker 8: are so generic that they're laughable. And that's what's kind 398 00:23:32,640 --> 00:23:35,240 Speaker 8: of funny is Lee Rothschild has some on each side. 399 00:23:35,280 --> 00:23:38,879 Speaker 8: He has some that are very serious, groundbreaking inventions, and 400 00:23:38,880 --> 00:23:40,960 Speaker 8: then he has a couple that have been named soup 401 00:23:41,000 --> 00:23:44,280 Speaker 8: and Patent of the Months by the Electronic Frontier Foundation, 402 00:23:44,800 --> 00:23:46,760 Speaker 8: which mocks him relentlessly. 403 00:23:47,320 --> 00:23:51,040 Speaker 2: He's got a sue and settle model in place. 404 00:23:51,760 --> 00:23:54,680 Speaker 8: Yes, he's very upfront that his business model is all 405 00:23:54,720 --> 00:23:58,520 Speaker 8: about licensing and litigation. He would rather that if a 406 00:23:58,520 --> 00:24:02,760 Speaker 8: company is utilizing one of his protected ideas, a patented idea, 407 00:24:03,080 --> 00:24:05,040 Speaker 8: that they simply come to him and license it or 408 00:24:05,080 --> 00:24:08,120 Speaker 8: even buy the patent. The company that owns Instacart bought 409 00:24:08,119 --> 00:24:10,520 Speaker 8: one of his patents several years ago to improve their 410 00:24:10,600 --> 00:24:14,480 Speaker 8: user experience on their app, and he says he's licensed 411 00:24:14,680 --> 00:24:16,920 Speaker 8: that one, that it was called stupid patent of the month. 412 00:24:16,960 --> 00:24:21,080 Speaker 8: He said he's licensed at least fifty times to major companies, 413 00:24:21,080 --> 00:24:23,760 Speaker 8: so it clearly has the merit somewhere. The thing is, 414 00:24:23,800 --> 00:24:27,280 Speaker 8: most patent trolls, and he follows this model is they 415 00:24:27,280 --> 00:24:30,600 Speaker 8: file a lawsuit and they want damages for past and 416 00:24:30,720 --> 00:24:33,560 Speaker 8: future infringement, they want a royalty whatever, something like that. 417 00:24:33,960 --> 00:24:36,359 Speaker 8: But then they almost immediately send an offer over to 418 00:24:36,400 --> 00:24:39,600 Speaker 8: their target and say, oh, we'll settle for what looks 419 00:24:39,640 --> 00:24:42,280 Speaker 8: like couch money because it's much less than the cost 420 00:24:42,280 --> 00:24:44,640 Speaker 8: of litigation, and yet it's more than enough to pay 421 00:24:45,040 --> 00:24:48,840 Speaker 8: the troll's expenses. We found a couple in Rothschild's name 422 00:24:48,880 --> 00:24:51,680 Speaker 8: and the names of several of his business entities, one 423 00:24:51,720 --> 00:24:55,920 Speaker 8: in particular, where he said, well, this lawsuit, you will 424 00:24:56,000 --> 00:24:58,600 Speaker 8: drop it if you give us seventy five thousand dollars 425 00:24:58,920 --> 00:25:01,200 Speaker 8: and the company said no, so we think you should 426 00:25:01,240 --> 00:25:03,880 Speaker 8: pay our attorney speedes because we don't think you were 427 00:25:03,960 --> 00:25:07,840 Speaker 8: acting properly. And the trialj has looked at that and said, well, 428 00:25:07,880 --> 00:25:10,879 Speaker 8: you know, they didn't exactly defile the temple of justice, 429 00:25:10,880 --> 00:25:12,439 Speaker 8: so I'm not going to make them pay your fees. 430 00:25:12,520 --> 00:25:15,000 Speaker 8: But I'm also not going to make you pay them either. 