1 00:00:00,560 --> 00:00:05,360 Speaker 1: This is Bloomberg Law with June Grassoe from Bloomberg Radio. 2 00:00:07,840 --> 00:00:10,520 Speaker 1: For the first time, the Supreme Court heard arguments this 3 00:00:10,560 --> 00:00:14,520 Speaker 1: week challenging a broad interpretation of the nation's only major 4 00:00:14,560 --> 00:00:18,240 Speaker 1: anti hacking law, and many of the justice is question 5 00:00:18,320 --> 00:00:22,360 Speaker 1: the innocuous acts the law could criminalize. Here are justice Is, 6 00:00:22,480 --> 00:00:26,680 Speaker 1: Samuel Alito, Elena Kagan, and Stephen Bryer. Take the example 7 00:00:26,880 --> 00:00:30,920 Speaker 1: of the person who puts who lies about weight on 8 00:00:31,040 --> 00:00:33,640 Speaker 1: a dating website. How would that be a violation of 9 00:00:33,680 --> 00:00:38,600 Speaker 1: this statute? An employee checking Instagram and work? How is 10 00:00:38,680 --> 00:00:44,920 Speaker 1: that obtaining or altering information? Your employer told you, Mr Jones, 11 00:00:45,320 --> 00:00:48,519 Speaker 1: you work for me. Here is a PC. You will 12 00:00:48,560 --> 00:00:50,959 Speaker 1: get all kinds of emails in this PC. You are 13 00:00:51,120 --> 00:00:54,520 Speaker 1: never to use this email for a personal purpose. Joining 14 00:00:54,560 --> 00:00:56,760 Speaker 1: me is David Thaw, a professor at the University of 15 00:00:56,800 --> 00:01:00,600 Speaker 1: Pittsburgh Law School. David the case before the word involved 16 00:01:00,600 --> 00:01:03,720 Speaker 1: a police officer who was convicted under the Computer Fraud 17 00:01:03,720 --> 00:01:06,200 Speaker 1: and Abuse Act for taking a bribe to look up 18 00:01:06,240 --> 00:01:09,440 Speaker 1: a license plate in the police database. What was the 19 00:01:09,480 --> 00:01:13,440 Speaker 1: basic issue confronting the justices here? This is an issue 20 00:01:13,600 --> 00:01:18,080 Speaker 1: that has been circulating around for a couple of decades. 21 00:01:18,400 --> 00:01:23,040 Speaker 1: In various forms, and on its surface, it sounds very simple, 22 00:01:23,480 --> 00:01:27,200 Speaker 1: which is, when someone who's using a computer that they 23 00:01:27,240 --> 00:01:30,680 Speaker 1: have access to does something on that computer that they're 24 00:01:30,720 --> 00:01:34,720 Speaker 1: not supposed to do but they're technologically able to do, 25 00:01:35,120 --> 00:01:38,920 Speaker 1: is that a violation of the Federal Anti Hacking Statute, 26 00:01:39,000 --> 00:01:44,520 Speaker 1: which prohibits not just unauthorized access but exceeding your authorized access. 27 00:01:44,560 --> 00:01:46,920 Speaker 1: So on its face, it sounds like, if you do 28 00:01:47,040 --> 00:01:50,880 Speaker 1: something that you're not supposed to do, you are exceeding 29 00:01:50,920 --> 00:01:55,360 Speaker 1: your authorized access. The problem is that, in practice, with 30 00:01:55,480 --> 00:02:00,480 Speaker 1: modern computing and information systems, what your quote not supposed 31 00:02:00,520 --> 00:02:05,680 Speaker 1: to do unquote is a much more complex question than 32 00:02:05,880 --> 00:02:09,560 Speaker 1: simply are you allowed to access a given file on 33 00:02:09,639 --> 00:02:13,040 Speaker 1: a computer, which was quite literally what the United States 34 00:02:13,040 --> 00:02:17,320 Speaker 1: Congress was talking about in six when it adopted the 35 00:02:17,360 --> 00:02:20,720 Speaker 1: current version of the statute. That's in questions. What we're 36 00:02:20,760 --> 00:02:26,000 Speaker 1: dealing with today are questions about complex sets of agreements 37 00:02:26,040 --> 00:02:29,960 Speaker 1: and policies and contracts and many other things, even sometimes 38 00:02:30,040 --> 00:02:33,440 Speaker 1: verbal instructions, for example, from an employer to an employee 39 00:02:33,840 --> 00:02:37,160 Speaker 1: regarding what a person can and can't do with a 40 00:02:37,200 --> 00:02:40,440 Speaker 1: computational device that they may carry around with them at 41 00:02:40,440 --> 00:02:43,360 Speaker 1: all times in use for multiple purposes. Some of the 42 00:02:43,480 --> 00:02:48,880 Speaker 1: justices gave scenarios everyday life scenarios like lying about your 43 00:02:48,880 --> 00:02:52,880 Speaker 1: weight on a dating app or browsing Instagram on a 44 00:02:52,960 --> 00:02:57,000 Speaker 1: work computer. What were their concerns so they're getting at 45 00:02:57,040 --> 00:03:00,240 Speaker 1: this complexity. A number of those questions were to acted 46 00:03:00,320 --> 00:03:03,200 Speaker 1: at the government. And what I think the justices were 47 00:03:03,200 --> 00:03:05,480 Speaker 1: trying to push it is the question of saying, well, 48 00:03:05,480 --> 00:03:08,480 Speaker 1: wait a minute, isn't the way you want us the 49 00:03:08,520 --> 00:03:13,360 Speaker 1: court to interpret exceeds authorized access? Isn't that a whole 50 00:03:13,360 --> 00:03:17,200 Speaker 1: lot more than just you're doing something that clearly, obviously 51 00:03:17,240 --> 00:03:20,360 Speaker 1: you're not supposed to. Clearly, obviously you're not supposed to 52 00:03:20,360 --> 00:03:23,520 Speaker 1: go into the file on the machine that is not 53 00:03:23,840 --> 00:03:27,760 Speaker 1: for you. Aren't you now getting into things where a 54 00:03:28,000 --> 00:03:33,760 Speaker 1: private entity can criminalize activities by writing a contract, where 55 00:03:33,840 --> 00:03:36,880 Speaker 1: a dating app could make it criminal. Think about that. 56 00:03:36,960 --> 00:03:40,560 Speaker 1: Make it a federal time to lie about your weight 57 00:03:40,880 --> 00:03:44,800 Speaker 1: for the purpose of getting access to another user's profile, 58 00:03:44,880 --> 00:03:47,960 Speaker 1: or lie about your age. Making that the subject of 59 00:03:48,560 --> 00:03:54,720 Speaker 1: federal criminal law is an incredible expansion beyond what Congress 60 00:03:54,760 --> 00:03:58,440 Speaker 1: originally contemplated. And that's what the Justice's line of questioning 61 00:03:58,480 --> 00:04:01,720 Speaker 1: was getting. It seems like Justice scourse, it's narrowed in 62 00:04:01,800 --> 00:04:04,920 Speaker 1: on that. He said that this risks making a federal 63 00:04:05,000 --> 00:04:09,200 Speaker 1: criminal of all of us, and he called the case 64 00:04:09,280 --> 00:04:11,480 Speaker 1: the latest in a long line of cases where the 65 00:04:11,520 --> 00:04:15,600 Speaker 1: government has sought to expand federal criminal jurisdiction. Do you 66 00:04:15,640 --> 00:04:19,600 Speaker 1: see that as the government trying to expand federal criminal jurisdiction. 