WEBVTT - Why Supreme Court Justices Talked About Taylor Swift 0:00:00.560 --> 0:00:05.360 This is Bloomberg Law with June Grasso from Bloomberg Radio. 0:00:06.320 --> 0:00:11.200 The most famous nominal damages case I know in recent times, 0:00:11.600 --> 0:00:14.800 which is Taylor Swift sexual assault case. Do you know 0:00:14.880 --> 0:00:17.920 that one Taylor Swift did not have a case at 0:00:17.920 --> 0:00:20.639 the Supreme Court, but a case before the Court on 0:00:20.760 --> 0:00:25.440 campus speech rights. Reminded Justice Elina Kagan of Swift's successful 0:00:25.480 --> 0:00:30.560 student against a Denver radio host for sexual harassment, where 0:00:30.560 --> 0:00:33.360 the pop star asked for only a dollar in damages, 0:00:33.920 --> 0:00:36.720 and she said, I'm not really interested in your money. 0:00:36.840 --> 0:00:39.720 I just want a dollar, and that dollar is going 0:00:39.840 --> 0:00:42.680 to represent something both to me and to the world 0:00:42.680 --> 0:00:46.800 of women who have experienced what I've experienced. Kagan said 0:00:46.800 --> 0:00:49.440 Swift's case was similar to the case before the Court 0:00:49.720 --> 0:00:53.400 where two former students are suing Georgia Gwinnette College for 0:00:53.560 --> 0:00:57.720 nominal damages for violating their First Amendment rights. And Justice 0:00:57.760 --> 0:01:00.920 Amy Coney Barrett seemed to agree and just as Kagan's 0:01:01.000 --> 0:01:05.000 questions suggested that really what Taylor Swift wanted was, you know, 0:01:05.319 --> 0:01:10.080 vindication of the moral right, the legal right that sexual 0:01:10.120 --> 0:01:13.280 assault is reprehensible and wrong. My guest is Harold Crent, 0:01:13.400 --> 0:01:16.600 a professor at the Chicago, Kent College of Law. How first, 0:01:16.640 --> 0:01:18.840 tell us a little bit about the case. The case 0:01:18.920 --> 0:01:22.559 is a First Amendment challenged by students to their college 0:01:22.560 --> 0:01:26.479 administrators for limiting the right of free speech. They had 0:01:26.520 --> 0:01:29.880 to do with someone who's a evangelical Christian who wanted 0:01:29.920 --> 0:01:34.280 to talk about he preaches Saith, and the university quenched 0:01:34.360 --> 0:01:37.840 the speech. Therefore, you have precipitated a First Amendment challenge 0:01:38.000 --> 0:01:41.480 in court, and before it could be finally resolved, their 0:01:41.600 --> 0:01:45.560 college changed where duties could make speeches and broaden the 0:01:45.560 --> 0:01:49.760 opportunity for students, so in essence handing the plaintiffs of victory. 0:01:50.080 --> 0:01:52.320 But then the question was could they continue to get 0:01:52.360 --> 0:01:56.400 a court resolution that they were right under the Constitution 0:01:56.680 --> 0:01:59.800 and would be entitled at least two nominal damages and 0:01:59.840 --> 0:02:02.640 the atorney's fees. And so far the Eleventh Circuit had 0:02:02.680 --> 0:02:05.240 held that the case was moved because there's no longer 0:02:05.280 --> 0:02:09.239 a continuing controversy because the university had changed his policy 0:02:09.680 --> 0:02:12.040 and that the idea of just the tourny's fee and 0:02:12.120 --> 0:02:15.480 normal damages would not be enough to keep the case alive, 0:02:15.800 --> 0:02:19.840 so they refused to address the merits. Does the government 0:02:20.200 --> 0:02:25.560 or government ended these often changed policy following lawsuits. The 0:02:25.600 --> 0:02:29.800 government does not infrequently change his policies, and indeed, a 0:02:29.880 --> 0:02:33.280 great example that came up recently when New York City 0:02:33.360 --> 0:02:37.760 had an active, very tight gun controlled legislation which was challenging, 0:02:37.760 --> 0:02:40.080 and they fought it tooth and nail, But as it 0:02:40.120 --> 0:02:42.680 was getting close to the Supreme Court, New York City 0:02:42.720 --> 0:02:45.880 backed down and said, well, maybe this was too restrictive, 0:02:46.200 --> 0:02:50.560 and therefore, in essence mooted out the controversy, giving plaintiffs 0:02:50.600 --> 0:02:53.000 all that they wanted, And the Supreme Court in that 