Speaker 1: This is Bloomberg Law with June Brusso from Bloomberg Radio.
Speaker 1: A jury of seven men and five women has been
Speaker 1: sworn in to hear Donald Trump's hush money case. One
Speaker 1: alternate juror has also been selected. That means five more
Speaker 1: alternates have to be selected to round out the panel
Speaker 1: that will decide the first ever criminal case against a
Speaker 1: former US president. Jury selection got off to a slow
Speaker 1: start this morning after two previously sworn in jurors were dismissed,
Speaker 1: one because she expressed doubts about her ability to be
Speaker 1: fair and impartial after some of her personal information had
Speaker 1: been made public, the second because prosecutors told the judge
Speaker 1: they had information that the man was arrested in the
Speaker 1: nineteen nineties for tearing down conservative political advertisements. Judge One
Speaker 1: Mreshan says he's hopeful the jury selection process will be
Speaker 1: wrapped up tomorrow and opening statements can take place on Monday.
Speaker 1: Turning down to legal news on the Supreme Court, the
Speaker 1: facts are undisputed. James Snyder, the former mayor of a
Speaker 1: Northwest Indiana town, received thirteen thousand dollars from a trucking
Speaker 1: company one month after was awarded city contracts worth more
Speaker 1: than one point one million dollars in a bidding process
Speaker 1: he oversaw. Snyder was convicted by a jury of bribery,
Speaker 1: and then convicted by a second jury in a retrial.
Speaker 1: But the Supreme Court, which has been having its own
Speaker 1: problems of late with unreported gifts to justices, seem to
Speaker 1: think that thirteen thousand dollars was like taking a teacher
Speaker 1: to the cheesecake factory as a thank you or buying
Speaker 1: a gift card to Starbucks. Here's Justice Neil gorsicch.
Speaker 2: It can mean something more than that. It can mean
Speaker 2: a venal sin, It can mean a mortal sin. How
Speaker 2: does somebody who accepts the cheesecake factory no a trip
Speaker 2: to the cheesecake factory for nice treatment at the hospital,
Speaker 2: for treating my child well in school, for an arrest made?
Speaker 2: How does that person know whether that falls on the
Speaker 2: what you call the wrongfulness side of the equation or not.
Speaker 1: For the Justices, the question was whether the bribery law
Speaker 1: covers gratuities paid after the fact or only covers bribes
Speaker 1: before the fact, meaning a tit for town agreement. Joining
Speaker 1: me to answer this question and others is business law
Speaker 1: professor Eric Tally of Columbia Law School Law School Eric.
Speaker 1: This case centers on the scope of eighteen USC. Six
Speaker 1: sixty six, a federal bribery law which has been in
Speaker 1: effect for a long time.
Speaker 3: Oh yeah, this antibribery law has been around for a
Speaker 3: long time. There have been very many prosecutions under it
Speaker 3: and prior situations involving this that this has not been
Speaker 3: an issue. So it's no or at least it hasn't been
Speaker 3: thought to be at issue by the judges that are
Speaker 3: hearing these cases. So this is in some ways kind
Speaker 3: of a novel legal argument applied to a pretty old statue.
Speaker 1: The law makes it a crime for certain state or
Speaker 1: local officials to corruptly accept anything of value over five
Speaker 1: thousand dollars. The word corruptly seemed to be a problem
Speaker 1: for the justices.
Speaker 3: Yes, and the key issue on the question of corruptly
Speaker 3: seems to be, at least in part, circulating around a
Speaker 3: question of timing, and a lot of the Q and
Speaker 3: A during the oral argument was all about, you know,
Speaker 3: the timing of a payment that, let's just say, for
Speaker 3: argument's sake, exceeds five thousand dollars. But the hypotheticals that
Speaker 3: were being bandied about involved situations like taking someone out
Speaker 3: to dinner at the cheesecake factory. I don't know if
Speaker 3: you've been to the cheesecake factory lately, but lately I've
Speaker 3: never run up anything like a five one hundred dollars
Speaker 3: bill of the cheesecake factory. So it wouldn't actually hit
Speaker 3: that status tarror threshold.
Speaker 1: Well, Kavanaugh said, you don't know if the concert tickets,
Speaker 1: the game tickets, the gift card to Starbucks, whatever, where
Speaker 1: is the line? So there's that vagueness. I mean, are
Speaker 1: they really talking about a more than five thousand dollars
Speaker 1: gift card to Starbucks?
Speaker 3: Super odd? I mean, just so of my or brought
Speaker 3: this up, but it ended up sort of, this question
Speaker 3: of corruptly ended up floating around in its own mist right,
Speaker 3: independent of the dollar amount. Look, a lot of times
Speaker 3: in these situations there will be either inside the statute
Speaker 3: or kind of a reasonable construction of statute, a judge
Speaker 3: will come in and say, listen, we're going to impose
Speaker 3: a you know, it's sometimes called a materiality threshold or
Speaker 3: a materiality test on some sort of suspect payment. And
Speaker 3: the definition of materiality is itself. It's a little foggy.
