1 00:00:03,200 --> 00:00:08,760 Speaker 1: This is Bloomberg Law with June Brusso from Bloomberg Radio. 2 00:00:10,200 --> 00:00:14,240 Speaker 2: Warner Brothers Discovery is suing the NBA for breach of 3 00:00:14,360 --> 00:00:18,680 Speaker 2: contract after the league didn't accept the company's matching offer 4 00:00:18,800 --> 00:00:22,279 Speaker 2: for one of its packages in its upcoming eleven year 5 00:00:22,400 --> 00:00:27,160 Speaker 2: media rights deal. Warner is the parent company of TNT Sports, 6 00:00:27,480 --> 00:00:30,960 Speaker 2: and the NBA said it wasn't accepting Warner's one point 7 00:00:31,040 --> 00:00:34,720 Speaker 2: eight billion dollar a year offer and instead signed deals 8 00:00:34,760 --> 00:00:39,479 Speaker 2: with Amazon, Disney and NBC Universal. The new contracts are 9 00:00:39,520 --> 00:00:43,960 Speaker 2: expected to triple the league's broadcast income. Charles Barkley, who's 10 00:00:43,960 --> 00:00:47,559 Speaker 2: been an analyst on TNT for twenty four years, was 11 00:00:47,600 --> 00:00:49,080 Speaker 2: outspoken about the deal. 12 00:00:50,040 --> 00:00:53,880 Speaker 1: This was a last ditch cash grab by the NBA 13 00:00:54,200 --> 00:00:57,639 Speaker 1: and the players. That's why I think they signed an 14 00:00:57,640 --> 00:01:01,320 Speaker 1: eleven year deal. So they're like, hey, let's get as 15 00:01:01,400 --> 00:01:03,840 Speaker 1: much money as we possibly can right now. This is 16 00:01:03,840 --> 00:01:09,560 Speaker 1: going to be our last bite of the apple because TNT, ABCSPN, 17 00:01:10,080 --> 00:01:14,360 Speaker 1: they're not going to pay more money going forwards. 18 00:01:14,920 --> 00:01:19,280 Speaker 2: The lawsuit is another chapter in the deteriorating relationship between 19 00:01:19,319 --> 00:01:23,800 Speaker 2: the NBA and Turner Sports, a relationship that's lasted nearly 20 00:01:23,880 --> 00:01:28,520 Speaker 2: forty years. Joining me is entertainment and media lawyer Ronald Beanstock, 21 00:01:28,880 --> 00:01:32,479 Speaker 2: a partner at Scarincy Hollandbeck. What happened here? As far 22 00:01:32,480 --> 00:01:34,240 Speaker 2: as you can make out, this. 23 00:01:34,120 --> 00:01:36,600 Speaker 3: Is what appears to have happened, because there's a lot 24 00:01:36,600 --> 00:01:39,120 Speaker 3: of redactions in the complaints, so it's kind of hard 25 00:01:39,120 --> 00:01:42,480 Speaker 3: to note from the specifics of the agreements prior. But 26 00:01:42,480 --> 00:01:44,319 Speaker 3: I will tell you what I think happened. So this 27 00:01:44,400 --> 00:01:47,920 Speaker 3: is really a fight between tech corporate structure looking to 28 00:01:47,960 --> 00:01:53,200 Speaker 3: find their way into the larger dollars of entertainment properties. 29 00:01:53,280 --> 00:01:56,120 Speaker 3: And you can't get any biggers really in sports versus 30 00:01:56,240 --> 00:01:59,840 Speaker 3: the as the kids would say, old school broadcasting. You've 31 00:01:59,840 --> 00:02:02,600 Speaker 3: got a company P and T here who has had 32 00:02:02,640 --> 00:02:06,680 Speaker 3: the right as a licensee for forty years within their agreement, 33 00:02:07,040 --> 00:02:09,040 Speaker 3: which again a lot of redactions. Hard to know the 34 00:02:09,120 --> 00:02:12,600 Speaker 3: specifics and the definition of the word match right a 35 00:02:12,800 --> 00:02:15,160 Speaker 3: commonly used I don't want to say trope, but a 36 00:02:15,160 --> 00:02:19,399 Speaker 3: commonly used part of entertainment agreement where somebody who has 37 00:02:19,520 --> 00:02:21,959 Speaker 3: rights to something would like to keep those rights to something, 38 00:02:22,000 --> 00:02:24,440 Speaker 3: but they allow a third party to come in make 39 00:02:24,480 --> 00:02:26,800 Speaker 3: the offer and it get the match. That's a discussion 40 00:02:26,840 --> 00:02:28,960 Speaker 3: we have to have. What is the match right, how 41 00:02:29,040 --> 00:02:31,200 Speaker 3: is it defined? And then you know you've got a 42 00:02:31,320 --> 00:02:35,440 Speaker 3: usurper if you will tech company, Amazon, obviously Disney that 43 00:02:35,520 --> 00:02:38,000 Speaker 3: comes in and says, I want to make a really 44 00:02:38,360 --> 00:02:40,840 Speaker 3: great offer to you. I'd like to bring this asset, 45 00:02:41,080 --> 00:02:43,239 Speaker 3: which is called an asset by T and T in 46 00:02:43,720 --> 00:02:46,200 Speaker 3: their complaints. I want to bring this asset to our camp, 47 00:02:46,440 --> 00:02:48,200 Speaker 3: and we think we can do a great job with 48 00:02:48,360 --> 00:02:50,520 Speaker 3: this and the billions of dollars every year, we think 49 00:02:50,560 --> 00:02:53,160 Speaker 3: we can enhance them, do really well with and enhance 50 00:02:53,240 --> 00:02:57,560 Speaker 3: the NBA income and enhance ours obviously, bring bigger and 51 00:02:57,560 --> 00:03:01,720 Speaker 3: better advertising dollars to their format and in subscriptions. And 52 00:03:01,760 --> 00:03:04,560 Speaker 3: we'd like to take an offer on this somewhere. They 53 00:03:04,600 --> 00:03:07,480 Speaker 3: made that offer right. The timing was correct. They made 54 00:03:07,520 --> 00:03:10,200 Speaker 3: the offer, and T and T had two quote match. 55 00:03:10,680 --> 00:03:13,040 Speaker 3: So T and T says we matched, we matched timely. 56 00:03:13,240 --> 00:03:15,840 Speaker 3: That's not in dispute. Seems to be all done correctly. 57 00:03:15,960 --> 00:03:19,840 Speaker 3: But Amazon is saying, and apparently NBA is saying, no, 58 00:03:20,160 --> 00:03:24,600 Speaker 3: you didn't. You didn't match. According to the agreement, we 59 00:03:24,720 --> 00:03:27,200 Speaker 3: have other services or other things we can offer. You 60 00:03:27,240 --> 00:03:30,600 Speaker 3: didn't match that you're only matching the initial offer, and 61 00:03:30,639 --> 00:03:34,160 Speaker 3: that definition of match is one of the crucial discussions 62 00:03:34,200 --> 00:03:35,640 Speaker 3: with billions of dollars at stake. 63 00:03:36,200 --> 00:03:40,520 Speaker 2: I mean, what's the general interpretation of what match means 64 00:03:40,560 --> 00:03:41,720 Speaker 2: in a contract like this? 65 00:03:42,240 --> 00:03:45,040 Speaker 3: So in interesting businesses like this, the match would be 66 00:03:45,400 --> 00:03:48,120 Speaker 3: first right, like a first right refusal. And that's what 67 00:03:48,160 --> 00:03:50,440 Speaker 3: the definition I'm not clear about. No one's clear about, 68 00:03:50,440 --> 00:03:53,560 Speaker 3: because it's contractual language is underdacted from the complaint. But 69 00:03:53,800 --> 00:03:55,960 Speaker 3: there's a real difference here, and that is the difference 70 00:03:56,000 --> 00:03:59,480 Speaker 3: would be between I get to match and the words 71 00:03:59,520 --> 00:04:02,360 Speaker 3: that are using complaint as an incumbent, which is not 72 00:04:02,440 --> 00:04:06,120 Speaker 3: a commonly used word in entertainment property agreement incumbenty, and 73 00:04:06,240 --> 00:04:08,839 Speaker 3: that it says as an incumbent, TBS has the right 74 00:04:08,960 --> 00:04:13,040 Speaker 3: to match any quote third party offer end quote for 75 00:04:13,120 --> 00:04:17,239 Speaker 3: future NBA telecast rights, right to match any third party offer, 76 00:04:17,279 --> 00:04:20,640 Speaker 3: which would indicate to me that it's an initial match right. 77 00:04:21,000 --> 00:04:23,480 Speaker 3: If someone says two hundred and I say I'll give 78 00:04:23,520 --> 00:04:26,400 Speaker 3: you two hundred, I'll match that. Now it stays with me. 79 00:04:26,960 --> 00:04:30,360 Speaker 3: I am, as they call it, the legacy or incumbent here, 80 00:04:30,400 --> 00:04:33,839 Speaker 3: I'm the legacy licenseee. I would maintain my rights. And 81 00:04:33,960 --> 00:04:36,360 Speaker 3: the term length of the next portion of this agreement 82 00:04:36,360 --> 00:04:40,320 Speaker 3: is eleven years. That would be over fifty years of 83 00:04:40,400 --> 00:04:43,040 Speaker 3: retaining rights in terms of a licensee to a piece 84 00:04:43,080 --> 00:04:46,720 Speaker 3: of property like this, And that's probably where everybody is 85 00:04:46,760 --> 00:04:50,120 Speaker 3: fighting this because the tech companies think, if I do 86 00:04:50,160 --> 00:04:53,479 Speaker 3: a better job, So the word match looks like initial match. 