Speaker 1: Welcome to the Bloomberg Law Podcast. I'm June Grosso. Every
Speaker 1: day we bring you insight and analysis into the most
Speaker 1: important legal news of the day. You can find more
Speaker 1: episodes of the Bloomberg Law Podcast on Apple Podcasts, SoundCloud
Speaker 1: and on Bloomberg dot com slash podcasts. Southwest Airlines is
Speaker 1: stepping up engine inspections as the discount carrier grapples with
Speaker 1: its first accident to result in a passenger's death. One
Speaker 1: woman died after shrapnel from a blown engine tour through
Speaker 1: a window about twenty minutes into flight from New York
Speaker 1: to Dallas on Tuesday. Southwest Chief executive Officer Gary Kelly
Speaker 1: had a message for the passengers. We will do all
Speaker 1: that we can to support them during this difficult time
Speaker 1: and the difficult days ahead. I'm immensely grateful there are
Speaker 1: no other reports of injuries, but truly this is a
Speaker 1: tragic loss. Joining me is Ronald Goldman, head of the
Speaker 1: Aviation Disaster Litigation team at baum Headland Oursty and Goldman
Speaker 1: Ron The f a A says a broken fan blade
Speaker 1: caused the left engine to explode on the flight, and
Speaker 1: the NTSB found indications of metal fatigue caused by repeated
Speaker 1: bending what companies could be found responsible legally for this?
Speaker 1: Thank you for inviting me on. First, let me express
Speaker 1: my deep condolences for the loss of the life of
Speaker 1: the passenger. UH. The company is responsible will be first
Speaker 1: of all Southwest Airlines as a common carrier. They are
Speaker 1: responsible for the safety of the flight and all of
Speaker 1: the equipment used on the flight. Then, obviously the engine
Speaker 1: manufacturer will bear responsibility as well. That may well be
Speaker 1: something that has to be sorted out between Southwest Airlines
Speaker 1: and the and the engine manufacturer, so they both will
Speaker 1: bear responsibility at least. Now, what kind of damage control
Speaker 1: our south s ge Boeing and the insurance companies doing
Speaker 1: at this point, and are they coordinating with each other? Well,
Speaker 1: they usually do coordinate with each other. Their damage control
Speaker 1: has been to send condolences and to UH suggest that
Speaker 1: they are deeply concerned about the other passengers. Let it
Speaker 1: be clear that almost all normally constituted passengers suffered a
Speaker 1: twenty two minute terror flight UH. They will bear the
Speaker 1: scars of this very likely for the rest of their lives.
Speaker 1: So that while we have one immense tragedy in the
Speaker 1: loss of life, we have others who will have suffered
Speaker 1: a great deal as well. So the coordination will be
Speaker 1: between all all of those parties and their insurance carriers.
Speaker 1: So do you think that CEO Kelly, who said he
Speaker 1: was grateful that there were no reports of serious injuries
Speaker 1: except for of course the tragic death, is ignoring the
Speaker 1: post traumatic stress disorder. Well, I don't know that yet,
Speaker 1: but certainly he did express that they were concerned for
Speaker 1: the other passengers. I hope that they will take responsibility
Speaker 1: for all of the injuries on this flight. We have
Speaker 1: often had to battle, uh with the airlines with respect
Speaker 1: to the injuries that they did not manifest themselves in
Speaker 1: physical injuries and uh so this is something that we
Speaker 1: have had to deal with for a very long time,
Speaker 1: actually ever since when a similar episode happened on United
Speaker 1: two thirty two, which was the case we handled. So
Speaker 1: this is not something that's completely new. And let me
Speaker 1: also suggest that there were really two failures on this flight.
Speaker 1: There's not just the fan bail fan blade failure. There
Speaker 1: was also the failure of the design to contain that event.
Speaker 1: There's never supposed to be an escape of material from
Speaker 1: the airplane engine to the fuselage or wings of of
Speaker 1: the of the airplane. Uh, so this is a double
Speaker 1: failure that has to be considered not just the family,
Speaker 1: but also why wasn't it contained ron there was an
Speaker 1: incident with a Southwest flight, the same kind of airplane,
Speaker 1: the same kind of engine. In will that play into this?
