Speaker 1: This is Bloomberg Law with June Brusso from Bloomberg Radio.
Speaker 2: We will be moving forward swiftly on those articles. It's
Speaker 2: long overdue.
Speaker 1: Only one Cabinet secretary has ever been impeached by the House,
Speaker 1: and that was in eighteen seventy six. But House Republicans
Speaker 1: are trying to make that happen again, this time to
Speaker 1: Homeland Security Secretary Alejandro Majorcis. The Republicans who are leading
Speaker 1: the impeachment inquiry said that Majorcas has been ignoring the
Speaker 1: law and accused him of creating the crisis at the border.
Speaker 1: Here's the chair of the Homeland Security Committee, Republican Mark Green.
Speaker 2: Homeland Security Secretary Alejandro Majorcis took a similar oath, but
Speaker 2: he has not lived up to it. He is wilfully
Speaker 2: and systematically refused to comply with the laws passed by
Speaker 2: Congress and breached the trust of Congress and the American people.
Speaker 1: But Democrats, like Committee ranking member Benny Thompson, say that
Speaker 1: Republicans are confusing law with policy and that Majorcis has
Speaker 1: acted within his authority to enforce current immigration laws.
Speaker 3: He's leveraged the full range of authorities at his disposal,
Speaker 3: while stretching the resources provided by Congress to secure the border.
Speaker 3: He has removed record levels of migrants detained by more
Speaker 3: people than Congress has provided funding for, and prevented record
Speaker 3: levels of fentanyl from entering our communities.
Speaker 1: And Democratic Congressman Dan Goldman says its pure hypocrisy to
Speaker 1: impeach Mariorcists while he's working with a group of Senate
Speaker 1: Republicans to craft a bipartisan deal on immigration, a deal
Speaker 1: that House Republicans refused to consider. The committee vote to
Speaker 1: advance the impeachment articles against Mariorcists was eighteen to fifteen
Speaker 1: down party lines. Joining me is an expert on impeachment,
Speaker 1: Michael Gerhard, a professor at the University of North Carolina
Speaker 1: Law School. I'd like to start with the basics, explain
Speaker 1: the standard of high crimes and misdemeanors needed to impeach someone.
Speaker 4: Those terms referred to serious abuses of power or misconduct
Speaker 4: on the part of the people who are impeachable that
Speaker 4: seriously hurts the republic.
Speaker 1: So there's nothing definitive. It's a broad category.
Speaker 4: Well, it's a broad category, but I don't think it
Speaker 4: lacks definiteness. I think it just means that it creates
Speaker 4: a metric which ought to sort of recognize that some
Speaker 4: things are going to fall below it and some things
Speaker 4: are going to fit. Jay Walkin won't qualify, but President's
Speaker 4: lying to the Senate to securit a Treaties ratification might qualify.
Speaker 4: Abuse of the pardon power might qualify.
Speaker 1: They have advanced two articles of impeachment against Secretary Majorcis.
Speaker 1: The first is that he's willfully and systemically refused to
Speaker 1: comply with immigration laws enacted by Congress. They're basically saying
Speaker 1: that his actions have created the crisis at the border.
Speaker 4: That's what they want to say. Yes, and of course
Speaker 4: that's absurd. That crisis has been around for decades and
Speaker 4: New Yorcus is following the law, as both he and
Speaker 4: President Biden understand.
Speaker 1: Some Democratic lawmakers have said that what the Republicans are
Speaker 1: complaining about or attacking Majorcus for is policy.
Speaker 4: Yes. In fact, for example, the reference to as a
Speaker 4: basis for one of the patron articles, New York has
Speaker 4: has made various false statements. But if you sort of
Speaker 4: get behind that, what the articles are really saying is, well,
Speaker 4: he hasn't said under oath that the situation at the
Speaker 4: southern border is like what we the Republicans think it is.
Speaker 4: They doesn't make for a false statement. It just means
Speaker 4: that New York is you know from the respective he's god,
Speaker 4: he's got a good faith understanding. It's just different than
Speaker 4: what the Republicans said.
Speaker 1: That's part of the second article of impeachment, knowingly making
Speaker 1: false it's to Congress and the American people and obstructing
Speaker 1: Congressional oversight of his department. In fact, he's testified before
Speaker 1: Congress more than any other cabinet member twenty seven times
Speaker 1: in thirty five months.
Speaker 4: And really what's behind that charge is he just hasn't
Speaker 4: said what they want him to say. He hasn't done
Speaker 4: what they want him to do, So no legitimate basis
Speaker 4: for impeachment.
Speaker 1: How unusual is it that they held two public impeachment
Speaker 1: hearings last month without majorcas is in person testimony or
Speaker 1: testimony from any fact witnesses.
Speaker 4: Exactly right, because this is not about impeachure on wisconduct.