87 00:04:53,920 --> 00:04:58,039 Speaker 3: Many times when negotiating entertainment property agreements like this. Music 88 00:04:58,080 --> 00:05:00,960 Speaker 3: business is a good example, music published record deals or 89 00:05:00,960 --> 00:05:05,839 Speaker 3: things of this nature. Licensing deals, we have last match. 90 00:05:06,520 --> 00:05:09,280 Speaker 3: That's a preference of mine because if you say two hundred, 91 00:05:09,400 --> 00:05:12,760 Speaker 3: but that's not the fully ending negotiated deal, I think 92 00:05:12,800 --> 00:05:14,680 Speaker 3: I can get you to three. I don't want you 93 00:05:14,720 --> 00:05:16,919 Speaker 3: to match two. I want you to match the deal 94 00:05:17,000 --> 00:05:20,080 Speaker 3: I'm willing to execute. That would be what the match 95 00:05:20,160 --> 00:05:23,640 Speaker 3: right should say. I don't know because it's been redacted, 96 00:05:23,960 --> 00:05:26,320 Speaker 3: so we'll have to find out as Discovery goes. 97 00:05:26,160 --> 00:05:29,400 Speaker 2: On with the deal with Amazon. The games would be 98 00:05:29,400 --> 00:05:34,000 Speaker 2: distributed across Amazon Prime Video, NBC's broadcast network and Peacock 99 00:05:34,080 --> 00:05:39,080 Speaker 2: streaming service, and Disney ABC and ESPN platforms. So it's 100 00:05:39,120 --> 00:05:42,680 Speaker 2: not just matching the money, is it. It's also matching 101 00:05:42,760 --> 00:05:43,360 Speaker 2: the scope. 102 00:05:43,600 --> 00:05:45,599 Speaker 3: Yes, I think that that's part of the process, and 103 00:05:45,600 --> 00:05:47,200 Speaker 3: I think the match is the scope what can we 104 00:05:47,240 --> 00:05:51,400 Speaker 3: offer in terms of SBOD subscription video on demand. I 105 00:05:51,400 --> 00:05:55,320 Speaker 3: think this is all within the concept of the match, right, 106 00:05:55,360 --> 00:05:58,160 Speaker 3: because I don't think the match was one sentence match. 107 00:05:58,200 --> 00:05:59,960 Speaker 3: I don't think it says here's the money match it. 108 00:06:00,080 --> 00:06:04,159 Speaker 3: I think structurally it's the scope clearly territories worldwide, but 109 00:06:04,200 --> 00:06:07,240 Speaker 3: it's scope in terms of what is we have to 110 00:06:07,320 --> 00:06:09,800 Speaker 3: offer and what platforms. I think that's a part of this. 111 00:06:10,200 --> 00:06:11,640 Speaker 3: I think that they're trying to say you're an old 112 00:06:11,640 --> 00:06:15,120 Speaker 3: school broadcaster, but TNT has other platforms that they get 113 00:06:15,160 --> 00:06:17,320 Speaker 3: to put it onto. MAC So I think these are 114 00:06:17,320 --> 00:06:20,560 Speaker 3: parallel universes colliding. I don't know if they're exactly in 115 00:06:20,600 --> 00:06:23,040 Speaker 3: the same size universe, but I think that they are 116 00:06:23,640 --> 00:06:28,800 Speaker 3: structurally similar because MAX allows the similar version of platform 117 00:06:28,880 --> 00:06:31,760 Speaker 3: structure as Amazon would have as well. 118 00:06:32,000 --> 00:06:35,360 Speaker 2: Suppose the NBA says, you know, we think we'll get 119 00:06:35,400 --> 00:06:39,359 Speaker 2: more viewers with the deal with Amazon, and it's in 120 00:06:39,440 --> 00:06:43,080 Speaker 2: our long term best interests. Can they walk away from 121 00:06:43,080 --> 00:06:46,520 Speaker 2: the deal if somehow TNT says we can give you 122 00:06:46,560 --> 00:06:50,159 Speaker 2: the same kind of exposure and money. 123 00:06:50,279 --> 00:06:53,040 Speaker 3: Someone is looking at this in the long term process, right, 124 00:06:53,080 --> 00:06:55,880 Speaker 3: Someone's saying this is better for us in terms of 125 00:06:55,920 --> 00:06:59,640 Speaker 3: the NBA brand and our largest in the future. Clearly, 126 00:06:59,680 --> 00:07:02,920 Speaker 3: that's what's at stake here. Somewhere in that agreement between 127 00:07:03,279 --> 00:07:06,719 Speaker 3: P and T and the NBA this forty year. That's 128 00:07:06,760 --> 00:07:10,840 Speaker 3: a lengthy relationship which apparently, according to whatever I've seen 129 00:07:10,840 --> 00:07:12,720 Speaker 3: in the press and people that I know, has not 130 00:07:12,800 --> 00:07:15,000 Speaker 3: been the best in the few years that there's been 131 00:07:15,040 --> 00:07:17,200 Speaker 3: a lot of discussion about this, you know, and again 132 00:07:17,360 --> 00:07:20,360 Speaker 3: I'm going to reiterate that point about tech giants versus 133 00:07:20,360 --> 00:07:24,920 Speaker 3: old school broadcasters. There seems to have been a exclusive 134 00:07:25,360 --> 00:07:29,760 Speaker 3: negotiation period that was the precursor to this match. So 135 00:07:29,840 --> 00:07:33,400 Speaker 3: it looked like there was some over the last year. Contractually, 136 00:07:33,440 --> 00:07:36,800 Speaker 3: they were obligated to have not mediation, but a negotiation 137 00:07:37,440 --> 00:07:39,840 Speaker 3: where they would sit in that room and they would 138 00:07:40,120 --> 00:07:43,080 Speaker 3: try to knock out their new agreement. And it didn't work. 139 00:07:43,280 --> 00:07:44,760 Speaker 3: Somewhere in the NBA to keep the people in the 140 00:07:44,840 --> 00:07:48,080 Speaker 3: NBA or the owners whoever was involved, said no, it's 141 00:07:48,120 --> 00:07:51,480 Speaker 3: not structurally sufficient. We think we can do better. We 142 00:07:51,600 --> 00:07:54,760 Speaker 3: think the NBA brand can do better at this different 143 00:07:54,840 --> 00:07:57,680 Speaker 3: set of platforms. But they had that moment and it 144 00:07:57,680 --> 00:07:58,880 Speaker 3: didn't work out well. 145 00:07:58,920 --> 00:08:01,880 Speaker 2: They've asked for a jury try is it difficult to 146 00:08:02,000 --> 00:08:04,680 Speaker 2: line up two different offers like this when it's not 147 00:08:04,840 --> 00:08:08,080 Speaker 2: just money and determine whether it's a real match. 148 00:08:08,680 --> 00:08:13,040 Speaker 3: I don't think it's that's sophisticated. Look this jury trial demand, yes, 149 00:08:13,080 --> 00:08:14,640 Speaker 3: but think about what we've got here. We've got in 150 00:08:14,640 --> 00:08:17,200 Speaker 3: the quest for junct of belief specific performance. I mean, 151 00:08:17,280 --> 00:08:20,280 Speaker 3: everybody's just looking to try to keep it long before 152 00:08:20,280 --> 00:08:22,320 Speaker 3: you get to a jury. But if we get to 153 00:08:22,400 --> 00:08:25,280 Speaker 3: a jury, you know, this to me looks like you 154 00:08:25,320 --> 00:08:27,640 Speaker 3: can put the two offers up on you know, large 155 00:08:27,640 --> 00:08:30,120 Speaker 3: boards in front of a jury and go, there's their offer, 156 00:08:30,160 --> 00:08:32,640 Speaker 3: here's our offer. Look at ours? You see me? Match 157 00:08:32,720 --> 00:08:34,719 Speaker 3: that there it is. I don't think it's hard to 158 00:08:34,760 --> 00:08:37,480 Speaker 3: get in front of a jury. It's not difficult areas 159 00:08:37,600 --> 00:08:40,920 Speaker 3: of law. It's going to be how do you define match? 160 00:08:41,040 --> 00:08:42,680 Speaker 3: And did we do it? And if we did it, 161 00:08:42,679 --> 00:08:44,400 Speaker 3: I'm going to show the jury here here, these two 162 00:08:44,400 --> 00:08:47,800 Speaker 3: pluckers right up here, right here's ours. There's there getting 163 00:08:47,840 --> 00:08:50,040 Speaker 3: to that though, Oh my goodness, we have a long 164 00:08:50,080 --> 00:08:54,160 Speaker 3: way to go. We have all this other stuff we're 165 00:08:54,160 --> 00:08:55,200 Speaker 3: going to have to go through. 166 00:08:55,679 --> 00:08:59,960 Speaker 2: Also, Warner Brothers said that if this isn't settled before 167 00:09:00,120 --> 00:09:04,439 Speaker 2: or the contract expires. They want injunction. Yeah, you think 168 00:09:04,440 --> 00:09:06,160 Speaker 2: a judge would give them that, Well, it. 169 00:09:06,120 --> 00:09:09,600 Speaker 3: Says a lot, But Judge Grant's an injunction that also says, here, 170 00:09:09,720 --> 00:09:11,400 Speaker 3: if a likelihood you're going to run on the barracks, 171 00:09:11,760 --> 00:09:15,319 Speaker 3: that kind of steers things in a different direction. A 172 00:09:15,480 --> 00:09:16,880 Speaker 3: prognosticator is tough. 