Speaker 1: Absolutely it will because that was the warning sign. You know,
Speaker 1: in aviation terms, these are parts that are never supposed
Speaker 1: to fail. The technical language would suggest that should only
Speaker 1: fail one in a billion times. Um. These are never
Speaker 1: supposed to fail. When you get a failure, uh, in
Speaker 1: one instance, you know that you have a problem, then
Speaker 1: the question is how do you go about attacking it? Uh.
Speaker 1: The suggestion that there was a an a D which
Speaker 1: is an airworthiness directive that was proposed in two thousand
Speaker 1: and sixteen but ever really implemented. These are weak steps.
Speaker 1: There should have been alarm bells going off throughout the industry.
Speaker 1: We had a failure that should never have happened. Another
Speaker 1: one could happen. The mere fact that nobody died or
Speaker 1: was seriously injured on the first one, although there was terror,
Speaker 1: um should not have been a matter of complacency. It
Speaker 1: should have been a matter of intense investigation. At that point,
Speaker 1: I want to go back for a moment to the
Speaker 1: other passengers, and post traumatic stress disorder, any other smaller
Speaker 1: injuries they may have suffered. So is there legal precedent
Speaker 1: for liability based on emotional trauma or injuries that are
Speaker 1: not serious, or is it just that the airlines settled. Well,
Speaker 1: let me first suggest that these other injuries are and
Speaker 1: can be serious. Post Traumatic stress disorder is something that
Speaker 1: can affect a person's life deeply, uh and and for
Speaker 1: the rest of their lives, So we don't look at
Speaker 1: these injuries as being my or or insignificant. Secondly, yes,
Speaker 1: there is. As a matter of fact, we are involved
Speaker 1: right now in a case involving Jet Blue where they
Speaker 1: had an engine fire when they took off from uh
Speaker 1: Long Leach Airport a couple of years ago, and they
Speaker 1: had an engine fire, had to return to the airport,
Speaker 1: and we have many passengers that we represent who suffered
Speaker 1: post traumatic stress disorder from that event and nothing blew up.
Speaker 1: So yes, there's there's considerable precedence for this. Every commercial
Speaker 1: plane in the sky is insured for anywhere from one
Speaker 1: five billion to two point one billion dollars. So so
Speaker 1: how do they decide and is there a fight over
Speaker 1: this money. When the money is there, are the insurance
Speaker 1: companies looking to keep the cost down. Tell us how
Speaker 1: how it works when you're negotiating this. Well, yes, there's
Speaker 1: there was always a fight, and uh, we we produce
Speaker 1: information concerning each individual. There's there's no lumping of all
Speaker 1: people together. Every human being is different and suffers differently.
Speaker 1: So we we put together the information that's necessary to
Speaker 1: demonstrate the magnitude of the loss for each individual. We
Speaker 1: presented to the appropriate parties uh, and they, together with
Speaker 1: their insurance carriers, then get their own evaluation. And then
Speaker 1: we always almost always differ uh certainly at the early
Speaker 1: stages UM and negotiate towards what we hope will be
Speaker 1: a solution that uh satisfies the needs of the passengers.
Speaker 1: They're usually looking for something that will deliver to them
Speaker 1: a sense of justice that they have not been ignored
Speaker 1: and that there that their needs have been met. So
Speaker 1: that's what we try to deliver about thirty seconds here,
Speaker 1: rom So one quick question. Do these cases often land
Speaker 1: in a trial settlement? They rarely land in a trial.
Speaker 1: They almost always uh ultimately be unsettled. All right, Thank
Speaker 1: you so much, ron Ronald Goldman, head of the aviation
Speaker 1: disaster litigation team at Boum Headland, Haristy and Goldman. President
Speaker 1: Trump addressed the job security of Special Counsel Robert Muller
Speaker 1: and the man who hired him, Deputy Attorney General Rod Rosenstein,
Speaker 1: in response to a reporter's question yesterday. They've been saying
Speaker 1: I'm going to get rid of them for the last
Speaker 1: three months, four months, five months, and uh, they're still here.
