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

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Speaker 1: A jury of seven men and five women has been

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Speaker 1: sworn in to hear Donald Trump's hush money case. One

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Speaker 1: alternate juror has also been selected. That means five more

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Speaker 1: alternates have to be selected to round out the panel

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Speaker 1: that will decide the first ever criminal case against a

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Speaker 1: former US president. Jury selection got off to a slow

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Speaker 1: start this morning after two previously sworn in jurors were dismissed,

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Speaker 1: one because she expressed doubts about her ability to be

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Speaker 1: fair and impartial after some of her personal information had

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Speaker 1: been made public, the second because prosecutors told the judge

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Speaker 1: they had information that the man was arrested in the

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Speaker 1: nineteen nineties for tearing down conservative political advertisements. Judge One

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Speaker 1: Mreshan says he's hopeful the jury selection process will be

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Speaker 1: wrapped up tomorrow and opening statements can take place on Monday.

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Speaker 1: Turning down to legal news on the Supreme Court, the

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Speaker 1: facts are undisputed. James Snyder, the former mayor of a

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Speaker 1: Northwest Indiana town, received thirteen thousand dollars from a trucking

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Speaker 1: company one month after was awarded city contracts worth more

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Speaker 1: than one point one million dollars in a bidding process

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Speaker 1: he oversaw. Snyder was convicted by a jury of bribery,

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Speaker 1: and then convicted by a second jury in a retrial.

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Speaker 1: But the Supreme Court, which has been having its own

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Speaker 1: problems of late with unreported gifts to justices, seem to

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Speaker 1: think that thirteen thousand dollars was like taking a teacher

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Speaker 1: to the cheesecake factory as a thank you or buying

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Speaker 1: a gift card to Starbucks. Here's Justice Neil gorsicch.

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Speaker 2: It can mean something more than that. It can mean

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Speaker 2: a venal sin, It can mean a mortal sin. How

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Speaker 2: does somebody who accepts the cheesecake factory no a trip

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Speaker 2: to the cheesecake factory for nice treatment at the hospital,

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Speaker 2: for treating my child well in school, for an arrest made?

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Speaker 2: How does that person know whether that falls on the

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Speaker 2: what you call the wrongfulness side of the equation or not.

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Speaker 1: For the Justices, the question was whether the bribery law

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Speaker 1: covers gratuities paid after the fact or only covers bribes

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Speaker 1: before the fact, meaning a tit for town agreement. Joining

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Speaker 1: me to answer this question and others is business law

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Speaker 1: professor Eric Tally of Columbia Law School Law School Eric.

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Speaker 1: This case centers on the scope of eighteen USC. Six

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Speaker 1: sixty six, a federal bribery law which has been in

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Speaker 1: effect for a long time.

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Speaker 3: Oh yeah, this antibribery law has been around for a

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Speaker 3: long time. There have been very many prosecutions under it

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Speaker 3: and prior situations involving this that this has not been

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Speaker 3: an issue. So it's no or at least it hasn't been

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Speaker 3: thought to be at issue by the judges that are

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Speaker 3: hearing these cases. So this is in some ways kind

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Speaker 3: of a novel legal argument applied to a pretty old statue.

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Speaker 1: The law makes it a crime for certain state or

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Speaker 1: local officials to corruptly accept anything of value over five

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Speaker 1: thousand dollars. The word corruptly seemed to be a problem

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Speaker 1: for the justices.

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Speaker 3: Yes, and the key issue on the question of corruptly

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Speaker 3: seems to be, at least in part, circulating around a

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Speaker 3: question of timing, and a lot of the Q and

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Speaker 3: A during the oral argument was all about, you know,

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Speaker 3: the timing of a payment that, let's just say, for

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Speaker 3: argument's sake, exceeds five thousand dollars. But the hypotheticals that

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Speaker 3: were being bandied about involved situations like taking someone out

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Speaker 3: to dinner at the cheesecake factory. I don't know if

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Speaker 3: you've been to the cheesecake factory lately, but lately I've

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Speaker 3: never run up anything like a five one hundred dollars

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Speaker 3: bill of the cheesecake factory. So it wouldn't actually hit

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Speaker 3: that status tarror threshold.

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Speaker 1: Well, Kavanaugh said, you don't know if the concert tickets,

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Speaker 1: the game tickets, the gift card to Starbucks, whatever, where

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Speaker 1: is the line? So there's that vagueness. I mean, are

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Speaker 1: they really talking about a more than five thousand dollars

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Speaker 1: gift card to Starbucks?

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Speaker 3: Super odd? I mean, just so of my or brought

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Speaker 3: this up, but it ended up sort of, this question

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Speaker 3: of corruptly ended up floating around in its own mist right,

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Speaker 3: independent of the dollar amount. Look, a lot of times

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Speaker 3: in these situations there will be either inside the statute

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Speaker 3: or kind of a reasonable construction of statute, a judge

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Speaker 3: will come in and say, listen, we're going to impose

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Speaker 3: a you know, it's sometimes called a materiality threshold or

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Speaker 3: a materiality test on some sort of suspect payment. And

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Speaker 3: the definition of materiality is itself. It's a little foggy.

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Speaker 3: It usually circulates around and you know what a reasonable

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Speaker 3: person think, this is a big payment that would change

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Speaker 3: someone's judgment. But that has worked all over the place

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Speaker 3: and all types of financial crimes and financial civil actions.

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Speaker 3: Materiality is a very very common workhorse. That was oddly,

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Speaker 3: it wasn't quite absent, but it seemed to be suppressed

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Speaker 3: pretty far down the list in the oral argument.

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Speaker 1: Was there a division between the liberal and the conservatives, because,

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Speaker 1: I know, Brett Kavanaugh at one point said that he

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Speaker 1: was concerned about ensnaring the nineteen million state and local

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Speaker 1: officials who are subject to the law, and then Alena

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Speaker 1: Kagan chimed in that includes employees of public hospitals and universities.

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Speaker 1: Was there a split ideological Well.

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Speaker 3: Yeah, maybe, or maybe not. Like usually you would think

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Speaker 3: that Kagan is, you know, sort of coming down on

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Speaker 3: plausibly different sides than Kavani is, though they're both a

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Speaker 3: little bit more centrist in the approach that they have.

