WEBVTT - Legal Cases Take Off After Southwest Engine Explosion

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<v Speaker 1>Welcome to the Bloomberg Law Podcast. I'm June Grosso. Every

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<v Speaker 1>day we bring you insight and analysis into the most

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<v Speaker 1>important legal news of the day. You can find more

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<v Speaker 1>episodes of the Bloomberg Law Podcast on Apple Podcasts, SoundCloud

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<v Speaker 1>and on Bloomberg dot com slash podcasts. Southwest Airlines is

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<v Speaker 1>stepping up engine inspections as the discount carrier grapples with

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<v Speaker 1>its first accident to result in a passenger's death. One

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<v Speaker 1>woman died after shrapnel from a blown engine tour through

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<v Speaker 1>a window about twenty minutes into flight from New York

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<v Speaker 1>to Dallas on Tuesday. Southwest Chief executive Officer Gary Kelly

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<v Speaker 1>had a message for the passengers. We will do all

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<v Speaker 1>that we can to support them during this difficult time

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<v Speaker 1>and the difficult days ahead. I'm immensely grateful there are

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<v Speaker 1>no other reports of injuries, but truly this is a

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<v Speaker 1>tragic loss. Joining me is Ronald Goldman, head of the

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<v Speaker 1>Aviation Disaster Litigation team at baum Headland Oursty and Goldman

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<v Speaker 1>Ron The f a A says a broken fan blade

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<v Speaker 1>caused the left engine to explode on the flight, and

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<v Speaker 1>the NTSB found indications of metal fatigue caused by repeated

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<v Speaker 1>bending what companies could be found responsible legally for this?

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<v Speaker 1>Thank you for inviting me on. First, let me express

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<v Speaker 1>my deep condolences for the loss of the life of

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<v Speaker 1>the passenger. UH. The company is responsible will be first

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<v Speaker 1>of all Southwest Airlines as a common carrier. They are

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<v Speaker 1>responsible for the safety of the flight and all of

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<v Speaker 1>the equipment used on the flight. Then, obviously the engine

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<v Speaker 1>manufacturer will bear responsibility as well. That may well be

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<v Speaker 1>something that has to be sorted out between Southwest Airlines

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<v Speaker 1>and the and the engine manufacturer, so they both will

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<v Speaker 1>bear responsibility at least. Now, what kind of damage control

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<v Speaker 1>our south s ge Boeing and the insurance companies doing

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<v Speaker 1>at this point, and are they coordinating with each other? Well,

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<v Speaker 1>they usually do coordinate with each other. Their damage control

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<v Speaker 1>has been to send condolences and to UH suggest that

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<v Speaker 1>they are deeply concerned about the other passengers. Let it

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<v Speaker 1>be clear that almost all normally constituted passengers suffered a

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<v Speaker 1>twenty two minute terror flight UH. They will bear the

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<v Speaker 1>scars of this very likely for the rest of their lives.

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<v Speaker 1>So that while we have one immense tragedy in the

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<v Speaker 1>loss of life, we have others who will have suffered

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<v Speaker 1>a great deal as well. So the coordination will be

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<v Speaker 1>between all all of those parties and their insurance carriers.

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<v Speaker 1>So do you think that CEO Kelly, who said he

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<v Speaker 1>was grateful that there were no reports of serious injuries

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<v Speaker 1>except for of course the tragic death, is ignoring the

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<v Speaker 1>post traumatic stress disorder. Well, I don't know that yet,

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<v Speaker 1>but certainly he did express that they were concerned for

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<v Speaker 1>the other passengers. I hope that they will take responsibility

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<v Speaker 1>for all of the injuries on this flight. We have

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<v Speaker 1>often had to battle, uh with the airlines with respect

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<v Speaker 1>to the injuries that they did not manifest themselves in

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<v Speaker 1>physical injuries and uh so this is something that we

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<v Speaker 1>have had to deal with for a very long time,

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<v Speaker 1>actually ever since when a similar episode happened on United

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<v Speaker 1>two thirty two, which was the case we handled. So

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<v Speaker 1>this is not something that's completely new. And let me

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<v Speaker 1>also suggest that there were really two failures on this flight.