173 00:09:17,760 --> 00:09:22,479 Speaker 2: Interesting that Turner, in its complaint said that we strongly 174 00:09:22,559 --> 00:09:26,200 Speaker 2: believe that this is not just our contractual right, but 175 00:09:26,400 --> 00:09:29,080 Speaker 2: also in the best interest of fans who want to 176 00:09:29,160 --> 00:09:32,520 Speaker 2: keep watching our industry leading NBA content. 177 00:09:33,040 --> 00:09:36,760 Speaker 3: I want to discuss this T and Keith investment into 178 00:09:37,040 --> 00:09:39,160 Speaker 3: the property they call their asset, which they shouldn't be 179 00:09:39,200 --> 00:09:42,000 Speaker 3: calling its assets, but they do in that complaint. That's 180 00:09:42,080 --> 00:09:44,440 Speaker 3: very telling. They've come to think of it as their own. 181 00:09:44,760 --> 00:09:50,920 Speaker 3: They have a large investment in the NBA broadcasters and 182 00:09:51,120 --> 00:09:55,319 Speaker 3: experts and color commentators. That's a lot of money they've 183 00:09:55,360 --> 00:09:57,680 Speaker 3: got invested, and they've they've been very successful with that. 184 00:09:57,679 --> 00:10:00,000 Speaker 3: I think they've won their own Emmys separately, whatever those 185 00:10:00,040 --> 00:10:02,520 Speaker 3: shows are, you know, I know shows now start before 186 00:10:02,600 --> 00:10:05,600 Speaker 3: the game, during the game, after the game, next week's game, and. 187 00:10:05,600 --> 00:10:08,440 Speaker 2: I knows absolutely they're not ending. 188 00:10:08,800 --> 00:10:11,920 Speaker 3: It's just a perpetual series of commentary. But I think 189 00:10:11,920 --> 00:10:13,880 Speaker 3: that's a huge part of this that they say, look, 190 00:10:13,920 --> 00:10:16,080 Speaker 3: we pay Charles Barkley X and we have the best 191 00:10:16,080 --> 00:10:18,000 Speaker 3: people to do this. Now who you're going to bring 192 00:10:18,040 --> 00:10:19,960 Speaker 3: on to do this? Right? Look at what you've invested 193 00:10:19,960 --> 00:10:21,679 Speaker 3: into this, And I think that's part of this. And 194 00:10:21,720 --> 00:10:24,040 Speaker 3: I think that what they're trying to say in the complaint, 195 00:10:24,040 --> 00:10:26,800 Speaker 3: which leads back to the injunction angle here, is that 196 00:10:27,000 --> 00:10:29,360 Speaker 3: we've got so much invested and look at the terrible 197 00:10:29,400 --> 00:10:32,319 Speaker 3: losses will suffer. Well, I have a hard time. I mean, 198 00:10:32,640 --> 00:10:35,920 Speaker 3: that's forty years. Did you do everything in the forty years? 199 00:10:35,920 --> 00:10:37,520 Speaker 3: I think that's going to come up, right. They're going 200 00:10:37,600 --> 00:10:40,440 Speaker 3: to say they got complacent. Sure, they had these great 201 00:10:40,440 --> 00:10:43,440 Speaker 3: team of experts, these really popular posts, and you know, 202 00:10:43,520 --> 00:10:47,160 Speaker 3: superstar guys and gals. You know, it's interesting to see 203 00:10:47,160 --> 00:10:49,319 Speaker 3: that in the complaint. I want to say, it's a 204 00:10:49,360 --> 00:10:51,600 Speaker 3: woe is me kind of thing, saying how terribly we'll 205 00:10:51,640 --> 00:10:53,840 Speaker 3: be hurt. Sure, that's what complaints say, but that's not 206 00:10:53,960 --> 00:10:57,360 Speaker 3: the point here. Did you match it? Did you follow 207 00:10:57,400 --> 00:10:59,599 Speaker 3: what they had said? I also want to know what 208 00:10:59,640 --> 00:11:02,920 Speaker 3: went for all in that exclusive negotiation period, What happened there, 209 00:11:03,000 --> 00:11:07,160 Speaker 3: and ultimately, if I can be the prognosticator for a second, 210 00:11:07,360 --> 00:11:09,640 Speaker 3: you know, if it doesn't work out, there may be 211 00:11:09,679 --> 00:11:12,760 Speaker 3: a split. The baby here it is State Court is 212 00:11:12,800 --> 00:11:14,760 Speaker 3: State Supreme in New York, So this won't be the 213 00:11:14,760 --> 00:11:17,080 Speaker 3: first time anybody does something like this. They may say, 214 00:11:17,440 --> 00:11:19,719 Speaker 3: you know what, for the first three years, we may 215 00:11:19,800 --> 00:11:22,120 Speaker 3: give key games to stay with T and T and 216 00:11:22,160 --> 00:11:24,679 Speaker 3: their team, and then regular season games X, Y, and 217 00:11:24,760 --> 00:11:26,760 Speaker 3: Z will go over here, and then eventually we're going 218 00:11:26,840 --> 00:11:31,120 Speaker 3: to morph this all entirely over to the new licensee. 219 00:11:31,240 --> 00:11:34,280 Speaker 3: That may be how this gets done. Nobody, particularly the 220 00:11:34,360 --> 00:11:37,400 Speaker 3: NBA and TNT. Nobody's going to want to have this 221 00:11:37,520 --> 00:11:40,880 Speaker 3: extend past even the preseason, so I think they're going 222 00:11:40,960 --> 00:11:44,760 Speaker 3: to have to figure out methodologies to compromise at some point. 223 00:11:44,880 --> 00:11:46,960 Speaker 3: It's not like they're going to postpone the season, So 224 00:11:47,400 --> 00:11:49,120 Speaker 3: I think that the issue is going to start to 225 00:11:49,120 --> 00:11:51,200 Speaker 3: come up pretty fast and furious. This is not just 226 00:11:51,320 --> 00:11:53,640 Speaker 3: rocket docket as in the federal system. This is going 227 00:11:53,720 --> 00:11:55,680 Speaker 3: to be oh boy, we got to move this along. 228 00:11:56,080 --> 00:11:59,280 Speaker 3: There's billions and billions to stake here, and this is 229 00:11:59,280 --> 00:12:02,240 Speaker 3: one of the most valuable properties and entertainment biz in 230 00:12:02,320 --> 00:12:04,600 Speaker 3: the world, and we need to get this moving along. 231 00:12:05,000 --> 00:12:10,280 Speaker 2: Are courts reluctant to force someone into a deal they 232 00:12:10,320 --> 00:12:11,200 Speaker 2: don't want to be in? 233 00:12:12,040 --> 00:12:16,920 Speaker 3: Yes, simplest answer I can give. Yeah, that's a common discussion. 234 00:12:17,200 --> 00:12:19,720 Speaker 3: Like I said back in entertainment properties, if an artist 235 00:12:19,800 --> 00:12:22,440 Speaker 3: wants off a label, the judge's going to say, how 236 00:12:22,440 --> 00:12:25,120 Speaker 3: do you guys getting along? Oh? Terribly? Okay, Now I 237 00:12:25,200 --> 00:12:27,360 Speaker 3: want you guys back together, shake hands, Come on, you 238 00:12:27,400 --> 00:12:30,560 Speaker 3: can put it back. Never happens. It never happens that way. 239 00:12:30,600 --> 00:12:34,880 Speaker 3: There's always some override, similar to the theory here of 240 00:12:34,920 --> 00:12:37,679 Speaker 3: certain games being split up. There may be an override 241 00:12:37,720 --> 00:12:39,520 Speaker 3: on structure of money. There may be a way to 242 00:12:39,800 --> 00:12:42,280 Speaker 3: know UO two records to this person, Oh you owe 243 00:12:42,320 --> 00:12:45,600 Speaker 3: five songs to this publisher. Oh you owe twelve episodes 244 00:12:45,640 --> 00:12:49,080 Speaker 3: the original production company. Yeah, we do that to get 245 00:12:49,200 --> 00:12:53,000 Speaker 3: through the process. So we don't kill the golden goose here. 246 00:12:53,360 --> 00:12:56,360 Speaker 3: Enter Human properties take decades, if not lifetimes to develop 247 00:12:56,440 --> 00:12:58,840 Speaker 3: like this, and so nobody wants to hurt that just 248 00:12:58,880 --> 00:13:01,400 Speaker 3: when it's probably coming off an Olympic high right now. 249 00:13:01,840 --> 00:13:03,720 Speaker 3: So I think that they're going to be ways we 250 00:13:03,800 --> 00:13:07,800 Speaker 3: get this resolved that may not be in the standard methodology. 251 00:13:07,880 --> 00:13:10,280 Speaker 3: I think there's gonna be a lot of meetings and chambers. 252 00:13:10,320 --> 00:13:11,720 Speaker 3: I think there's gonna be a lot of meetings with 253 00:13:11,760 --> 00:13:15,040 Speaker 3: everybody just discussing how to make this work. But it's 254 00:13:15,040 --> 00:13:17,079 Speaker 3: can be a fascinating couple of months. 