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Speaker 3: You know, Atlanta Kagan put a hypothetical forward about providing

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Speaker 3: some life saving you know, a university hospital deciding to

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Speaker 3: provide some life saving operation or service to a billionaire

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Speaker 3: in the hopes that they would later get a big

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Speaker 3: charitable donation to the university. Wouldn't that be a problem.

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Speaker 3: So that much of the oral argument seems to devolve

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Speaker 3: into like kind of a non stop set of hypotheticals,

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Speaker 3: each somewhat more extraordinary than the others. And you know,

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Speaker 3: that kind of is where the two lawyers had to go. Now,

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Speaker 3: I think the lawyer for mister Snyder was quite happy

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Speaker 3: to go there, because the entire theory on the case

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Speaker 3: is it's just impossible to draw lines in this type

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Speaker 3: of a situation. And the government's attorneys pretty much had

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Speaker 3: to say, now, line drawing is hard, but it's always hard,

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Speaker 3: and the government's going to only, you know, bring these

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Speaker 3: cases when it feels like it's a good case that's

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Speaker 3: consistent with you know, public policy associated with the anti

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Speaker 3: bribery Statute. But that itself, you know, at least to

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Speaker 3: some judges and maybe to some observers, is a type

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Speaker 3: of assurance that's really hard to check later on. And

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Speaker 3: so you know, I think, you know, the court is

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Speaker 3: probably going to have to be forced into some sort

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Speaker 3: of a line drawing exercise here. The big issue that

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Speaker 3: was brought up in the case was in this particular scenario,

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Speaker 3: and even Kavanaugh said the facts were really good for

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Speaker 3: the government prosecutors. In this case, a mister Snyder had

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Speaker 3: had allegedly sort of rigged a contract bidding process when

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Speaker 3: he was mayor of Portage, Indiana, and the company that

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Speaker 3: won that bidding process he had been in consistent contact with,

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Speaker 3: and then pretty shortly after the contract was awarded to them,

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Speaker 3: they handed over a thirteen thousand dollars check, ostensibly for

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Speaker 3: consulting services to be provided in the future. And so

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Speaker 3: the line drawing exercise between his administration of the bidding

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Speaker 3: process and the thirteen thousand dollars check seems pretty direct.

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Speaker 3: But the point that his attorneys were making, they were

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Speaker 3: making quite vehemently at the court, is that, well, no,

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Speaker 3: this would have to be payments that are made before

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Speaker 3: the favor is granted and not after. And this came afterwards.

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Speaker 3: And there are too many hypothetical situations that would lead

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Speaker 3: us on lawyers like to talk about slippery slopes to hell,

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Speaker 3: and this was one, and that's what caused us to

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Speaker 3: go into the dinner out of gratitude for your high

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Speaker 3: school English teacher at the cheesecake factories. And is that

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Speaker 3: a bribe.

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Speaker 1: So the government's attorney suggested that the government typically wouldn't

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Speaker 1: prosecute fringe cases, but Chief Justice Roberts noted that in

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Speaker 1: recent cases, the Court has been skeptical of prosecutors trust

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Speaker 1: us arguments. We've had several cases where we've made the

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Speaker 1: very clear point that we don't rely on the good

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Speaker 1: faith of the prosecutors in deciding cases like this, And

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Speaker 1: that sort of came up in the argument for the

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Speaker 1: January sixth obstruction charge, where the Solicitor General was arguing

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Speaker 1: about how prosecutors would charge under that statute and they

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Speaker 1: would require all these different elements. What are the justices

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Speaker 1: afraid of here?

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Speaker 3: Well, I think there is a justified caution or skepticism

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Speaker 3: about statutory authorizations that give prosecutors too much of a

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Speaker 3: blank check and what they're going to go forward on

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Speaker 3: and charge people with. If the check is too much

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Speaker 3: of a blank check, then it's not inconceivable that political

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Speaker 3: calculations may end up either entering or being perceived to

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Speaker 3: have entered into a prosecutor's decision about whom to go

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Speaker 3: after and whom to leave alone. And so I think

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Speaker 3: that that's part of what the Court has been trying

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Speaker 3: to grapple with and you know, in fairness, there have

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Speaker 3: been several high profile cases involving various types of applications

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Speaker 3: of this and other anti bribery or anti corruption statutes

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Speaker 3: in which politics is pretty hard to ignore. There was

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Speaker 3: a twenty twenty case that involved the infamous Bridgegate scenario

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Speaker 3: in which Chris Christy was alleged to have had his

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Speaker 3: subordinates closed down the GW Bridge in order to punish

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Speaker 3: his political foes. And then the prosecution was brought at

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Speaker 3: least allegedly for political reasons, sort of anti Chris Christy,

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Speaker 3: anti Republican reasons, and the Supreme Court ended up actually

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Speaker 3: reversing that conviction, but on kind of weird technical grounds

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Speaker 3: about what was motivating the these operatives. So they sort

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Speaker 3: of found kind of maybe even unrelated fault reasons to

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Speaker 3: reverse in some of these cases. And you know that

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Speaker 3: maybe what is being put forward here this kind of

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Speaker 3: idea that well, if the payment happens after the political

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Speaker 3: favor is given, then that can't possibly be corruption. That's

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Speaker 3: a nice bright line rule, you know, as the government

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Speaker 3: lawyers were bringing up, probably correctly, is that if if

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Speaker 3: you established that as a bright line rule that will

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Speaker 3: be kind of a gold embossed invitation for how you

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Speaker 3: should structure corruption payments in the future. Right that, you know,

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Speaker 3: you always have the political actor go first, wait some

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Speaker 3: you know, requisite short amount of time, and then the

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Speaker 3: payment comes second. And you know, in some ways, the

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Speaker 3: ease with which one could engineer around that type of

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Speaker 3: a definition, I think it's going to make it difficult

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Speaker 3: for a majority of the judges to ignore that as

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Speaker 3: a kind of an obvious sort of response from the

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Speaker 3: other side.

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Speaker 1: The Supreme Court over the years has made it harder

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Speaker 1: and harder to prosecute politicians and other public officials for corruption,

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Speaker 1: starting in twenty sixteen.