Speaker 4: It's about trying to hurt President Biden in his re
Speaker 4: election campaign. This is about trying to serve make a
Speaker 4: circus out of what's happening down at the border. So
Speaker 4: the problem with basing impeachment on policy differences is that's
Speaker 4: what elections are supposed to be about. And it's just
Speaker 4: absurd to think what the trial is going to look
Speaker 4: like if there were a trial on this, because what's
Speaker 4: going to be put on trial is the Biden immigration policy,
Speaker 4: and that's ridiculous. Peatment's design, as I said at the beginning,
Speaker 4: for serious misconduct or abuse of power that hurts the
Speaker 4: Republic and having a good face difference of opinion about
Speaker 4: what might work at the border and what might not
Speaker 4: work at the border is well within the bounds of
Speaker 4: the President and Secretary's discression. And it's something that is
Speaker 4: bear game to talk about in a presidential campaign.
Speaker 1: And two law professors who testified before the committee agree
Speaker 1: with you. They both stated they did not see a
Speaker 1: constitutional basis for impeachment. And there are a whole slate
Speaker 1: of Democrats that House Republicans want to impeach, including of
Speaker 1: course the president. How did we get to this frequent
Speaker 1: use of impeachment something that was rare in our history.
Speaker 4: It happened with Trump and those people that want to
Speaker 4: sort of follow his lead. So Mike Johnson is very
Speaker 4: close to Trump. You know, he voted not to impeach
Speaker 4: Trump either time. And he's working with the kind of
Speaker 4: far right and the magu Republicans in the House to
Speaker 4: really turn impeachment into a partisan weapon. This is not
Speaker 4: something that we've had experience with before because generally speaking,
Speaker 4: although we've never had a perfect system of politics, impeachment
Speaker 4: has been something that's been rarely used. But I think
Speaker 4: one way Republicans can dilute the impeachment of Trump to
Speaker 4: make it seem less serious, as if they just start
Speaker 4: impeaching everybody. But of course they're not going to be
Speaker 4: able to impeach everybody because they'd have to get the
Speaker 4: moderate Republicans to go along. And there's no prospect whatsoever
Speaker 4: that any of these things are going to result in
Speaker 4: the Senate conviction.
Speaker 1: Yeah, and so the Homeland Security Committee Chair Mark Green
Speaker 1: said he feels quote pretty good. The same question gets asked,
Speaker 1: are you just doing something that's going to wind up
Speaker 1: being fruitless anyway because of the Senate? Well, fine, if
Speaker 1: that's what they choose to do, but I have a
Speaker 1: duty to.
Speaker 4: Do right way is exactly what House Democrats said when
Speaker 4: they were faced with the same argument when they were
Speaker 4: trying to impeach Trump, and Republicans said at that time, Oh,
Speaker 4: this is a waste of time. It's just going to
Speaker 4: die in the Senate. But in my opinion, one big
Speaker 4: difference between the two impeachments of Trump and these other
Speaker 4: impeachments is the impeachments against Trump were based on his misconduct.
Speaker 4: Nobody invented that he engaged in certain activities that were
Speaker 4: beyond either the skill of his power or that really
Speaker 4: seriously injured the Constitution and the rule of law. So
Speaker 4: I think one reason why we get this kind of
Speaker 4: the whole slew of threats of impeachment is to perhaps
Speaker 4: desensitize I guess the public when it comes to the
Speaker 4: serious sense of impeachment. They want the public and gets
Speaker 4: sick of it. They want to turn it into a joke.
Speaker 4: And that's not what impeach is supposed to be for,
Speaker 4: supposed to be rare, supposed to be the last resort
Speaker 4: the dealing with going abuse of power that cannot be
Speaker 4: remedied in any other way.
Speaker 1: The full House is going to vote on this, and
Speaker 1: the Speaker the vote will take place as soon as possible,
Speaker 1: and then it goes to the Senate. Does the Senate
Speaker 1: have to hold a trial.
Speaker 4: Then that is the big question. The Senate has to
Speaker 4: do something now that doesn't necessarily mean hold the trial.
Speaker 4: The Senate has various options. One is to consider point
Speaker 4: of order to try and dismiss the articles basically for
Speaker 4: failing to staying anything that's impeachable. Another option is to
Speaker 4: have a trial committee authorized, which would then also consider
Speaker 4: motions and brief while by the parties, one of which
Speaker 4: might well be this ought to be dismissed because there's
Speaker 4: no basis for it, And I think the likelihood is
Speaker 4: that even in those scenarios I just described would be
Speaker 4: the likeless possibility in the Senate because holding a trial
Speaker 4: on these articles is absurd. As I mentioned before, it's
Speaker 4: absurd because what the trial had been involved is putting
Speaker 4: Biden's immigration policy on trial. That's never happened in American
Speaker 4: history before, and it shouldn't happen here, and I don't
Speaker 4: think the Senate's going to let it happen.
Speaker 1: So the Senate could also just run out the clock
Speaker 1: until the next election.
Speaker 4: Well, I don't know that the Senate will run out
Speaker 4: the clock. I think they'll reach some resolution. I find
Speaker 4: it less likely they would just run out the clock.