Speaker 3: It usually circulates around and you know what a reasonable
Speaker 3: person think, this is a big payment that would change
Speaker 3: someone's judgment. But that has worked all over the place
Speaker 3: and all types of financial crimes and financial civil actions.
Speaker 3: Materiality is a very very common workhorse. That was oddly,
Speaker 3: it wasn't quite absent, but it seemed to be suppressed
Speaker 3: pretty far down the list in the oral argument.
Speaker 1: Was there a division between the liberal and the conservatives, because,
Speaker 1: I know, Brett Kavanaugh at one point said that he
Speaker 1: was concerned about ensnaring the nineteen million state and local
Speaker 1: officials who are subject to the law, and then Alena
Speaker 1: Kagan chimed in that includes employees of public hospitals and universities.
Speaker 1: Was there a split ideological Well.
Speaker 3: Yeah, maybe, or maybe not. Like usually you would think
Speaker 3: that Kagan is, you know, sort of coming down on
Speaker 3: plausibly different sides than Kavani is, though they're both a
Speaker 3: little bit more centrist in the approach that they have.
Speaker 3: You know, Atlanta Kagan put a hypothetical forward about providing
Speaker 3: some life saving you know, a university hospital deciding to
Speaker 3: provide some life saving operation or service to a billionaire
Speaker 3: in the hopes that they would later get a big
Speaker 3: charitable donation to the university. Wouldn't that be a problem.
Speaker 3: So that much of the oral argument seems to devolve
Speaker 3: into like kind of a non stop set of hypotheticals,
Speaker 3: each somewhat more extraordinary than the others. And you know,
Speaker 3: that kind of is where the two lawyers had to go. Now,
Speaker 3: I think the lawyer for mister Snyder was quite happy
Speaker 3: to go there, because the entire theory on the case
Speaker 3: is it's just impossible to draw lines in this type
Speaker 3: of a situation. And the government's attorneys pretty much had
Speaker 3: to say, now, line drawing is hard, but it's always hard,
Speaker 3: and the government's going to only, you know, bring these
Speaker 3: cases when it feels like it's a good case that's
Speaker 3: consistent with you know, public policy associated with the anti
Speaker 3: bribery Statute. But that itself, you know, at least to
Speaker 3: some judges and maybe to some observers, is a type
Speaker 3: of assurance that's really hard to check later on. And
Speaker 3: so you know, I think, you know, the court is
Speaker 3: probably going to have to be forced into some sort
Speaker 3: of a line drawing exercise here. The big issue that
Speaker 3: was brought up in the case was in this particular scenario,
Speaker 3: and even Kavanaugh said the facts were really good for
Speaker 3: the government prosecutors. In this case, a mister Snyder had
Speaker 3: had allegedly sort of rigged a contract bidding process when
Speaker 3: he was mayor of Portage, Indiana, and the company that
Speaker 3: won that bidding process he had been in consistent contact with,
Speaker 3: and then pretty shortly after the contract was awarded to them,
Speaker 3: they handed over a thirteen thousand dollars check, ostensibly for
Speaker 3: consulting services to be provided in the future. And so
Speaker 3: the line drawing exercise between his administration of the bidding
Speaker 3: process and the thirteen thousand dollars check seems pretty direct.
Speaker 3: But the point that his attorneys were making, they were
Speaker 3: making quite vehemently at the court, is that, well, no,
Speaker 3: this would have to be payments that are made before
Speaker 3: the favor is granted and not after. And this came afterwards.
Speaker 3: And there are too many hypothetical situations that would lead
Speaker 3: us on lawyers like to talk about slippery slopes to hell,
Speaker 3: and this was one, and that's what caused us to
Speaker 3: go into the dinner out of gratitude for your high
Speaker 3: school English teacher at the cheesecake factories. And is that
Speaker 3: a bribe.
Speaker 1: So the government's attorney suggested that the government typically wouldn't
Speaker 1: prosecute fringe cases, but Chief Justice Roberts noted that in
Speaker 1: recent cases, the Court has been skeptical of prosecutors trust
Speaker 1: us arguments. We've had several cases where we've made the
Speaker 1: very clear point that we don't rely on the good
Speaker 1: faith of the prosecutors in deciding cases like this, And
Speaker 1: that sort of came up in the argument for the
Speaker 1: January sixth obstruction charge, where the Solicitor General was arguing
Speaker 1: about how prosecutors would charge under that statute and they
Speaker 1: would require all these different elements. What are the justices
Speaker 1: afraid of here?