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Speaker 3: Right, Yeah, the skepticism goes at least back to a

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Speaker 3: twenty sixteen case, and there have been several others, both

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Speaker 3: at the federal level and the state level, and so

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Speaker 3: there is on some level a little bit of a

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Speaker 3: I guess it's sort of a trend here where the

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Speaker 3: judges have become, i don't know, increasingly worried about the

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Speaker 3: possibility that these antibribery or anti corruption statutes are being

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Speaker 3: used for political reasons, and therefore, you know, they're trying

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Speaker 3: to carve back on them you know, I guess another

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Speaker 3: factor of this is sort of almost a meta factor June,

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Speaker 3: which is that one of the bodies of the federal

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Speaker 3: government that has come under immense scrutiny recently is the

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Speaker 3: Supreme Court itself for whether there are you know, friends

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Speaker 3: of justices of the Supreme Court who bestow all kinds

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Speaker 3: of valuable gifts on them out of friendship or for

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Speaker 3: people they care about, and whether that itself is something

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Speaker 3: that should trigger at least suspicion, if not considerable hand

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Speaker 3: ringing amongst people who are trying to regularly court. There's

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Speaker 3: big separation of powers issues, and the Supreme Court itself

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Speaker 3: basically decided to promulgate its own ethics guideline. But a

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Speaker 3: lot of people think it's somewhat toothless. It is not

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Speaker 3: a subtle fact that Justice Thomas, who's been one of

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Speaker 3: the people who's been at the center of this Maelstrom,

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Speaker 3: decided not to even participate in the oral argument, but

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Speaker 3: he is going to participate in the judgment through briefs

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Speaker 3: and through reading the transcript. That was sort of an

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Speaker 3: odd decision that didn't really have much of an explanation. So,

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Speaker 3: you know, I think all aspects of this are in

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Speaker 3: some ways delicate, and I think the fact that the

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Speaker 3: Supreme Court itself has gotten dragged a little bit into

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Speaker 3: its own kerfuffles around when are expressions of gratitude that

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Speaker 3: may have significant monetary value, when of the appropriate and

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Speaker 3: when do they trigger considerations and concerns about corruption and bribery?

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Speaker 1: Coming up next on the Bloomberg Law Show, I'll continue

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Speaker 1: this conference as with Professor Eric Tally of Columbia Law School.

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Speaker 1: How might the Justice's rule in this case? And Tesla's

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Speaker 1: shareholders will be voting on that Elon Musk pay package

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Speaker 1: that was thrown out by a Delaware court. This is Bloomberg.

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Speaker 1: The Supreme Court seemed skeptical of another public corruption law.

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Speaker 1: The Justice has appeared likely to side with a former

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Speaker 1: Indiana mayor convicted of receiving a thirteen thousand dollars bribe

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Speaker 1: from a trucking company after it was awarded city contracts.

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Speaker 1: I've been talking to Professor Eric Tally of Columbia Law School,

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Speaker 1: and Eric, these public corruption cases are hard to prosecute,

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Speaker 1: aren't they. You know, public officials and these kind of bribes,

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Speaker 1: they don't leave notes or emails saying thanks so much

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Speaker 1: for that. I was happy to.

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Speaker 3: Help you out. Yet typically they don't. There have been

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Speaker 3: some cases in which, you know that have larga been

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Speaker 3: overturned that sort of said, well, you have to have

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Speaker 3: a written contract on bribery. I think everyone realizes that

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Speaker 3: that's an easy one to engineer your way around. So

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Speaker 3: you have to demonstrate either a conversation or a set

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Speaker 3: of conversations that establishes this understanding, or a set of

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Speaker 3: patterns and practices of behavior whose only reasonable construction or

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Speaker 3: interpretation would be Yeah, these folks are acting as though

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Speaker 3: they are in a quid pro quo that they are

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Speaker 3: recognizing through either their communicative acts or hard to misinterpret actions,

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Speaker 3: and that makes it tough. Right, everyone is on notice

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Speaker 3: that this is an issue in involving any public official.

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Speaker 2: You know.

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Speaker 3: The possible irony about this case is if the court

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Speaker 3: decides to go with this timing argument. I think it's unlikely,

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Speaker 3: but they might. Then in fact, it sort of sets

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Speaker 3: up a formula in which the payment just gets made

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Speaker 3: after the fact, and it's possible that people will just

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Speaker 3: be much more upfront about it now that they know

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Speaker 3: they've got a safe harbor, because they're not gonna We're

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Speaker 3: gonna wait, you know, we're gonna set the alarm clock

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Speaker 3: after the political favor and just wait for the payment

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Speaker 3: until it's seemed to sit with it the Supreme Court process.

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Speaker 3: That's one of the reasons why I doubt they're going

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Speaker 3: to go in that direction. It's it's not rocket science

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Speaker 3: to predict that that would be a response to this

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Speaker 3: kind of bright line rule that mister Snyder's lawyers were

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Speaker 3: asking for.

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Speaker 1: What other way could they go considering their concerns about

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Speaker 1: the Starbucks cards.

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Speaker 3: Yeah, I think that most of the absurd situations involved

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Speaker 3: little perks that are kind of pocket change type perks,

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Speaker 3: and that once things got large, including the five thousand

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Speaker 3: dollars trigger in this situation, then that would be large

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Speaker 3: enough to trigger not only the explicit trigger, but also

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Speaker 3: a judicial interpretation that yes, this is large enough that

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Speaker 3: it could affect someone's judgment. And that's one of the

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Speaker 3: reasons why I feel like the Court may well end

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Speaker 3: up borrowing from a half dozen, if not more than

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Speaker 3: a dozen other areas of you know, financial fraud and

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Speaker 3: white collar crime that all sort of turns on materiality. So,

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Speaker 3: for instance, if I decide I'm going to trade on

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Speaker 3: inside information because I've gotten some kind of an insider

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Speaker 3: tip that I'm not really authorized to trade on, but

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Speaker 3: I trade one share and I make a buck seventy five,

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Speaker 3: that may not be prosecuted. Or if the nature of

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Speaker 3: the information I've gotten is just not probabilistically as helpful

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Speaker 3: as it might otherwise, be sure, it's inside information, but

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Speaker 3: it's not material enough to matter, And that may end

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Speaker 3: up being a helpful lever for the Supreme Court when

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Speaker 3: they try to decide this case. If they don't go

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Speaker 3: with the timing part, they're going to have to have

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Speaker 3: some sort of a cutoff, and a materiality cutoff is

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Speaker 3: not a crazy place to put it. That's why you

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Speaker 3: see it so many other areas of law.