0:02:53.200 --> 0:02:56.560 case refused to entertain the case by saying it was 0:02:56.600 --> 0:02:59.680 moved because New York changes policies, it was not likely 0:02:59.720 --> 0:03:01.480 to go back. So this in some ways to a 0:03:01.600 --> 0:03:04.919 cousin case in the sense that it asks what happens 0:03:04.960 --> 0:03:08.520 when a government changes its policy not likely to revert 0:03:08.560 --> 0:03:12.560 to the older policy. Can a core nonetheless continue to 0:03:12.680 --> 0:03:15.799 hear the substance of the claim because it's kept alive 0:03:15.880 --> 0:03:18.680 by this notion of nominal damages. So it's a narrow 0:03:18.760 --> 0:03:23.120 case focusing on what really is nominal damages and should 0:03:23.160 --> 0:03:28.320 the judges have power to consider more constitutional claims, In particular, 0:03:28.840 --> 0:03:32.280 if nominal damages are alleged in the case. Before we 0:03:32.320 --> 0:03:35.680 get back to nominal damages, people might ask, well, why 0:03:35.760 --> 0:03:40.320 doesn't that case from last term where the justices said 0:03:40.360 --> 0:03:43.320 it was moot, why doesn't that control here? It's going 0:03:43.400 --> 0:03:46.360 to be in the justice's mind. In that case, nominal 0:03:46.480 --> 0:03:48.480 damages were not sought, and so there was not an 0:03:48.600 --> 0:03:50.840 argument that the case was still alive because of the 0:03:51.320 --> 0:03:54.120 nonminal damages as there are in the Georgia case. But 0:03:54.360 --> 0:03:57.760 certainly what this case is about, it's about judicial power. 0:03:58.080 --> 0:04:02.800 Should judges be able to second guests and scrutinize more 0:04:03.360 --> 0:04:06.720 governmental bodies actions than otherwise would be able to the 0:04:06.800 --> 0:04:10.240 problem is, it's hard to quantify First Amendment speech in 0:04:10.280 --> 0:04:12.920 our case, and the plaintiff wasn't allowed to speak. How 0:04:12.960 --> 0:04:15.480 do you put a dollar value on that? Maybe you 0:04:15.520 --> 0:04:18.120 could say he had to walk fifteen minutes to a 0:04:18.120 --> 0:04:21.760 different forum and that would cost time, and time is money, 0:04:21.760 --> 0:04:24.120 and maybe he should have said it costs me thirty 0:04:24.120 --> 0:04:26.600 five dollars that I could otherwise be making in order 0:04:26.640 --> 0:04:29.240 to go to the other forum to give my speech, 0:04:29.800 --> 0:04:32.160 and the courts would entertain that they'd have to It's 0:04:32.160 --> 0:04:37.080 a traditional thirty five injury, isn't it more practical to say, 0:04:37.240 --> 0:04:40.359 we know that the restriction on speech damaged you, you 0:04:40.360 --> 0:04:42.599 couldn't speak. It's hard to put dollar figure on that, 0:04:42.880 --> 0:04:46.640 So vindicate your claim by just saying its phenominal damages. 0:04:47.040 --> 0:04:50.400 And that's why this has become really a very intriguing 0:04:50.720 --> 0:04:53.840 case because it doesn't fall really on a conservative versus 0:04:53.920 --> 0:04:57.280 liberal lines exactly. It falls with the question of how 0:04:57.360 --> 0:05:01.520 much power should judges have to second guests and administration. 0:05:01.839 --> 0:05:04.880 So I think that's the axis under which the position 0:05:05.040 --> 0:05:09.440 we reached in the case. The school officials basically said, look, 0:05:09.480 --> 0:05:12.919 there's nothing left for the court to do. Is that 0:05:13.000 --> 0:05:16.040 a strong argument? In one sense, it's true. The only 0:05:16.080 --> 0:05:18.960 thing left for the court to do is to decide 0:05:19.000 --> 0:05:22.400 the constitutional question and decide to give the planets a 0:05:22.440 --> 0:05:25.560 dollar each if they agree that their First Amendment rights 0:05:25.600 --> 0:05:29.520 were violated. Um. That is, on the one hand, you 0:05:29.560 --> 0:05:32.920 can say this is not with the need to address 0:05:33.200 --> 0:05:36.320 the constitutional issue in that context, and that's what Chief 0:05:36.400 --> 0:05:39.120 Justice Roberts seems to be saying. But on the other hand, 0:05:39.560 --> 0:05:45.000 there was a very arguably serious First Amendment