431 00:25:15,720 --> 00:25:19,800 Speaker 2: But the Federal Circuit Court of Appeals, which handles patent cases, 432 00:25:20,480 --> 00:25:22,360 Speaker 2: had something different to say about him. 433 00:25:23,040 --> 00:25:27,600 Speaker 8: In a particular case involving the ADS Home Security System company, 434 00:25:27,760 --> 00:25:31,040 Speaker 8: they brought forward enough evidence that Rothschild said, Okay, I'm 435 00:25:31,040 --> 00:25:33,320 Speaker 8: going to drop my complaint because I don't think I 436 00:25:33,359 --> 00:25:36,920 Speaker 8: can win an infringement action against you. So ADS got 437 00:25:36,920 --> 00:25:38,960 Speaker 8: real aggressive and said no, we're going to counter see 438 00:25:38,960 --> 00:25:41,960 Speaker 8: you for our attorney speed and he refused to pay, 439 00:25:42,000 --> 00:25:45,639 Speaker 8: and the trial jie said well, now let's just call. 440 00:25:45,520 --> 00:25:45,840 Speaker 6: It to day. 441 00:25:45,880 --> 00:25:48,520 Speaker 8: Nobody pays anybody. And then it went up on appeal 442 00:25:48,560 --> 00:25:52,720 Speaker 8: and the appellate court got real aggressive and said, this 443 00:25:52,840 --> 00:25:55,239 Speaker 8: is a frivolous lawsuit. It's frivolous on a face, it 444 00:25:55,280 --> 00:25:58,720 Speaker 8: never should have been filed and we're going to require 445 00:25:58,880 --> 00:26:02,720 Speaker 8: the rothschild entity to pay ads. It's attorney's seasons. There's 446 00:26:02,960 --> 00:26:06,240 Speaker 8: forty three thousand dollars. So there's clearly a camp of 447 00:26:06,280 --> 00:26:08,560 Speaker 8: detractors out there that don't like this kind of litigation. 448 00:26:09,160 --> 00:26:14,199 Speaker 2: Are the people he's suing deliberately infringing his patents or 449 00:26:14,280 --> 00:26:18,000 Speaker 2: are they working under other patents and so have good 450 00:26:18,000 --> 00:26:21,760 Speaker 2: grounds for fighting these lawsuits? He brings it's both. 451 00:26:22,000 --> 00:26:24,880 Speaker 8: Sometimes the companies are actually stealing your idea. I mean, 452 00:26:25,200 --> 00:26:29,119 Speaker 8: I certainly am not familiar with his entire portfolio, not 453 00:26:29,200 --> 00:26:31,719 Speaker 8: even close, But I know that I cover patents all 454 00:26:31,760 --> 00:26:35,680 Speaker 8: the time, and there are legitimate cases where large technology 455 00:26:35,680 --> 00:26:39,360 Speaker 8: companies have simply taken an idea that they like. They've 456 00:26:39,400 --> 00:26:41,879 Speaker 8: held licensing talks, the talks went nowhere. They took the 457 00:26:41,960 --> 00:26:45,600 Speaker 8: idea and ran with it. So that happens, and inventors 458 00:26:45,600 --> 00:26:50,160 Speaker 8: have legitimate rights to defend themselves. He's filed literally thousands 459 00:26:50,240 --> 00:26:53,359 Speaker 8: of these patent claims, and he's gone after big names. 460 00:26:53,359 --> 00:26:57,320 Speaker 8: He's sued Google, he's too, Roku, Apple, Samsung. I mean, 461 00:26:57,680 --> 00:26:59,560 Speaker 8: do you look up any high tech company and he's 462 00:26:59,560 --> 00:27:01,479 Speaker 8: probably all an action against them. I mean, that may 463 00:27:01,520 --> 00:27:03,879 Speaker 8: be a bit too broad, but it's pretty clear. And 464 00:27:04,359 --> 00:27:08,600 Speaker 8: sometimes patents are in addition to an idea, so it 465 00:27:08,600 --> 00:27:11,040 Speaker 8: becomes kind of a gray zone as to what would 466 00:27:11,040 --> 00:27:13,000 Speaker 8: fly in in front of a jury and what wouldn't. 467 00:27:13,600 --> 00:27:18,360 Speaker 8: And he tends to file his cases in patent friendly jurisdictions. 