255 00:13:17,440 --> 00:13:20,760 Speaker 2: So you think that there might be a settlement before 256 00:13:20,800 --> 00:13:24,240 Speaker 2: this gets more serious, before it goes to a jury 257 00:13:24,320 --> 00:13:25,720 Speaker 2: or a judge makes a decision. 258 00:13:26,400 --> 00:13:28,920 Speaker 3: I think there's a possibility there's going to be a 259 00:13:29,480 --> 00:13:34,000 Speaker 3: series of workaround to try to satisfy some immediacy for 260 00:13:34,520 --> 00:13:36,920 Speaker 3: T and T. But I think eventually there's going to 261 00:13:36,960 --> 00:13:41,480 Speaker 3: be a transition unless everything has gone wrong. From the 262 00:13:41,520 --> 00:13:45,040 Speaker 3: Amazon point of view, in terms of where the match 263 00:13:45,240 --> 00:13:48,920 Speaker 3: was and how you define match, it sounds like the 264 00:13:48,960 --> 00:13:52,680 Speaker 3: timeliness was there had an exclusive negotiation process that preceded it, 265 00:13:52,960 --> 00:13:56,559 Speaker 3: and it sounded like something happened in that definitional process. 266 00:13:56,720 --> 00:14:00,280 Speaker 3: Somebody says, we did it the other side, NBA, No 267 00:14:00,559 --> 00:14:03,160 Speaker 3: you didn't do that. No it didn't. Is it based 268 00:14:03,240 --> 00:14:06,360 Speaker 3: upon as you and I just discussed, the variable platforms 269 00:14:06,360 --> 00:14:09,319 Speaker 3: and the extensive nature of the other digital platform It's 270 00:14:09,320 --> 00:14:11,120 Speaker 3: hard to know. The redactions make it hard to know 271 00:14:11,440 --> 00:14:14,880 Speaker 3: because at the end of the complaint June. There is 272 00:14:14,920 --> 00:14:19,880 Speaker 3: a series of redactions where it's effectively saying the Amazon 273 00:14:20,000 --> 00:14:22,600 Speaker 3: offer they figured a way around it. And that's the 274 00:14:22,680 --> 00:14:25,680 Speaker 3: kind of language you see in the complaint. They found 275 00:14:25,720 --> 00:14:28,560 Speaker 3: a way around it here. They did something here that 276 00:14:29,040 --> 00:14:31,440 Speaker 3: wasn't in good faith. It's a bad faith effort to 277 00:14:31,480 --> 00:14:36,560 Speaker 3: deprive TBS of its contractual right. That's pretty hefty redacted 278 00:14:36,880 --> 00:14:39,080 Speaker 3: in the complaint. We don't know what the language was, 279 00:14:39,400 --> 00:14:43,640 Speaker 3: but they're saying they caused the match to be rejected. 280 00:14:43,840 --> 00:14:45,240 Speaker 3: Has to be proof of that. What did they do? 281 00:14:45,560 --> 00:14:47,720 Speaker 3: Where is that here? You know where? If that's the enter? 282 00:14:47,800 --> 00:14:48,280 Speaker 3: What did they do? 283 00:14:48,600 --> 00:14:48,720 Speaker 2: So? 284 00:14:48,760 --> 00:14:51,080 Speaker 3: What was so crasty about these guys that they were 285 00:14:51,120 --> 00:14:53,280 Speaker 3: able to convince them that they can get around the match? 286 00:14:53,360 --> 00:14:53,520 Speaker 2: Right? 287 00:14:53,680 --> 00:14:55,440 Speaker 3: That's redacted. We're gonna have to go find out once 288 00:14:55,440 --> 00:14:58,760 Speaker 3: this proceeding really gets rolling to me. In the last overview, 289 00:14:59,200 --> 00:15:01,400 Speaker 3: it could have been that if Aready got complacent on 290 00:15:01,440 --> 00:15:03,320 Speaker 3: the TBST and T side could have been I mean, 291 00:15:03,360 --> 00:15:05,920 Speaker 3: they had this property for forty years. It could have 292 00:15:05,920 --> 00:15:08,040 Speaker 3: been I don't know, maybe they got complacent, Maybe they 293 00:15:08,040 --> 00:15:10,960 Speaker 3: could have done more, Maybe they weren't pushing the brandess 294 00:15:11,000 --> 00:15:13,040 Speaker 3: as well. Long as they could. I mean, these are 295 00:15:13,080 --> 00:15:15,520 Speaker 3: growth issues that the NBA has access to that are 296 00:15:15,560 --> 00:15:17,960 Speaker 3: not a part of the record. But I started out 297 00:15:18,000 --> 00:15:19,640 Speaker 3: by saying, I'm going to stay with it. This is 298 00:15:20,080 --> 00:15:22,520 Speaker 3: the invasion of the tech companies, and they're coming for 299 00:15:22,600 --> 00:15:25,320 Speaker 3: the old school broadcasters, and they think that they could 300 00:15:25,360 --> 00:15:29,120 Speaker 3: grab up these multi billion dollar properties and do something 301 00:15:29,160 --> 00:15:32,040 Speaker 3: new with them and gives them a lot of cloud. 302 00:15:32,160 --> 00:15:35,600 Speaker 3: We're not just delivering pactors anymore. Right, We've got entertainment 303 00:15:35,680 --> 00:15:37,920 Speaker 3: properties and we're going to have a long term, eleven 304 00:15:38,000 --> 00:15:41,600 Speaker 3: year deal on one of the most important entertainment sports 305 00:15:41,640 --> 00:15:43,000 Speaker 3: properties in the world. 306 00:15:43,240 --> 00:15:46,720 Speaker 2: I may use that line, We're not just delivering packages anymore. 307 00:15:47,360 --> 00:15:50,840 Speaker 2: Thanks so much for being on the show. That's Ronald Beanstock, 308 00:15:51,000 --> 00:15:55,160 Speaker 2: a partner at Scarincy Holland Beck. Coming up next. Why 309 00:15:55,200 --> 00:15:58,880 Speaker 2: federal agencies are losing more court battles since the Supreme 310 00:15:58,960 --> 00:16:05,520 Speaker 2: Court's term. This is Bloomberg. Last term, the Supreme Court 311 00:16:05,680 --> 00:16:09,440 Speaker 2: changed the landscape for federal agencies when it threw out 312 00:16:09,480 --> 00:16:13,200 Speaker 2: a forty year old precedent known as Chevron deference, which 313 00:16:13,280 --> 00:16:19,200 Speaker 2: required that courts deferred to reasonable agency interpretations of ambiguous laws. 314 00:16:19,520 --> 00:16:23,040 Speaker 2: The effects can already be seen in federal court rulings 315 00:16:23,240 --> 00:16:27,160 Speaker 2: since that June decision called loeper Bright. According to a 316 00:16:27,160 --> 00:16:31,040 Speaker 2: Bloomberg Law review of rulings on agency actions, in the 317 00:16:31,080 --> 00:16:36,560 Speaker 2: month after that decision, federal judges ruled against agency interpretations 318 00:16:36,600 --> 00:16:40,840 Speaker 2: in thirteen out of twenty decisions, including orders that blocked 319 00:16:40,920 --> 00:16:46,080 Speaker 2: rules prohibiting discrimination against transgender people in health care and education, 320 00:16:46,600 --> 00:16:50,760 Speaker 2: and that blocked rules banning worker non compete agreements. And 321 00:16:50,880 --> 00:16:55,240 Speaker 2: in all those cases save one, the federal judges reviewing 322 00:16:55,360 --> 00:16:59,400 Speaker 2: the agency actions had not even used a milder form 323 00:16:59,440 --> 00:17:02,720 Speaker 2: of defferences to the government an eighty year old president 324 00:17:02,840 --> 00:17:07,119 Speaker 2: called Skidmore deference, which the Supreme Court said could be used. 325 00:17:07,480 --> 00:17:10,879 Speaker 2: Joining me is an administrative law expert. Carrie Coliniese, a 326 00:17:10,920 --> 00:17:14,320 Speaker 2: professor at the University of Pennsylvania Law School. Will you 327 00:17:14,400 --> 00:17:17,080 Speaker 2: explain what Skidmore deference is? 328 00:17:17,400 --> 00:17:17,680 Speaker 3: Sure? 329 00:17:17,760 --> 00:17:17,920 Speaker 2: So? 330 00:17:18,080 --> 00:17:20,880 Speaker 3: I think the best way to really explained Skidmore difference 331 00:17:21,000 --> 00:17:24,680 Speaker 3: is by reference to what Chevron difference was, because it's 332 00:17:24,720 --> 00:17:28,600 Speaker 3: helpful to know what Skidmore difference is not, and it's 333 00:17:28,680 --> 00:17:34,439 Speaker 3: not Chevron difference. The Chevron difference is where courts in 334 00:17:34,440 --> 00:17:37,960 Speaker 3: cases where the statute is ambiguous and the agency is 335 00:17:38,000 --> 00:17:42,879 Speaker 3: a reasonable interpretation of the statute, Courts are obligated to 336 00:17:42,920 --> 00:17:48,359 Speaker 3: accept the agency's reasonable interpretation. There's actually a duty to 337 00:17:49,560 --> 00:17:53,680 Speaker 3: follow what the agency says. The idea being that Congress 338 00:17:53,720 --> 00:17:58,879 Speaker 3: has delegated, even implicitly, the authority to the agency to 339 00:17:59,000 --> 00:18:04,080 Speaker 3: determine what ambiguous that she means, and courts must follow it. 340 00:18:04,160 --> 00:18:07,680 Speaker 3: Get more difference now goes back to a decision forty 341 00:18:07,760 --> 00:18:12,080 Speaker 3: years prior to Chevron. Chevron was decided in nineteen eighty four. 342 00:18:12,880 --> 00:18:16,280 Speaker 3: It's now just been overturned in twenty twenty four, forty 343 00:18:16,320 --> 00:18:18,440 Speaker 3: years later. But if you go without sort of forty 344 00:18:18,520 --> 00:18:21,880 Speaker 3: years before kind of symmetry, here, we can see a 345 00:18:22,000 --> 00:18:27,159 Speaker 3: Supreme Court's decision called Skidmore that articulated a type of 346 00:18:27,320 --> 00:18:33,160 Speaker 3: deference that's similar when that she's are ambiguous, but it's 347 00:18:33,240 --> 00:18:38,359 Speaker 3: not mandatory that courts follow what the agencies have decided. 