Speaker 4: I mean, for one reason that when you have an
Speaker 4: impeachment by the rules of the Senate, that tends to
Speaker 4: displace everything else on the agenda. So the Senate's going
Speaker 4: an incentive, if anything, to get rid of this quickly.
Speaker 4: I think the fact that there is no evidence, that
Speaker 4: Republicans themselves are saying there's no evidence, is a fatal
Speaker 4: problem with these impeachment articles. And then I also think
Speaker 4: another fatal problem is impeachment's not supposed to be a
Speaker 4: partisan weapon, supposed to have a lawful purpose, and there's
Speaker 4: no lawful purpose here.
Speaker 1: Also, some Democrats are pointing out that it's odd or
Speaker 1: hypocritical to impeach Majorcus at the same time that he's
Speaker 1: working with a group of Senate Republicans to craft a
Speaker 1: bypart is in deal to update immigration laws, a deal
Speaker 1: which House Republicans oppose.
Speaker 4: Exactly, And that tells us something out House Republicans' agenda.
Speaker 4: So I think when you know Speaker Mike Johnson says
Speaker 4: the Senate deal on the border is dead and arrival
Speaker 4: and then proceeds to prioritize an impeachment in New YORKUS,
Speaker 4: that pretty much is telling us all we need to
Speaker 4: know because impeaching New Yorkers will not solve the crisis
Speaker 4: at the border. Infect Senator Langford, a Republican from Oklahoma, said,
Speaker 4: it's just going to result in Biden putting somebody else
Speaker 4: in the same office, and that person will do exactly
Speaker 4: what ri Orcus did. So I think the fact that
Speaker 4: the House Repubments do not want to consider any compromise
Speaker 4: bill coming from the Senate tells us that they're not
Speaker 4: really concerned with whatever is happening at the border, but
Speaker 4: rather they want to obviously hurt Biden in his re
Speaker 4: election campaign.
Speaker 1: When was the last time anyone who was impeached was
Speaker 1: convicted in the Senate?
Speaker 4: Thomas Portius federal trial Judge Portis was convicted around twenty ten.
Speaker 4: But I mean, and there's one Cabinet member in American
Speaker 4: history who is impeached. That's William Beltnapp, who tried to
Speaker 4: resign but the Senate proceeded to hold a trial anyway
Speaker 4: because he'd been accused of bribery. But it turned out
Speaker 4: a majority of the Senate essentially voted to quit him
Speaker 4: because he was no longer in offered.
Speaker 1: And to put the Majorcis impeachment in context, there have
Speaker 1: only been twenty one impeachments in our country's history, and
Speaker 1: only eight were found guilty by the Senate and removed
Speaker 1: from office. And they were all federal judges like Judge Portius.
Speaker 1: Thanks so much for being on the show, Michael. That's
Speaker 1: Professor Michael Gerhardt of the University of North Carolina School
Speaker 1: of Law coming up next on the Bloomberg Law Show.
Speaker 1: After the latest two point three billion dollar jury verdict
Speaker 1: against Beyer over its Roundup weed killer, the question is
Speaker 1: does the company need a new legal strategy. I'm June
Speaker 1: Grosso and you're listening to Bloomberg. In the last three months,
Speaker 1: Beyer has been hammered by jury verdicts totally almost four
Speaker 1: billion dollars over its round Up weed killer. The latest
Speaker 1: courtroom loss was its biggest since round up cases started
Speaker 1: going to trial about five years ago, with the Pennsylvania
Speaker 1: jury awarding two point twenty five billion dollars to a
Speaker 1: former round Up user who blamed his cancer diagnosis on
Speaker 1: long term exposure to the herbicide. That prompted a fresh
Speaker 1: slump in Beyer shares as investors worried about the more
Speaker 1: than fifty thousand round up claims outstanding, and that raises
Speaker 1: the question of whether Beayer needs a new legal strategy
Speaker 1: and what new game plan is even available. Joining me
Speaker 1: is an expert in mass tort litigation, Elizabeth Birch, a
Speaker 1: professor at the University of Georgia School of Law. So
Speaker 1: Bayer's latest courtroom loss was its biggest since round up
Speaker 1: cases started going to trial. Aren't companies supposed to learn
Speaker 1: from past trials and avoid these huge verdicts.
Speaker 5: One would certainly hope. So although I think you know,
Speaker 5: Bear would probably mention that they've won ten of the
Speaker 5: last sixteen trials, I think their hope certainly is to
Speaker 5: try to get a case like this reverse on appeal,
Speaker 5: and there is some precedent for that in the past.
Speaker 5: Back in twenty nineteen, a California jury awarded roughly two
Speaker 5: point five billion dollars in damages that ended up getting
Speaker 5: slashed to eighty seven million. So it's still a lot
Speaker 5: of money, but certainly not money.
Speaker 1: With a bee, you know, beyor it's vowed to appeal,
Speaker 1: express confidence that will prevail, and it says it's not
Speaker 1: giving up as far as trying cases, But what is
Speaker 1: it strategy? Because it did settle, it did spend about
Speaker 1: ten billion on settling one hundred and fifty thousand cases.