Speaker 1: So we want to get the investigation over with, done with,
Speaker 1: put it behind us. But is the Mueller investigation fading
Speaker 1: into the background of Trump's thoughts after the raid on
Speaker 1: the offices of his private attorney Michael Cohen joining me
Speaker 1: as former federal prosecutor Jeffrey Kramer a partner at the
Speaker 1: Berkeley Research Group. So, Jeff does Trump have more to
Speaker 1: fear from prosecutors in the Southern District of New York
Speaker 1: than he does from Mueller? Well, it certainly hits hits
Speaker 1: closer to home. It's one thing to investigate, uh, connections
Speaker 1: or meetings with the Trump campaign or administration and people
Speaker 1: connected with the Russian government. That's that's one thing that's
Speaker 1: necessarily finite period of time. Once you start talking about
Speaker 1: his personal lawyer, and by all accounts, a guy has
Speaker 1: been fixing his problems for a decade. Uh. That is
Speaker 1: that's the Pandora's box, which should give the president moments
Speaker 1: of pause. Judge kimball Wood is going to decide who
Speaker 1: will conduct the review of the documents hard drives in
Speaker 1: the cell phone data seize from Cohen's office by the
Speaker 1: FBI to determine whether they're protected under attorney client privilege.
Speaker 1: Should she depart from the regular practice of having a
Speaker 1: special team of prosecutors review the documents and the other things. Well,
Speaker 1: in in a normal case, that's what happens. Uh, you
Speaker 1: know that paint team, if you will reviews it. If
Speaker 1: the was you know, the United States versus Jim Smith, Uh,
Speaker 1: that is probably what would happen. However, because of the
Speaker 1: heightened sensitivity here and certainly all the rhetoric back and forth,
Speaker 1: not really back and forth, which is one way from
Speaker 1: the White House, tours, the Department of Justice, and the
Speaker 1: FBI with all sorts of accusations, that is a safer
Speaker 1: way to go to have an independent third party review it.
Speaker 1: And and that is not uncommon, It's just not as
Speaker 1: common as having a regular team team do it. So
Speaker 1: the prosecutors proposed three people who could fill the job
Speaker 1: of special Master. Those three are ex magistrate judges in
Speaker 1: the Federal Court in Manhattan. And the defense also put
Speaker 1: out four people, and one of them was Trump Confident,
Speaker 1: was a joint had a joint venture with Trump Confident
Speaker 1: Rudy Giuliani, another work for the Federal Prosecute who was
Speaker 1: now in charge of the case. Which of those stand
Speaker 1: out to you? Uh, well, something you always want to
Speaker 1: look at. Any sort of bias, not even real bias,
Speaker 1: but by a sorty sort of connection with Giuliani or
Speaker 1: certainly the Trump organization any way, shape or form, probably
Speaker 1: precludes it. It's always safer to get a former federal judge,
Speaker 1: either a former distrecord judge or a former magistrate judge
Speaker 1: to oversee the process. Now that individual is obviously not
Speaker 1: physically going through all the hard drives. They'll hire another
Speaker 1: company to do that, but it's under their auspices, and
Speaker 1: usually it's a former federal judge that's retained to do that.