67 00:04:20,040 --> 00:04:22,240 Speaker 1: I can't speak to the government's motives, And it's actually 68 00:04:22,279 --> 00:04:26,039 Speaker 1: very difficult really for anyone to speak to the government's motives, 69 00:04:26,080 --> 00:04:31,200 Speaker 1: because governments don't have motives in that kind of sort 70 00:04:31,240 --> 00:04:34,760 Speaker 1: of a linear, continuous sense that we think of. Our 71 00:04:34,800 --> 00:04:38,560 Speaker 1: Congress changes every two years, our executive changes no less 72 00:04:38,560 --> 00:04:42,120 Speaker 1: than every eight years, and the arc of cases that 73 00:04:42,240 --> 00:04:45,719 Speaker 1: Justice course it was describing was over the course of 74 00:04:45,760 --> 00:04:49,719 Speaker 1: a couple of decades. But the point still remains that 75 00:04:49,800 --> 00:04:53,000 Speaker 1: even if there isn't necessarily motive there, there has been 76 00:04:53,040 --> 00:04:55,880 Speaker 1: a trend in a direction. What I think he was 77 00:04:56,000 --> 00:04:59,080 Speaker 1: probably getting at with less about motive and more about 78 00:04:59,080 --> 00:05:02,799 Speaker 1: the building of an inertia, of an expansion of various 79 00:05:02,839 --> 00:05:09,599 Speaker 1: federal criminal statutes that are used in prosecuting what more, traditionally, 80 00:05:10,040 --> 00:05:12,960 Speaker 1: under our federalist constitution would be thought of as the 81 00:05:13,000 --> 00:05:17,160 Speaker 1: province of the states to criminalize, and he and several 82 00:05:17,200 --> 00:05:20,719 Speaker 1: of the other justices asked questions about that about doesn't 83 00:05:20,800 --> 00:05:25,600 Speaker 1: state law also criminalize this. My colleague, Professor Orn Kerr 84 00:05:25,680 --> 00:05:29,640 Speaker 1: from the University of California at Berkeley, in his Amicust brief, 85 00:05:29,839 --> 00:05:33,400 Speaker 1: he talked about the fact that there are other state 86 00:05:33,480 --> 00:05:38,680 Speaker 1: laws that criminalize some of these activities and the federal 87 00:05:38,760 --> 00:05:43,919 Speaker 1: criminal power. Many courts over the decades and centuries of 88 00:05:43,960 --> 00:05:48,239 Speaker 1: the United States have looked at as something that should 89 00:05:48,320 --> 00:05:52,320 Speaker 1: be used for its very specific purpose as outlined in 90 00:05:52,360 --> 00:05:57,039 Speaker 1: the Constitution, not as something that is sort of a 91 00:05:57,120 --> 00:06:01,440 Speaker 1: catch all for when the states overlook something. My colleague, 92 00:06:01,440 --> 00:06:05,120 Speaker 1: Professor Oren Kerr, from the University of California at Berkeley, 93 00:06:05,279 --> 00:06:08,880 Speaker 1: in his Amaricust brief, he talked about the fact that 94 00:06:08,920 --> 00:06:13,000 Speaker 1: there are other state laws that criminalize some of these 95 00:06:13,040 --> 00:06:19,359 Speaker 1: activities and the federal criminal power. Many courts over the 96 00:06:19,520 --> 00:06:23,000 Speaker 1: decades and centuries of the United States have looked at 97 00:06:23,040 --> 00:06:27,760 Speaker 1: as something that should be used for its very specific 98 00:06:27,920 --> 00:06:33,280 Speaker 1: purpose as outlined in the Constitution, not as something that 99 00:06:33,520 --> 00:06:36,159 Speaker 1: is sort of a catch all for when the states 100 00:06:36,279 --> 00:06:42,040 Speaker 1: overlook something. Now, it's important to note here that this 101 00:06:42,160 --> 00:06:47,360 Speaker 1: observation is not one necessarily of malintent, in fact, almost 102 00:06:47,360 --> 00:06:52,080 Speaker 1: certainly not anything other than good faith. One of the 103 00:06:52,160 --> 00:06:57,279 Speaker 1: reasons that federal criminal prosecutions are often brought is because 104 00:06:57,440 --> 00:07:02,120 Speaker 1: federal investigative agencies and really have far more resources and 105 00:07:02,240 --> 00:07:05,960 Speaker 1: far more ability to coordinate, and in the case of 106 00:07:06,160 --> 00:07:11,960 Speaker 1: investigating computer crimes, for example, those resources and interstate coordination 107 00:07:12,040 --> 00:07:16,000 Speaker 1: can be key in successfully being able to not just investigate, 108 00:07:16,480 --> 00:07:22,120 Speaker 1: but collect adequate evidence, apprehend and convict someone who has 109 00:07:22,160 --> 00:07:26,920 Speaker 1: perpetrated a crime. So what I would suggest leads to 110 00:07:27,000 --> 00:07:29,920 Speaker 1: this observation again, which I think justice course is correct 111 00:07:29,960 --> 00:07:33,600 Speaker 1: that there has been a trend in that direction. But 112 00:07:33,680 --> 00:07:35,400 Speaker 1: what leads to it, I think is just a good 113 00:07:35,520 --> 00:07:38,560 Speaker 1: faith effort on the part of law enforcement to try 114 00:07:38,560 --> 00:07:41,880 Speaker 1: and marshal whatever resources they can to deal with an 115 00:07:41,880 --> 00:07:47,000 Speaker 1: incredibly growing problem. And I think what you saw from 116 00:07:47,040 --> 00:07:52,840 Speaker 1: justice across almost the entire bench was a concern that 117 00:07:53,080 --> 00:07:58,440 Speaker 1: the federal government doesn't have plenary police power, and the 118 00:07:58,520 --> 00:08:02,600 Speaker 1: Court was expressing con turn that if there aren't some 119 00:08:02,760 --> 00:08:09,600 Speaker 1: limits in that regard, then those federalist protections, the separation 120 00:08:09,640 --> 00:08:12,000 Speaker 1: of the power between the federal government and the state 121 00:08:12,040 --> 00:08:16,280 Speaker 1: governments will start to erupt. And there have been cases 122 00:08:16,440 --> 00:08:21,520 Speaker 1: where the federal government has prosecuted people under this statute 123 00:08:21,600 --> 00:08:25,360 Speaker 1: where