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Speaker 1: Speaking of a buck seventy five, what's happening with Elon

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Speaker 1: Musk and his Tesla pay package that was fifty six

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Speaker 1: billion dollars.

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Speaker 3: Well, our friend mister Musk is definitely added again. It's

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Speaker 3: not surprising that he has, you know, you know, basically

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Speaker 3: been planning a formal response to his you know, pretty

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Speaker 3: significant loss in the Delaware Chancery Court in January of

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Speaker 3: twenty twenty four invalidating his at the time, fifty five

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Speaker 3: fifty six billion dollar compensation contract. I think a lot

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Speaker 3: of people were sort of betting on one of two

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Speaker 3: things to happen. One possibility is that he would, you know,

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Speaker 3: wait for a final judgment and appeal, and there's every

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Speaker 3: indication that he intends to do that. But another possibility

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Speaker 3: is that, you know, having had his compensation contract thrown

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Speaker 3: out by the judge because of a defective process by

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Speaker 3: which it was approved both the board level and the shareholders,

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Speaker 3: they've decided in a public filing they made the other

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Speaker 3: day to go out to the shareholders and ask them

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Speaker 3: to quote ratify unquote his twenty eighteen package. And they've

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Speaker 3: done so in kind of a clever way, but it

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Speaker 3: effectively is trying to fix one of the infirmities in

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Speaker 3: the in the that the package got approved. They're not

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Speaker 3: really redoing anything at the board level, but they are

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Speaker 3: going out to get a shareholder approval this time with

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Speaker 3: full information because we've got a case out there and

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Speaker 3: there's a long, copious disclosure about what the judge found

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Speaker 3: in that case. And I think that they are hoping

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Speaker 3: that if they got a vote from their stockholders, they

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Speaker 3: could either go back and try to use that on

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Speaker 3: appeal or possibly say well, listen, we're just going to

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Speaker 3: award once again a big options award to mister Musk

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Speaker 3: because it's been authorized by the stockholders with their eyes

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Speaker 3: wide open. And so that is going out to the

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Speaker 3: to the stockholders of Tesla at the next annual meeting.

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Speaker 3: And they decided to include another thing, which is almost

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Speaker 3: a direct channel from one of Elon Musk's tweets after

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Speaker 3: the opinion saying, you know, we're going to reincorporate out

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Speaker 3: of Delaware and into Texas. Sure enough, that's another proposal

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Speaker 3: is being put in front of the shareholders to reincorporate

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Speaker 3: away from Delaware and into Texas with the thought, at

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Speaker 3: least this is what's in the proxy materials, is that

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Speaker 3: Texas is going to be a more friendly place and

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Speaker 3: more predictable place to know what's going on in terms

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Speaker 3: of corporate law and fiduciary duty lawsuits. Now, I will

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Speaker 3: tell you June that you know this, this kind of

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Speaker 3: you know, possibility has been floating around for months. A

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Speaker 3: lot of the you know, corporate law junkies that I

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Speaker 3: run around with have been, you know, I've been sort

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Speaker 3: of talking about this and these are folks that you know,

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Speaker 3: they've been teaching corporate law for decades, and one of

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Speaker 3: the things I always like to ask them is, quick,

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Speaker 3: name your five favorite Texas corporate law cases. And usually

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Speaker 3: people can get two, maybe three into that list, and

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Speaker 3: then they run out of it. The fact of the

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Speaker 3: matter is Texas really doesn't have that much of an

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Speaker 3: of a developed set of corporate law precedents, and the

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Speaker 3: ones that they do have often a seek guy from

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Speaker 3: guessware from Delaware. So it's kind of an odd situation

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Speaker 3: to make that statement to stockholders. Weirdly enough, there have

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Speaker 3: been a whole spate of cases in Delaware that in

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Speaker 3: which the judges seem to have been receptive to them,

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Speaker 3: in which a shareholder says the very act of putting

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Speaker 3: to the shareholders a vote to reincorporate itself can be

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Speaker 3: a conflicted at a financially conflicted transaction, and therefore should

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Speaker 3: be analyzed under exactly the same test that got used

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Speaker 3: to analyze Elon Musk's compensation contract. So there's a kind

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Speaker 3: of an interesting meta story here, which is that both

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Speaker 3: of these stockholder votes themselves might be thought of as

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Speaker 3: independent new actions that each of each of which could

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Speaker 3: be potentially challenged by stockholder litigation, and I have every

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Speaker 3: reason to think at some point they will.

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Speaker 1: And this is pretty aggressive and nervy even for him,

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Speaker 1: since he's laid off ten percent of Tesla's workforce.

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Speaker 3: Yeah, I mean, this is not the greatest time to

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Speaker 3: be sort of selling the narrative that Tesla can do

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Speaker 3: no wrong so long as Elon is at the helm, right,

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Speaker 3: that was a pretty saleable story two or three years ago.

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Speaker 3: And I think there were a lot more of the

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Speaker 3: I don't know what to call them, the Elon stands

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Speaker 3: that were basically going to, you know, back him under

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Speaker 3: any circumstances. There are still many of those out there,

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Speaker 3: and many of them hold Tesla shares. But I think

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Speaker 3: a lot of folks are looking at their portfolio and say, well,

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Speaker 3: I went and really overweight in Tesla because I believed

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Speaker 3: in Elon Musk and I guess I still do. But

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Speaker 3: these these shares are not doing as well. And maybe

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Speaker 3: I can tell myself a story that the whole reason

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Speaker 3: they're not doing well is because, you know, Delaware is

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Speaker 3: treating mister Musk, you know, poorly. But the fact of

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Speaker 3: the matter is, if you're paying attention to the electronic

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Speaker 3: vehicle segment. You will realize that this is you know,

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Speaker 3: this is definitely at least a correction within that segment.

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Speaker 3: The you know, sales across the board have cooled, It's

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Speaker 3: not just Tesla or sales cooled. And as a result,

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Speaker 3: you know that you just can't expect this type of

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Speaker 3: high velocity growth trajectory going forward, even under Elon Musk.