Speaker 3: Well, I think there is a justified caution or skepticism
Speaker 3: about statutory authorizations that give prosecutors too much of a
Speaker 3: blank check and what they're going to go forward on
Speaker 3: and charge people with. If the check is too much
Speaker 3: of a blank check, then it's not inconceivable that political
Speaker 3: calculations may end up either entering or being perceived to
Speaker 3: have entered into a prosecutor's decision about whom to go
Speaker 3: after and whom to leave alone. And so I think
Speaker 3: that that's part of what the Court has been trying
Speaker 3: to grapple with and you know, in fairness, there have
Speaker 3: been several high profile cases involving various types of applications
Speaker 3: of this and other anti bribery or anti corruption statutes
Speaker 3: in which politics is pretty hard to ignore. There was
Speaker 3: a twenty twenty case that involved the infamous Bridgegate scenario
Speaker 3: in which Chris Christy was alleged to have had his
Speaker 3: subordinates closed down the GW Bridge in order to punish
Speaker 3: his political foes. And then the prosecution was brought at
Speaker 3: least allegedly for political reasons, sort of anti Chris Christy,
Speaker 3: anti Republican reasons, and the Supreme Court ended up actually
Speaker 3: reversing that conviction, but on kind of weird technical grounds
Speaker 3: about what was motivating the these operatives. So they sort
Speaker 3: of found kind of maybe even unrelated fault reasons to
Speaker 3: reverse in some of these cases. And you know that
Speaker 3: maybe what is being put forward here this kind of
Speaker 3: idea that well, if the payment happens after the political
Speaker 3: favor is given, then that can't possibly be corruption. That's
Speaker 3: a nice bright line rule, you know, as the government
Speaker 3: lawyers were bringing up, probably correctly, is that if if
Speaker 3: you established that as a bright line rule that will
Speaker 3: be kind of a gold embossed invitation for how you
Speaker 3: should structure corruption payments in the future. Right that, you know,
Speaker 3: you always have the political actor go first, wait some
Speaker 3: you know, requisite short amount of time, and then the
Speaker 3: payment comes second. And you know, in some ways, the
Speaker 3: ease with which one could engineer around that type of
Speaker 3: a definition, I think it's going to make it difficult
Speaker 3: for a majority of the judges to ignore that as
Speaker 3: a kind of an obvious sort of response from the
Speaker 3: other side.
Speaker 1: The Supreme Court over the years has made it harder
Speaker 1: and harder to prosecute politicians and other public officials for corruption,
Speaker 1: starting in twenty sixteen.
Speaker 3: Right, Yeah, the skepticism goes at least back to a
Speaker 3: twenty sixteen case, and there have been several others, both
Speaker 3: at the federal level and the state level, and so
Speaker 3: there is on some level a little bit of a
Speaker 3: I guess it's sort of a trend here where the
Speaker 3: judges have become, i don't know, increasingly worried about the
Speaker 3: possibility that these antibribery or anti corruption statutes are being
Speaker 3: used for political reasons, and therefore, you know, they're trying
Speaker 3: to carve back on them you know, I guess another
Speaker 3: factor of this is sort of almost a meta factor June,
Speaker 3: which is that one of the bodies of the federal
Speaker 3: government that has come under immense scrutiny recently is the
Speaker 3: Supreme Court itself for whether there are you know, friends
Speaker 3: of justices of the Supreme Court who bestow all kinds
Speaker 3: of valuable gifts on them out of friendship or for
Speaker 3: people they care about, and whether that itself is something
Speaker 3: that should trigger at least suspicion, if not considerable hand
Speaker 3: ringing amongst people who are trying to regularly court. There's
Speaker 3: big separation of powers issues, and the Supreme Court itself
Speaker 3: basically decided to promulgate its own ethics guideline. But a
Speaker 3: lot of people think it's somewhat toothless. It is not
Speaker 3: a subtle fact that Justice Thomas, who's been one of
Speaker 3: the people who's been at the center of this Maelstrom,
Speaker 3: decided not to even participate in the oral argument, but
Speaker 3: he is going to participate in the judgment through briefs
Speaker 3: and through reading the transcript. That was sort of an
Speaker 3: odd decision that didn't really have much of an explanation. So,
Speaker 3: you know, I think all aspects of this are in
Speaker 3: some ways delicate, and I think the fact that the
Speaker 3: Supreme Court itself has gotten dragged a little bit into
Speaker 3: its own kerfuffles around when are expressions of gratitude that
Speaker 3: may have significant monetary value, when of the appropriate and
Speaker 3: when do they trigger considerations and concerns about corruption and bribery?
Speaker 1: Coming up next on the Bloomberg Law Show, I'll continue
Speaker 1: this conference as with Professor Eric Tally of Columbia Law School.
Speaker 1: How might the Justice's rule in this case? And Tesla's
Speaker 1: shareholders will be voting on that Elon Musk pay package
Speaker 1: that was thrown out by a Delaware court. This is Bloomberg.