348 00:18:38,760 --> 00:18:43,320 Speaker 3: Get more difference is known as difference that follows from 349 00:18:43,520 --> 00:18:49,439 Speaker 3: agency's power to persuade. If the court reviewing an agency's 350 00:18:49,480 --> 00:18:54,359 Speaker 3: interpretation finds that, on the basis of the agency's expertise 351 00:18:54,680 --> 00:18:59,960 Speaker 3: and the thoroughness of its investigations, that well, the agency 352 00:19:00,080 --> 00:19:04,119 Speaker 3: he's probably right, then it can go ahead and defer 353 00:19:04,280 --> 00:19:09,119 Speaker 3: to the agency, but it's not obligated to do so. 354 00:19:09,800 --> 00:19:14,160 Speaker 3: And that's the real difference here. What the Court did 355 00:19:14,240 --> 00:19:17,480 Speaker 3: this year in Low for Bright was to return us 356 00:19:17,560 --> 00:19:21,879 Speaker 3: back to a world eighty years ago, which was the 357 00:19:22,000 --> 00:19:27,800 Speaker 3: world dominated by skidmore difference, where courts could follow what 358 00:19:28,320 --> 00:19:31,320 Speaker 3: the agency said if they had the power to persuade 359 00:19:31,760 --> 00:19:34,280 Speaker 3: the court that they were right. I don't know. If 360 00:19:34,280 --> 00:19:38,800 Speaker 3: your audience is highly technical and filled with a lot 361 00:19:38,800 --> 00:19:41,520 Speaker 3: of lawyers, I could actually give another analogy that I 362 00:19:41,560 --> 00:19:46,080 Speaker 3: think claims did more difference well for lawyers. Okay, if 363 00:19:46,240 --> 00:19:49,520 Speaker 3: we go back to a world back in the common law, 364 00:19:49,800 --> 00:19:53,719 Speaker 3: where courts were deciding all sorts of questions, courts had 365 00:19:53,760 --> 00:19:58,560 Speaker 3: to follow precedents of prior court decisions, and the Pennsylvania 366 00:19:58,800 --> 00:20:03,320 Speaker 3: Supreme Court, let's say, needed to follow prior decisions of 367 00:20:03,359 --> 00:20:07,920 Speaker 3: the Pennsylvania Supreme Court unless or until they overruled themselves. 368 00:20:08,080 --> 00:20:11,959 Speaker 3: Binding precedent followed when you were in the same state 369 00:20:12,320 --> 00:20:16,200 Speaker 3: with the same court. However, it was always the case, 370 00:20:16,200 --> 00:20:19,040 Speaker 3: and it still is always the case. Say a Pennsylvania 371 00:20:19,080 --> 00:20:23,320 Speaker 3: Supreme Court could look to the decisions of the Ohio 372 00:20:23,400 --> 00:20:28,080 Speaker 3: Supreme Court or the Florida Supreme Court in deciding very 373 00:20:28,080 --> 00:20:32,960 Speaker 3: similar cases, and they weren't obligated to follow what the 374 00:20:33,040 --> 00:20:37,359 Speaker 3: Ohio or the Florida courts decided, but they might be 375 00:20:37,440 --> 00:20:41,600 Speaker 3: persuaded by what the courts in Ohio and Florida decided. 376 00:20:41,880 --> 00:20:45,679 Speaker 3: And that's the way to think about Gidmore deference is 377 00:20:46,359 --> 00:20:50,399 Speaker 3: not mandatory to follow it, but it is an option 378 00:20:50,640 --> 00:20:52,880 Speaker 3: if a court is persuaded. 379 00:20:53,640 --> 00:20:57,080 Speaker 2: In the opinion in Low ur Bright, the Chief Justice 380 00:20:57,320 --> 00:21:01,719 Speaker 2: John Roberts invoked the skid defense a couple of times. 381 00:21:01,840 --> 00:21:04,879 Speaker 2: What was his position on it? Was he telling courts 382 00:21:05,000 --> 00:21:05,360 Speaker 2: use this? 383 00:21:06,080 --> 00:21:10,320 Speaker 3: He says, it's available. It's still available. Why because it's 384 00:21:10,320 --> 00:21:14,720 Speaker 3: a doctrine that still puts the court in the driver's seat, 385 00:21:14,800 --> 00:21:18,280 Speaker 3: because it's the court that gets to decide whether they 386 00:21:18,520 --> 00:21:21,680 Speaker 3: think it's appropriate to refer to the agency, whether they're 387 00:21:21,720 --> 00:21:26,240 Speaker 3: persuaded that the agency has the best interpretation of the statute. 388 00:21:26,800 --> 00:21:30,800 Speaker 3: And Chief Justice Roberts, in the majority opinion in moper Bright, 389 00:21:30,920 --> 00:21:36,280 Speaker 3: says that's fine in agencies, he says, are still deserving 390 00:21:36,480 --> 00:21:42,320 Speaker 3: of respectful consideration for their views. So a court should 391 00:21:42,640 --> 00:21:48,640 Speaker 3: certainly hear agencies out, and if they are persuaded, then 392 00:21:49,359 --> 00:21:52,160 Speaker 3: sure they follow them. You know, some people would say 393 00:21:52,160 --> 00:21:55,520 Speaker 3: it's not really a difference at all. It's what's always 394 00:21:55,560 --> 00:21:58,639 Speaker 3: there for any litigant. If you persuade the josh that 395 00:21:58,760 --> 00:22:02,439 Speaker 3: you have the best interpret the judge will agree with you. 396 00:22:02,680 --> 00:22:06,400 Speaker 3: And so it may not really give agencies a whole 397 00:22:06,440 --> 00:22:09,600 Speaker 3: lot of weight behind what they do. But you know, 398 00:22:09,680 --> 00:22:11,960 Speaker 3: the reality, of course, is that a lot of these 399 00:22:12,040 --> 00:22:16,320 Speaker 3: cases arise under statutes and with issues that are very technical, 400 00:22:17,040 --> 00:22:22,359 Speaker 3: and judges did before Chevron side with agencies, you know, 401 00:22:22,480 --> 00:22:26,119 Speaker 3: more often than not, and one might might expect the 402 00:22:26,160 --> 00:22:29,480 Speaker 3: same to happen afterwards, except we have, you know, a 403 00:22:29,680 --> 00:22:33,320 Speaker 3: different composition to the judiciary today. And I think the 404 00:22:33,359 --> 00:22:37,600 Speaker 3: Supreme Court's decision to overrule the Chevron is sending a 405 00:22:37,640 --> 00:22:42,280 Speaker 3: signal throughout the lower courts that you should be skeptical, 406 00:22:42,400 --> 00:22:47,119 Speaker 3: notwithstanding these passing references to skid More and the possibility 407 00:22:47,200 --> 00:22:51,040 Speaker 3: that it still might apply. It's very clear. I think 408 00:22:51,080 --> 00:22:54,520 Speaker 3: the message from the Supreme Court is be very skeptical 409 00:22:54,560 --> 00:22:57,880 Speaker 3: of agency power. And that's not only in the overruling 410 00:22:57,960 --> 00:23:02,040 Speaker 3: of Chevron, but it's in the Court's recent invocation of 411 00:23:02,119 --> 00:23:06,119 Speaker 3: the Major Questions doctrine and in some other cases as well. 412 00:23:06,680 --> 00:23:10,359 Speaker 2: According to a Bloomberg Law review of decisions issued between 413 00:23:10,440 --> 00:23:14,320 Speaker 2: June twenty eighth and July twenty six, federal courts didn't 414 00:23:14,359 --> 00:23:18,600 Speaker 2: refer to Skidmore in nineteen of twenty rulings on agency 415 00:23:18,640 --> 00:23:21,520 Speaker 2: actions that cited Lower Bright, which is the case that 416 00:23:21,600 --> 00:23:25,000 Speaker 2: did away with the Chevron doctrine, and federal judges ruled 417 00:23:25,040 --> 00:23:30,240 Speaker 2: against agency interpretations in thirteen out of those decisions. What 418 00:23:30,359 --> 00:23:31,159 Speaker 2: does that tell you? 419 00:23:31,600 --> 00:23:36,679 Speaker 3: It's not surprising for one Gidmore difference. It's not obligatory. 