violation, and 0:05:45.160 --> 0:05:48.719 we may wonder what courts should arguably address that in 0:05:48.839 --> 0:05:51.919 order to give guidance for the future and to compensate 0:05:52.160 --> 0:05:55.960 the individual through nominal damages in light of the fact 0:05:55.960 --> 0:05:59.560 that their First Amendment rights allegedly were violated. In this 0:05:59.640 --> 0:06:03.480 case has groups that are often on opposite sides of issues, 0:06:03.800 --> 0:06:06.800 like the Americans Civil Liberties Union and the U S 0:06:06.880 --> 0:06:10.560 Conference of Catholic Bishops uniting. And there were just two 0:06:10.560 --> 0:06:14.080 amiquest briefs in support of the College. How odd is 0:06:14.120 --> 0:06:18.520 that it's very unusual. And I think that any kind 0:06:18.520 --> 0:06:22.920 of interest group that challenges governmental action knows that its 0:06:22.920 --> 0:06:26.919 ability to get cases heard before the court depend upon 0:06:27.440 --> 0:06:31.240 a vehicle for keeping a case alive and normal damages 0:06:31.560 --> 0:06:34.760 is such a vehicle because it recognizes that there are 0:06:35.000 --> 0:06:39.120 dignitary harms caused by when the government violates your constitutional rights, 0:06:39.320 --> 0:06:42.400 even if they're not quantifiable. I mean, there are dignitary 0:06:42.440 --> 0:06:46.080 harms that common laws trespassed, the violation of someone's trademark, 0:06:46.400 --> 0:06:50.279 and private individuals would get some kind of damages even 0:06:50.360 --> 0:06:55.120 if you couldn't prove actual damages. And that's in essence 0:06:55.160 --> 0:06:58.520 what the claim is here, supported by many Friends of 0:06:58.520 --> 0:07:01.640 the Court's briefs. And also I think it's a recognition 0:07:02.080 --> 0:07:05.520 that we somehow don't trust government when they change policies 0:07:05.760 --> 0:07:08.359 that they're not doing it for the wrong reason, namely 0:07:08.440 --> 0:07:11.720 to avoid a judicial decision as to right or wrong. 0:07:12.240 --> 0:07:15.920 Taylor Swift came up in the oral arguments. I think 0:07:15.920 --> 0:07:17.600 it was a little bit of a surprise. Tell us 0:07:17.640 --> 0:07:23.120 how her name came up. She relatively famously sued a 0:07:23.200 --> 0:07:27.400 Denver talk show host for sexual proprieties when he had 0:07:27.400 --> 0:07:30.040 her on the air, and she said, look, I'm not 0:07:30.480 --> 0:07:33.200 going to try to quantify the kind of damages that 0:07:33.280 --> 0:07:36.520 you caused me. All I want is a vindication in 0:07:36.600 --> 0:07:39.600 court that you acted inappropriately, and I'm going to do 0:07:39.640 --> 0:07:42.680 that by just asking phenomenal damages. She could have tried 0:07:42.720 --> 0:07:46.720 to characterize her injuries in terms of money figure, but 0:07:46.800 --> 0:07:49.720 she saw instead to say, I'm suing because of principle. 0:07:50.080 --> 0:07:53.280 I want to be validated regally in that you evaded 0:07:53.320 --> 0:07:56.760 my autonomy, and she won't. So it's become one of 0:07:56.800 --> 0:08:00.640 the more famous recent cases phenomenal damages. And so the 0:08:00.760 --> 0:08:04.080 reason why Justice Kagan suggested this is to show that 0:08:04.160 --> 0:08:08.440 normal damages can play a very important role to vindicate 0:08:08.600 --> 0:08:12.560 the individual's injuries, even if it doesn't look like a 0:08:12.600 --> 0:08:17.600 traditional compensatory harm. Such as I have a broken bone, 0:08:17.880 --> 0:08:19.640 how much does it cost me to get to a doctor? 0:08:20.320 --> 0:08:23.520 Or my house has been ruined by a flood, how 0:08:23.600 --> 0:08:26.560 much will cost to repair it. This instead is a 0:08:26.640 --> 0:08:29.280 notion that, yes, there's been an invasion of illegal wrong 0:08:29.880 --> 0:08:32.760 and that should be sufficient to continue a case. Even 0:08:32.800 --> 0:08:35.280 if it's otherwise it would be mooted out because of 0:08:35.320 --> 0:08:38.600 the change of policy of a government defendant. Now, some 0:08:38.679 --> 0:08:42.440 of the justice has expressed concerns that this could lead 0:08:42.440 --> 0:08:45.200 to a flood of litigation. If you allow these kinds 0:08:45.200 --> 0:08:48.880 of claims. There is no question that a ruling in 0:08:48.960 --> 0:08:52.679 favor of the plaintiffs in Georgia will result in increased 0:08:52.760 --> 0:08:56.000 claims against government action. I don't think there'll be a flood. 