Speaker 1: The Supreme Court seemed skeptical of another public corruption law.
Speaker 1: The Justice has appeared likely to side with a former
Speaker 1: Indiana mayor convicted of receiving a thirteen thousand dollars bribe
Speaker 1: from a trucking company after it was awarded city contracts.
Speaker 1: I've been talking to Professor Eric Tally of Columbia Law School,
Speaker 1: and Eric, these public corruption cases are hard to prosecute,
Speaker 1: aren't they. You know, public officials and these kind of bribes,
Speaker 1: they don't leave notes or emails saying thanks so much
Speaker 1: for that. I was happy to.
Speaker 3: Help you out. Yet typically they don't. There have been
Speaker 3: some cases in which, you know that have larga been
Speaker 3: overturned that sort of said, well, you have to have
Speaker 3: a written contract on bribery. I think everyone realizes that
Speaker 3: that's an easy one to engineer your way around. So
Speaker 3: you have to demonstrate either a conversation or a set
Speaker 3: of conversations that establishes this understanding, or a set of
Speaker 3: patterns and practices of behavior whose only reasonable construction or
Speaker 3: interpretation would be Yeah, these folks are acting as though
Speaker 3: they are in a quid pro quo that they are
Speaker 3: recognizing through either their communicative acts or hard to misinterpret actions,
Speaker 3: and that makes it tough. Right, everyone is on notice
Speaker 3: that this is an issue in involving any public official.
Speaker 2: You know.
Speaker 3: The possible irony about this case is if the court
Speaker 3: decides to go with this timing argument. I think it's unlikely,
Speaker 3: but they might. Then in fact, it sort of sets
Speaker 3: up a formula in which the payment just gets made
Speaker 3: after the fact, and it's possible that people will just
Speaker 3: be much more upfront about it now that they know
Speaker 3: they've got a safe harbor, because they're not gonna We're
Speaker 3: gonna wait, you know, we're gonna set the alarm clock
Speaker 3: after the political favor and just wait for the payment
Speaker 3: until it's seemed to sit with it the Supreme Court process.
Speaker 3: That's one of the reasons why I doubt they're going
Speaker 3: to go in that direction. It's it's not rocket science
Speaker 3: to predict that that would be a response to this
Speaker 3: kind of bright line rule that mister Snyder's lawyers were
Speaker 3: asking for.
Speaker 1: What other way could they go considering their concerns about
Speaker 1: the Starbucks cards.
Speaker 3: Yeah, I think that most of the absurd situations involved
Speaker 3: little perks that are kind of pocket change type perks,
Speaker 3: and that once things got large, including the five thousand
Speaker 3: dollars trigger in this situation, then that would be large
Speaker 3: enough to trigger not only the explicit trigger, but also
Speaker 3: a judicial interpretation that yes, this is large enough that
Speaker 3: it could affect someone's judgment. And that's one of the
Speaker 3: reasons why I feel like the Court may well end
Speaker 3: up borrowing from a half dozen, if not more than
Speaker 3: a dozen other areas of you know, financial fraud and
Speaker 3: white collar crime that all sort of turns on materiality. So,
Speaker 3: for instance, if I decide I'm going to trade on
Speaker 3: inside information because I've gotten some kind of an insider
Speaker 3: tip that I'm not really authorized to trade on, but
Speaker 3: I trade one share and I make a buck seventy five,
Speaker 3: that may not be prosecuted. Or if the nature of
Speaker 3: the information I've gotten is just not probabilistically as helpful
Speaker 3: as it might otherwise, be sure, it's inside information, but
Speaker 3: it's not material enough to matter, And that may end
Speaker 3: up being a helpful lever for the Supreme Court when
Speaker 3: they try to decide this case. If they don't go
Speaker 3: with the timing part, they're going to have to have
Speaker 3: some sort of a cutoff, and a materiality cutoff is
Speaker 3: not a crazy place to put it. That's why you
Speaker 3: see it so many other areas of law.
Speaker 1: Speaking of a buck seventy five, what's happening with Elon
Speaker 1: Musk and his Tesla pay package that was fifty six
Speaker 1: billion dollars.