468 00:27:18,400 --> 00:27:21,440 Speaker 8: There's two primary patent courts in Texas and he files 469 00:27:21,880 --> 00:27:25,400 Speaker 8: in both of them, and they're both notorious for having 470 00:27:25,480 --> 00:27:29,720 Speaker 8: juries that return Whopper awards in favor of the plaintiffs. 471 00:27:30,119 --> 00:27:32,919 Speaker 8: So he's kind of got the choice of courthouse on 472 00:27:32,960 --> 00:27:34,200 Speaker 8: his side when he fils. 473 00:27:35,040 --> 00:27:37,399 Speaker 2: You talk to a professor who said, it's an urban 474 00:27:37,520 --> 00:27:40,720 Speaker 2: myth that Texas is a haven for patent trolls. But 475 00:27:41,080 --> 00:27:43,320 Speaker 2: that's what I've always heard. There have been plenty of 476 00:27:43,359 --> 00:27:45,880 Speaker 2: stories about patent suits in Texas. 477 00:27:46,480 --> 00:27:51,080 Speaker 8: Well. Yeah, I think that. I think Texas, the two 478 00:27:51,119 --> 00:27:54,760 Speaker 8: particular Texas courts in Waco and in Marshall, which is 479 00:27:54,760 --> 00:27:58,479 Speaker 8: in Deep East Texas, they deserve their reputations as patent 480 00:27:58,600 --> 00:28:03,200 Speaker 8: havens trolls for two reasons. First of all, the judges 481 00:28:03,400 --> 00:28:07,320 Speaker 8: are former patent attorneys. They understand patent law very very well. 482 00:28:08,080 --> 00:28:11,520 Speaker 8: The other thing is they get so many patent cases 483 00:28:11,560 --> 00:28:14,679 Speaker 8: that it simply becomes a numbers game. Most litigation in 484 00:28:14,720 --> 00:28:17,399 Speaker 8: the United States, the patent cases included subtle and they 485 00:28:17,440 --> 00:28:20,119 Speaker 8: never go to trial. But if you've got thousands and 486 00:28:20,160 --> 00:28:23,600 Speaker 8: thousands more cases being filed in your court, odds are 487 00:28:23,640 --> 00:28:25,000 Speaker 8: a few of them are going to go to trial. 488 00:28:25,600 --> 00:28:29,000 Speaker 8: And Texas jury's are sort of notorious for punishing people 489 00:28:29,040 --> 00:28:32,239 Speaker 8: who steal from little guys. So if an inventor can 490 00:28:32,280 --> 00:28:33,960 Speaker 8: get their story in front of a jury that you 491 00:28:34,040 --> 00:28:36,399 Speaker 8: so told my idea and it's David versus Goliath, and 492 00:28:36,440 --> 00:28:38,680 Speaker 8: you owe me a lot of times, the Texas jury 493 00:28:38,720 --> 00:28:42,440 Speaker 8: will reward that story. But what's really interesting about Rothschild 494 00:28:42,480 --> 00:28:45,920 Speaker 8: is he's never gone to trial ever. He's filed thousands 495 00:28:46,000 --> 00:28:48,440 Speaker 8: of these lawsuits. In fact, I think we counted he 496 00:28:48,520 --> 00:28:52,520 Speaker 8: has eighty filed since twenty twenty one alone in the US, 497 00:28:52,720 --> 00:28:56,120 Speaker 8: and he's never gone to trial. He settles or drops 498 00:28:56,240 --> 00:28:58,600 Speaker 8: every single one of them, and I find that amazing. 499 00:28:59,040 --> 00:29:02,440 Speaker 2: And he's got a t T to support his litigation 500 00:29:02,600 --> 00:29:04,760 Speaker 2: efforts absolutely. 