0:08:56.040 --> 0:08:57.760 There's been no showing that there'll be a flood, but 0:08:57.920 --> 0:09:01.400 absolutely because they'll be more because, as you suggested earlier, 0:09:01.600 --> 0:09:05.200 there are a not insignificant number of times when government 0:09:05.679 --> 0:09:09.640 is sued, they realize that they have taken an untenable 0:09:09.880 --> 0:09:13.679 legal position, they'll change course. And if changing course will 0:09:13.679 --> 0:09:16.679 not get with the lawsuits, then course will more frequently 0:09:17.000 --> 0:09:20.600 be invited into the dispute. So, yes, that the margin 0:09:20.640 --> 0:09:23.719 there will definitely be more suits that are brought. And indeed, 0:09:23.920 --> 0:09:27.640 because of the fact that nominal damages in some contexts 0:09:27.640 --> 0:09:31.240 will support an attorney's fees award, a decision in favor 0:09:31.280 --> 0:09:35.040 of the Georgia plantiffs would give plainests attorneys more incentive 0:09:35.120 --> 0:09:38.840 defined plainists to challenge government action that they think is 0:09:38.880 --> 0:09:41.120 illegal because they may, at the end of the day 0:09:41.400 --> 0:09:45.280 recover a handsome attorney's FASA award. Now Chief Justice John 0:09:45.400 --> 0:09:48.080 Robert's question whether it would make a mockery of the 0:09:48.120 --> 0:09:52.040 courts mutinous doctrine if a plaintiff could stop a judge 0:09:52.040 --> 0:09:55.120 from throwing out a case by simply asking for a 0:09:55.160 --> 0:09:58.600 dollar in damages and he says, well, then you don't 0:09:58.640 --> 0:10:02.120 have standing of got to throw the case out. You said, oh, 0:10:02.200 --> 0:10:04.480 well throw me throwing a buck, and then the judge 0:10:04.480 --> 0:10:06.760 is supposed say, yeah, well everything's fine now, doesn't that 0:10:06.920 --> 0:10:10.920 Doesn't that make a mockery of our Article three requirements. 0:10:11.600 --> 0:10:14.839 What he is considering is that it would limit the 0:10:14.880 --> 0:10:17.319 moutenous doctor And I think that Chief Justice Roberts is 0:10:17.400 --> 0:10:20.480 right about that, but not totally. What you're saying is 0:10:20.520 --> 0:10:24.119 that an individual's right to go to court and say 0:10:24.360 --> 0:10:27.560 I want you to say that I was injured, just 0:10:27.600 --> 0:10:29.600 so I can have the satisfaction that you say that 0:10:29.640 --> 0:10:32.160 I was injured. You know, that is one way to 0:10:32.240 --> 0:10:35.240 frame the issue. And if you believe in a strong 0:10:35.320 --> 0:10:38.240 moutenous doctor and to limit the courts, that you only 0:10:38.280 --> 0:10:41.280 want to have the courts opine on these issues of 0:10:41.400 --> 0:10:44.520 great constitution moment when they actually have to. Then you 0:10:44.840 --> 0:10:47.400 want to get rid of this case because there is 0:10:47.480 --> 0:10:51.199 no continuing dispute. So Chief Justice Roberts is right. And 0:10:51.240 --> 0:10:54.040 this goes to the whole question of judicial power. Judges 0:10:54.080 --> 0:10:58.080 will be brought into more controversies if they decide that 0:10:58.120 --> 0:11:02.200 a normal damages is sufficient to keep a case alive, 0:11:02.360 --> 0:11:05.000 probably not as many as the court fears, but at 0:11:05.080 --> 0:11:08.240 least at the margin, more controversies. And so that's why 0:11:08.240 --> 0:11:11.720 this becomes a question really about judicial power and about 0:11:11.760 --> 0:11:15.640 how much you trust administrative and bureaucratic governmental entities. And 0:11:15.720 --> 0:11:18.560 I think that we may see an unusual alliance here. 0:11:18.960 --> 0:11:23.240 So what kind of alliance of the justices might we see? So, 0:11:23.400 --> 0:11:27.319 for instance, we might see Justice Comy and Justice Corsets 0:11:27.600 --> 0:11:32.080 deciding in favor of