Speaker 3: Well, our friend mister Musk is definitely added again. It's
Speaker 3: not surprising that he has, you know, you know, basically
Speaker 3: been planning a formal response to his you know, pretty
Speaker 3: significant loss in the Delaware Chancery Court in January of
Speaker 3: twenty twenty four invalidating his at the time, fifty five
Speaker 3: fifty six billion dollar compensation contract. I think a lot
Speaker 3: of people were sort of betting on one of two
Speaker 3: things to happen. One possibility is that he would, you know,
Speaker 3: wait for a final judgment and appeal, and there's every
Speaker 3: indication that he intends to do that. But another possibility
Speaker 3: is that, you know, having had his compensation contract thrown
Speaker 3: out by the judge because of a defective process by
Speaker 3: which it was approved both the board level and the shareholders,
Speaker 3: they've decided in a public filing they made the other
Speaker 3: day to go out to the shareholders and ask them
Speaker 3: to quote ratify unquote his twenty eighteen package. And they've
Speaker 3: done so in kind of a clever way, but it
Speaker 3: effectively is trying to fix one of the infirmities in
Speaker 3: the in the that the package got approved. They're not
Speaker 3: really redoing anything at the board level, but they are
Speaker 3: going out to get a shareholder approval this time with
Speaker 3: full information because we've got a case out there and
Speaker 3: there's a long, copious disclosure about what the judge found
Speaker 3: in that case. And I think that they are hoping
Speaker 3: that if they got a vote from their stockholders, they
Speaker 3: could either go back and try to use that on
Speaker 3: appeal or possibly say well, listen, we're just going to
Speaker 3: award once again a big options award to mister Musk
Speaker 3: because it's been authorized by the stockholders with their eyes
Speaker 3: wide open. And so that is going out to the
Speaker 3: to the stockholders of Tesla at the next annual meeting.
Speaker 3: And they decided to include another thing, which is almost
Speaker 3: a direct channel from one of Elon Musk's tweets after
Speaker 3: the opinion saying, you know, we're going to reincorporate out
Speaker 3: of Delaware and into Texas. Sure enough, that's another proposal
Speaker 3: is being put in front of the shareholders to reincorporate
Speaker 3: away from Delaware and into Texas with the thought, at
Speaker 3: least this is what's in the proxy materials, is that
Speaker 3: Texas is going to be a more friendly place and
Speaker 3: more predictable place to know what's going on in terms
Speaker 3: of corporate law and fiduciary duty lawsuits. Now, I will
Speaker 3: tell you June that you know this, this kind of
Speaker 3: you know, possibility has been floating around for months. A
Speaker 3: lot of the you know, corporate law junkies that I
Speaker 3: run around with have been, you know, I've been sort
Speaker 3: of talking about this and these are folks that you know,
Speaker 3: they've been teaching corporate law for decades, and one of
Speaker 3: the things I always like to ask them is, quick,
Speaker 3: name your five favorite Texas corporate law cases. And usually
Speaker 3: people can get two, maybe three into that list, and
Speaker 3: then they run out of it. The fact of the
Speaker 3: matter is Texas really doesn't have that much of an
Speaker 3: of a developed set of corporate law precedents, and the
Speaker 3: ones that they do have often a seek guy from
Speaker 3: guessware from Delaware. So it's kind of an odd situation
Speaker 3: to make that statement to stockholders. Weirdly enough, there have
Speaker 3: been a whole spate of cases in Delaware that in
Speaker 3: which the judges seem to have been receptive to them,
Speaker 3: in which a shareholder says the very act of putting
Speaker 3: to the shareholders a vote to reincorporate itself can be
Speaker 3: a conflicted at a financially conflicted transaction, and therefore should
Speaker 3: be analyzed under exactly the same test that got used
Speaker 3: to analyze Elon Musk's compensation contract. So there's a kind
Speaker 3: of an interesting meta story here, which is that both
Speaker 3: of these stockholder votes themselves might be thought of as
Speaker 3: independent new actions that each of each of which could
Speaker 3: be potentially challenged by stockholder litigation, and I have every
Speaker 3: reason to think at some point they will.
Speaker 1: And this is pretty aggressive and nervy even for him,
Speaker 1: since he's laid off ten percent of Tesla's workforce.
Speaker 3: Yeah, I mean, this is not the greatest time to
Speaker 3: be sort of selling the narrative that Tesla can do
Speaker 3: no wrong so long as Elon is at the helm, right,
Speaker 3: that was a pretty saleable story two or three years ago.
Speaker 3: And I think there were a lot more of the
Speaker 3: I don't know what to call them, the Elon stands
Speaker 3: that were basically going to, you know, back him under
Speaker 3: any circumstances. There are still many of those out there,
Speaker 3: and many of them hold Tesla shares. But I think
Speaker 3: a lot of folks are looking at their portfolio and say, well,
Speaker 3: I went and really overweight in Tesla because I believed
Speaker 3: in Elon Musk and I guess I still do. But
Speaker 3: these these shares are not doing as well. And maybe
Speaker 3: I can tell myself a story that the whole reason
Speaker 3: they're not doing well is because, you know, Delaware is
Speaker 3: treating mister Musk, you know, poorly. But the fact of
Speaker 3: the matter is, if you're paying attention to the electronic
Speaker 3: vehicle segment. You will realize that this is you know,
Speaker 3: this is definitely at least a correction within that segment.
Speaker 3: The you know, sales across the board have cooled, It's
Speaker 3: not just Tesla or sales cooled. And as a result,
Speaker 3: you know that you just can't expect this type of
Speaker 3: high velocity growth trajectory going forward, even under Elon Musk.