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Speaker 3: I think some people might might come to the really

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Speaker 3: realization of and then at that point, if that's where

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Speaker 3: you get in terms of thinking through this, well, then

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Speaker 3: we've got a CEO who's you know, basically trying to

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Speaker 3: claim a big chunk of stock of the company by

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Speaker 3: basically resurrecting an options award that's been nullified, and wants

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Speaker 3: to move the entire company to Texas, where we don't

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Speaker 3: really even know what's going to be going on. If

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Speaker 3: you know, if if mister Musk, you know, decides to

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Speaker 3: start using Tesla as more of a personal piggybag, so

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Speaker 3: I could I could see some stockholders deciding that they've

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Speaker 3: lost at least a little bit of faith in the

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Speaker 3: Church of Elon Musk and and you know, deciding that

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Speaker 3: they might want to at least play the field a

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Speaker 3: little bit try to figure out, you know, whether they

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Speaker 3: want to support one or both or neither of these

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Speaker 3: proposals that is going to be going before stockholders. One

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Speaker 3: of the things that's interesting about this June is that

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Speaker 3: a lot of times, you know, the stocks of companies

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Speaker 3: are sometimes owned by big institutional investors and hedge funds,

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Speaker 3: but then there are a lot of retail investors that

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Speaker 3: you know, just own own stock because they're infatuated with

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Speaker 3: the company, or it's part of some you know, other

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Speaker 3: sort of you know, highly highly tailored investment plan. Test

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Speaker 3: had a lot of retail investors that people that just

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Speaker 3: just individual rando people who just own the stock, and

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Speaker 3: those are some of the hardest people to predict in

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Speaker 3: terms of what their proclivities are going to do. So

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Speaker 3: so you know that I can imagine that there may

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Speaker 3: well be an activist who comes out and says, we

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Speaker 3: got to vote against these things. I'm gonna you know,

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Speaker 3: I'm going to wage a contest against mister Musk. If

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Speaker 3: that happens, it actually then then you know, if this

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Speaker 3: becomes a contested vote, then it's not as easy for

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Speaker 3: Musk and Tesla to collect votes from all these retail stockholders.

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Speaker 3: You can't do it with an automated approach anymore. That

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Speaker 3: you really kind of have to go through the formal

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Speaker 3: rules of engagement. So I think it might be it'll

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Speaker 3: be really interesting to see if there is a stockholder

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Speaker 3: out there who is willing to come forward and say, yeah,

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Speaker 3: I don't think this is good, and I'm going to

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Speaker 3: actually run a you know, a contested vote process to

436
00:24:29,119 --> 00:24:32,600
Speaker 3: basically get this thing defeated or at least one of

437
00:24:32,640 --> 00:24:35,800
Speaker 3: these two proposals defeated. You know, still early days and

438
00:24:35,840 --> 00:24:40,200
Speaker 3: there's still some time to do that, but that could

439
00:24:40,280 --> 00:24:42,600
Speaker 3: turn out to be a sort of an interesting.

440
00:24:42,240 --> 00:24:46,120
Speaker 1: Moment out of many interesting moments. Thanks so much, Eric.

441
00:24:46,280 --> 00:24:50,400
Speaker 1: That's Professor Eric Talley of Columbia Law School. Four years ago,

442
00:24:50,680 --> 00:24:53,760
Speaker 1: only the state of Arkansas had a ban on providing

443
00:24:53,920 --> 00:24:58,600
Speaker 1: gender transition care for minors. Today, nearly half the states

444
00:24:58,640 --> 00:25:02,000
Speaker 1: haven't acted such ban, and the Supreme Court has stepped

445
00:25:02,000 --> 00:25:06,080
Speaker 1: into the culture war battle over transgender rights by allowing

446
00:25:06,160 --> 00:25:10,240
Speaker 1: Idaho to enforce its ban on providing gender affirming care

447
00:25:10,320 --> 00:25:14,560
Speaker 1: for minors while litigation plays out. It was a six

448
00:25:14,640 --> 00:25:18,080
Speaker 1: to three vote, with the conservative justices in the majority.

449
00:25:18,200 --> 00:25:21,320
Speaker 1: And the liberal justices in the minority. Joining me is

450
00:25:21,359 --> 00:25:25,639
Speaker 1: healthcare attorney Harry Nelson of Nelson Hardiman Harry. Four years ago,

451
00:25:25,960 --> 00:25:29,119
Speaker 1: just one state had this kind of a ban on

452
00:25:29,400 --> 00:25:34,080
Speaker 1: gender affirming care. Now twenty three states do. That seems

453
00:25:34,119 --> 00:25:35,639
Speaker 1: remarkably fast.

454
00:25:35,800 --> 00:25:40,800
Speaker 4: I think this issue of gender affirming care has definitely

455
00:25:40,880 --> 00:25:45,879
Speaker 4: been an activating issue, even say, an electrifying issue for

456
00:25:46,119 --> 00:25:49,480
Speaker 4: voters for conservatives and you know, for voters on the right.

457
00:25:49,640 --> 00:25:52,240
Speaker 4: I think that we've seen this issue as kind of

458
00:25:52,280 --> 00:25:56,880
Speaker 4: an extension of this red blue divide and clearly something

459
00:25:56,920 --> 00:25:59,400
Speaker 4: that is troubling a lot of people. And so yeah,

460
00:25:59,440 --> 00:26:04,120
Speaker 4: it's definitely clearly gained them a more conservative approach.

461
00:26:05,440 --> 00:26:10,320
Speaker 1: Are there generally accepted or approved clinical guidelines for treating

462
00:26:11,040 --> 00:26:13,760
Speaker 1: teenagers or youth with gender dysphoria.