Speaker 5: You're right, it absolutely did, and it also indicated I
Speaker 5: think a year or two ago, that it was planning
Speaker 5: to pull round Up off the market in the next
Speaker 5: couple of years. I think the hope being that at
Speaker 5: some point these cases will stop. But the difficulty of
Speaker 5: that bear's facing is that there's a long gap between
Speaker 5: exposure a round Up and then the potential for developing
Speaker 5: some sort of a non Hodgkinson bomar, a different type
Speaker 5: of cancer and these types of cases. So it's really
Speaker 5: hard to say, you know, even if we were to
Speaker 5: pull round Up off the market tomorrow, when the litigation
Speaker 5: might end, this isn't.
Speaker 1: The only multi billion dollar verdict in a mass torque case.
Speaker 1: Is there a reason why these verdicts are reaching what,
Speaker 1: you know, i'd consider astronomical figures.
Speaker 5: Yeah, I mean, you know, the juries are not happy
Speaker 5: with the evidence that they hear. There is evidence that
Speaker 5: they are wanting to punish the company. So this isn't
Speaker 5: just sort of a slap on the risk, let's compensate
Speaker 5: the victim type of damage award. This is a you've
Speaker 5: done something really wrong and we're angry about it kind
Speaker 5: of award.
Speaker 1: It certainly seems they're angry. So theyer is facing now.
Speaker 1: Ten trials are expected this year in state courts. It
Speaker 1: says the companies committed to trying round up cases based
Speaker 1: on the strength of the science, favorable regulatory assessments worldwide,
Speaker 1: and approven record of success at trial. It was successful
Speaker 1: until I think it was October when plaintiffs started racking
Speaker 1: up victories in California, Missouri, and Pennsylvania state courts. Did
Speaker 1: something happen where the cases started to turn against Beyer?
Speaker 5: You know, it's hard to pinpoint a particular sea change.
Speaker 5: They were certainly successful in settling a bulk of those
Speaker 5: cases through what's known as the multi district litigation process.
Speaker 5: That's at the federal level, but where they're really facing
Speaker 5: pressure now is at the state level, particularly in jurisdictions
Speaker 5: like Philadelphia.
Speaker 1: Do you know, does Beyer use the same legal team
Speaker 1: for these cases or do they change up legal teams?
Speaker 5: You know, I don't know the answer to that. I
Speaker 5: haven't followed who their lead lawyers are in these cases.
Speaker 5: But it's not uncommon for there to be several big
Speaker 5: law firms involved in handling a litigation.
Speaker 1: Like this, does beyor have enough money in its knowation
Speaker 1: coffers to settle these cases or to pay them.
Speaker 5: Even well, I mean that certainly remains to be seen.
Speaker 5: No money goes to the victims while cases are on appeal,
Speaker 5: and as you know, appeals can last for a couple
Speaker 5: of years. So certainly there's that question if they're going
Speaker 5: to continue to face these types of billion dollar verdicts,
Speaker 5: whether at some point it's going to become an issue.
Speaker 5: But they haven't indicated that they are considering filing for
Speaker 5: bankruptcy to my knowledge, And as you said.
Speaker 1: Even if they settle some cases, because Roundup is still
Speaker 1: on the market, they're exposed to future litigation exactly.
Speaker 5: So you can't sue just because you've been exposed to
Speaker 5: a chemical. You can only sue once something has manifested,
Speaker 5: some sort of injury has manifested, which means that if
Speaker 5: it takes some you know, ten to fourteen years between
Speaker 5: the exposure to the product and the development of the disease,
Speaker 5: that we're going to be looking at these types of
Speaker 5: lawsuits for many years to come.
Speaker 1: Do you know why Bayer didn't take round Up off
Speaker 1: the market? What went into their calculation.
Speaker 5: I can only assume it's because it's still a pretty
Speaker 5: big seller. You know, when they contemplated taking it off
Speaker 5: the market and indicated that they were going to take
Speaker 5: it off the market in the future, they were trying
Speaker 5: to come up with something that was equally effective at
Speaker 5: killing weeds, and that was going to take some time
Speaker 5: to develop. With my understanding, so I think they're trying
Speaker 5: to have some sort of replacement for it as soon
Speaker 5: as they pull it from the shelf.
Speaker 1: And there's contradictory scientific evidence and opinions from different agencies
Speaker 1: about whether the chemical in roundup is a carcinogen dravid
Speaker 1: and whether it's cancerous.
Speaker 5: That's correct, and I think that's part of what juries
Speaker 5: might be struggling with and maybe the reason for the
Speaker 5: ten wins that they've had at trials. So back in
Speaker 5: twenty fifteen, part of the World Health Organization shown called
Speaker 5: the International Agency for Research on Cancer, classified the chemical
Speaker 5: that's used in round Up, glycophosphate, as part of a
Speaker 5: chemical that is probably carcinogenic in humans. But the EPA
Speaker 5: back in twenty ten said there were no risks to
Speaker 5: human help. So we really have some conflicting findings between
Speaker 5: different organizations.