Speaker 3: I think some people might might come to the really
Speaker 3: realization of and then at that point, if that's where
Speaker 3: you get in terms of thinking through this, well, then
Speaker 3: we've got a CEO who's you know, basically trying to
Speaker 3: claim a big chunk of stock of the company by
Speaker 3: basically resurrecting an options award that's been nullified, and wants
Speaker 3: to move the entire company to Texas, where we don't
Speaker 3: really even know what's going to be going on. If
Speaker 3: you know, if if mister Musk, you know, decides to
Speaker 3: start using Tesla as more of a personal piggybag, so
Speaker 3: I could I could see some stockholders deciding that they've
Speaker 3: lost at least a little bit of faith in the
Speaker 3: Church of Elon Musk and and you know, deciding that
Speaker 3: they might want to at least play the field a
Speaker 3: little bit try to figure out, you know, whether they
Speaker 3: want to support one or both or neither of these
Speaker 3: proposals that is going to be going before stockholders. One
Speaker 3: of the things that's interesting about this June is that
Speaker 3: a lot of times, you know, the stocks of companies
Speaker 3: are sometimes owned by big institutional investors and hedge funds,
Speaker 3: but then there are a lot of retail investors that
Speaker 3: you know, just own own stock because they're infatuated with
Speaker 3: the company, or it's part of some you know, other
Speaker 3: sort of you know, highly highly tailored investment plan. Test
Speaker 3: had a lot of retail investors that people that just
Speaker 3: just individual rando people who just own the stock, and
Speaker 3: those are some of the hardest people to predict in
Speaker 3: terms of what their proclivities are going to do. So
Speaker 3: so you know that I can imagine that there may
Speaker 3: well be an activist who comes out and says, we
Speaker 3: got to vote against these things. I'm gonna you know,
Speaker 3: I'm going to wage a contest against mister Musk. If
Speaker 3: that happens, it actually then then you know, if this
Speaker 3: becomes a contested vote, then it's not as easy for
Speaker 3: Musk and Tesla to collect votes from all these retail stockholders.
Speaker 3: You can't do it with an automated approach anymore. That
Speaker 3: you really kind of have to go through the formal
Speaker 3: rules of engagement. So I think it might be it'll
Speaker 3: be really interesting to see if there is a stockholder
Speaker 3: out there who is willing to come forward and say, yeah,
Speaker 3: I don't think this is good, and I'm going to
Speaker 3: actually run a you know, a contested vote process to
Speaker 3: basically get this thing defeated or at least one of
Speaker 3: these two proposals defeated. You know, still early days and
Speaker 3: there's still some time to do that, but that could
Speaker 3: turn out to be a sort of an interesting.
Speaker 1: Moment out of many interesting moments. Thanks so much, Eric.
Speaker 1: That's Professor Eric Talley of Columbia Law School. Four years ago,
Speaker 1: only the state of Arkansas had a ban on providing
Speaker 1: gender transition care for minors. Today, nearly half the states
Speaker 1: haven't acted such ban, and the Supreme Court has stepped
Speaker 1: into the culture war battle over transgender rights by allowing
Speaker 1: Idaho to enforce its ban on providing gender affirming care
Speaker 1: for minors while litigation plays out. It was a six
Speaker 1: to three vote, with the conservative justices in the majority.
Speaker 1: And the liberal justices in the minority. Joining me is
Speaker 1: healthcare attorney Harry Nelson of Nelson Hardiman Harry. Four years ago,
Speaker 1: just one state had this kind of a ban on
Speaker 1: gender affirming care. Now twenty three states do. That seems
Speaker 1: remarkably fast.
Speaker 4: I think this issue of gender affirming care has definitely
Speaker 4: been an activating issue, even say, an electrifying issue for
Speaker 4: voters for conservatives and you know, for voters on the right.
Speaker 4: I think that we've seen this issue as kind of
Speaker 4: an extension of this red blue divide and clearly something
Speaker 4: that is troubling a lot of people. And so yeah,
Speaker 4: it's definitely clearly gained them a more conservative approach.
Speaker 1: Are there generally accepted or approved clinical guidelines for treating
Speaker 1: teenagers or youth with gender dysphoria.
Speaker 4: So we've seen a significant shift going on around the
Speaker 4: world right originally to the whole you know, position in
Speaker 4: favor of gender firming care and essentially supporting you know,
Speaker 4: children and their parents at the year and younger ages
Speaker 4: to start receiving whether it's puberty blockers or other forms
Speaker 4: of care. And we do see that the sort of
Speaker 4: research that's out there has raised questions we saw Just
Speaker 4: last month in England, the National Health Service said that
Speaker 4: it would stop prescribing puberty blockers to kids and that
Speaker 4: all gender firming care needs to be evidence based and
Speaker 4: based on extra clinical opinions. So there definitely are two
Speaker 4: opposing camps, one sort of saying, wait, we don't have
Speaker 4: enough evidence to support this sort of transformative, radical care,
Speaker 4: and the other, you know, advancing civil liberty argument and
Speaker 4: an argument official harm to these children if they don't
Speaker 4: get gender or firming care right, that it tots them
Speaker 4: up for all kinds of mental health risks, for potential suicidality.