463
00:26:14,400 --> 00:26:17,919
Speaker 4: So we've seen a significant shift going on around the

464
00:26:17,960 --> 00:26:22,760
Speaker 4: world right originally to the whole you know, position in

465
00:26:22,800 --> 00:26:26,520
Speaker 4: favor of gender firming care and essentially supporting you know,

466
00:26:26,760 --> 00:26:28,800
Speaker 4: children and their parents at the year and younger ages

467
00:26:28,920 --> 00:26:33,560
Speaker 4: to start receiving whether it's puberty blockers or other forms

468
00:26:33,560 --> 00:26:35,679
Speaker 4: of care. And we do see that the sort of

469
00:26:35,800 --> 00:26:39,480
Speaker 4: research that's out there has raised questions we saw Just

470
00:26:39,640 --> 00:26:43,280
Speaker 4: last month in England, the National Health Service said that

471
00:26:43,320 --> 00:26:46,440
Speaker 4: it would stop prescribing puberty blockers to kids and that

472
00:26:46,640 --> 00:26:48,879
Speaker 4: all gender firming care needs to be evidence based and

473
00:26:48,880 --> 00:26:51,200
Speaker 4: based on extra clinical opinions. So there definitely are two

474
00:26:51,880 --> 00:26:55,360
Speaker 4: opposing camps, one sort of saying, wait, we don't have

475
00:26:55,560 --> 00:26:59,600
Speaker 4: enough evidence to support this sort of transformative, radical care,

476
00:27:00,040 --> 00:27:04,040
Speaker 4: and the other, you know, advancing civil liberty argument and

477
00:27:04,080 --> 00:27:06,800
Speaker 4: an argument official harm to these children if they don't

478
00:27:06,800 --> 00:27:09,360
Speaker 4: get gender or firming care right, that it tots them

479
00:27:09,400 --> 00:27:13,200
Speaker 4: up for all kinds of mental health risks, for potential suicidality.

480
00:27:13,680 --> 00:27:16,800
Speaker 4: So we have these really radically opposed camps and not

481
00:27:16,960 --> 00:27:19,400
Speaker 4: a great body of evidence. Frankly on either side.

482
00:27:19,600 --> 00:27:23,919
Speaker 1: Idaho's law seems pretty broad. It bars more than twenty treatments,

483
00:27:24,000 --> 00:27:28,320
Speaker 1: including puberty blockers, and doctors and pharmacists who violate the

484
00:27:28,400 --> 00:27:30,760
Speaker 1: law and face up to ten years in prison. Is

485
00:27:30,800 --> 00:27:33,480
Speaker 1: that par for the course for these laws or is

486
00:27:33,520 --> 00:27:34,680
Speaker 1: it broader than usual.

487
00:27:35,000 --> 00:27:37,800
Speaker 4: It's definitely in line with some of the other states

488
00:27:37,880 --> 00:27:40,680
Speaker 4: of the stronger laws, I mean definitely. The approach of

489
00:27:40,760 --> 00:27:45,600
Speaker 4: using criminal sanctions against physicians and pharmacists is in I

490
00:27:45,680 --> 00:27:47,879
Speaker 4: believe most of the laws of these states that have

491
00:27:47,960 --> 00:27:48,640
Speaker 4: banned this care.

492
00:27:49,480 --> 00:27:53,919
Speaker 1: This is a narrow question that's before the Supreme Court

493
00:27:54,040 --> 00:27:57,520
Speaker 1: about temporary injunctions.

494
00:27:56,880 --> 00:27:59,760
Speaker 4: Right, Yeah, the Supreme Court essentially, you know, allowed this

495
00:27:59,840 --> 00:28:03,680
Speaker 4: law to go into effect. It didn't decide anything with finale.

496
00:28:03,760 --> 00:28:06,760
Speaker 4: It just said that Idaho was entitled to enforce this

497
00:28:06,920 --> 00:28:10,040
Speaker 4: ban on gender firming care for minors except for the.

498
00:28:10,240 --> 00:28:14,800
Speaker 1: Two petitioners here. But the ACLU, which represents them, said

499
00:28:14,880 --> 00:28:19,640
Speaker 1: that this won't protect the teenagers because medical providers won't

500
00:28:19,760 --> 00:28:23,560
Speaker 1: risk triggering a law that could put them behind bars

501
00:28:23,600 --> 00:28:26,240
Speaker 1: for a decade, and the teens would have to give

502
00:28:26,320 --> 00:28:29,920
Speaker 1: up their anonymity, So it may not even help the

503
00:28:30,040 --> 00:28:31,360
Speaker 1: two who are petitioning.

504
00:28:32,080 --> 00:28:34,280
Speaker 4: Right. By the way, I should say that the families

505
00:28:34,320 --> 00:28:36,719
Speaker 4: here and the teens have an option of traveling out

506
00:28:36,760 --> 00:28:38,720
Speaker 4: of state. Nobody, nobody can stop them from traveling to

507
00:28:38,760 --> 00:28:42,040
Speaker 4: a jurisdiction that is allowing this kind of care. So

508
00:28:42,400 --> 00:28:43,760
Speaker 4: what's at stake here is whether you can get this

509
00:28:43,840 --> 00:28:46,120
Speaker 4: care in Idaho, which is a problem, but there still

510
00:28:46,160 --> 00:28:48,640
Speaker 4: is an option to travel and get the care elsewhere.

511
00:28:48,880 --> 00:28:50,840
Speaker 1: Let's just say you have a family who can't afford

512
00:28:50,880 --> 00:28:54,360
Speaker 1: to go outside Idaho for this kind of care. If

513
00:28:54,400 --> 00:28:57,720
Speaker 1: the band goes into effect young people who are using

514
00:28:57,880 --> 00:29:01,200
Speaker 1: the puberty blockers, let's say they have to stop, then

515
00:29:01,280 --> 00:29:04,400
Speaker 1: puberty begins, So the question is sort of moot.

516
00:29:04,480 --> 00:29:06,760
Speaker 4: Then it certainly means that they're going to go through

517
00:29:06,760 --> 00:29:09,960
Speaker 4: physical changes that are going to make them much more,

518
00:29:10,120 --> 00:29:12,800
Speaker 4: you know, strongly appearing like males. Right Like, they're going

519
00:29:12,880 --> 00:29:17,000
Speaker 4: to be bigger and thicker and have a male frame,

520
00:29:17,080 --> 00:29:19,520
Speaker 4: male facial features. So it won't prevent them in the

521
00:29:19,560 --> 00:29:22,240
Speaker 4: future from getting gender firming care, but it will make

522
00:29:22,320 --> 00:29:24,880
Speaker 4: it harder for them to sort of have a transition

523
00:29:25,000 --> 00:29:27,320
Speaker 4: that's less noticeable. By the way, I think they're in

524
00:29:27,360 --> 00:29:31,000
Speaker 4: addition to puberty blockets, I believe these two trans girls,

525
00:29:31,040 --> 00:29:35,000
Speaker 4: who the stage is calling adolescent boys, were also receiving estrogen.

526
00:29:35,080 --> 00:29:37,760
Speaker 4: So it's really both drugs in combination that we're at

527
00:29:37,800 --> 00:29:38,360
Speaker 4: issue here.