sympathetic plainmus here because of their 0:11:32.160 --> 0:11:36.000 mistrust of government entities and their sympathy for individuals who 0:11:36.200 --> 0:11:39.240 might be harmed by a Biden administration, for instance, or 0:11:39.440 --> 0:11:42.959 who might be harmed because entities are not respecting the 0:11:43.080 --> 0:11:47.040 religious interests. So it may be some traditional liberals such 0:11:47.080 --> 0:11:50.000 as Briar taken and so to my or that may 0:11:50.120 --> 0:11:53.320 make a pact or alliance in this case with some 0:11:53.400 --> 0:11:56.000 of the more conservative justices, because at the end of 0:11:56.000 --> 0:11:58.520 the day, this is about do you want these cases 0:11:58.559 --> 0:12:00.520 to go to court? And if you're the court, you 0:12:00.559 --> 0:12:03.520 may trust the court more than the political branches to 0:12:03.559 --> 0:12:07.480 get these issues right. Let's say that the plaintiffs do 0:12:07.679 --> 0:12:10.400 win here with the opinion by the court, have to 0:12:10.520 --> 0:12:14.920 explain how this differs from the Second Amendment case we're 0:12:14.920 --> 0:12:18.240 talking about. The Second Amendment case did not squarely raised 0:12:18.280 --> 0:12:21.440 this issue. It is as a kind of a cousin 0:12:21.520 --> 0:12:24.240 of it. It could have raised the issue, but that's 0:12:24.320 --> 0:12:27.360 not what the court was focusing on um or the 0:12:27.400 --> 0:12:31.240 parties we're focusing on uh in the procedural posture before 0:12:31.280 --> 0:12:34.400 the court. But there will be My prediction is that 0:12:34.440 --> 0:12:37.920 there will be discussion of that situation because the Court 0:12:37.960 --> 0:12:41.600 will want to explain or give guidance to what should 0:12:41.600 --> 0:12:45.560 happen if that Second Amendment challenge is raised again. Thanks 0:12:45.559 --> 0:12:48.679 Hal that's Harold Crant to the Chicago Kent College of Law. 0:12:50.080 --> 0:12:53.120 The Supreme Court has vacated the convictions of four men, 0:12:53.320 --> 0:12:57.000 including the one time King of Political Intelligence, in an 0:12:57.000 --> 0:13:01.280 insider trading case involving a scheme to profit from government secrets. 0:13:01.720 --> 0:13:04.200 The Justice has sent the case back to the Second 0:13:04.200 --> 0:13:07.120 Circuit Federal Court of Appeals to take another look at 0:13:07.160 --> 0:13:09.920 its ruling in light of the Supreme courts so called 0:13:09.920 --> 0:13:13.680 Bridgegate case. You may remember the case that drew headlines 0:13:13.720 --> 0:13:16.360 and the scandal that helped to derail former New Jersey 0:13:16.360 --> 0:13:20.920 Governor Chris Christie's run for president, a politically motivated scheme 0:13:20.960 --> 0:13:24.160 that caused a traffic nightmare on the George Washington Bridge 0:13:24.160 --> 0:13:28.280 in and led to two of Christie's aids being convicted 0:13:28.280 --> 0:13:32.959 of fraud. Bridget Kelly blamed Christie. Just because someone has 0:13:32.960 --> 0:13:35.920 the title of governor doesn't give them the right to 0:13:36.000 --> 0:13:41.160 mislead others. It's dishonorable and it only shows that person 0:13:41.800 --> 0:13:44.760 for the coward he is. The Supreme Court reversed those 0:13:44.760 --> 0:13:47.640 convictions last May. But what does that have to do 0:13:47.720 --> 0:13:50.960 with an insider trading case? Here to answer that question 0:13:51.080 --> 0:13:54.680 is John Coffee, a professor at Columbia Law School. Jack 0:13:54.720 --> 0:13:57.800 tell us about the so called King of Political Intelligence. 