Speaker 4: So we have these really radically opposed camps and not
Speaker 4: a great body of evidence. Frankly on either side.
Speaker 1: Idaho's law seems pretty broad. It bars more than twenty treatments,
Speaker 1: including puberty blockers, and doctors and pharmacists who violate the
Speaker 1: law and face up to ten years in prison. Is
Speaker 1: that par for the course for these laws or is
Speaker 1: it broader than usual.
Speaker 4: It's definitely in line with some of the other states
Speaker 4: of the stronger laws, I mean definitely. The approach of
Speaker 4: using criminal sanctions against physicians and pharmacists is in I
Speaker 4: believe most of the laws of these states that have
Speaker 4: banned this care.
Speaker 1: This is a narrow question that's before the Supreme Court
Speaker 1: about temporary injunctions.
Speaker 4: Right, Yeah, the Supreme Court essentially, you know, allowed this
Speaker 4: law to go into effect. It didn't decide anything with finale.
Speaker 4: It just said that Idaho was entitled to enforce this
Speaker 4: ban on gender firming care for minors except for the.
Speaker 1: Two petitioners here. But the ACLU, which represents them, said
Speaker 1: that this won't protect the teenagers because medical providers won't
Speaker 1: risk triggering a law that could put them behind bars
Speaker 1: for a decade, and the teens would have to give
Speaker 1: up their anonymity, So it may not even help the
Speaker 1: two who are petitioning.
Speaker 4: Right. By the way, I should say that the families
Speaker 4: here and the teens have an option of traveling out
Speaker 4: of state. Nobody, nobody can stop them from traveling to
Speaker 4: a jurisdiction that is allowing this kind of care. So
Speaker 4: what's at stake here is whether you can get this
Speaker 4: care in Idaho, which is a problem, but there still
Speaker 4: is an option to travel and get the care elsewhere.
Speaker 1: Let's just say you have a family who can't afford
Speaker 1: to go outside Idaho for this kind of care. If
Speaker 1: the band goes into effect young people who are using
Speaker 1: the puberty blockers, let's say they have to stop, then
Speaker 1: puberty begins, So the question is sort of moot.
Speaker 4: Then it certainly means that they're going to go through
Speaker 4: physical changes that are going to make them much more,
Speaker 4: you know, strongly appearing like males. Right Like, they're going
Speaker 4: to be bigger and thicker and have a male frame,
Speaker 4: male facial features. So it won't prevent them in the
Speaker 4: future from getting gender firming care, but it will make
Speaker 4: it harder for them to sort of have a transition
Speaker 4: that's less noticeable. By the way, I think they're in
Speaker 4: addition to puberty blockets, I believe these two trans girls,
Speaker 4: who the stage is calling adolescent boys, were also receiving estrogen.
Speaker 4: So it's really both drugs in combination that we're at
Speaker 4: issue here.
Speaker 1: So the Justice isn't the majority cast this less about
Speaker 1: the substance of the law than the reach of the
Speaker 1: district judges. Injunction Justice Neil Gorsuch and Brett Kavanaugh, there
Speaker 1: were two thirteen page opinions. They said that the High
Speaker 1: Court was trying to tackle what has become a nettlesome
Speaker 1: issue nationwide and statewide injunctions issued by a single judge
Speaker 1: on a major controversy. But they've been complaining about this
Speaker 1: for years. Wow. Is it striking that they chose this
Speaker 1: case to, you know, draw a line in the sand.
Speaker 4: It's a good question. I think what was striking about
Speaker 4: this case was it was a narrow jurisdictional question of,
Speaker 4: you know, what the power of Idaho was to put
Speaker 4: the law into effect, and what the power of the
Speaker 4: lower courts, the district court here is that, you know,
Speaker 4: found that these adolescents should continue receiving care to avoid
Speaker 4: severe psychological distress. It's possible that it was practical in
Speaker 4: the sense that it was a narrow of jurisdictional issue
Speaker 4: of what the rights of the Idaho courts versus the
Speaker 4: Idaho legislature was, and not forcing the Supreme Court to
Speaker 4: go through the messy and controversial question of actually addressing
Speaker 4: the broader issue of the rights of parents, the rights
Speaker 4: of children, and this whole messy, sticky subject of how
Speaker 4: far we let children go what ages in receiving gender
Speaker 4: affirming care.