Speaker 1: Have plaintiffs attorneys had a different strategy in the latest cases.
Speaker 5: You know, I think every case is probably unique in
Speaker 5: the sense that you're really highlighting the facts of your
Speaker 5: particular client. And I think what we see in this
Speaker 5: latest case is not just the use of kind of
Speaker 5: garden variety round up on a half acre plot of land,
Speaker 5: but sustained use over a fairly large plot of land,
Speaker 5: multiple acres and many, many gallons of round up braid
Speaker 5: at a time. So you really do see a high
Speaker 5: volume of exposure. And it's possible that the cases that
Speaker 5: have been lost are cases with more casual use.
Speaker 1: So we talk about the possibility of future cases. But
Speaker 1: plaintiffs who sue in the future, are they on notice
Speaker 1: of the possible cancer causing agents in roundup?
Speaker 5: So this is one of the questions that we'll have
Speaker 5: to see in the future. You know that the cases
Speaker 5: that we're seeing right now don't have notice about this
Speaker 5: potential for cancer. But in tort law, there's something called
Speaker 5: the assumption of the risk and defense called comparative fault,
Speaker 5: which means, you know, for example, that if you're a
Speaker 5: smoker and you've been smoking for a long time. But
Speaker 5: you know that smoking can cause lung cancer, then you
Speaker 5: bear some sort of fault in continuing to smoke. So
Speaker 5: we may see defenses like that becoming more successful in
Speaker 5: the future.
Speaker 1: Another front that Behar still hopes will be successful is
Speaker 1: convincing US appeals courts that federal law preempts state based claims.
Speaker 5: Well, the preemption question has been out there for a
Speaker 5: long time. It's not some thing that they've been successful
Speaker 5: on thus far, and so you know, I think that's
Speaker 5: still a really open question that remains to be seen,
Speaker 5: but they haven't gotten a lot of traction with it.
Speaker 1: Would it be possible for Bayer to negotiate a global
Speaker 1: settlement of these claims.
Speaker 5: I think it's going to be really difficult for them
Speaker 5: at this point. They certainly tried to negotiate a global
Speaker 5: settlement several years ago when they tried to certify these
Speaker 5: cases as a class action in federal court. That was
Speaker 5: a move that was denied by the judge and the
Speaker 5: federal multi district litigation. It would be really difficult, I
Speaker 5: think without plaine of consent and Plaine offs attorney's consent
Speaker 5: to get any sort of a global settlement. Given that
Speaker 5: we're now looking at individual state court litigation, the round
Speaker 5: up litigation.
Speaker 1: Is it creating a cloud over the company itself?
Speaker 5: Certainly? I mean, you know, we see shares of Bear
Speaker 5: falling almost three percent before the jury announce their verdict,
Speaker 5: and the sharehold are certainly watching this. So this is
Speaker 5: a litigation that is a thorn in the side of Bear.
Speaker 1: If you were advising Beyer, how would you advise them
Speaker 1: to handle all these cases? I mean, try to settle.
Speaker 5: I mean, it's a real problem. There's not a way
Speaker 5: to get any kind of global resolution based on the
Speaker 5: types of things that we know now. So the easiest
Speaker 5: way to try to do something like that would be
Speaker 5: the file bankruptcy. But Bear has not indicated that I
Speaker 5: know of that they have any sort of plans of
Speaker 5: filing bankruptcy in the future. But in order to try
Speaker 5: to get rid of state and federal cases and any
Speaker 5: kind of holistic settlement, most defendants are looking at bankruptcy.
Speaker 1: Johnson and Johnson tried to get the Supreme Court to
Speaker 1: here it's appeal over a two point one billion dollar
Speaker 1: chalk award, and the court refused. That was back in
Speaker 1: twenty twenty one. Remind us of where the court stands
Speaker 1: on these damage awards.
Speaker 5: The Supreme Court back in the nineties decided several cases
Speaker 5: a trilogy of cases on punitive damages that capped essentially
Speaker 5: capped the ratio between compensatory damages and punitive damages is
Speaker 5: no greater than nine to one. Now, there can certainly
Speaker 5: be some exceptions to that, but in general, the Supreme
Speaker 5: Court has weighed in. So this is what we think
Speaker 5: would be appropriate. But the Supreme Court really has not
Speaker 5: gotten involved in these types of mass towards settlements. In fact,
Speaker 5: the closest that we've really seen recently has been the
Speaker 5: argument in front of the Supreme Court over the Purdue pharmacate,
Speaker 5: where the Stackler family is trying to fre ride on
Speaker 5: the bankruptcy of Purdue to avoid civil liability for the
Speaker 5: opioid epidemics.
Speaker 1: Can the round Up litigation be compared to the Tauk litigation?
Speaker 1: Is it similar?