528
00:29:38,840 --> 00:29:43,240
Speaker 1: So the Justice isn't the majority cast this less about

529
00:29:43,280 --> 00:29:46,719
Speaker 1: the substance of the law than the reach of the

530
00:29:46,760 --> 00:29:51,440
Speaker 1: district judges. Injunction Justice Neil Gorsuch and Brett Kavanaugh, there

531
00:29:51,440 --> 00:29:55,680
Speaker 1: were two thirteen page opinions. They said that the High

532
00:29:55,680 --> 00:29:58,320
Speaker 1: Court was trying to tackle what has become a nettlesome

533
00:29:58,360 --> 00:30:03,080
Speaker 1: issue nationwide and statewide injunctions issued by a single judge

534
00:30:03,120 --> 00:30:07,440
Speaker 1: on a major controversy. But they've been complaining about this

535
00:30:07,840 --> 00:30:11,920
Speaker 1: for years. Wow. Is it striking that they chose this

536
00:30:12,160 --> 00:30:14,960
Speaker 1: case to, you know, draw a line in the sand.

537
00:30:15,480 --> 00:30:17,760
Speaker 4: It's a good question. I think what was striking about

538
00:30:17,800 --> 00:30:20,880
Speaker 4: this case was it was a narrow jurisdictional question of,

539
00:30:21,120 --> 00:30:24,360
Speaker 4: you know, what the power of Idaho was to put

540
00:30:24,360 --> 00:30:26,480
Speaker 4: the law into effect, and what the power of the

541
00:30:26,520 --> 00:30:29,360
Speaker 4: lower courts, the district court here is that, you know,

542
00:30:29,440 --> 00:30:32,640
Speaker 4: found that these adolescents should continue receiving care to avoid

543
00:30:32,880 --> 00:30:36,200
Speaker 4: severe psychological distress. It's possible that it was practical in

544
00:30:36,240 --> 00:30:39,120
Speaker 4: the sense that it was a narrow of jurisdictional issue

545
00:30:39,120 --> 00:30:41,600
Speaker 4: of what the rights of the Idaho courts versus the

546
00:30:41,600 --> 00:30:46,120
Speaker 4: Idaho legislature was, and not forcing the Supreme Court to

547
00:30:46,160 --> 00:30:50,760
Speaker 4: go through the messy and controversial question of actually addressing

548
00:30:51,160 --> 00:30:54,880
Speaker 4: the broader issue of the rights of parents, the rights

549
00:30:54,880 --> 00:30:58,320
Speaker 4: of children, and this whole messy, sticky subject of how

550
00:30:58,320 --> 00:31:01,920
Speaker 4: far we let children go what ages in receiving gender

551
00:31:01,960 --> 00:31:02,560
Speaker 4: affirming care.

552
00:31:03,120 --> 00:31:06,720
Speaker 1: So Justice Katanji Brown Jackson running for herself, and Justice

553
00:31:06,760 --> 00:31:10,360
Speaker 1: Sonia Sotomayor said this Court is not compelled to rise

554
00:31:10,400 --> 00:31:13,400
Speaker 1: and respond every time an applicant rushes to us with

555
00:31:13,440 --> 00:31:16,880
Speaker 1: an alleged emergency, and it's especially important for us to

556
00:31:16,920 --> 00:31:22,400
Speaker 1: refrain from doing so in novel, highly charged and unsettled circumstances.

557
00:31:23,000 --> 00:31:26,320
Speaker 1: I mean that the Supreme Court could have just ignored this, right, Yeah, you.

558
00:31:26,560 --> 00:31:30,320
Speaker 4: Really have two really profoundly different positions about what was

559
00:31:30,360 --> 00:31:34,080
Speaker 4: protecting children and justice. Katangi Brown is definitely, you know,

560
00:31:34,320 --> 00:31:37,360
Speaker 4: making a fair point that every time the Supreme Court

561
00:31:37,480 --> 00:31:39,840
Speaker 4: takes one of these opportunities and weighs in, it is

562
00:31:39,920 --> 00:31:44,680
Speaker 4: taking an aggressive position. It certainly would have been the

563
00:31:44,960 --> 00:31:48,160
Speaker 4: more judicially conservative. It would have shown more restraints that

564
00:31:48,280 --> 00:31:50,719
Speaker 4: just allow the lower court ruling to stand and not

565
00:31:51,280 --> 00:31:52,120
Speaker 4: get involved here.

566
00:31:52,640 --> 00:31:56,800
Speaker 1: So this straightened me out on one thing. Is this

567
00:31:58,200 --> 00:32:01,200
Speaker 1: I mean, is this before the Ninth Court of Appeals.

568
00:32:01,240 --> 00:32:03,640
Speaker 1: Yet where does the case stand in the lower courts?

569
00:32:04,400 --> 00:32:07,640
Speaker 4: The lower court ruling was the ruling that basically had

570
00:32:07,840 --> 00:32:10,120
Speaker 4: imposed a stay, meaning that the law wasn't going into

571
00:32:10,160 --> 00:32:13,800
Speaker 4: a force because of the risk of your psychological distress,

572
00:32:14,040 --> 00:32:16,840
Speaker 4: and the Ninth Circuit had affirmed. So this was essentially

573
00:32:17,280 --> 00:32:20,160
Speaker 4: a reversal of the Ninth Circuit and the lower court

574
00:32:20,280 --> 00:32:22,280
Speaker 4: in terms of allowing this slow to go into effect.

575
00:32:22,800 --> 00:32:27,240
Speaker 1: Praising the court's decision, Idaho's attorney general said the law

576
00:32:27,280 --> 00:32:30,640
Speaker 1: ensurer's miners will not be subjected to life altering drugs

577
00:32:30,640 --> 00:32:34,560
Speaker 1: and procedures. Quote. Denying the basic truth that boys and

578
00:32:34,640 --> 00:32:38,160
Speaker 1: girls are biologically different hurts our kids.