Speaker 1: So Justice Katanji Brown Jackson running for herself, and Justice
Speaker 1: Sonia Sotomayor said this Court is not compelled to rise
Speaker 1: and respond every time an applicant rushes to us with
Speaker 1: an alleged emergency, and it's especially important for us to
Speaker 1: refrain from doing so in novel, highly charged and unsettled circumstances.
Speaker 1: I mean that the Supreme Court could have just ignored this, right, Yeah, you.
Speaker 4: Really have two really profoundly different positions about what was
Speaker 4: protecting children and justice. Katangi Brown is definitely, you know,
Speaker 4: making a fair point that every time the Supreme Court
Speaker 4: takes one of these opportunities and weighs in, it is
Speaker 4: taking an aggressive position. It certainly would have been the
Speaker 4: more judicially conservative. It would have shown more restraints that
Speaker 4: just allow the lower court ruling to stand and not
Speaker 4: get involved here.
Speaker 1: So this straightened me out on one thing. Is this
Speaker 1: I mean, is this before the Ninth Court of Appeals.
Speaker 1: Yet where does the case stand in the lower courts?
Speaker 4: The lower court ruling was the ruling that basically had
Speaker 4: imposed a stay, meaning that the law wasn't going into
Speaker 4: a force because of the risk of your psychological distress,
Speaker 4: and the Ninth Circuit had affirmed. So this was essentially
Speaker 4: a reversal of the Ninth Circuit and the lower court
Speaker 4: in terms of allowing this slow to go into effect.
Speaker 1: Praising the court's decision, Idaho's attorney general said the law
Speaker 1: ensurer's miners will not be subjected to life altering drugs
Speaker 1: and procedures. Quote. Denying the basic truth that boys and
Speaker 1: girls are biologically different hurts our kids.
Speaker 4: You know, you're looking straight obviously, you know he's expressing
Speaker 4: the view that children are being exposed in American schools
Speaker 4: and just in our culture at this moment to a
Speaker 4: suggestiveness of the fact that they are born in the
Speaker 4: wrong body, or that they are a different gender than
Speaker 4: the gender assigned to the biologically at perth. In a way,
Speaker 4: it mirrors the abortion issue, and that we have like
Speaker 4: deeply held fundamental beliefs about what it means to protect kids,
Speaker 4: right it is protecting kids preventing them from being at
Speaker 4: risk psychologically, or if tecting kids, preventing them from being
Speaker 4: exposed to the possibility of exploring whether this is something
Speaker 4: that's appropriate for them. Clearly, you know, what we've seen
Speaker 4: is that on the right there's a growing body of
Speaker 4: people concerned that our schools and just all of the
Speaker 4: sort of messaging around kids is encouraging them to go
Speaker 4: down this path. But obviously his view is going to
Speaker 4: start representing half of the conversation.
Speaker 1: Backing up your theory, there is the Christian nationalist legal
Speaker 1: organization Aligance Defending Freedom jumped into this to represent the
Speaker 1: state of Idaho, and they're the group that brought mif
Speaker 1: of Bristom to the Supreme Court.
Speaker 4: Yeah, these issues have really become sort of really adjacent
Speaker 4: and related questions about, you know, the personal right of
Speaker 4: both the people who are experiencing and asking gender firming
Speaker 4: care and their parents versus these you know, traditional societal
Speaker 4: expectations and definitely with a certain religious quality to them.
Speaker 4: So I think this one personally is trigated because we
Speaker 4: have competing camps that in Europe, in the UK in particular,
Speaker 4: itching back on whether this is healthy and on the
Speaker 4: fact that genderferming care can always be delivered earlier. What
Speaker 4: we're really fighting about is under eighteen, how young can
Speaker 4: we believe children and take their desire for gender ferming
Speaker 4: care and their parents support for it to be controlling
Speaker 4: of their decisions. I think these two questions are going
Speaker 4: to continue to be going hand in hand, reflecting this
Speaker 4: sort of way that the conversation is dominated by these
Speaker 4: fundamental views of personal rights, healthcare.
Speaker 1: And the justices are deliberating behind the scenes on a
Speaker 1: set of a including one that's presented by the Biden
Speaker 1: administration in a Tennessee case. They don't seem unwilling to
Speaker 1: jump into culture war issues, but with the federal courts divided,
Speaker 1: the lower federal courts, it seems like it's something they
Speaker 1: should take up.
Speaker 4: I would imagine that ultimately, you know, given the decision
Speaker 4: in the Dabbs case said we're leaving this to the state.
Speaker 4: We're not going to decide this issue at the federal level.
Speaker 4: It's logical to think that the Supreme Court would sort
Speaker 4: of align similarly and really leave this to the state.
Speaker 4: But I think we're going to find.
Speaker 1: Out in the next year or two that timing seems
Speaker 1: just about right. Thanks so much, Harry. That's Harry Nelson
Speaker 1: of Nelson Hardiman, And that's it for this edition of
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