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<v Speaker 1>There's not just the fan bail fan blade failure. There

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<v Speaker 1>was also the failure of the design to contain that event.

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<v Speaker 1>There's never supposed to be an escape of material from

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<v Speaker 1>the airplane engine to the fuselage or wings of of

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<v Speaker 1>the of the airplane. Uh, so this is a double

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<v Speaker 1>failure that has to be considered not just the family,

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<v Speaker 1>but also why wasn't it contained ron there was an

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<v Speaker 1>incident with a Southwest flight, the same kind of airplane,

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<v Speaker 1>the same kind of engine. In will that play into this?

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<v Speaker 1>Absolutely it will because that was the warning sign. You know,

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<v Speaker 1>in aviation terms, these are parts that are never supposed

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<v Speaker 1>to fail. The technical language would suggest that should only

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<v Speaker 1>fail one in a billion times. Um. These are never

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<v Speaker 1>supposed to fail. When you get a failure, uh, in

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<v Speaker 1>one instance, you know that you have a problem, then

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<v Speaker 1>the question is how do you go about attacking it? Uh.

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<v Speaker 1>The suggestion that there was a an a D which

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<v Speaker 1>is an airworthiness directive that was proposed in two thousand

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<v Speaker 1>and sixteen but ever really implemented. These are weak steps.

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<v Speaker 1>There should have been alarm bells going off throughout the industry.

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<v Speaker 1>We had a failure that should never have happened. Another

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<v Speaker 1>one could happen. The mere fact that nobody died or

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<v Speaker 1>was seriously injured on the first one, although there was terror,

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<v Speaker 1>um should not have been a matter of complacency. It

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<v Speaker 1>should have been a matter of intense investigation. At that point,

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<v Speaker 1>I want to go back for a moment to the

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<v Speaker 1>other passengers, and post traumatic stress disorder, any other smaller

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<v Speaker 1>injuries they may have suffered. So is there legal precedent

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<v Speaker 1>for liability based on emotional trauma or injuries that are

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<v Speaker 1>not serious, or is it just that the airlines settled. Well,

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<v Speaker 1>let me first suggest that these other injuries are and

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<v Speaker 1>can be serious. Post Traumatic stress disorder is something that

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<v Speaker 1>can affect a person's life deeply, uh and and for

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<v Speaker 1>the rest of their lives, So we don't look at

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<v Speaker 1>these injuries as being my or or insignificant. Secondly, yes,

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<v Speaker 1>there is. As a matter of fact, we are involved

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<v Speaker 1>right now in a case involving Jet Blue where they

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<v Speaker 1>had an engine fire when they took off from uh

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<v Speaker 1>Long Leach Airport a couple of years ago, and they

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<v Speaker 1>had an engine fire, had to return to the airport,

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<v Speaker 1>and we have many passengers that we represent who suffered

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<v Speaker 1>post traumatic stress disorder from that event and nothing blew up.

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<v Speaker 1>So yes, there's there's considerable precedence for this. Every commercial

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<v Speaker 1>plane in the sky is insured for anywhere from one

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<v Speaker 1>five billion to two point one billion dollars. So so

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<v Speaker 1>how do they decide and is there a fight over

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<v Speaker 1>this money. When the money is there, are the insurance

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<v Speaker 1>companies looking to keep the cost down. Tell us how

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<v Speaker 1>how it works when you're negotiating this. Well, yes, there's

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<v Speaker 1>there was always a fight, and uh, we we produce

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<v Speaker 1>information concerning each individual. There's there's no lumping of all

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<v Speaker 1>people together. Every human being is different and suffers differently.