Speaker 5: It is similar Like round Up. There is a latency
Speaker 5: period in town, particularly between the exposure to tell Some
Speaker 5: would say that's exposure to taut laced with asbestos, between
Speaker 5: the exposure and the development of the disease. So I
Speaker 5: think both Johnson and Johnson and the tout cases and
Speaker 5: there in the round up cases are struggling with how
Speaker 5: do we get closure in a case like this where
Speaker 5: there are likely to be in many more cases in
Speaker 5: the pipeline for years to come.
Speaker 1: I've been noticing recently that not just in this area,
Speaker 1: but in many areas, there are just stunning jury verdicts.
Speaker 6: You know.
Speaker 5: I think what we see oftentimes is in the headlines.
Speaker 5: We get these astronomical verdicts because they are so newsworthy
Speaker 5: and they're so fun to report. But it's important to
Speaker 5: remember that in about eighty percent of the cases, judges
Speaker 5: and juries actually agree on what the amount should be.
Speaker 5: And so when you see verdicts like this, they aren't
Speaker 5: necessarily the run of the mill cases. They're typically some
Speaker 5: kind of an aberration, and there might well be a
Speaker 5: reason for that.
Speaker 1: Thanks so much for being on the show, Elizabeth, then
Speaker 1: giving us insights into this complex area of litigation. As
Speaker 1: Professor Elizabeth Birch of the University of Georgia School of Law.
Speaker 1: Coming up next on The Bloomberg Law Show, Harvard University
Speaker 1: is facing congressional investigations as well as an investigation by
Speaker 1: the Department of Education. I'm June Grossen, you're listening to Bloomberg.
Speaker 1: Harvard University is still struggling to resolve tensions after President
Speaker 1: Claudine Gay resigned last month amid an onslaught of criticism
Speaker 1: over her response to anti Semitism as well as accusations
Speaker 1: of plagiarism in her scholarship. The school is under investigation
Speaker 1: by congressional committees and the Department of Education. Joining me
Speaker 1: is Janet Lauren, the Bloomberg Higher Education and Finance reporter.
Speaker 1: How many House committees are investigating Harvard.
Speaker 6: So two congressional committees are investigating Harvard. The House Education
Speaker 6: and the Workforce Committee has two inquiries going on on
Speaker 6: and the House Waves and Means Committee has has its
Speaker 6: own inquiry. And you'll remember that the House Ways and
Speaker 6: Means Committee called Harvard President Claudine Gay, as well as
Speaker 6: the presidents of MIT and PEN for that now infamous
Speaker 6: hearing on December fifth.
Speaker 1: And it's sort of amazing that two of them were
Speaker 1: fired or had to leave.
Speaker 6: Yes, And there's been pressure on the third president, Sally
Speaker 6: Cornbluth at MIT, for her to step down, but her
Speaker 6: board has been pretty supportive.
Speaker 7: They came out right after the hearing in support.
Speaker 1: Of her, and the Harvard board was pretty supportive until
Speaker 1: these plagiarism allegations came up with gay Right.
Speaker 6: Yes, they came out on December twelfth with a statement
Speaker 6: that they support her and she was the right leader
Speaker 6: for Harvard, and then you started seeing more plagiarism charges
Speaker 6: coming out. But also there was a couple of other
Speaker 6: things that we reported on and we broke the news
Speaker 6: on about Harvard, including a seventeen percent decline in early applications,
Speaker 6: this second congressional inquiry that came up at the end
Speaker 6: of December, and then another big donor pulled out, Len Blivotnik,
Speaker 6: who had donated almost three hundred million dollars to Harvard.
Speaker 6: And we also wrote a lot about the constrained finances.
Speaker 6: So while certainly plagiarism was taking up a lot of
Speaker 6: space and energy, there are also a lot of financial
Speaker 6: constraints to Harvard. And you think, well, they have a
Speaker 6: fifty one billion dollar endowment, how could that be possible? Well,
Speaker 6: because they rely quite a lot on fundraising. They've raised
Speaker 6: over a billion dollars every year since twenty fourteen, and
Speaker 6: people have been pulling back. Now, granted we're not going
Speaker 6: to know the full numbers until June thirtieth.
Speaker 7: Of this year.
Speaker 6: Their endowment returns have not been great. They haven't seen
Speaker 6: these double digit returns for many years. Of course, everyone
Speaker 6: did in twenty twenty one, but Harvard lagged its peers.
Speaker 6: And they also are spending a lot, and also one
Speaker 6: of their biggest donors is the federal government. Eleven percent
Speaker 6: of their budget last year came from the federal government
Speaker 6: in scientific research grants and other grants. And that money
Speaker 6: also doesn't include one hundred and five million dollars in
Speaker 6: federal loans that the government gave to its students. So
Speaker 6: they're very generous in financial aid for undergraduates, but graduate students.
Speaker 1: Have to borrow.