501 00:29:05,040 --> 00:29:08,640 Speaker 8: His business model is that he works with two different 502 00:29:08,720 --> 00:29:12,080 Speaker 8: groups of people. He has a team of patent researchers 503 00:29:12,200 --> 00:29:16,000 Speaker 8: who are based in India and they are very familiar 504 00:29:16,160 --> 00:29:20,200 Speaker 8: with the patents in the Rothschild into these portfolios, and 505 00:29:20,240 --> 00:29:23,400 Speaker 8: they actively go out and search for potential infringers that 506 00:29:23,480 --> 00:29:26,040 Speaker 8: they can bring actions against in courts. They do it 507 00:29:26,080 --> 00:29:27,720 Speaker 8: in other parts of the world. I just don't only 508 00:29:27,720 --> 00:29:31,160 Speaker 8: following the United States. But the researchers bring potential candidates 509 00:29:31,160 --> 00:29:35,120 Speaker 8: forward and then a team of lawyers that Rosschild employees 510 00:29:35,160 --> 00:29:38,160 Speaker 8: look them over and say that's so potential winner, that 511 00:29:38,200 --> 00:29:40,160 Speaker 8: one's a no go, and they make their choices there. 512 00:29:40,720 --> 00:29:42,960 Speaker 8: Then he has another side, on the invention side. He 513 00:29:43,000 --> 00:29:47,000 Speaker 8: employs a team of patent attorneys in Florida where he 514 00:29:47,040 --> 00:29:50,400 Speaker 8: lives that also work with some in London, where he 515 00:29:50,480 --> 00:29:53,240 Speaker 8: bounces his ideas off of these lawyers and say, I've 516 00:29:53,280 --> 00:29:56,040 Speaker 8: come up with this idea. I've got this invention, should 517 00:29:56,040 --> 00:29:58,600 Speaker 8: we patent that? And they research it to see if 518 00:29:58,640 --> 00:30:01,920 Speaker 8: somebody else has already patented the idea, and then they 519 00:30:01,960 --> 00:30:03,840 Speaker 8: go forward with that. So he has he has lawyers 520 00:30:03,840 --> 00:30:06,560 Speaker 8: on both sides helping him patent his inventions and helping 521 00:30:06,640 --> 00:30:10,080 Speaker 8: him prosecute potential infringers of his inventions. He told me 522 00:30:10,160 --> 00:30:14,840 Speaker 8: he has right now at least two hundred ideas patent 523 00:30:14,880 --> 00:30:19,000 Speaker 8: applications in process, backlogged within his own invention team that 524 00:30:19,080 --> 00:30:21,400 Speaker 8: they just haven't had time to fully finish out and 525 00:30:21,440 --> 00:30:23,680 Speaker 8: send over to the patent office. He says he has 526 00:30:23,800 --> 00:30:27,200 Speaker 8: dozens pending at the patent office waiting to be approved. 527 00:30:27,920 --> 00:30:28,840 Speaker 8: So this guy's busy. 528 00:30:29,520 --> 00:30:33,600 Speaker 2: Coming up next, efforts to solve the problem of patent trolls. 529 00:30:34,040 --> 00:30:36,400 Speaker 2: I'm June Grosso, and you're listening to Bloomberg. 530 00:30:44,480 --> 00:30:49,280 Speaker 6: This is Bloomberg Law with June Grosso from Bloomberg Radio. 531 00:30:50,000 --> 00:30:52,640 Speaker 2: You're listening to a special best of edition of the 532 00:30:52,680 --> 00:30:56,400 Speaker 2: Bloomberg Law Show. I've been talking to Bloomberg Law reporter 533 00:30:56,720 --> 00:31:00,680 Speaker 2: Laurel Culkins about Lee Rothschild, who's it's listed as the 534 00:31:00,760 --> 00:31:03,720 Speaker 2: sole inventor of more than one hundred and thirty patents, 535 00:31:04,040 --> 00:31:08,000 Speaker 2: but his business model is built around litigation, so critics 536 00:31:08,040 --> 00:31:11,200 Speaker 2: call him a patent troll. So why isn't he the 537 00:31:11,280 --> 00:31:14,440 Speaker 2: greatest inventor of all? Timothy has all these ideas and 538 00:31:14,520 --> 00:31:18,280 Speaker 2: all these patents. Why aren't people licensing them or buying them? 539 00:31:19,040 --> 00:31:21,600 Speaker 8: That's a good question. I don't really have an answer 540 00:31:21,600 --> 00:31:24,440 Speaker 8: for you. I know that he says he negotiated more 541 00:31:24,480 --> 00:31:27,200 Speaker 8: than a thousand licenses. The thing