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<v Speaker 1>So we we put together the information that's necessary to

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<v Speaker 1>demonstrate the magnitude of the loss for each individual. We

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<v Speaker 1>presented to the appropriate parties uh, and they, together with

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<v Speaker 1>their insurance carriers, then get their own evaluation. And then

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<v Speaker 1>we always almost always differ uh certainly at the early

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<v Speaker 1>stages UM and negotiate towards what we hope will be

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<v Speaker 1>a solution that uh satisfies the needs of the passengers.

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<v Speaker 1>They're usually looking for something that will deliver to them

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<v Speaker 1>a sense of justice that they have not been ignored

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<v Speaker 1>and that there that their needs have been met. So

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<v Speaker 1>that's what we try to deliver about thirty seconds here,

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<v Speaker 1>rom So one quick question. Do these cases often land

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<v Speaker 1>in a trial settlement? They rarely land in a trial.

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<v Speaker 1>They almost always uh ultimately be unsettled. All right, Thank

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<v Speaker 1>you so much, ron Ronald Goldman, head of the aviation

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<v Speaker 1>disaster litigation team at Boum Headland, Haristy and Goldman. President

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<v Speaker 1>Trump addressed the job security of Special Counsel Robert Muller

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<v Speaker 1>and the man who hired him, Deputy Attorney General Rod Rosenstein,

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<v Speaker 1>in response to a reporter's question yesterday. They've been saying

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<v Speaker 1>I'm going to get rid of them for the last

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<v Speaker 1>three months, four months, five months, and uh, they're still here.

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<v Speaker 1>So we want to get the investigation over with, done with,

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<v Speaker 1>put it behind us. But is the Mueller investigation fading

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<v Speaker 1>into the background of Trump's thoughts after the raid on

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<v Speaker 1>the offices of his private attorney Michael Cohen joining me

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<v Speaker 1>as former federal prosecutor Jeffrey Kramer a partner at the

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<v Speaker 1>Berkeley Research Group. So, Jeff does Trump have more to

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<v Speaker 1>fear from prosecutors in the Southern District of New York

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<v Speaker 1>than he does from Mueller? Well, it certainly hits hits

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<v Speaker 1>closer to home. It's one thing to investigate, uh, connections

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<v Speaker 1>or meetings with the Trump campaign or administration and people

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<v Speaker 1>connected with the Russian government. That's that's one thing that's

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<v Speaker 1>necessarily finite period of time. Once you start talking about

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<v Speaker 1>his personal lawyer, and by all accounts, a guy has

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<v Speaker 1>been fixing his problems for a decade. Uh. That is

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<v Speaker 1>that's the Pandora's box, which should give the president moments

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<v Speaker 1>of pause. Judge kimball Wood is going to decide who

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<v Speaker 1>will conduct the review of the documents hard drives in

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<v Speaker 1>the cell phone data seize from Cohen's office by the

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<v Speaker 1>FBI to determine whether they're protected under attorney client privilege.

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<v Speaker 1>Should she depart from the regular practice of having a

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<v Speaker 1>special team of prosecutors review the documents and the other things. Well,

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<v Speaker 1>in in a normal case, that's what happens. Uh, you

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<v Speaker 1>know that paint team, if you will reviews it. If

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<v Speaker 1>the was you know, the United States versus Jim Smith, Uh,

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<v Speaker 1>that is probably what would happen. However, because of the

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<v Speaker 1>heightened sensitivity here and certainly all the rhetoric back and forth,

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<v Speaker 1>not really back and forth, which is one way from

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<v Speaker 1>the White House, tours, the Department of Justice, and the

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<v Speaker 1>FBI with all sorts of accusations, that is a safer

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<v Speaker 1>way to go to have an independent third party review it.