579
00:32:38,600 --> 00:32:44,000
Speaker 4: You know, you're looking straight obviously, you know he's expressing

580
00:32:44,240 --> 00:32:49,200
Speaker 4: the view that children are being exposed in American schools

581
00:32:49,240 --> 00:32:51,640
Speaker 4: and just in our culture at this moment to a

582
00:32:51,640 --> 00:32:55,920
Speaker 4: suggestiveness of the fact that they are born in the

583
00:32:55,960 --> 00:32:58,520
Speaker 4: wrong body, or that they are a different gender than

584
00:32:58,560 --> 00:33:01,720
Speaker 4: the gender assigned to the biologically at perth. In a way,

585
00:33:01,920 --> 00:33:04,000
Speaker 4: it mirrors the abortion issue, and that we have like

586
00:33:04,120 --> 00:33:08,840
Speaker 4: deeply held fundamental beliefs about what it means to protect kids,

587
00:33:08,920 --> 00:33:12,040
Speaker 4: right it is protecting kids preventing them from being at

588
00:33:12,120 --> 00:33:16,560
Speaker 4: risk psychologically, or if tecting kids, preventing them from being

589
00:33:16,680 --> 00:33:21,000
Speaker 4: exposed to the possibility of exploring whether this is something

590
00:33:21,000 --> 00:33:23,960
Speaker 4: that's appropriate for them. Clearly, you know, what we've seen

591
00:33:24,040 --> 00:33:26,200
Speaker 4: is that on the right there's a growing body of

592
00:33:26,200 --> 00:33:29,760
Speaker 4: people concerned that our schools and just all of the

593
00:33:29,880 --> 00:33:33,440
Speaker 4: sort of messaging around kids is encouraging them to go

594
00:33:33,480 --> 00:33:36,200
Speaker 4: down this path. But obviously his view is going to

595
00:33:36,400 --> 00:33:38,520
Speaker 4: start representing half of the conversation.

596
00:33:39,440 --> 00:33:43,440
Speaker 1: Backing up your theory, there is the Christian nationalist legal

597
00:33:43,520 --> 00:33:47,880
Speaker 1: organization Aligance Defending Freedom jumped into this to represent the

598
00:33:47,920 --> 00:33:52,080
Speaker 1: state of Idaho, and they're the group that brought mif

599
00:33:52,120 --> 00:33:53,880
Speaker 1: of Bristom to the Supreme Court.

600
00:33:54,240 --> 00:33:57,800
Speaker 4: Yeah, these issues have really become sort of really adjacent

601
00:33:57,960 --> 00:34:01,800
Speaker 4: and related questions about, you know, the personal right of

602
00:34:01,880 --> 00:34:06,560
Speaker 4: both the people who are experiencing and asking gender firming

603
00:34:06,600 --> 00:34:11,600
Speaker 4: care and their parents versus these you know, traditional societal

604
00:34:11,960 --> 00:34:16,279
Speaker 4: expectations and definitely with a certain religious quality to them.

605
00:34:16,360 --> 00:34:19,759
Speaker 4: So I think this one personally is trigated because we

606
00:34:19,840 --> 00:34:24,080
Speaker 4: have competing camps that in Europe, in the UK in particular,

607
00:34:24,480 --> 00:34:28,000
Speaker 4: itching back on whether this is healthy and on the

608
00:34:28,000 --> 00:34:31,400
Speaker 4: fact that genderferming care can always be delivered earlier. What

609
00:34:31,400 --> 00:34:34,600
Speaker 4: we're really fighting about is under eighteen, how young can

610
00:34:34,920 --> 00:34:39,399
Speaker 4: we believe children and take their desire for gender ferming

611
00:34:39,440 --> 00:34:42,640
Speaker 4: care and their parents support for it to be controlling

612
00:34:42,680 --> 00:34:45,000
Speaker 4: of their decisions. I think these two questions are going

613
00:34:45,080 --> 00:34:48,080
Speaker 4: to continue to be going hand in hand, reflecting this

614
00:34:48,200 --> 00:34:51,440
Speaker 4: sort of way that the conversation is dominated by these

615
00:34:51,440 --> 00:34:54,480
Speaker 4: fundamental views of personal rights, healthcare.

616
00:34:54,880 --> 00:34:59,520
Speaker 1: And the justices are deliberating behind the scenes on a

617
00:34:59,560 --> 00:35:02,320
Speaker 1: set of a including one that's presented by the Biden

618
00:35:02,360 --> 00:35:06,400
Speaker 1: administration in a Tennessee case. They don't seem unwilling to

619
00:35:06,520 --> 00:35:11,520
Speaker 1: jump into culture war issues, but with the federal courts divided,

620
00:35:11,719 --> 00:35:14,680
Speaker 1: the lower federal courts, it seems like it's something they

621
00:35:15,280 --> 00:35:16,160
Speaker 1: should take up.

622
00:35:16,760 --> 00:35:20,520
Speaker 4: I would imagine that ultimately, you know, given the decision

623
00:35:20,600 --> 00:35:22,959
Speaker 4: in the Dabbs case said we're leaving this to the state.

624
00:35:23,120 --> 00:35:25,760
Speaker 4: We're not going to decide this issue at the federal level.

625
00:35:25,840 --> 00:35:28,319
Speaker 4: It's logical to think that the Supreme Court would sort

626
00:35:28,360 --> 00:35:31,719
Speaker 4: of align similarly and really leave this to the state.

627
00:35:31,960 --> 00:35:33,280
Speaker 4: But I think we're going to find.

628
00:35:33,080 --> 00:35:35,600
Speaker 1: Out in the next year or two that timing seems

629
00:35:35,640 --> 00:35:38,840
Speaker 1: just about right. Thanks so much, Harry. That's Harry Nelson

630
00:35:38,840 --> 00:35:41,440
Speaker 1: of Nelson Hardiman, And that's it for this edition of

631
00:35:41,440 --> 00:35:44,120
Speaker 1: the Bloomberg Law Show. Remember you can always get the

632
00:35:44,160 --> 00:35:47,399
Speaker 1: latest legal news on our Bloomberg Law Podcast. You can

633
00:35:47,440 --> 00:35:51,680
Speaker 1: find them on Apple Podcasts, Spotify, and at www dot

634
00:35:51,680 --> 00:35:55,880
Speaker 1: Bloomberg dot com, slash podcast Slash Law, and remember to

635
00:35:55,880 --> 00:35:58,960
Speaker 1: tune into the Bloomberg Law Show every weeknight at ten

636
00:35:59,000 --> 00:36:02,760
Speaker 1: pm Wall Street Time. I'm June Grosso and you're listening

637
00:36:02,880 --> 00:36:08,719
Speaker 1: to Bloomberg. Mhm