Speaker 1: So might she pick someone completely different? Absolutely, the Delici
Speaker 1: is just some suggestions. It's always nice for federal judges,
Speaker 1: as the parties can agree on uh, someone that makes
Speaker 1: life easier. But if the judge is not happy with
Speaker 1: any of the you know seven opportunities there, uh, then
Speaker 1: she can ask for either more names or go to
Speaker 1: someone she trusts Cohen has dropped his defamation lawsuits against
Speaker 1: BuzzFeed and Fusion GPS over that infamous Steel dossier. His
Speaker 1: lawyer said that given the recent of ends, which we
Speaker 1: know what he's referring to there, and the time and
Speaker 1: resources needed to prosecute those matters, we have dismissed the
Speaker 1: matters despite their merits. Is there likely more to hit
Speaker 1: them dropping the case than what they're saying, Um, well,
Speaker 1: you don't want to get the civil case maybe state anyways,
Speaker 1: there's a criminal proceeding. You don't need to fight the
Speaker 1: same battle on on many fronts. And you know, if
Speaker 1: it's if the defamation claim, you're obviously just looking for money,
Speaker 1: but the other side that gets to get into depositions
Speaker 1: and get discovery, and you don't need to fight that
Speaker 1: battle while you're also fighting the basically unlimited resources of
Speaker 1: the federal government. And just to confuse your battles. May
Speaker 1: he also not want to answer any questions in the
Speaker 1: litigation that might come up. And that's I mean, that's
Speaker 1: what I meant by depositions. You know, you don't want
Speaker 1: to lend yourself to any sort of discovery in a
Speaker 1: civil case which could then be used against you in
Speaker 1: a far more important and die or proceeding where you
Speaker 1: could go to prison. So that's not even a close call.
Speaker 1: You just hit pause on that. Uh, you can bring
Speaker 1: it back later if things work out well for you.
Speaker 1: But like I said, that is not the biggest hurdle
Speaker 1: that Mr Cohen has right now is a defamation claim.
Speaker 1: So when this first started, we heard a lot about
Speaker 1: how you know Cohen has has you know, has sworn
Speaker 1: that he would defend Tromp, And now we're hearing well,
Speaker 1: mighty flip, what's your opinion of that. Yeah, it's an
Speaker 1: interesting one. I mean, loyalty, it only goes so far,
Speaker 1: and once they start looking at the prison prison doors,
Speaker 1: loyalty tends to go out the window. However, this might
Speaker 1: be the exception. Uh, Cohen, from what we know now,
Speaker 1: is not looking at the kind of jail time that
Speaker 1: a Manafort is looking at. Paul Manaford is seventy years old,
Speaker 1: and he's looking for anywhere from ten to fifteen years
Speaker 1: in a pretty rock solid case. If you read the
Speaker 1: indictment with eight figures of money laundering going back and forth.
Speaker 1: That's not what Cohen is looking at, you know. If
Speaker 1: it's a campaign finance regulation violation, it's uh, you know,
Speaker 1: the slap on the wrist for the most part. Maybe
Speaker 1: there's something more there, but he's probably not looking at
Speaker 1: tremendous jail time. So he's at a fork in the road.
Speaker 1: If he cooperates, Uh, he's certainly going to be disbarred
Speaker 1: if he is please guilty, A partner commutation is out
Speaker 1: the door if he cooperates, And at the end of
Speaker 1: the day, he's a disbarred lawyer who has just lost
Speaker 1: his biggest client. So that's one path. The other path
Speaker 1: is not to cooperate. Take whatever hits coming your way.
Speaker 1: At the end of the day, you're still a disbarred lawyer.
Speaker 1: But then maybe you get a vice presidency, a Trump
Speaker 1: organization and you know, retired to a golf course. You know.
Speaker 1: So that's that's what he's looking at right now. And
Speaker 1: what about we have about thirty seconds here, what about
Speaker 1: a pardon from Trump? Absolutely? You know, So if you
Speaker 1: don't cooperate, pardon is on the table. Uh, if you
Speaker 1: do cooperate, it's gone. So you know, not cooperating has
Speaker 1: a couple exit ramps there that gets you off scott free.
Speaker 1: You know. A pardoners one way, even if you're sentenced
Speaker 1: to prison. A commutation which basically suspends that is another way.
Speaker 1: So there's a lot more opportunities. And Mr Cohen, who
Speaker 1: prides himself, all right, we've got leave it there, but
Speaker 1: I love the the exit ramp analogy. That's Jeffrey Kramer,
Speaker 1: a partner at the Berkeley Research Group. Thanks for listening
Speaker 1: to the Bloomberg Law Podcast. You can subscribe and listen
Speaker 1: to the show on Apple Podcasts, SoundCloud, and on Bloomberg
Speaker 1: dot com slash podcast. I'm June Brosso. This is Bloomberg