420 00:23:36,840 --> 00:23:40,919 Speaker 3: So there's no reason that courts need to decide on 421 00:23:41,000 --> 00:23:43,840 Speaker 3: the basis of Skidmore. There's no reasons for courts to 422 00:23:44,000 --> 00:23:49,800 Speaker 3: cite Skidmore. The court in Lowperbright was saying to lower courts, 423 00:23:50,240 --> 00:23:52,960 Speaker 3: you all figure it out and come up with your 424 00:23:53,040 --> 00:23:57,880 Speaker 3: own best reading of the statutes. And that doesn't leave 425 00:23:57,920 --> 00:24:01,240 Speaker 3: a whole lot of room for of any kind, even 426 00:24:01,280 --> 00:24:03,920 Speaker 3: an optional kind of deference like Skidmark. 427 00:24:04,600 --> 00:24:08,240 Speaker 2: I remember during the oral arguments in the Lower Bright case, 428 00:24:08,680 --> 00:24:12,760 Speaker 2: the Chief Justice saying something like, we haven't relied on 429 00:24:12,880 --> 00:24:16,880 Speaker 2: Chevron in more than a decade, But the lower courts 430 00:24:17,480 --> 00:24:19,240 Speaker 2: relied on Chevron. 431 00:24:18,760 --> 00:24:23,880 Speaker 3: Didn't They sure they cited the Chevron right absolutely That's 432 00:24:23,920 --> 00:24:28,520 Speaker 3: why Lower Bright's three key words Chevron is over ruled 433 00:24:28,560 --> 00:24:32,200 Speaker 3: were so important, as it signaled to the lower courts, 434 00:24:32,320 --> 00:24:36,320 Speaker 3: don't cite Chevron anymore. You have to figure it out. 435 00:24:37,040 --> 00:24:40,480 Speaker 3: And you know that's a I mean, I've kind of 436 00:24:40,520 --> 00:24:43,080 Speaker 3: thought of it as a legal earthquake. I mean, it's 437 00:24:43,119 --> 00:24:47,720 Speaker 3: really shaken the things up here. After forty years of 438 00:24:47,960 --> 00:24:51,560 Speaker 3: court citing Chevron, citing Chevron, citing Chevron, it was one 439 00:24:51,600 --> 00:24:55,760 Speaker 3: of the most widely cited administrative law decisions, really one 440 00:24:55,760 --> 00:24:59,320 Speaker 3: of the more widely cited of any Supreme Court decisions 441 00:24:59,320 --> 00:25:02,879 Speaker 3: of all time. Now the Court says away from that, 442 00:25:03,000 --> 00:25:07,640 Speaker 3: don't cite it. And so it's also I think has 443 00:25:07,880 --> 00:25:11,720 Speaker 3: around it kind of a penumber that is apparently telling 444 00:25:11,880 --> 00:25:15,920 Speaker 3: lower court judges be skeptical of deference of any kind, 445 00:25:16,200 --> 00:25:20,400 Speaker 3: because again, your job as judges is not to defer 446 00:25:20,520 --> 00:25:24,239 Speaker 3: to anyone, but to make the best reading of the 447 00:25:24,320 --> 00:25:28,960 Speaker 3: statue yourself. And yes, you can listen to the agency, 448 00:25:29,080 --> 00:25:32,840 Speaker 3: give the agency respectful consideration, but you know that doesn't 449 00:25:32,960 --> 00:25:36,880 Speaker 3: leave much room for a notion of deference if it's 450 00:25:36,960 --> 00:25:40,160 Speaker 3: the courts that are supposed to be decided this difference 451 00:25:40,200 --> 00:25:43,840 Speaker 3: of any kind, even a voluntary deference even though the 452 00:25:43,920 --> 00:25:48,400 Speaker 3: lower bright opinion as you can rely on if you're 453 00:25:48,440 --> 00:25:51,400 Speaker 3: persuaded by the agency. But if you're a lower court 454 00:25:51,440 --> 00:25:53,960 Speaker 3: judge and you're going to agree with the agency, then 455 00:25:54,119 --> 00:25:58,760 Speaker 3: just lay out the argument for why the best reading 456 00:25:58,800 --> 00:26:01,920 Speaker 3: of the statute is the same one that the agency 457 00:26:02,040 --> 00:26:05,320 Speaker 3: has made no need to cite. Get more. Just lay it. 458 00:26:05,240 --> 00:26:07,560 Speaker 2: Out, and you sort of referred to this I think 459 00:26:07,640 --> 00:26:11,800 Speaker 2: Bloomberg law. The review found that district court decisions on 460 00:26:12,040 --> 00:26:16,400 Speaker 2: requests to freeze Biden administration regulations show a partisan pattern. 461 00:26:16,720 --> 00:26:19,440 Speaker 2: Seven of the eight rulings that pause the rules were 462 00:26:19,440 --> 00:26:24,119 Speaker 2: Republican appointed judges. Democratic appointee handed down the one rejecting 463 00:26:24,160 --> 00:26:27,520 Speaker 2: an injunction bid. So does it seem as if the 464 00:26:27,960 --> 00:26:32,280 Speaker 2: more conservative judges are the ones that are anti agency 465 00:26:32,320 --> 00:26:35,879 Speaker 2: and are going to rule against agencies if they can, 466 00:26:35,960 --> 00:26:40,280 Speaker 2: whereas the more liberal judges will rule four agencies. 467 00:26:40,720 --> 00:26:44,200 Speaker 3: It's generally been the pattern. It's generally been the pattern 468 00:26:44,480 --> 00:26:48,560 Speaker 3: in a very subtle way over the past several decades, 469 00:26:48,640 --> 00:26:54,120 Speaker 3: but certainly in recent years we've seen a greater degree 470 00:26:54,160 --> 00:26:58,719 Speaker 3: of polarization in the judiciary that kind of mirrors the 471 00:26:58,760 --> 00:27:03,600 Speaker 3: polarization and society at large, and this is a matter 472 00:27:03,760 --> 00:27:09,440 Speaker 3: I think of considerable concern generally about our court system. 473 00:27:09,920 --> 00:27:15,000 Speaker 3: But it also will manifest itself in judges of different 474 00:27:15,240 --> 00:27:23,880 Speaker 3: you know, political, partisan, ideological persuasions come into different readings 475 00:27:23,880 --> 00:27:28,280 Speaker 3: of the statutes. There's you know, empirical evidence that indicates that, 476 00:27:28,520 --> 00:27:31,679 Speaker 3: and we might expect that judges that are skeptical of 477 00:27:31,760 --> 00:27:36,119 Speaker 3: agency power are hearing this signal that the Supreme Court 478 00:27:36,160 --> 00:27:40,320 Speaker 3: is sending in lower Bright much more loudly and strongly 479 00:27:40,960 --> 00:27:44,320 Speaker 3: than our other judges. Perhaps now may be the case, 480 00:27:44,359 --> 00:27:48,399 Speaker 3: of course, that there will be judges that are willing 481 00:27:48,440 --> 00:27:51,200 Speaker 3: to side with the agency too, and they're going to 482 00:27:51,240 --> 00:27:55,359 Speaker 3: say the best reading is the agency's interpretation. In some sense, 483 00:27:55,359 --> 00:27:58,840 Speaker 3: we're going to have some dueling opinions I suspect in 484 00:27:59,200 --> 00:28:04,920 Speaker 3: various different courts around the country, ultimately perhaps having more 485 00:28:05,000 --> 00:28:08,199 Speaker 3: of these conflicts or what we call circuits splits that 486 00:28:08,320 --> 00:28:11,320 Speaker 3: the Supreme Court will have to resolve, and it's going 487 00:28:11,359 --> 00:28:13,359 Speaker 3: to go up to a majority of the Supreme Court 488 00:28:13,400 --> 00:28:17,920 Speaker 3: that I think has demonstrated itself to be extremely skeptical 489 00:28:17,960 --> 00:28:19,320 Speaker 3: of agency authority. 490 00:28:19,880 --> 00:28:22,200 Speaker 2: Coming up next on the Bloomberg Lawn Show, I'll continue 491 00:28:22,240 --> 00:28:26,119 Speaker 2: this conversation with professor Carrie Colinisi of the University of 492 00:28:26,160 --> 00:28:29,840 Speaker 2: Pennsylvania Law School. Will we reach a point where federal 493 00:28:29,880 --> 00:28:33,679 Speaker 2: agencies throw up their hands and say no more rulemaking 494 00:28:33,800 --> 00:28:37,040 Speaker 2: for us? I'm June Grosso and you're listening to Bloomberg. 495 00:28:39,080 --> 00:28:43,240 Speaker 2: The Supreme Court's decision overturning a forty year old president, 496 00:28:43,400 --> 00:28:46,440 Speaker 2: known as the Chevron Doctrine, was one of the most 497 00:28:46,600 --> 00:28:51,120 Speaker 2: watched cases of the last term. The Supreme Court's conservative 498 00:28:51,200 --> 00:28:55,360 Speaker 2: majority set forth a new standard calling on judges to 499 00:28:55,480 --> 00:28:59,880 Speaker 2: use their independent judgment to decide whether an agency acts 500 00:29:00,160 --> 00:29:03,640 Speaker 2: within the authority that Congress granted it, and a little 501 00:29:03,640 --> 00:29:07,440 Speaker 2: over a month after that decision, the effects can already 502 00:29:07,440 --> 00:29:11,240 Speaker 2: be seen in federal court rulings. District court decisions on 503 00:29:11,400 --> 00:29:16,880 Speaker 2: request to freeze Biden administration regulations showed a partisan pattern. 