0:13:58.760 --> 0:14:02.600 David Blazak was a former employee of the Center for 0:14:02.720 --> 0:14:06.839 Medicare and Medicaid Services, and when he left that agency, 0:14:07.160 --> 0:14:11.040 he became a consultant for Hedge Funds because Hedge Funds 0:14:11.120 --> 0:14:15.160 follow what that agency does, because it determines the profitability 0:14:15.200 --> 0:14:18.600 of all kinds of treatments that various medical and pharmaceutical 0:14:18.640 --> 0:14:22.240 companies provide. Now he learns that the agency is going 0:14:22.280 --> 0:14:24.760 to cut back on the amount that will pay for 0:14:24.800 --> 0:14:28.120 certain kind of cancer treatments. He tells that to his 0:14:28.160 --> 0:14:32.480 Hedge fund clients. They sell short the companies that will 0:14:32.520 --> 0:14:35.880 be most adversely affected by that new ruling. They make 0:14:35.920 --> 0:14:38.160 a lot of money, They pay him a lot of money, 0:14:38.600 --> 0:14:42.360 and he gets convicted under a priority of charges. What 0:14:42.480 --> 0:14:45.800 was the essence of the prosecution's case against him and 0:14:45.960 --> 0:14:49.080 three others? The conduct would look to most people like 0:14:49.200 --> 0:14:54.840 pretty egregious insider trading. Well, you have misappropriated material, non 0:14:54.880 --> 0:14:59.080 public information that is known at that agency. Believe they 0:14:59.080 --> 0:15:02.280 could just really give this information to people who might 0:15:02.320 --> 0:15:05.040 want to trade on it. There's all kinds of governmental 0:15:05.120 --> 0:15:09.200 information that has a dramatic impact on the price of securities. 0:15:09.600 --> 0:15:12.120 If you know in advance that the Federal Reserve is 0:15:12.160 --> 0:15:16.400 going to raise or lower interest rates, you can make billions. 0:15:16.480 --> 0:15:18.720 And thus the Fedal Reserve probably to keep that very 0:15:18.840 --> 0:15:23.480 very confidential. And this agency basically had similar rules. But 0:15:23.960 --> 0:15:26.840 the guys who were friends and sort of alumni that 0:15:26.920 --> 0:15:29.800 agency had a way of lunching with their old colleagues 0:15:29.840 --> 0:15:32.000 and learning what was going on, and they got very 0:15:32.040 --> 0:15:37.920 valuable information. In the view of the prosecution, they were stealing, embezzling, 0:15:38.040 --> 0:15:43.120 or misappropriating that information from the agency. But then the 0:15:43.200 --> 0:15:47.800 big surprise occurs. The Supreme Court decides what's called the 0:15:47.840 --> 0:15:50.960 bridge Gate case, and that says the government may not 0:15:51.080 --> 0:15:56.160 have any property interest any right to hold its confidential 0:15:56.200 --> 0:15:59.280 information private. So if you don't have a property interest, 0:15:59.440 --> 0:16:02.680 there can't be a property charge. And the case he'll 0:16:02.720 --> 0:16:04.600 go back to the second Circuit to see if a 0:16:04.680 --> 0:16:07.920 different theory can be worked out that does not offend 0:16:08.000 --> 0:16:11.280 the bridge Gate decision. Just to be clear, the bridge 0:16:11.280 --> 0:16:15.320 Gate case did not involve insider trading of any kind involved, 0:16:15.360 --> 0:16:19.920 really just corrupt governmental action that was in a form 0:16:19.960 --> 0:16:23.520 of retaliation against the mayor of Fort Lee because he 0:16:23.560 --> 0:16:27.160 had not endorsed Governor Christie, and the Supreme Court said, 0:16:27.240 --> 0:16:31.520 that's not fraud, that's just politics. Explain why the federal 0:16:31.520 --> 0:16:36.200 prosecutors saw the Bridgegate decision and took the unusual step 0:16:36.240 --> 0:16:39.520 of asking the Supreme Court to remand the case that 0:16:39.640 --> 0:16:43.040 they won. They saw the Kelly decision, and they saw 0:16:43.120 --> 0:16:46.160 the briefs come in from the party that sought sociary. 0:16:46.520 --> 0:16:50.520 The Supreme Court granted sociary on the defendants theory that 0:16:50.680 --> 0:16:54.840 Kelly controlled this case. So because the government has suddenly 0:16:54.880 --> 0:16:58.640 seen the theory of property being narrowed, they know this 0:16:58.680 --> 0:17:01.440 case is in danger, and the government that rather than 0:17:01.520 --> 0:17:04.040 fight on that line of battle, let's get the case 0:17:04.119 --> 0:17:06.560 for Amanda down to the Second Circuit and they can 0:17:06.560 --> 0:17:09.720 write a revised opinion that ducks that problem. So what's 0:17:09.800 --> 0:17:13.640 likely to happen at the second Circuit? Specifically, the key 0:17:13.800 --> 0:17:19.040 charge here is something called securities fraud under section and 0:17:19.119 --> 0:17:21.680 that has two prongs, and one of those problems involves 0:17:21.920 --> 0:17:25.960 a deprivation of property and the other prong involves defrauding 0:17:26.000 --> 0:17:29.639 any person. I would suspect that the Second Circuit panel 0:17:29.680 --> 0:17:32.920 they've already did convict. This guy will say, well, he's 0:17:32.960 --> 0:17:36.520 also guilty of that other prong in which you are 0:17:36.920 --> 0:17:40.920 defrauding some person even though you're not obtaining money or property. 