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<v Speaker 1>And and that is not uncommon, It's just not as

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<v Speaker 1>common as having a regular team team do it. So

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<v Speaker 1>the prosecutors proposed three people who could fill the job

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<v Speaker 1>of special Master. Those three are ex magistrate judges in

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<v Speaker 1>the Federal Court in Manhattan. And the defense also put

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<v Speaker 1>out four people, and one of them was Trump Confident,

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<v Speaker 1>was a joint had a joint venture with Trump Confident

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<v Speaker 1>Rudy Giuliani, another work for the Federal Prosecute who was

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<v Speaker 1>now in charge of the case. Which of those stand

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<v Speaker 1>out to you? Uh, well, something you always want to

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<v Speaker 1>look at. Any sort of bias, not even real bias,

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<v Speaker 1>but by a sorty sort of connection with Giuliani or

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<v Speaker 1>certainly the Trump organization any way, shape or form, probably

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<v Speaker 1>precludes it. It's always safer to get a former federal judge,

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<v Speaker 1>either a former distrecord judge or a former magistrate judge

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<v Speaker 1>to oversee the process. Now that individual is obviously not

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<v Speaker 1>physically going through all the hard drives. They'll hire another

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<v Speaker 1>company to do that, but it's under their auspices, and

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<v Speaker 1>usually it's a former federal judge that's retained to do that.

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<v Speaker 1>So might she pick someone completely different? Absolutely, the Delici

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<v Speaker 1>is just some suggestions. It's always nice for federal judges,

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<v Speaker 1>as the parties can agree on uh, someone that makes

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<v Speaker 1>life easier. But if the judge is not happy with

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<v Speaker 1>any of the you know seven opportunities there, uh, then

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<v Speaker 1>she can ask for either more names or go to

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<v Speaker 1>someone she trusts Cohen has dropped his defamation lawsuits against

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<v Speaker 1>BuzzFeed and Fusion GPS over that infamous Steel dossier. His

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<v Speaker 1>lawyer said that given the recent of ends, which we

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<v Speaker 1>know what he's referring to there, and the time and

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<v Speaker 1>resources needed to prosecute those matters, we have dismissed the

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<v Speaker 1>matters despite their merits. Is there likely more to hit

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<v Speaker 1>them dropping the case than what they're saying, Um, well,

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<v Speaker 1>you don't want to get the civil case maybe state anyways,

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<v Speaker 1>there's a criminal proceeding. You don't need to fight the

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<v Speaker 1>same battle on on many fronts. And you know, if

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<v Speaker 1>it's if the defamation claim, you're obviously just looking for money,

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<v Speaker 1>but the other side that gets to get into depositions

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<v Speaker 1>and get discovery, and you don't need to fight that

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<v Speaker 1>battle while you're also fighting the basically unlimited resources of

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<v Speaker 1>the federal government. And just to confuse your battles. May

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<v Speaker 1>he also not want to answer any questions in the

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<v Speaker 1>litigation that might come up. And that's I mean, that's

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<v Speaker 1>what I meant by depositions. You know, you don't want

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<v Speaker 1>to lend yourself to any sort of discovery in a

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<v Speaker 1>civil case which could then be used against you in

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<v Speaker 1>a far more important and die or proceeding where you

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<v Speaker 1>could go to prison. So that's not even a close call.

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<v Speaker 1>You just hit pause on that. Uh, you can bring

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<v Speaker 1>it back later if things work out well for you.

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<v Speaker 1>But like I said, that is not the biggest hurdle

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<v Speaker 1>that Mr Cohen has right now is a defamation claim.