it seemed a little bit stretched, For example, the 124 00:08:25,400 --> 00:08:30,280 Speaker 1: infamous case of Aaron Swartz. There have been a number 125 00:08:30,320 --> 00:08:32,320 Speaker 1: the Aaron Sports case. I think one of the things 126 00:08:32,320 --> 00:08:35,400 Speaker 1: that we're missing in the air in Sports case, and 127 00:08:35,600 --> 00:08:37,480 Speaker 1: this is one of the reasons why it's not the 128 00:08:37,480 --> 00:08:44,040 Speaker 1: example I most commonly uses. We didn't have a full prosecution, trial, verdict, 129 00:08:44,720 --> 00:08:47,760 Speaker 1: and full set of appeals, and that takes some of 130 00:08:47,760 --> 00:08:51,360 Speaker 1: the story away. If you look at a case like 131 00:08:51,640 --> 00:08:55,360 Speaker 1: the at least within computer crime circles, equally infamous case 132 00:08:55,679 --> 00:09:02,079 Speaker 1: of Lori Drew or the case of Mr Ahernheimer, also 133 00:09:02,120 --> 00:09:06,920 Speaker 1: known by his hacker handle of Weaves, those two cases 134 00:09:07,720 --> 00:09:12,280 Speaker 1: illustrate the same type and set of concerns and have 135 00:09:12,440 --> 00:09:15,880 Speaker 1: a fully developed record we can look at. In Lori 136 00:09:16,080 --> 00:09:20,040 Speaker 1: Drew's case, not the judge entered a finding is not 137 00:09:20,120 --> 00:09:25,120 Speaker 1: guilty after the trial was concluded. That's really uncommon, and 138 00:09:25,520 --> 00:09:29,520 Speaker 1: it was done in part because of this issue that 139 00:09:29,600 --> 00:09:33,200 Speaker 1: we're talking about, that the platform in the mid two 140 00:09:33,240 --> 00:09:38,120 Speaker 1: thousands of my Space could not arbitrarily right into its 141 00:09:38,200 --> 00:09:44,320 Speaker 1: contract terms about what content users would put on the 142 00:09:44,360 --> 00:09:50,920 Speaker 1: website and thereby criminalized the activities. There's a concept in 143 00:09:50,960 --> 00:09:53,920 Speaker 1: the law that you have noticed at the time of 144 00:09:53,960 --> 00:09:57,720 Speaker 1: what is and is not criminal, and the Justice has 145 00:09:57,760 --> 00:09:59,840 Speaker 1: talked a lot about this and the fact that allow 146 00:10:00,040 --> 00:10:04,640 Speaker 1: in these private contracts to criminalize some activities and not 147 00:10:04,800 --> 00:10:09,600 Speaker 1: others as a function of the contract rather than something 148 00:10:09,640 --> 00:10:12,520 Speaker 1: that can be figured out clearly from the law itself, 149 00:10:13,200 --> 00:10:17,000 Speaker 1: doesn't put people on notice. And there's a similar problem 150 00:10:17,000 --> 00:10:20,520 Speaker 1: in the case of Mr Ahernheimer Um And in that 151 00:10:20,559 --> 00:10:24,880 Speaker 1: particular case, there's uh. I think a number of scholars, 152 00:10:24,920 --> 00:10:32,240 Speaker 1: myself included, who viewed that the aggrieved parties went, shall 153 00:10:32,280 --> 00:10:37,479 Speaker 1: we say, searching for a favorable prosecutor until they found one, 154 00:10:37,960 --> 00:10:40,600 Speaker 1: and that was in large part why the Third Circuit 155 00:10:40,600 --> 00:10:44,960 Speaker 1: Court of Appeals ultimately ended up rejecting the conviction on 156 00:10:45,000 --> 00:10:49,280 Speaker 1: the unusual grounds that venue was improper. Do you think 157 00:10:49,320 --> 00:10:53,559 Speaker 1: the potential fallout from a broad reading of this law 158 00:10:53,840 --> 00:10:58,080 Speaker 1: is being exaggerated or are there implications for example, for 159 00:10:58,600 --> 00:11:04,520 Speaker 1: cybersecurity research and other areas that we don't think about normally. Yeah, 160 00:11:04,520 --> 00:11:06,520 Speaker 1: there's an excellent question. I think it's one of the 161 00:11:06,559 --> 00:11:09,679 Speaker 1: core questions that we have to deal with given the 162 00:11:09,760 --> 00:11:14,160 Speaker 1: current wording of the statute and the degree to which 163 00:11:14,280 --> 00:11:17,400 Speaker 1: the circuit Courts of Appeal has somewhat split on this question. 164 00:11:17,760 --> 00:11:21,840 Speaker 1: It certainly is not an exaggeration in the context of 165 00:11:22,080 --> 00:11:26,760 Speaker 1: can either criminal prosecutions or the civil analog they remember 166 00:11:26,760 --> 00:11:29,199 Speaker 1: there is in the in the Justice has talked about 167 00:11:29,200 --> 00:11:33,400 Speaker 1: this in there, or there is a civil cause of 168 00:11:33,440 --> 00:11:36,640 Speaker 1: action that a private party can bring. And that actually 169 00:11:36,640 --> 00:11:40,520 Speaker 1: happened in an employer employee case in the Middle District 170 00:11:40,520 --> 00:11:42,559 Speaker 1: of Florida, I think in the late two thousands of 171 00:11:42,880 --> 00:11:46,480 Speaker 1: It might have been early, and it involves somebody using 172 00:11:46,679 --> 00:11:49,800 Speaker 1: Facebook too much at work, and the action was nothing 173 00:11:49,840 --> 00:11:53,040 Speaker 1: more than a retaliatory action against someone who had filed 174 00:11:53,040 --> 00:11:57,319 Speaker 1: an equal opportunity grievance against their employer. The court struck 175 00:11:57,360 --> 00:12:00,760 Speaker 1: it down. It sought for what it was, but it illustrated, 176 00:12:00,760 --> 00:12:03,120 Speaker 1: and I've written in an article about this stat it 177 00:12:03,240 --> 00:12:07,160 Speaker 1: illustrated much like the Lori Drew case, which Professor Kerr 178 00:12:07,200 --> 00:12:12,520 Speaker 1: was involved in, and the Arnheimer case. It illustrates the 179 00:12:12,559 --> 00:12:16,440 Speaker 1: ways in which an expansive reading of the statute can 180 00:12:16,480 --> 00:12:20,000 Speaker 1: be used to criminalize things which might or might not 181 00:12:20,200 --> 00:12:24,280 Speaker 1: otherwise be criminal, but aren't criminal as a function of 182 00:12:24,360 --> 00:12:27,560 Speaker 1: potentially violating in terms of a contract. What ms RU 183 00:12:27,720 --> 00:12:32,880 Speaker 1: did terrorizing a child, that certainly I think should be 184 00:12:32,960 --> 00:12:35,319 Speaker 1: and is criminal under the statutes that I believe that 185 00:12:35,400 --> 00:12:38,280 Speaker 1: jurisdiction was was