about patents is it's 542 00:31:27,240 --> 00:31:30,120 Speaker 8: not always the light bulb or the record player or 543 00:31:30,160 --> 00:31:34,200 Speaker 8: the telephone. Sometimes it's an integrated circuit. Sometimes it's a 544 00:31:34,240 --> 00:31:37,920 Speaker 8: way of connecting things together in a series. So the 545 00:31:38,000 --> 00:31:42,960 Speaker 8: idea is integral to the ultimate consumer product, but the 546 00:31:43,000 --> 00:31:45,920 Speaker 8: patent itself may not be the consumer product. So he 547 00:31:46,000 --> 00:31:48,440 Speaker 8: may actually be in a number of products. That's what 548 00:31:48,480 --> 00:31:50,960 Speaker 8: he claimed, that he's in a number of products. The 549 00:31:51,000 --> 00:31:53,760 Speaker 8: patent that was mocked as being a stupid patent of 550 00:31:53,760 --> 00:31:56,520 Speaker 8: the month, he claims that that's the forerunner of the 551 00:31:56,520 --> 00:31:59,520 Speaker 8: Internet of things, where all these devices are connected to 552 00:31:59,560 --> 00:32:01,320 Speaker 8: the Internet. So he may be in a lot of 553 00:32:01,320 --> 00:32:02,360 Speaker 8: things that we just don't know about. 554 00:32:02,720 --> 00:32:04,840 Speaker 2: And there's no way to really check it because he 555 00:32:04,960 --> 00:32:08,680 Speaker 2: tells you that it's confidential, right exactly. 556 00:32:08,920 --> 00:32:11,480 Speaker 8: He's a private company. He doesn't have to disclose any 557 00:32:11,480 --> 00:32:14,640 Speaker 8: of this. We went into the patent records at the 558 00:32:14,640 --> 00:32:19,280 Speaker 8: patent office and the abstracts are somewhat hard to understand sometimes, 559 00:32:19,400 --> 00:32:22,560 Speaker 8: and they don't always record licensing, you know, Licensing agreements 560 00:32:22,560 --> 00:32:25,200 Speaker 8: don't have to be recorded anywhere that I'm aware of. So, yeah, 561 00:32:25,240 --> 00:32:27,600 Speaker 8: you can't verify what he has to say. But I 562 00:32:27,640 --> 00:32:31,080 Speaker 8: also know that he would not be doing this if 563 00:32:31,080 --> 00:32:33,840 Speaker 8: it wasn't profitable, and I trip over him all the 564 00:32:33,920 --> 00:32:36,520 Speaker 8: time in the courthouse. I mean, I look at the 565 00:32:36,560 --> 00:32:40,800 Speaker 8: filings every day in a couple of these major Texas courthouses, 566 00:32:41,320 --> 00:32:43,560 Speaker 8: and it's rarely a week that goes by that I 567 00:32:43,560 --> 00:32:45,880 Speaker 8: don't see one or two actions from him, or action 568 00:32:46,040 --> 00:32:47,960 Speaker 8: on one or two of his existing cases. 569 00:32:48,760 --> 00:32:52,240 Speaker 2: And yet he says that litigation was not his primary goal, 570 00:32:53,520 --> 00:32:55,480 Speaker 2: but it sure seems like he's made a business out 571 00:32:55,480 --> 00:32:56,880 Speaker 2: of it, right. 572 00:32:56,960 --> 00:32:59,760 Speaker 8: It's because it works, He said, his dearest love is 573 00:32:59,800 --> 00:33:02,560 Speaker 8: in He really likes to invent, and he sort of 574 00:33:02,640 --> 00:33:05,560 Speaker 8: leaves the mechanics of the litigation to others, but he's 575 00:33:05,600 --> 00:33:10,040 Speaker 8: a very strong defender of inventor's rights to protect their ideas, 576 00:33:10,640 --> 00:33:13,520 Speaker 8: So he sort of places himself as a crusader. He 577 00:33:13,560 --> 00:33:18,240 Speaker 8: spends his time personally inventing and thinking things up, and 578 00:33:18,280 --> 00:33:21,280 Speaker 8: then he sort of turns things