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<v Speaker 1>So when this first started, we heard a lot about

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<v Speaker 1>how you know Cohen has has you know, has sworn

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<v Speaker 1>that he would defend Tromp, And now we're hearing well,

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<v Speaker 1>mighty flip, what's your opinion of that. Yeah, it's an

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<v Speaker 1>interesting one. I mean, loyalty, it only goes so far,

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<v Speaker 1>and once they start looking at the prison prison doors,

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<v Speaker 1>loyalty tends to go out the window. However, this might

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<v Speaker 1>be the exception. Uh, Cohen, from what we know now,

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<v Speaker 1>is not looking at the kind of jail time that

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<v Speaker 1>a Manafort is looking at. Paul Manaford is seventy years old,

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<v Speaker 1>and he's looking for anywhere from ten to fifteen years

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<v Speaker 1>in a pretty rock solid case. If you read the

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<v Speaker 1>indictment with eight figures of money laundering going back and forth.

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<v Speaker 1>That's not what Cohen is looking at, you know. If

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<v Speaker 1>it's a campaign finance regulation violation, it's uh, you know,

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<v Speaker 1>the slap on the wrist for the most part. Maybe

0:14:00.360 --> 0:14:02.280
<v Speaker 1>there's something more there, but he's probably not looking at

0:14:02.280 --> 0:14:04.720
<v Speaker 1>tremendous jail time. So he's at a fork in the road.

0:14:05.320 --> 0:14:09.960
<v Speaker 1>If he cooperates, Uh, he's certainly going to be disbarred

0:14:10.000 --> 0:14:13.800
<v Speaker 1>if he is please guilty, A partner commutation is out

0:14:13.840 --> 0:14:15.480
<v Speaker 1>the door if he cooperates, And at the end of

0:14:15.520 --> 0:14:17.840
<v Speaker 1>the day, he's a disbarred lawyer who has just lost

0:14:17.880 --> 0:14:20.400
<v Speaker 1>his biggest client. So that's one path. The other path

0:14:20.800 --> 0:14:24.040
<v Speaker 1>is not to cooperate. Take whatever hits coming your way.

0:14:24.440 --> 0:14:26.560
<v Speaker 1>At the end of the day, you're still a disbarred lawyer.

0:14:26.960 --> 0:14:29.080
<v Speaker 1>But then maybe you get a vice presidency, a Trump

0:14:29.160 --> 0:14:31.720
<v Speaker 1>organization and you know, retired to a golf course. You know.

0:14:31.760 --> 0:14:33.560
<v Speaker 1>So that's that's what he's looking at right now. And

0:14:33.600 --> 0:14:36.000
<v Speaker 1>what about we have about thirty seconds here, what about

0:14:36.000 --> 0:14:39.000
<v Speaker 1>a pardon from Trump? Absolutely? You know, So if you

0:14:39.080 --> 0:14:41.960
<v Speaker 1>don't cooperate, pardon is on the table. Uh, if you

0:14:42.000 --> 0:14:45.560
<v Speaker 1>do cooperate, it's gone. So you know, not cooperating has

0:14:45.600 --> 0:14:48.920
<v Speaker 1>a couple exit ramps there that gets you off scott free.

0:14:48.960 --> 0:14:51.360
<v Speaker 1>You know. A pardoners one way, even if you're sentenced

0:14:51.400 --> 0:14:54.960
<v Speaker 1>to prison. A commutation which basically suspends that is another way.

0:14:55.320 --> 0:14:57.720
<v Speaker 1>So there's a lot more opportunities. And Mr Cohen, who

0:14:57.720 --> 0:15:00.400
<v Speaker 1>prides himself, all right, we've got leave it there, but

0:15:00.480 --> 0:15:04.040
<v Speaker 1>I love the the exit ramp analogy. That's Jeffrey Kramer,

0:15:04.080 --> 0:15:07.200
<v Speaker 1>a partner at the Berkeley Research Group. Thanks for listening

0:15:07.240 --> 0:15:10.520
<v Speaker 1>to the Bloomberg Law Podcast. You can subscribe and listen

0:15:10.560 --> 0:15:14.119
<v Speaker 1>to the show on Apple Podcasts, SoundCloud, and on Bloomberg

0:15:14.200 --> 0:15:18.920
<v Speaker 1>dot com slash podcast. I'm June Brosso. This is Bloomberg