Missouri, where the child lived at the time, 186 00:12:38,840 --> 00:12:42,920 Speaker 1: But she wasn't prosecuted under Missouri state law. She's prosecuted 187 00:12:43,000 --> 00:12:45,000 Speaker 1: under a federal statute not designed for that purpose. And 188 00:12:45,160 --> 00:12:46,760 Speaker 1: Justice has talked about that a lot in the Van 189 00:12:46,840 --> 00:12:49,920 Speaker 1: Buren case yesterday. So I think that in the context 190 00:12:49,960 --> 00:12:53,920 Speaker 1: of overbroad prosecutions, yes in the context of security research, 191 00:12:54,160 --> 00:12:56,200 Speaker 1: I think the answer is we just don't know enough yet. 192 00:12:56,640 --> 00:12:58,240 Speaker 1: And I think part of the reason we don't know 193 00:12:58,360 --> 00:13:01,760 Speaker 1: enough is we just don't have enough cases to see 194 00:13:01,760 --> 00:13:06,080 Speaker 1: how courts would confront that and whether courts would say 195 00:13:06,240 --> 00:13:10,520 Speaker 1: this clearly is not what Congress was talking about, and 196 00:13:10,600 --> 00:13:13,640 Speaker 1: they're questioning. Most of the justices seemed critical of what 197 00:13:13,720 --> 00:13:17,439 Speaker 1: a broad reading of this statute might lead to. How 198 00:13:17,440 --> 00:13:19,520 Speaker 1: do you think they'll come out? And it's always hard 199 00:13:19,559 --> 00:13:22,439 Speaker 1: to read the tea leaves with the United States Supreme Court, 200 00:13:22,720 --> 00:13:25,760 Speaker 1: but I did not hear a bench that was very 201 00:13:25,840 --> 00:13:29,600 Speaker 1: favorable to the government's position, and I think that that's correct. 202 00:13:29,840 --> 00:13:34,480 Speaker 1: From the particular disposition of this case. It's not often 203 00:13:34,880 --> 00:13:37,480 Speaker 1: that when I hear oral argument for a case, I 204 00:13:37,520 --> 00:13:42,120 Speaker 1: find myself more persuaded by the justices questioning than I 205 00:13:42,160 --> 00:13:46,199 Speaker 1: was by the briefs and oral argument by counsel for 206 00:13:46,280 --> 00:13:49,280 Speaker 1: the parties. But the justice is questioning on the point 207 00:13:49,320 --> 00:13:52,920 Speaker 1: of whether the activity in question was properly criminalized by 208 00:13:53,080 --> 00:13:57,120 Speaker 1: a broad reading of a federal statute or by the states, 209 00:13:57,200 --> 00:14:00,960 Speaker 1: which clearly have the power to make the act otherwise criminal. 210 00:14:01,040 --> 00:14:03,640 Speaker 1: In this case, I think it was otherwise criminal in Georgia. 211 00:14:03,960 --> 00:14:07,280 Speaker 1: That was a very compelling argument, and it also fits 212 00:14:07,360 --> 00:14:10,280 Speaker 1: nicely with what we call the rule of lenity, which 213 00:14:10,400 --> 00:14:13,760 Speaker 1: is an assumption in criminal law that when there is 214 00:14:13,880 --> 00:14:18,920 Speaker 1: ambiguity in a statute is construed in favor of the 215 00:14:18,960 --> 00:14:22,400 Speaker 1: criminal defendant. Because we want to do everything possible to 216 00:14:22,440 --> 00:14:26,200 Speaker 1: give people notice of what the government is telling them 217 00:14:26,240 --> 00:14:29,120 Speaker 1: not to do by the commands and the criminal law. 218 00:14:29,240 --> 00:14:32,720 Speaker 1: So something is ambiguous, we say, well, the Congress should 219 00:14:32,760 --> 00:14:35,400 Speaker 1: be more clear. And I think that's the direction that 220 00:14:35,480 --> 00:14:39,800 Speaker 1: the Justices seemed to be leaning. Was Congress has ample 221 00:14:39,880 --> 00:14:43,440 Speaker 1: opportunity to make this more clear. If they really wanted 222 00:14:43,520 --> 00:14:46,560 Speaker 1: to be this broad, that would be my guess that 223 00:14:46,680 --> 00:14:48,960 Speaker 1: this is not a court that's going to be favorable 224 00:14:49,000 --> 00:14:51,680 Speaker 1: to the government's expensive reading where they're going to come 225 00:14:51,720 --> 00:14:55,880 Speaker 1: out on the reasoning. I think we got a sense 226 00:14:55,920 --> 00:14:58,800 Speaker 1: of how some of the individual justices are approaching it, 227 00:14:58,840 --> 00:15:01,600 Speaker 1: but I did not see an census building on the 228 00:15:01,720 --> 00:15:06,800 Speaker 1: reasoning for why an expansive interpretation of that particular clause 229 00:15:07,120 --> 00:15:09,080 Speaker 1: of the statute is appropriate. So I think it'll be 230 00:15:09,120 --> 00:15:11,440 Speaker 1: real interesting to see how the opinions themselves come down. 231 00:15:11,440 --> 00:15:14,520 Speaker 1: But I don't see five votes for the government's position. 232 00:15:14,760 --> 00:15:17,040 Speaker 1: I'm not even entirely sure I see three votes for 233 00:15:17,080 --> 00:15:20,280 Speaker 1: the government's position. Thanks David. That's David Thaw of the 234 00:15:20,400 --> 00:15:25,440 Speaker 1: University of Pittsburgh Law School. Near A Global Asset investment 235 00:15:25,480 --> 00:15:29,000 Speaker 1: company has successfully next to five point eight billion dollar 236 00:15:29,120 --> 00:15:34,080 Speaker 1: purchase of fifteen luxury US hotels from die Insurance Company 237 00:15:34,200 --> 00:15:38,640 Speaker 1: after arguing the coronavirus outbreak drained value out of the transaction. 238 00:15:39,160 --> 00:15:42,600 Speaker 1: A Delaware judge concluded that mere A properly canceled the 239 00:15:42,680 --> 00:15:46,360 Speaker 1: deal after the insurance company's response to the COVID nineteen 240 00:15:46,440 --> 00:15:49,880 Speaker 1: pandemic meant it couldn't meet conditions for closing the sale 241 00:15:49,880 --> 00:15:53,320 Speaker 1: of the hotels, which included iconic properties such as the 242 00:15:53,360 --> 00:15:56,600 Speaker 1: West ND Saint Francis in San Francisco and the Lows 243 00:15:56,680 --> 00:16:00,280 Speaker 1: Santa Monica Beach Hotel near Los Angeles. This is decision 244 00:16:00,320 --> 00:16:03,520 Speaker 1: is the first in Delaware addressing the legal consequences of 245 00:16:03,600 --> 00:16:06,840 Speaker 1: corporate counters to the pandemic, and they provide a basis 246 00:16:06,880 --> 00:16:09,480 Speaker 1: for other firms to walk away from deals they say 247 00:16:09,480 --> 