Speaker 6: So these congressional hearings and inquiries, and then we haven't
Speaker 6: even talked about the Education Department separate in quiry. There's
Speaker 6: a lot going on in Harvard. Their legal bills are mounting,
Speaker 6: and they added an additional law firm.
Speaker 7: To help them with a congressional committee work.
Speaker 1: So Wilmer Hale, that law firm was the only law
Speaker 1: firm who prepared Gay for her testimonies.
Speaker 6: At that's my understanding, But a place like Harvard is
Speaker 6: very complicated, so you know, wilmer Hale, we noted a
Speaker 6: ton of legal work for the affirmative action case, and
Speaker 6: that was another legal challenge that Harvard loss that had
Speaker 6: I'm sure racked up a lot of legal expenses, and
Speaker 6: on June twenty nine, Harvard lost that case in the
Speaker 6: Supreme Court.
Speaker 1: Was wilmer Hale doing this work pro bono? So?
Speaker 6: One attorney at wilmer Hale, Bill Lee, used to be
Speaker 6: the chairman of their governing board, which is called the
Speaker 6: Harvard Corporation, and his title with senior fellow and Harvard
Speaker 6: had discussed that he personally did not charge for his
Speaker 6: own time advising Harvard in the firmative ash case. But
Speaker 6: that doesn't mean the entire law firm wasn't big paid.
Speaker 6: My understanding as it was.
Speaker 1: And they were also advising the Penn president.
Speaker 7: Yes, they did advise the Penn president.
Speaker 6: And they're also advising Penn on their ways and means
Speaker 6: in coiry. And I should note that ways and means
Speaker 6: is not only Harvard, it's also Penn, MIT and Cornell.
Speaker 1: Is there something about wilmer Hale. Do they have a
Speaker 1: specific department that handles education. Is there a reason why
Speaker 1: they're so involved.
Speaker 6: Well, my understanding is there was a connection with Bill Lee,
Speaker 6: again is the senior fellow, former chairman of the board
Speaker 6: at Harvard, and he did a lot of the work
Speaker 6: for the admissions case, so perhaps they retained them to
Speaker 6: do other work. I know that Ropes and Gray had
Speaker 6: been a longtime firm for Harvard. But again there's a
Speaker 6: lot of legal work zoning, you know, real estate investments.
Speaker 6: It's a six billion dollar operation, so they must have
Speaker 6: a lot of different firms. And then one of the
Speaker 6: reports about plagiarism talked about another firm that they had
Speaker 6: employed during you know, the questions and one of the
Speaker 6: congressional reports that came out, Harvard released a summary said
Speaker 6: another firm that they had employed was Claire Locke and
Speaker 6: that was again specifically about the plagiarism charge.
Speaker 1: So now they're hiring another firm, King and Spaulding to
Speaker 1: come on and work with Wilmer Hale.
Speaker 7: Yes, that is correct, So now.
Speaker 1: Where does the plagiar investigations stand? Is it over?
Speaker 6: So that was granted an extension on December twenty ninth,
Speaker 6: they turned in reports to you know, addressing the inquiry, and.
Speaker 7: We don't know where that stands.
Speaker 6: And then the Anti Semitism Inquiry, and we had a
Speaker 6: story about that as well, and that story was about
Speaker 6: Harvard's inadequate answer to the probe. And you know, if
Speaker 6: you read the statement that Virginia Fox, the chairman of
Speaker 6: the committee, again the very person who called the December
Speaker 6: fifth hearing, she said that Harvard could face compulsory measures
Speaker 6: if it fails to cooperate with the inquiry, and that means,
Speaker 6: you know, they have the authority to issue subpoenis.
Speaker 1: Is this usual for congressional committees to be investigating private schools?
Speaker 7: Well, that's an excellent question.
Speaker 6: Why is congress in involving itself in private schools? And
Speaker 6: the answer is something we touched on earlier. Harvard and
Speaker 6: a lot of other search universities get a ton of
Speaker 6: money from the federal government. They got hundreds of millions
Speaker 6: of dollars annually in federal research grants. Their students last
Speaker 6: year got one hundred and five million dollars in federal
Speaker 6: student loans to borrow for graduate school, like at Harvard
Speaker 6: Law School. You know, it's one hundred and ten thousand
Speaker 6: dollars or so, it's a lot Harvard Business School and
Speaker 6: plus their students get pell grants. So the federal government
Speaker 6: is one of the biggest annual donors to Harvard.
Speaker 7: And other research universities.
Speaker 6: So is it fair that Congress is grilling them? You know,
Speaker 6: some might say they want to know how their money
Speaker 6: is being spent. And the question about plagiarism involved how
Speaker 6: is Harvard handling this inquiry, especially in light of how
Speaker 6: it handles plagiarism with students and other faculty members. And
Speaker 6: there were also questions about it's a creditor and Harvard
Speaker 6: cannot get any federal money unless it's accredited.
Speaker 1: And what is specifically is the anti semitism investigation about?