over to the other 579 00:33:21,360 --> 00:33:24,320 Speaker 8: teams to execute them in terms of protecting the idea 580 00:33:24,360 --> 00:33:27,680 Speaker 8: and licensing the idea. But he said he would love 581 00:33:27,720 --> 00:33:31,280 Speaker 8: nothing more than to see somebody buy one of his 582 00:33:31,840 --> 00:33:34,520 Speaker 8: patents and turn it into a full scale product, just 583 00:33:34,640 --> 00:33:36,200 Speaker 8: right there in front of him. He would love that. 584 00:33:36,600 --> 00:33:40,560 Speaker 2: So he says we've been talking about and hearing about 585 00:33:40,680 --> 00:33:45,479 Speaker 2: patent trolls for I don't know decades. Have they tried 586 00:33:45,560 --> 00:33:48,479 Speaker 2: to do anything to stop this or to curtail this. 587 00:33:50,240 --> 00:33:53,120 Speaker 8: Yes, certain states have come out with laws to try 588 00:33:53,160 --> 00:33:56,120 Speaker 8: to make these kinds of lawsuits more difficult to bring. 589 00:33:56,840 --> 00:33:59,440 Speaker 8: I believe we mentioned in the story a state in 590 00:33:59,480 --> 00:34:02,800 Speaker 8: the Pacific Northwest that has its own, you know, sort 591 00:34:02,800 --> 00:34:07,000 Speaker 8: of patent troll Prevention Act, and one of the high 592 00:34:07,040 --> 00:34:10,360 Speaker 8: tech companies out there that was being threatened with litigation 593 00:34:10,680 --> 00:34:13,640 Speaker 8: by one of the Rothschild entities counter suit him as 594 00:34:13,680 --> 00:34:16,439 Speaker 8: a preemptive strike and said you're violating the Patent Troll Act, 595 00:34:17,320 --> 00:34:21,880 Speaker 8: and it didn't stop them, a different Rosthschild than anyone 596 00:34:21,880 --> 00:34:25,319 Speaker 8: ahead ensued under the patent anyway. So you know, it's 597 00:34:25,320 --> 00:34:28,160 Speaker 8: continuing on both tracks. But there are efforts in Congress too, 598 00:34:28,680 --> 00:34:31,279 Speaker 8: I think for last year they introduced it and then 599 00:34:31,320 --> 00:34:33,520 Speaker 8: this year has been introduced again, but nothing's acted on 600 00:34:33,560 --> 00:34:38,000 Speaker 8: it about ways to narrow patent eligibility so that it's 601 00:34:38,080 --> 00:34:40,200 Speaker 8: not as easy to sue on some of these patents 602 00:34:40,200 --> 00:34:43,160 Speaker 8: that are so broad they're almost laughable, like you know, 603 00:34:43,520 --> 00:34:46,080 Speaker 8: connecting two things together in a circuit. I mean clearly 604 00:34:46,160 --> 00:34:48,720 Speaker 8: that's not it. But you know, it's just some stuff 605 00:34:48,719 --> 00:34:51,360 Speaker 8: that is so basic, like really, that's a patentable idea. 606 00:34:51,880 --> 00:34:55,880 Speaker 2: Thanks so much, Laurel. That's Bloomberg Law Reporter Laurel Culkins, 607 00:34:56,440 --> 00:34:58,880 Speaker 2: And that's it for this edition of the Bloomberg Law Show. 608 00:34:59,320 --> 00:35:01,720 Speaker 2: Remember you can and always get the latest legal news 609 00:35:01,760 --> 00:35:04,799 Speaker 2: by listening to our Bloomberg Law podcasts. You can find 610 00:35:04,800 --> 00:35:09,080 Speaker 2: them on Apple Podcasts, Spotify, and at www dot Bloomberg 611 00:35:09,160 --> 00:35:13,640 Speaker 2: dot com slash podcast Slash Law. This is Bloomberg Law 612 00:35:13,680 --> 00:35:17,280 Speaker 2: on Bloomberg Radio. I'm June Grosso. Stay with us. Today's 613 00:35:17,280 --> 00:35:20,799 Speaker 2: top stories and global business headlines are coming up right 614 00:35:20,840 --> 00:35:21,920 Speaker 2: now