00:16:13,240 Speaker 1: we're crippled by COVID nineteen. My guest is a lawyer 248 00:16:13,240 --> 00:16:17,760 Speaker 1: who represented Murray Mike Karlinsky, Global head of Complex Litigation 249 00:16:17,840 --> 00:16:21,280 Speaker 1: at Quinn Emmanuel. The judge wrote a two D forty 250 00:16:21,280 --> 00:16:25,920 Speaker 1: two page opinion tell us briefly why he decided to 251 00:16:26,000 --> 00:16:29,160 Speaker 1: cancel the deal. The starting point on this is that 252 00:16:29,240 --> 00:16:31,280 Speaker 1: there are a number of cases that are right now 253 00:16:31,320 --> 00:16:35,120 Speaker 1: pending in the various courts, mostly in Delaware, where you 254 00:16:35,160 --> 00:16:39,240 Speaker 1: have deals that have terminated in the post pandemic or 255 00:16:39,320 --> 00:16:44,920 Speaker 1: during the COVID world. And those cases have common themes 256 00:16:44,960 --> 00:16:48,440 Speaker 1: to them, which are that under the governing documents, the 257 00:16:48,520 --> 00:16:51,600 Speaker 1: merger agreement or the acquisition agreement, there clauses in there 258 00:16:51,640 --> 00:16:54,960 Speaker 1: that allow a buyer to terminate under certain circumstances, either 259 00:16:55,040 --> 00:16:59,520 Speaker 1: the failure of certain conditions having been satisfied or representations 260 00:16:59,560 --> 00:17:02,680 Speaker 1: that were aid that turned out to be false. This 261 00:17:02,760 --> 00:17:06,399 Speaker 1: case is consistent with those cases and that the buyer 262 00:17:06,480 --> 00:17:10,040 Speaker 1: here is seeking to terminate based upon failures by the 263 00:17:10,080 --> 00:17:12,679 Speaker 1: seller to comply with the terms of the agreement. We 264 00:17:12,720 --> 00:17:15,399 Speaker 1: went through a full trial. We litigated this case in 265 00:17:15,520 --> 00:17:19,240 Speaker 1: a very very expedited fashion over the course of three 266 00:17:19,280 --> 00:17:21,320 Speaker 1: and a half months from start to finish, in what 267 00:17:21,400 --> 00:17:24,480 Speaker 1: would otherwise be a three year litigation, but it was 268 00:17:24,520 --> 00:17:28,080 Speaker 1: all compressed with the seller seeking to force the buyer 269 00:17:28,160 --> 00:17:32,080 Speaker 1: to close and the buyer seeking to terminate the deal 270 00:17:32,400 --> 00:17:36,440 Speaker 1: based upon failures under the contract. The Court here by 271 00:17:36,520 --> 00:17:39,320 Speaker 1: Chancellor Laster, after a trial and hearing all of the 272 00:17:39,400 --> 00:17:42,320 Speaker 1: evidence and reviewing all of the materials that were submitted, 273 00:17:42,600 --> 00:17:46,840 Speaker 1: ultimately concluded that the buyer our client Mira A Asset, 274 00:17:47,400 --> 00:17:51,640 Speaker 1: had proven that the seller had failed to comply with 275 00:17:52,000 --> 00:17:56,160 Speaker 1: various provisions of the agreements, which were conditions that had 276 00:17:56,200 --> 00:17:59,720 Speaker 1: to be satisfied before the buyer would be required to 277 00:17:59,760 --> 00:18:03,760 Speaker 1: close is the deal? The judge wrote that the other 278 00:18:03,800 --> 00:18:07,920 Speaker 1: side committed fraud about fraud what was he referring to? There? 279 00:18:08,359 --> 00:18:11,920 Speaker 1: So one of the underlying questions in the case. This 280 00:18:12,000 --> 00:18:15,639 Speaker 1: was a bizarre case because while we had the contract 281 00:18:15,720 --> 00:18:20,520 Speaker 1: issues prior to entering into the contract. Uh and by 282 00:18:20,560 --> 00:18:23,520 Speaker 1: the way, just so we're all clear, the contract here 283 00:18:23,720 --> 00:18:29,879 Speaker 1: was to acquire luxury hotels in the United States and 284 00:18:30,040 --> 00:18:33,360 Speaker 1: some of the top name hotels. Prior to entering into 285 00:18:33,440 --> 00:18:38,400 Speaker 1: the agreement, it became known to us the buyer that 286 00:18:38,760 --> 00:18:43,960 Speaker 1: for six of the hotels, someone purported to transfer title 287 00:18:44,040 --> 00:18:47,320 Speaker 1: to those hotels to their own names, and so, in 288 00:18:47,359 --> 00:18:50,040 Speaker 1: other words, it raised the question as to whether the seller, 289 00:18:50,119 --> 00:18:53,600 Speaker 1: who was going to be transferring these hotels to us 290 00:18:53,880 --> 00:18:57,320 Speaker 1: in exchange for roughly six billion dollars in purchase price, 291 00:18:57,880 --> 00:19:02,800 Speaker 1: owned the hotels. So at the time the seller disclosed 292 00:19:03,200 --> 00:19:07,520 Speaker 1: the existence of these six what we're called fraudulent deeds 293 00:19:07,720 --> 00:19:11,120 Speaker 1: deeds on the properties to the buyer, there was an 294 00:19:11,119 --> 00:19:14,560 Speaker 1: explanation that was given to the buyer. We were told, essentially, 295 00:19:15,040 --> 00:19:18,440 Speaker 1: there's nothing really to worry about. This seems to be 296 00:19:18,560 --> 00:19:22,680 Speaker 1: or this is the work of a twenty something year 297 00:19:22,720 --> 00:19:27,119 Speaker 1: old uber driver with a criminal record, and it's really 298 00:19:27,160 --> 00:19:31,320 Speaker 1: nothing more than a nuisance. So to assuage the buyer's 299 00:19:31,359 --> 00:19:35,119 Speaker 1: concerns about is there a problem here does the seller 300 00:19:35,200 --> 00:19:39,080 Speaker 1: really own these hotels? We were given an explanation that 301 00:19:39,160 --> 00:19:43,520 Speaker 1: was quite the ninth and the essential message was this 302 00:19:43,600 --> 00:19:46,760 Speaker 1: is nothing really to worry about. What it turned out 303 00:19:47,000 --> 00:19:50,919 Speaker 1: in fact, and what was ultimately demonstrated through the course 304 00:19:50,960 --> 00:19:54,879 Speaker 1: of this case and a trial, is that there was 305 00:19:54,960 --> 00:19:59,520 Speaker 1: something much more sinister behind these deeds. There was an 306 00:19:59,560 --> 00:20:03,800 Speaker 1: individ jewel and an organization who was responsible for those 307 00:20:04,160 --> 00:20:09,359 Speaker 1: fraudulent deeds, and that the seller here had a long history, 308 00:20:09,400 --> 00:20:15,120 Speaker 1: over a decade long, of litigation with this very sinister party, 309 00:20:15,280 --> 