Speaker 6: So the Education Committee asked I believe it was twenty
Speaker 6: four sets of questions, so a lot looking at how
Speaker 6: they were handling anti semitism, looking at you know, asking
Speaker 6: for correspondence. They also asked questions about the Jewish population
Speaker 6: over time, because there had been questions about that it
Speaker 6: had declined, and you know, they wanted to know a
Speaker 6: lot of things. And Penn received the same inquiry last week.
Speaker 1: And the Education Department what is its investigation about?
Speaker 6: Now that's a completely separate investigation, and you know, almost
Speaker 6: three dozen colleges are also being investigated last week. I
Speaker 6: believe Yale and Northwestern were at it. And again the
Speaker 6: same group of colleges, Harvard, Mit, Penn, Cornell, you know
Speaker 6: a lot of schools, and that is looking at discrimination
Speaker 6: and it's about titles six of the Federal Civil Rights Act.
Speaker 1: Is there a date coming up that we have to
Speaker 1: keep our eye on.
Speaker 6: They haven't announced any more committee hearings, but that's always possible,
Speaker 6: waiting to hear more back about the Education Committee probe
Speaker 6: into anti Semitism, what happens with the plagiarism inquiry, what
Speaker 6: happens with Ways and Means? And I'll add Ways and
Speaker 6: Means also did its own inquiry around twenty sixteen with
Speaker 6: the Senate Finance Committee, and they asked a whole host
Speaker 6: of questions about their endowment spending, fees from investment managers,
Speaker 6: When do you not take money from donors? We did
Speaker 6: a lot of fun stories when that came.
Speaker 1: Out, fun for you, not fun for spills.
Speaker 6: But they were answering questions like when do you turn
Speaker 6: down money? So that was really insightful and people thought, well,
Speaker 6: nothing's going to happen of this. And what happened in
Speaker 6: twenty seventeen as part of the Trump tax package, they
Speaker 6: slapped an endowment tax on schools. More than three dozen
Speaker 6: schools now pay one point four percent on their net
Speaker 6: investment returns a couple hundred million dollars, and that goes
Speaker 6: to fund corporate tax cuts. So I'm not going to
Speaker 6: say nothing's going to happen, that it's a political witch hunt,
Speaker 6: because I don't think that's the case. You see, there
Speaker 6: was many Democrats who are signed a resolution to condemn
Speaker 6: the testimony. There have been Democrats on the committee and
Speaker 6: other committees who have been very upset and concerned about
Speaker 6: anti semitism on campus. So I don't see that it's
Speaker 6: a witch hunt at all. I think that would be
Speaker 6: a mistake to assume that. And you know, we'll see
Speaker 6: what's going to happen. So many things have been coming
Speaker 6: out of left field that you can't really anticipate. I
Speaker 6: can't tell you what's going to happen.
Speaker 1: Well, you did a good job of telling us what
Speaker 1: is happening. Thanks so much, Janet. That's Janet Lauren Bloomberg,
Speaker 1: higher Education and Finance reporter. And in other legal news today,
Speaker 1: for the first time, a mother is standing trial for
Speaker 1: a mass shooting by her child. Jennifer Crumbley is on
Speaker 1: trial for the murders of four students in a shooting
Speaker 1: room at a Michigan high school in November of twenty
Speaker 1: twenty one, the worst school shooting in the state's history.
Speaker 1: It was her fifteen year old son, Ethan who pulled
Speaker 1: the trigger, but prosecutors are trying to hold her responsible
Speaker 1: for what they say as wilful negligence of her son's
Speaker 1: deteriorating mental health and warning signs that he was contemplating violence,
Speaker 1: But her defense attorney argues that Crumbly had no reason
Speaker 1: to believe her son posed a threat, and today Jennifer
Speaker 1: Crumbly took the witness stand in her own defense. She
Speaker 1: testified that she and her son had a strong relationship.
Speaker 8: I trusted him and I felt like I had an
Speaker 8: open door and he can come to me about anything.
Speaker 8: I mean, I fell as a family where three of
Speaker 8: us were really close.
Speaker 1: Crumbly also said she never noticed her son having major
Speaker 1: mental health struggles.
Speaker 8: There's a couple of times where Ethan had sprossed anxiety,
Speaker 8: overtaking tests, anxiety about what he is going to do
Speaker 8: after high school while it was college military.
Speaker 1: Crumbley is being tried for involuntary manslaughter, which carries a
Speaker 1: maximum sentence of fifteen years in prison. Ethan's father, James Crumby,
Speaker 1: will also be tried for involuntary manslaughter at a separate
Speaker 1: trial in March. As for Ethan, he was sentenced to
Speaker 1: life in prison in December after he pleaded guilty to murder, terrorism,
Speaker 1: and other crimes. And that's it for this edition of
Speaker 1: the Bloomberg Law Podcast. Remember you can always get the
Speaker 1: latest legal news by subscribing and listening to the show
Speaker 1: on Apple Podcasts, Spotify, and at Bloomberg dot com, slash podcast,
Speaker 1: Slash Law. I'm June Grosso and this is Bloomberg