0:17:41.240 --> 0:17:44.280 So that's just a prediction. I'm not certain that I'm right, 0:17:44.600 --> 0:17:47.040 but I think the government asked the case to be 0:17:47.080 --> 0:17:50.280 remanded even though they had one, because they thought a 0:17:50.320 --> 0:17:53.520 stronger theory could be written now that Kelly was the lord. 0:17:54.600 --> 0:17:57.720 And so the Second Circuit will have no choice but 0:17:57.840 --> 0:18:03.360 to reverse itself rewrite a decision, because they are if 0:18:03.400 --> 0:18:08.040 the Supreme Court tells you to reconsider, you better reconsider seriously. 0:18:09.280 --> 0:18:13.480 Has a Supreme Court limited the take on the expanse 0:18:13.560 --> 0:18:17.560 of insider trading? Over the years now, the Supreme Court 0:18:17.560 --> 0:18:22.879 has been very much expansive and basically quite supportive of 0:18:22.920 --> 0:18:27.760 the prosecution. They do require that you have show a 0:18:27.840 --> 0:18:30.800 proof of a fiduciary breach if this is going to 0:18:30.880 --> 0:18:33.320 be done under rule ten B five. And that's sort 0:18:33.320 --> 0:18:36.560 of the irony of this case because the prosecutors, while 0:18:36.600 --> 0:18:39.560 they used Rule ten B five, use several other theories 0:18:39.880 --> 0:18:42.879 that allow them to outflank the need for showing a 0:18:42.920 --> 0:18:46.600 breach of fiduciary duty. And now those other theories are 0:18:46.640 --> 0:18:48.960 shown to have a problem because you've got to show 0:18:48.960 --> 0:18:53.800 at least some deprivation of property, and right now the 0:18:53.880 --> 0:18:55.960 government is not going to be able to convince the 0:18:55.960 --> 0:18:59.879 Supreme Court the confidential information of a government agency about 0:18:59.880 --> 0:19:02.760 what it's about to do amounts to property that can 0:19:03.000 --> 0:19:06.159 can have stolen. Norm Biddle, do you agree with that 0:19:06.160 --> 0:19:10.159 that confidential you know, government information shouldn't be considered. I 0:19:10.160 --> 0:19:12.240 think we have to protect that so it will be 0:19:12.280 --> 0:19:15.119 protected if you get it through computer hacking or if 0:19:15.119 --> 0:19:19.320 you violate the espionage Statute by the stealing defense secrets. 0:19:19.320 --> 0:19:22.639 But I think lots of information is extremely valuable and 0:19:22.680 --> 0:19:25.320 would wreck havoc with the government. Think of the Federal 0:19:25.359 --> 0:19:28.719 Reserve Board. If people could find out a week early 0:19:29.119 --> 0:19:31.359 that Federal Reserve we're going to raise or lower interest 0:19:31.440 --> 0:19:34.600 rates by defined amount, there would be a phenomenal amount 0:19:34.680 --> 0:19:37.920 of informed trading by people who would know information that 0:19:38.040 --> 0:19:40.639 the rest of the market would not know. You know, 0:19:40.680 --> 0:19:45.160 when Free Berrara was U S Attorney for the Southern District, 0:19:45.160 --> 0:19:50.080 we saw crackdown insider trading. How has that fared under 0:19:50.440 --> 0:19:53.840 the Trump administration. Well, the U S Attorneys have still 0:19:53.920 --> 0:19:59.040 one cases the Southern District. It's a sort of independent agency. 