00:20:19,200 Speaker 1: and that prior to signing the agreement, the seller actually 310 00:20:19,280 --> 00:20:22,200 Speaker 1: knew that it was not the work of a twentysomething 311 00:20:22,320 --> 00:20:25,000 Speaker 1: year old uber driver. It was not a mere nuisance 312 00:20:25,040 --> 00:20:27,399 Speaker 1: as it was portrayed to us, but rather there was 313 00:20:27,480 --> 00:20:30,840 Speaker 1: something much much more sinister, uh and much more of 314 00:20:30,840 --> 00:20:34,240 Speaker 1: a concern, And all of that was withheld from the 315 00:20:34,760 --> 00:20:37,440 Speaker 1: from the buyer, and so the buyer signed an agreement 316 00:20:38,119 --> 00:20:42,119 Speaker 1: it was unaware of any of these underlying facts and 317 00:20:42,200 --> 00:20:46,280 Speaker 1: details and the fact that the seller knew were concealed 318 00:20:46,359 --> 00:20:51,640 Speaker 1: from it. So the underlying the sinister person I'm referring 319 00:20:51,680 --> 00:20:55,560 Speaker 1: to was a fraudster in the court's eyes. But what 320 00:20:55,680 --> 00:20:58,080 Speaker 1: the court is referring to when it said a fraud 321 00:20:58,160 --> 00:21:02,879 Speaker 1: upon fraud is the the seller here defrauded the fire 322 00:21:03,600 --> 00:21:06,960 Speaker 1: by withholding all of this information as to who was 323 00:21:07,040 --> 00:21:10,200 Speaker 1: really behind these deeds and how big of a potential 324 00:21:10,280 --> 00:21:13,840 Speaker 1: problem this really was. And we only learned about this 325 00:21:13,960 --> 00:21:17,720 Speaker 1: as we the buyer, learned about these problems months and 326 00:21:17,800 --> 00:21:21,639 Speaker 1: months later, when um some more of the facts started 327 00:21:21,680 --> 00:21:24,000 Speaker 1: to come out. And that is what the court is 328 00:21:24,040 --> 00:21:28,240 Speaker 1: referring to when it referred to the seller having engaged 329 00:21:28,280 --> 00:21:33,960 Speaker 1: in fraud about fraud. Was the judge's decision based more 330 00:21:34,080 --> 00:21:37,159 Speaker 1: on that you perhaps couldn't get the proper title or 331 00:21:37,280 --> 00:21:41,399 Speaker 1: was it problems because of the coronavirus outbreak? That's a 332 00:21:41,440 --> 00:21:46,800 Speaker 1: great question, June. The court's decision is premised on two pillars. 333 00:21:47,359 --> 00:21:53,199 Speaker 1: One pillar was an argument that the coronavirus and the 334 00:21:53,359 --> 00:21:58,280 Speaker 1: impact that COVID had on the hotel's at these particular 335 00:21:58,359 --> 00:22:03,240 Speaker 1: fifteen luxury hotels was so significant that the seller started 336 00:22:03,280 --> 00:22:07,320 Speaker 1: to make changes to the operations of these hotels in 337 00:22:07,520 --> 00:22:11,720 Speaker 1: violation of obligations that it had under the contract. There's 338 00:22:11,760 --> 00:22:14,959 Speaker 1: a provision which is standard in these contracts called an 339 00:22:15,080 --> 00:22:18,879 Speaker 1: ordinary course covenant, and it basically says from the time I, 340 00:22:19,040 --> 00:22:22,399 Speaker 1: as a buyer, signed the contract to the closing of 341 00:22:22,400 --> 00:22:26,399 Speaker 1: the contract, which could take many months. Here signing to 342 00:22:26,520 --> 00:22:30,840 Speaker 1: closing was expected to be nine months or so. The seller, 343 00:22:31,000 --> 00:22:35,480 Speaker 1: you're obligated to operate the business these hotels in the 344 00:22:35,640 --> 00:22:41,080 Speaker 1: ordinary course, consistent with past practice. Here the seller made 345 00:22:41,240 --> 00:22:46,720 Speaker 1: dramatic changes. It furloughed five thousand plus employees, and it 346 00:22:46,800 --> 00:22:49,560 Speaker 1: did a number of other things. And so one of 347 00:22:49,600 --> 00:22:53,199 Speaker 1: the argument, and this is the one that was specific 348 00:22:53,280 --> 00:22:57,240 Speaker 1: to COVID, was we said, this was a violation of 349 00:22:57,320 --> 00:22:59,800 Speaker 1: that covenant and it gave the buyer an opportunity to 350 00:22:59,800 --> 00:23:02,639 Speaker 1: turn eminate the deal. And the court agreed with us. 351 00:23:02,720 --> 00:23:06,720 Speaker 1: So the court concluded, notwithstanding that these changes were made 352 00:23:07,160 --> 00:23:09,320 Speaker 1: in the light of COVID, and they may have even 353 00:23:09,400 --> 00:23:14,399 Speaker 1: been reasonable given COVID, they nevertheless violated the terms of 354 00:23:14,440 --> 00:23:19,080 Speaker 1: the merger agreement. That was the specific COVID issue. The 355 00:23:19,200 --> 00:23:22,240 Speaker 1: other issue, which was the second pillar of the court's decision, 356 00:23:22,640 --> 00:23:27,679 Speaker 1: related to this whole underlying title issue and the failures 357 00:23:27,720 --> 00:23:29,879 Speaker 1: as we talked about a moment ago of the seller 358 00:23:29,920 --> 00:23:33,800 Speaker 1: to make proper disclosures, and the way it all culminated 359 00:23:34,480 --> 00:23:37,080 Speaker 1: was that one of the key things that is a 360 00:23:37,119 --> 00:23:42,000 Speaker 1: buyer of real estate let alone, billions of dollars worth 361 00:23:42,040 --> 00:23:45,600 Speaker 1: of real estate always has to have both for its 362 00:23:45,640 --> 00:23:49,359 Speaker 1: own protection and because third party lenders who are going 363 00:23:49,400 --> 00:23:52,920 Speaker 1: to be lending the buyer proceeds to buy the deal 364 00:23:53,520 --> 00:23:57,800 Speaker 1: is they have to have complete title insurance. When we 365 00:23:57,880 --> 00:24:00,280 Speaker 1: buy a house, we buy title insurance to make sure 366 00:24:00,359 --> 00:24:05,040 Speaker 1: that the title we're getting is is correct, it doesn't 367 00:24:05,080 --> 00:24:08,080 Speaker 1: have clouds on it will so too in a deal 368 00:24:08,160 --> 00:24:11,159 Speaker 1: like this. But because of all of these issues that 369 00:24:11,280 --> 00:24:16,240 Speaker 1: were raised both by the UH, the sinister character, plus 370 00:24:16,480 --> 00:24:19,280 Speaker 1: the fact that there were all of these concealments by 371 00:24:19,320 --> 00:24:23,480 Speaker 1: the seller itself that went on for months, and surprises 372 00:24:23,520 --> 00:24:27,879 Speaker 1: that were ultimately sprung upon um the buyer here and 373 00:24:27,960 --> 00:24:31,639 Speaker 1: the title insurance companies. When the deal was getting set 374 00:24:31,720 --> 00:24:36,119 Speaker 1: for closing, the title insurers basically threw their hands up 375 00:24:36,160 --> 00:24:41,560 Speaker 1: and said, we can't provide complete title insurance here. We 376 00:24:41,600 --> 00:24:44,560 Speaker 1: have real concerns because of these issues that have not 377 00:24:44,680 --> 00:24:49,040 Speaker 1: been properly addressed by the seller. We're just not comfortable. 