504 00:29:17,280 --> 00:29:21,440 Speaker 2: According to a Bloomberg Law review of rulings on agency actions, 505 00:29:21,880 --> 00:29:25,160 Speaker 2: seven of the eight rulings that paused rules were issued 506 00:29:25,200 --> 00:29:29,440 Speaker 2: by Republican appointed judges, while a Democratic appointee handed down 507 00:29:29,480 --> 00:29:33,320 Speaker 2: the one rule rejecting an injunction bid. I've been talking 508 00:29:33,320 --> 00:29:36,920 Speaker 2: to administrative law expert Carrie Coloniesi, a professor at the 509 00:29:37,000 --> 00:29:41,080 Speaker 2: University of Pennsylvania Law School. This may be a little extreme, 510 00:29:41,240 --> 00:29:43,200 Speaker 2: but do you think we'll get to the point where 511 00:29:43,240 --> 00:29:46,680 Speaker 2: agencies will throw up their hands and say, why go 512 00:29:46,760 --> 00:29:49,440 Speaker 2: through the rule making process when we're just going to 513 00:29:49,480 --> 00:29:51,360 Speaker 2: be overruled by the courts. 514 00:29:51,720 --> 00:29:56,640 Speaker 3: It might be certainly something that happens. We'll have to see. 515 00:29:56,680 --> 00:30:00,840 Speaker 3: I mean, there's actually one recent study done by a 516 00:30:00,960 --> 00:30:05,040 Speaker 3: legal scholar and political scientists at Texas A and M University, 517 00:30:05,360 --> 00:30:11,200 Speaker 3: Dan Walters, who looked at the productivity of actually legislatures 518 00:30:11,400 --> 00:30:14,520 Speaker 3: at the state level because one thought is that, you know, 519 00:30:14,600 --> 00:30:18,000 Speaker 3: if we have a judges that are not willing to 520 00:30:18,040 --> 00:30:21,640 Speaker 3: pass the buck to the agencies and to really back 521 00:30:21,720 --> 00:30:25,520 Speaker 3: up and support what the legislature meant, maybe we'll have 522 00:30:25,720 --> 00:30:29,560 Speaker 3: more legislation. And he actually found that, you know, there's 523 00:30:29,600 --> 00:30:33,360 Speaker 3: actually less legislation in states that didn't have something like 524 00:30:33,400 --> 00:30:38,280 Speaker 3: the Chevron doctrine at the state level. And he surmises that, 525 00:30:38,480 --> 00:30:41,600 Speaker 3: you know, it might be the same thing that you're 526 00:30:41,640 --> 00:30:45,480 Speaker 3: suggesting that my bother with legislation if at the end 527 00:30:45,520 --> 00:30:47,680 Speaker 3: of the day, courts are going to get to decide 528 00:30:47,720 --> 00:30:50,360 Speaker 3: what it is and it's going to be fixed because 529 00:30:50,600 --> 00:30:54,880 Speaker 3: when courts decide what a statute means that's in precedent, 530 00:30:55,440 --> 00:30:58,960 Speaker 3: and there's not a lot of flexibility, so you know, 531 00:30:59,080 --> 00:31:02,960 Speaker 3: even legislations might well kind of say, well, why bother, 532 00:31:03,200 --> 00:31:04,440 Speaker 3: and not only agencies. 533 00:31:04,600 --> 00:31:05,960 Speaker 2: It sounds pretty dismal. 534 00:31:05,920 --> 00:31:09,480 Speaker 3: But I will say there is one possibility here. Keep 535 00:31:09,520 --> 00:31:12,760 Speaker 3: in mind that lower Bright was a case that was 536 00:31:12,840 --> 00:31:18,440 Speaker 3: decided on the basis of a statute, the Administrative Procedure Acts, 537 00:31:18,840 --> 00:31:22,760 Speaker 3: and the court said that the Chevron doctrine was inconsistent 538 00:31:23,080 --> 00:31:29,920 Speaker 3: with this overriding statute that governs any time agencies are 539 00:31:29,960 --> 00:31:34,360 Speaker 3: in court and their actions are being challenged. That statute 540 00:31:34,560 --> 00:31:38,760 Speaker 3: says that all relevant decisions are to be decided by courts, 541 00:31:38,960 --> 00:31:44,280 Speaker 3: All relevant legal determinations are supposed to be decided by courts, 542 00:31:44,840 --> 00:31:50,080 Speaker 3: and Loper Bright really hinged itself in its reasoning on 543 00:31:50,400 --> 00:31:55,480 Speaker 3: an inconsistency it saw between the Chevron doctrine of deference 544 00:31:56,320 --> 00:32:02,080 Speaker 3: and the Administrative Procedure Acts that leaves. So maybe this 545 00:32:02,200 --> 00:32:06,160 Speaker 3: isn't so dismal. If there is a Congress that wants 546 00:32:06,200 --> 00:32:09,880 Speaker 3: to amend the Administrative Procedure Act, it's possible for them 547 00:32:09,960 --> 00:32:12,960 Speaker 3: to reverse what the Court has done here in Loper Bright. 548 00:32:13,560 --> 00:32:15,120 Speaker 3: So we'll have to see I mean, I think what 549 00:32:15,160 --> 00:32:18,000 Speaker 3: the future holds is going to be dependent upon a 550 00:32:18,120 --> 00:32:22,400 Speaker 3: very complex set of interactions between judges at a lower 551 00:32:22,400 --> 00:32:27,200 Speaker 3: court level, different persuasions between what the Supreme Court does 552 00:32:27,240 --> 00:32:32,560 Speaker 3: in future cases, what agencies do, and what Congress ultimately 553 00:32:32,800 --> 00:32:36,240 Speaker 3: do in what might be called, you know, the administrative 554 00:32:36,320 --> 00:32:40,080 Speaker 3: governance game. That's going to be playing out for some 555 00:32:40,200 --> 00:32:41,840 Speaker 3: years to come, and we'll have to see how it 556 00:32:41,880 --> 00:32:42,400 Speaker 3: plays out. 557 00:32:43,480 --> 00:32:46,320 Speaker 2: I wanted to get your take on what the Chief 558 00:32:46,520 --> 00:32:49,640 Speaker 2: Justice meant when he wrote in lower bright in an 559 00:32:49,680 --> 00:32:52,640 Speaker 2: agency case in particular, the court will go about its 560 00:32:52,680 --> 00:32:56,920 Speaker 2: task with the agency's body of experience and informed judgment, 561 00:32:57,520 --> 00:32:59,960 Speaker 2: among other information, at its disposed. 562 00:33:01,160 --> 00:33:06,040 Speaker 3: Sure, well, this is a recognition that first, agencies are 563 00:33:06,120 --> 00:33:10,680 Speaker 3: themselves part of the same government that courts are right, 564 00:33:11,360 --> 00:33:17,040 Speaker 3: and this is a reality why agencies historically have won 565 00:33:17,480 --> 00:33:21,840 Speaker 3: more often than not when their actions are challenged in court. 566 00:33:22,360 --> 00:33:27,960 Speaker 3: It's not easy to prevail against a government litigator because 567 00:33:28,040 --> 00:33:32,520 Speaker 3: they do bring with them a lot of expertise and knowledge, 568 00:33:32,600 --> 00:33:37,520 Speaker 3: and courts have at least historically tended to say, well, 569 00:33:37,600 --> 00:33:40,760 Speaker 3: you know, they're the government. They you know, we're the 570 00:33:40,800 --> 00:33:46,120 Speaker 3: government too, in some sense, maybe on the same side, 571 00:33:46,240 --> 00:33:49,440 Speaker 3: and you know, as long as the government's been pretty 572 00:33:49,480 --> 00:33:54,080 Speaker 3: reasonable and Congress intended the agency to decide we should 573 00:33:54,200 --> 00:33:56,800 Speaker 3: we should follow that. That was the underlying basis of 574 00:33:56,880 --> 00:34:01,320 Speaker 3: Chevron and Justice roberts Is, I think recognized the reality 575 00:34:01,480 --> 00:34:06,320 Speaker 3: that those factors will still be there. The question, though, 576 00:34:06,480 --> 00:34:09,560 Speaker 3: is the judiciary has changed, and it's not so clear 577 00:34:09,600 --> 00:34:13,280 Speaker 3: that there are as many judges that are as inclined 578 00:34:13,320 --> 00:34:16,239 Speaker 3: to say that we're on the same team as the agencies. 