0:19:59.480 --> 0:20:02.119 It called itself the Sovereign District in New York, and 0:20:02.480 --> 0:20:07.360 they haven't let the government in Washington directly control everything 0:20:07.440 --> 0:20:10.240 they do. Uh. And this was a case that was 0:20:11.000 --> 0:20:13.879 prosecuted years ago. The decision came down from the Second 0:20:13.920 --> 0:20:17.400 Circuit on the last day of two thousand nineteen. So 0:20:17.480 --> 0:20:20.679 this was a prosecution that we brought before Trump. The 0:20:20.720 --> 0:20:25.040 Trump administration has not been particularly vocal about not bringing 0:20:25.040 --> 0:20:27.600 inside a trading cases, other kind of cases that they're 0:20:27.840 --> 0:20:30.760 much more conservative about. So I think the Southern District 0:20:30.760 --> 0:20:34.679 has persisted in bringing some inside writer trading cases, but 0:20:34.800 --> 0:20:38.120 not nearly as many as were brought under President Obama. 0:20:38.240 --> 0:20:41.120 Do you have any expectations about what will happen under 0:20:41.160 --> 0:20:44.920 a President Biden. I think we've got to go back 0:20:44.960 --> 0:20:48.320 to the old pattern. I think the Democrats and most 0:20:48.359 --> 0:20:51.760 of the country doesn't see any value and insider trading, 0:20:52.040 --> 0:20:54.760 and they wanted those cases prosecuted, or at least the 0:20:54.800 --> 0:20:57.840 big cases prosecuted. And this was a case in which 0:20:57.840 --> 0:21:00.600 an awful lot of money was made and just to 0:21:00.680 --> 0:21:04.399 summon up you think that Blazac will end up with 0:21:04.480 --> 0:21:09.160 a prison sentence, even after the second Circuits. Well, I'm 0:21:09.160 --> 0:21:11.919 not going to predict the sentencing, but that is the 0:21:12.000 --> 0:21:15.479 normal sentence that even first defenders usually get a prison 0:21:15.680 --> 0:21:18.720 term when they are convicted of inside the trading. I 0:21:18.760 --> 0:21:22.200 think that the Second Circuit can write a decision that 0:21:22.320 --> 0:21:25.880 skirts around the problems in the Kelly case and the 0:21:25.960 --> 0:21:29.960 RidgeGate case because they can find something not involving property 0:21:30.040 --> 0:21:33.320 was violated, such as a defrauding of an individual. You 0:21:33.359 --> 0:21:37.360 can say the agency was defrauded and cheated because they 0:21:37.400 --> 0:21:43.800 weren't allowed to persist in keeping their internal processes secret. 0:21:43.840 --> 0:21:46.280 Even though it wasn't property. You could say you devoted 0:21:46.320 --> 0:21:49.080 the agency. I will see how they write it. I mean, 0:21:49.200 --> 0:21:52.520 maybe they decide they can't write a decision, but I 0:21:52.560 --> 0:21:55.080 think they've been giving the opportunity, and the U S 0:21:55.119 --> 0:21:57.520 attorneys Upice thought if they got a second chance, they 0:21:57.560 --> 0:22:00.000 would be able to write a decision that would would 0:22:00.119 --> 0:22:03.800 withstand an appeal based on Kelly. In the bridge Gate case, 0:22:04.040 --> 0:22:07.080 what about the three other people who were involved, Well, 0:22:07.119 --> 0:22:09.280 some of them have said guilty already, but they're all 0:22:09.320 --> 0:22:10.919 in the same boat. Those that are up there in 0:22:10.920 --> 0:22:14.879 the Supreme Court are all in the same boat. Blaizac 0:22:15.040 --> 0:22:18.000 was the critical person because he was the person who 0:22:18.119 --> 0:22:21.000 got the information from the agency and gave it to 0:22:21.040 --> 0:22:24.840 the hedge funds. The hedge funds are basically doing that 0:22:24.880 --> 0:22:27.320 they're usually doing, trying to pay experts to get them 0:22:27.320 --> 0:22:30.440 information that the public doesn't know. So the case now 0:22:30.480 --> 0:22:33.880 returns to the Second Circuit Court of Appeals. We'll keep 0:22:33.920 --> 0:22:37.040 you updated on what happens there. Thanks so much for 0:22:37.080 --> 0:22:39.800 being on the Bloomberg Laws Show. Jack. That's Professor John 0:22:39.840 --> 0:22:43.000 Coffee of Columbia Law School. And that's it for the 0:22:43.160 --> 0:22:46.400 edition of the Bloomberg Lawn Podcast. I'm June Grosso. Thanks 0:22:46.440 --> 0:22:49.080 so much for listening, and remember you can always get 0:22:49.080 --> 0:22:52.159 the latest legal news on our Bloomberg Lawn podcast. You 0:22:52.200 --> 0:22:55.480 can find them on Apple podcast and Spotify and wherever 0:22:55.560 --> 0:23:00.639 you get your favorite podcast. You're listening to Bloomberg. The 0:23:00.720 --> 0:23:04.720 counting of the counting ended the end of the