378 00:24:49,480 --> 00:24:51,840 Speaker 1: And so they did something which known in the industry 379 00:24:51,920 --> 00:24:56,480 Speaker 1: as raising exceptions. So they're saying we will provide title 380 00:24:56,520 --> 00:25:00,320 Speaker 1: insurance for some, but not all, and then at all. 381 00:25:00,440 --> 00:25:04,080 Speaker 1: Part was really really significant and so in the end, 382 00:25:04,200 --> 00:25:08,520 Speaker 1: that was another provision in the agreement that failed. The 383 00:25:08,640 --> 00:25:11,760 Speaker 1: court found that the seller was obligated to make sure 384 00:25:11,880 --> 00:25:16,639 Speaker 1: that the actions it took allowed title insurance that fully 385 00:25:16,680 --> 00:25:20,399 Speaker 1: protected the buyer here as to any of this underlying 386 00:25:20,440 --> 00:25:24,159 Speaker 1: fraudulent indeed scheme. And because the title insurers could not 387 00:25:24,359 --> 00:25:28,960 Speaker 1: get comfortable uh and therefore wouldn't give that complete insurance, 388 00:25:29,200 --> 00:25:32,560 Speaker 1: the condition in the contract failed. And of course also 389 00:25:32,600 --> 00:25:35,280 Speaker 1: the lenders who would have been asked to lend four 390 00:25:35,320 --> 00:25:39,240 Speaker 1: billion dollars of third party financing for this transaction, they 391 00:25:39,280 --> 00:25:42,720 Speaker 1: too said we're not comfortable, and they too said, if 392 00:25:42,720 --> 00:25:46,240 Speaker 1: there's not complete title insurance, we can't go forward. So 393 00:25:46,280 --> 00:25:50,959 Speaker 1: that second pillar was fact specific to this case, and 394 00:25:51,040 --> 00:25:54,440 Speaker 1: I think what compelled the court to the outcome as 395 00:25:54,480 --> 00:25:57,640 Speaker 1: it related to this particular issue was the court understood 396 00:25:58,160 --> 00:26:02,399 Speaker 1: contextually just how serious of an issue this was and 397 00:26:02,480 --> 00:26:07,320 Speaker 1: why it ultimately led to the title insurers raising these exceptions, 398 00:26:07,920 --> 00:26:10,920 Speaker 1: and that the blame for it lies at the feet 399 00:26:10,960 --> 00:26:14,480 Speaker 1: of the seller because of all of its concealment throughout 400 00:26:14,480 --> 00:26:18,120 Speaker 1: the course of the deal process. Do you think that 401 00:26:18,200 --> 00:26:21,960 Speaker 1: this case might in any way provide a precedent to 402 00:26:21,960 --> 00:26:25,800 Speaker 1: torpedo other deals. Well, I don't like to use the 403 00:26:25,800 --> 00:26:31,080 Speaker 1: word torpedo, I think though understanding the question, sure, I 404 00:26:31,119 --> 00:26:34,760 Speaker 1: think the answer is that clearly this is a precedential 405 00:26:34,880 --> 00:26:38,919 Speaker 1: decision on both the issues we went on and also 406 00:26:39,000 --> 00:26:41,040 Speaker 1: one of the other issues that we didn't win on. 407 00:26:41,119 --> 00:26:43,800 Speaker 1: But with the court, the court issued here are two 408 00:26:44,040 --> 00:26:47,080 Speaker 1: d and forty page opinions in one of the most 409 00:26:47,119 --> 00:26:52,640 Speaker 1: detailed and thorough analyzes of these critical murder and acquisition 410 00:26:52,680 --> 00:26:58,880 Speaker 1: related issues. So to your question, um, the it is 411 00:26:59,000 --> 00:27:02,720 Speaker 1: it is clear that many of the other cases that 412 00:27:02,760 --> 00:27:06,080 Speaker 1: are pending, both in Delaware and throughout the country, and 413 00:27:06,119 --> 00:27:09,880 Speaker 1: I dare say even outside of the United States, are 414 00:27:09,960 --> 00:27:13,639 Speaker 1: looking to Vice Chancellor Laster's decision. I think there were 415 00:27:13,680 --> 00:27:16,600 Speaker 1: courts that have been waiting on this decision, knowing that 416 00:27:16,680 --> 00:27:19,080 Speaker 1: it was coming and it was imminent, and now that 417 00:27:19,119 --> 00:27:21,960 Speaker 1: it has been issued, I do think this will become 418 00:27:22,320 --> 00:27:26,200 Speaker 1: one of the seminal decisions in the field of mergers 419 00:27:26,200 --> 00:27:30,280 Speaker 1: and acquisitions litigation as it relates to the M and 420 00:27:30,400 --> 00:27:33,520 Speaker 1: A clause, that is, the material adverse effect clause, which 421 00:27:33,520 --> 00:27:36,320 Speaker 1: again is a standard provision in these types of agreement, 422 00:27:36,600 --> 00:27:40,639 Speaker 1: and as they said earlier, the ordinary course covenant that 423 00:27:40,800 --> 00:27:44,359 Speaker 1: the Court ultimately found in this case was violated. The 424 00:27:44,480 --> 00:27:48,840 Speaker 1: Court goes through in more detail and analysis than any 425 00:27:48,840 --> 00:27:52,720 Speaker 1: other decision that precedes it uh in going through and 426 00:27:52,800 --> 00:27:58,000 Speaker 1: analyzing that ordinary course covenant. And so both the cases 427 00:27:58,040 --> 00:28:01,760 Speaker 1: that are pending that involved termated deals will be looking 428 00:28:01,800 --> 00:28:04,840 Speaker 1: to this case for its precedential value and its guidance. 