579 00:34:16,440 --> 00:34:19,799 Speaker 3: There are judges, I think out on the federal judiciary 580 00:34:19,840 --> 00:34:24,760 Speaker 3: today that the administrative agencies is part of a deep state, 581 00:34:25,080 --> 00:34:28,719 Speaker 3: you know, a conspiracy of working against the public and 582 00:34:29,560 --> 00:34:34,400 Speaker 3: hamstringing business unduly and so forth, being out of control 583 00:34:34,440 --> 00:34:37,120 Speaker 3: and needing to be rained in and being very suspicious 584 00:34:37,239 --> 00:34:40,200 Speaker 3: of them. And when you have judges that take that view, 585 00:34:40,520 --> 00:34:44,040 Speaker 3: litigants know how to find them, and they will find them, 586 00:34:44,239 --> 00:34:47,000 Speaker 3: and we will get rulings that have the agency on 587 00:34:47,040 --> 00:34:48,520 Speaker 3: the losing side in the future. 588 00:34:49,040 --> 00:34:52,080 Speaker 2: Do you think that at some point this is going 589 00:34:52,120 --> 00:34:54,680 Speaker 2: to have to go back to the Supreme Court to 590 00:34:54,760 --> 00:34:58,080 Speaker 2: give more instruction to the lower courts or this is it? 591 00:34:58,600 --> 00:34:58,759 Speaker 1: Oh? 592 00:34:58,840 --> 00:35:02,520 Speaker 3: No, there's a lot of unanswered questions in lower right. 593 00:35:03,280 --> 00:35:06,879 Speaker 3: The Supreme Court is not done with this by any means. 594 00:35:07,320 --> 00:35:10,719 Speaker 3: And there's two types of questions that will be facing 595 00:35:10,840 --> 00:35:14,480 Speaker 3: the court. One I might call kind of meta questions, 596 00:35:14,520 --> 00:35:19,440 Speaker 3: that is, questions about lower Bride and what the overruling 597 00:35:19,520 --> 00:35:24,479 Speaker 3: of Chevron mean. These are questions about, for example, what 598 00:35:24,560 --> 00:35:30,080 Speaker 3: did overruling Chevron mean, for example, for past decisions and 599 00:35:30,160 --> 00:35:36,880 Speaker 3: determinations by courts that had been grounded on Chevron reasoning. 600 00:35:37,480 --> 00:35:41,080 Speaker 3: The Court tried to address this in one paragraph of 601 00:35:41,160 --> 00:35:44,600 Speaker 3: its opinion, but it's ambiguous and leaves a lot of questions. 602 00:35:44,600 --> 00:35:47,880 Speaker 3: So these meta questions about what lower Bright means and 603 00:35:47,920 --> 00:35:50,799 Speaker 3: how it will apply, and there's several of them, those 604 00:35:50,880 --> 00:35:53,719 Speaker 3: will be there. The second set of questions that are 605 00:35:53,719 --> 00:35:56,279 Speaker 3: going to be there is to settle all of these 606 00:35:56,640 --> 00:36:01,719 Speaker 3: more targeted statute specific questions that are going to arise, 607 00:36:02,360 --> 00:36:05,560 Speaker 3: and to some extent, they always did arise when different 608 00:36:05,640 --> 00:36:11,840 Speaker 3: circuits come to different meanings about what the same statute says. 609 00:36:12,120 --> 00:36:15,880 Speaker 3: And the Court may well have to be even busier 610 00:36:15,920 --> 00:36:19,160 Speaker 3: than it is today in resolving what we would call 611 00:36:19,239 --> 00:36:22,880 Speaker 3: circuit splits or where you know, different courts are coming 612 00:36:22,920 --> 00:36:27,600 Speaker 3: to different best readings of the same statute and we'll 613 00:36:27,640 --> 00:36:29,840 Speaker 3: have to see how that plays out too. But yes, 614 00:36:30,120 --> 00:36:35,200 Speaker 3: there's no getting out of the fact that statutory interpretation is, 615 00:36:35,440 --> 00:36:38,720 Speaker 3: you know, a fundamental part of what judges and lawyers 616 00:36:38,760 --> 00:36:42,520 Speaker 3: are tasked with doing. It was so under Chevron, and 617 00:36:43,280 --> 00:36:47,239 Speaker 3: the Supreme Court will continue to have to play a role. 618 00:36:47,280 --> 00:36:49,920 Speaker 3: There's no getting out of this. You know. 619 00:36:50,040 --> 00:36:53,319 Speaker 2: I wonder facetiously, but I wonder if at some point 620 00:36:53,480 --> 00:36:57,760 Speaker 2: the justices who overturn these precedents are going to regret 621 00:36:57,920 --> 00:37:00,439 Speaker 2: overturning so many in such a short pers of time. 622 00:37:00,480 --> 00:37:02,719 Speaker 2: Because if you look at, for example, what's happened with 623 00:37:02,800 --> 00:37:06,399 Speaker 2: the reversal of Roe v. Wade, where Justice Kavanaugh said, 624 00:37:06,440 --> 00:37:08,520 Speaker 2: now we'll leave it to the States, we can wash 625 00:37:08,560 --> 00:37:11,360 Speaker 2: our hands of this. Well, look at what's happened. 626 00:37:11,400 --> 00:37:14,640 Speaker 3: It's a complete mess, right right exactly. And this is 627 00:37:14,640 --> 00:37:17,360 Speaker 3: why I say this is an earthquake. There's going to 628 00:37:17,440 --> 00:37:19,960 Speaker 3: be some rubble in place, and this question of you know, 629 00:37:20,239 --> 00:37:24,719 Speaker 3: which structures will remain standing, as with any earthquake, how 630 00:37:25,560 --> 00:37:30,000 Speaker 3: badly things will have been damaged. It's not a court 631 00:37:30,080 --> 00:37:37,080 Speaker 3: that's exercising what had been traditional conservative humility at all, 632 00:37:37,160 --> 00:37:41,399 Speaker 3: but really been quite an aggressive court here. And you're right, 633 00:37:41,719 --> 00:37:45,120 Speaker 3: it's unleashed, you know, a mess if you will. You know, 634 00:37:45,160 --> 00:37:49,480 Speaker 3: at the minimum, on abortion right, it's certainly not alleviated. 635 00:37:50,000 --> 00:37:53,759 Speaker 3: The Supreme Courts need to decide cases like in the 636 00:37:53,800 --> 00:37:57,600 Speaker 3: misipristone case or you know, heaven forbid, we're going to 637 00:37:57,680 --> 00:38:03,040 Speaker 3: have compstack Act case for example, down the road. So 638 00:38:03,120 --> 00:38:07,680 Speaker 3: abortion has not left the Supreme Court's agenda, and this 639 00:38:07,840 --> 00:38:12,520 Speaker 3: whole idea of overturning Chevron and having a major questions 640 00:38:12,560 --> 00:38:16,279 Speaker 3: doctrine all of it. Ultimately, though, there may be a 641 00:38:16,400 --> 00:38:19,880 Speaker 3: message to the mess. First of all, it's disruptive to government, 642 00:38:19,960 --> 00:38:24,919 Speaker 3: and maybe that's part of their objective here. Another thing 643 00:38:25,440 --> 00:38:29,440 Speaker 3: is empowering of the court. It's putting the court front 644 00:38:29,480 --> 00:38:34,200 Speaker 3: and center in governing on some of the most controversial 645 00:38:34,320 --> 00:38:37,320 Speaker 3: issues of our time in a way that you know, 646 00:38:37,360 --> 00:38:40,880 Speaker 3: I don't think it's been occupying that role for at 647 00:38:41,000 --> 00:38:45,319 Speaker 3: least fifty years, probably even more. When you look across 648 00:38:45,640 --> 00:38:48,640 Speaker 3: the whole sweep and certainly when you look at administrative 649 00:38:48,680 --> 00:38:52,239 Speaker 3: law decisions, the courts have not played the kind of 650 00:38:52,280 --> 00:38:56,279 Speaker 3: central role that now they will be playing. And you know, 651 00:38:56,600 --> 00:38:59,240 Speaker 3: it raises a host of questions about whether the courts 652 00:38:59,239 --> 00:39:02,240 Speaker 3: have the capacity to deal with these issues in a 653 00:39:02,280 --> 00:39:05,719 Speaker 3: smart and effective way. Are we going to have new 654 00:39:05,800 --> 00:39:12,440 Speaker 3: technologies and new ways of doing business that needs some sound, sensible, 655 00:39:12,880 --> 00:39:16,000 Speaker 3: good analytic decisions and will the courts be able to 656 00:39:16,080 --> 00:39:18,280 Speaker 3: deliver that? You know, it's an open question. 657 00:39:19,000 --> 00:39:22,440 Speaker 2: Unfortunately, it seems like there are a lot more questions 658 00:39:22,520 --> 00:39:25,720 Speaker 2: than answers. But thanks so much for your answers. Carrie. 659 00:39:26,000 --> 00:39:30,120 Speaker 2: That's Professor Carrie Coliniesi of the University of Pennsylvania Law School. 660 00:39:30,560 --> 00:39:33,239 Speaker 2: And that's it for this edition of the Bloomberg Law Podcast. 661 00:39:33,560 --> 00:39:35,960 Speaker 2: Remember you can always get the latest legal news by 662 00:39:36,000 --> 00:39:39,799 Speaker 2: subscribing and listening to the show on Apple Podcasts, Spotify, 663 00:39:40,120 --> 00:39:43,960 Speaker 2: and at Bloomberg dot com, slash podcast, Slash Law. I'm 664 00:39:44,040 --> 00:39:46,440 Speaker 2: June Grosso and this is Bloomberg