429 00:28:05,320 --> 00:28:07,959 Speaker 1: But there's a second point here, which is the Court's 430 00:28:08,000 --> 00:28:12,440 Speaker 1: opinion in this case will become must reading for any 431 00:28:12,480 --> 00:28:17,359 Speaker 1: practitioner going forward that drafts murder and acquisition agreements, whether 432 00:28:17,400 --> 00:28:21,719 Speaker 1: they be merger agreements acquisition agreements. The Court has provided 433 00:28:21,920 --> 00:28:26,040 Speaker 1: clear guidance for I'll call it the rules of the 434 00:28:26,160 --> 00:28:30,679 Speaker 1: road and the concepts around these various provisions that every 435 00:28:30,760 --> 00:28:34,160 Speaker 1: practitioner who prepares one of these agreements or negotiates one 436 00:28:34,160 --> 00:28:37,000 Speaker 1: of these agreements must be aware of. And you took 437 00:28:37,040 --> 00:28:39,840 Speaker 1: over this case from another firm just three and a 438 00:28:39,880 --> 00:28:44,880 Speaker 1: half months before trial. You're dealing with witnesses in China, 439 00:28:45,320 --> 00:28:47,000 Speaker 1: So just give me a little bit about you know, 440 00:28:47,040 --> 00:28:50,680 Speaker 1: what went on behind the scenes, the kind of workforce 441 00:28:50,760 --> 00:28:53,640 Speaker 1: you had, and how you dealt with all this. As 442 00:28:53,960 --> 00:28:56,200 Speaker 1: we're all aware we were dealing with all of this 443 00:28:57,160 --> 00:29:01,320 Speaker 1: in the most of unusual times. We're dealing with all 444 00:29:01,360 --> 00:29:04,480 Speaker 1: of this in the midst of a global pandemic, and so, 445 00:29:04,520 --> 00:29:07,880 Speaker 1: as I said earlier, this was really three years of 446 00:29:07,920 --> 00:29:12,320 Speaker 1: litigation compressed into roughly three and a half months. Delaware 447 00:29:12,400 --> 00:29:15,200 Speaker 1: Chancery Court of Chancery in Delaware is one of the 448 00:29:15,240 --> 00:29:18,600 Speaker 1: best equipped courts, and it's the court in which all 449 00:29:18,640 --> 00:29:21,840 Speaker 1: of these cases tend to be filed because of choice 450 00:29:21,880 --> 00:29:25,400 Speaker 1: of law and governing provisions. But the Court of Chancery 451 00:29:25,440 --> 00:29:29,239 Speaker 1: is well equipped to deal with cases that move with 452 00:29:29,360 --> 00:29:33,440 Speaker 1: extreme expedition. And in cases like this, remember what is 453 00:29:33,480 --> 00:29:37,840 Speaker 1: the seller here seeking. The seller is seeking to force 454 00:29:38,480 --> 00:29:43,200 Speaker 1: my client mire A, the buyer, to close the transaction. 455 00:29:43,720 --> 00:29:46,200 Speaker 1: They literally want the court to issue an order that 456 00:29:46,280 --> 00:29:50,160 Speaker 1: says mi A, you must buy these hotels, and you 457 00:29:50,240 --> 00:29:54,480 Speaker 1: must buy them at the contractual price of six billion dollars, 458 00:29:54,520 --> 00:29:57,920 Speaker 1: even though in a pandemic world, we know those hotels 459 00:29:57,920 --> 00:30:01,760 Speaker 1: are going to be worked significantly last and so in 460 00:30:01,880 --> 00:30:05,400 Speaker 1: order to get to that potential outcome, things have to 461 00:30:05,440 --> 00:30:08,320 Speaker 1: happen very quickly. You can't afford a three year litigation, 462 00:30:08,360 --> 00:30:11,800 Speaker 1: you can't afford a one year litigation. If ultimately there's 463 00:30:11,840 --> 00:30:14,920 Speaker 1: the potential for the court saying you must buy that 464 00:30:15,080 --> 00:30:18,479 Speaker 1: it has to happen quickly. So we understood that coming in, 465 00:30:18,960 --> 00:30:21,240 Speaker 1: and it was just an extraordinary effort. I mean, we 466 00:30:21,320 --> 00:30:24,880 Speaker 1: had a core team of twenty lawyers at my firm, 467 00:30:24,920 --> 00:30:27,960 Speaker 1: and then we probably had another forty or forty or 468 00:30:28,040 --> 00:30:31,480 Speaker 1: fifty lawyers who were assisting in the document reviews and 469 00:30:31,480 --> 00:30:35,520 Speaker 1: the document productions. This was nothing short of a herculean effort. 470 00:30:35,560 --> 00:30:38,960 Speaker 1: In fact, by Chancellor Laster in his opinion very early on, 471 00:30:39,120 --> 00:30:42,640 Speaker 1: points out just how extraordinary this was for both firms. 472 00:30:42,680 --> 00:30:44,920 Speaker 1: I don't mean just my firm, but for the other 473 00:30:44,960 --> 00:30:47,560 Speaker 1: side as well. And recognize that it was all being 474 00:30:47,600 --> 00:30:53,000 Speaker 1: done remotely. So we had depositions of fifty witnesses. They 475 00:30:53,000 --> 00:30:56,680 Speaker 1: were being done by Zoom. Many of those witnesses were 476 00:30:56,720 --> 00:31:01,440 Speaker 1: located in either China or Korea, so it was standard 477 00:31:01,480 --> 00:31:05,000 Speaker 1: fair for depositions to start because we were taking a 478 00:31:05,080 --> 00:31:09,160 Speaker 1: deposition of a witness on their daylight time. So we 479 00:31:09,160 --> 00:31:13,240 Speaker 1: were starting depositions here in New York at six pm, 480 00:31:13,320 --> 00:31:16,560 Speaker 1: seven pm, eight pm in the evening, and those depositions 481 00:31:16,600 --> 00:31:19,240 Speaker 1: were running literally straight through the night. I had one 482 00:31:19,280 --> 00:31:23,200 Speaker 1: deposition of a witness that ended at six fifty two am. 483 00:31:23,240 --> 00:31:27,360 Speaker 1: It was sunshine. Birds were chirping, my family was waking, 484 00:31:27,840 --> 00:31:30,320 Speaker 1: and I was finishing up a deposition that had started 485 00:31:30,440 --> 00:31:33,280 Speaker 1: six pm the night before. But we did it, and 486 00:31:33,360 --> 00:31:35,920 Speaker 1: my team did it, and I can't uh tell you 487 00:31:36,320 --> 00:31:38,120 Speaker 1: how proud I am of my team and this was 488 00:31:38,160 --> 00:31:41,440 Speaker 1: an extraordinary effort. Thanks for being on The Bloomberg Laws Show. Mike. 489 00:31:41,840 --> 00:31:45,880 Speaker 1: That's Mike Carlinsky, Global head of Complex Litigation at Quinn Emmanuel. 490 00:31:46,400 --> 00:31:48,640 Speaker 1: And that's it for the edition of the Bloomberg Law Show. 491 00:31:49,000 --> 00:31:51,080 Speaker 1: Remember you can always at the latest legal news on 492 00:31:51,120 --> 00:31:55,280 Speaker 1: our Bloomberg Law Podcast. You can find them on iTunes, SoundCloud, 493 00:31:55,440 --> 00:32:00,240 Speaker 1: or at www dot bloomberg dot com slash podcast Last Law. 494 00:32:00,760 --> 00:32:03,600 Speaker 1: I'm June gross O. Thanks so much for listening. Tune 495 00:32:03,640 --> 00:32:06,320 Speaker 1: into The Bloomberg Law Show every weeknight a Champion Eastern 496 00:32:06,560 --> 00:32:11,920 Speaker 1: right here on Bloomberg Radio