WEBVTT - Possible Criminal Charges in Deadly Houston Concert 0:00:20.440 --> 0:00:23.560 As Travis Scott took the stage at his sold out 0:00:23.640 --> 0:00:27.560 concert in Houston last Friday, the crowd pushed forward towards 0:00:27.600 --> 0:00:31.120 the stage and the crush began. It took only twenty 0:00:31.120 --> 0:00:34.560 minutes for the police to radio about the unfolding tragedy, 0:00:34.880 --> 0:00:41.440 and Scott paused briefly after noticing an ambulance in the crowd. 0:00:42.000 --> 0:00:44.440 Moments later, he asked fans to put up a middle 0:00:44.520 --> 0:00:50.680 finger if they were okay every Scott resumed his performance 0:00:50.760 --> 0:00:58.000 until his set was over, despite please from the crowd. 0:00:59.200 --> 0:01:02.760 Nine people were killed and dozens were injured. Joining me 0:01:02.800 --> 0:01:05.960 is Rachel Phase, a criminal defense attorney with his wy 0:01:06.000 --> 0:01:09.160 back Phez and Coleman Rachel This isn't the first time 0:01:09.200 --> 0:01:13.600 Scott has face legal action over his concerts. Are criminal 0:01:13.720 --> 0:01:17.200 charges possible here? I think there needs to be an 0:01:17.240 --> 0:01:24.200 incredibly massive investigation that encompasses Travis Scott, Light Nation, the venue, 0:01:24.440 --> 0:01:28.200 the security team, and all members of the crowd to 0:01:28.319 --> 0:01:32.319 determine what happened. So what they'll be looking for in 0:01:32.440 --> 0:01:37.880 that investigation, particularly as it relates to Scot's role, is 0:01:38.120 --> 0:01:41.480 if he encouraged the conduct that led to the deaths 0:01:41.560 --> 0:01:44.720 and the injuries, and if he did encourage it in 0:01:44.800 --> 0:01:48.960 some way, if that encouragement rises to a criminal act. 0:01:49.080 --> 0:01:53.120 In Texas, Scott was arrested twice when he encouraged fans 0:01:53.160 --> 0:01:58.960 at concerts in Chicago and and Arkansas in to ignore 0:01:59.080 --> 0:02:02.880 security measure and rush the stage. He pleaded guilty to 0:02:02.960 --> 0:02:07.200 public disorder charges both times. That's a slap on the wrist. 0:02:07.840 --> 0:02:10.400 Is that what's likely to happen here? I think the 0:02:10.520 --> 0:02:14.040 public disorder charges are different than what would rise to 0:02:14.120 --> 0:02:16.960 the level of a felony, which would be that Scott 0:02:17.000 --> 0:02:19.760 acted in a way that he knew he was creating 0:02:19.800 --> 0:02:24.200 an unjustifiable risk given the circumstances, And so if he 0:02:24.280 --> 0:02:28.919 was creating an unjustifiable risk to his crowd, that would 0:02:28.919 --> 0:02:33.000 be a felony in Texas as to disorderly conduct. I 0:02:33.080 --> 0:02:35.440 think that was a plea deal, and so it was 0:02:35.680 --> 0:02:39.160 down from what maybe law enforcements thought they could charge 0:02:39.240 --> 0:02:41.840 him with. How does it play and the fact that 0:02:42.240 --> 0:02:45.640 this seems to be part of what he does fans 0:02:45.760 --> 0:02:51.760 come expecting. I suppose this kind of raucous environment. So 0:02:52.120 --> 0:02:55.160 the way it plays in and the way negligence always works, 0:02:55.240 --> 0:02:57.920 has to do with force, the ability, and so it 0:02:57.960 --> 0:03:00.440 really has to do with his state of mind, and 0:03:00.600 --> 0:03:05.000 that's where his priors come in, because he already knows 0:03:05.400 --> 0:03:09.560 that there's been injuries at task concerts and that he 0:03:09.720 --> 0:03:14.800 has been found responsible for inciting some of those safety breaches. 0:03:15.200 --> 0:03:18.720 So it really puts him on maybe higher alert than 0:03:18.919 --> 0:03:22.040 somebody who has not been charged. So it makes this 0:03:22.240 --> 0:03:26.519 act more foreseeable. And that's really how a negligence determination, 0:03:26.680 --> 0:03:31.000 both for civil liability and for criminal liability plays out. 0:03:31.600 --> 0:03:36.240 Because nothing was intentional. He didn't intentionally kill anyone. It's 0:03:36.320 --> 0:03:38.960 whether he acted in a way where he was putting 0:03:39.000 --> 0:03:43.080 these people at risk. Also, the Houston Police chief said 0:03:43.160 --> 0:03:47.120 he met with Scott and his head of security prior 0:03:47.200 --> 0:03:51.720 to the event to express his concerns about safety. So 0:03:52.160 --> 0:03:55.560 that's putting him on notice, isn't it. Absolutely all of 0:03:55.600 --> 0:03:59.440 these things put him on notice. He's getting sued by 0:03:59.600 --> 0:04:03.440 a or concert goer that was paralyzed at one of 0:04:03.480 --> 0:04:06.720 his shows. It would be hard to say that safety 0:04:06.760 --> 0:04:11.560 concerns for frankly, all parties involved, including the venue, including 0:04:11.600 --> 0:04:16.000 the security team, including the promoter, including everyone, safety concerns 0:04:16.320 --> 0:04:18.520 people were on notice of them. They should have been 0:04:18.640 --> 0:04:23.200 front of mind based on past events, particularly at Travis 0:04:23.200 --> 0:04:27.880 Scott concerts. This should have been foreseeable and so what 0:04:28.040 --> 0:04:31.560 was done to prevent it? Now becomes the questions. Let's 0:04:31.560 --> 0:04:34.839 discuss the civil lawsuits that are piling up. They're being 0:04:34.839 --> 0:04:40.040 filed against Scott, the events promoters and management, including Live Nation, 0:04:40.360 --> 0:04:43.720 basically for negligence. What would have to be proven if 0:04:43.720 --> 0:04:46.839 the cases went to a jury. So these kinds of 0:04:46.880 --> 0:04:52.080 determinations go back to the same analysis. What was foreseeable 0:04:52.200 --> 0:04:55.760 and what was done in advance and during the show 0:04:56.160 --> 0:04:59.960 to take the correct measures for the safety of the 0:05:00.040 --> 0:05:04.000 crowd and as to the venue and the security and 0:05:04.040 --> 0:05:07.239 all the people setting up in advance, were those roots 0:05:07.279 --> 0:05:09.960 in play? Did they have safety measures, do they have 0:05:10.040 --> 0:05:13.800 emergency measures? Did they have the right amount of people 0:05:13.880 --> 0:05:17.520 in the fake What was done in advance to make 0:05:17.560 --> 0:05:20.080 sure the crowd was faked? And there are a lot 0:05:20.160 --> 0:05:22.960 of the sports that even before Travis Dot came on 0:05:23.560 --> 0:05:27.479 that people were passing out and basically the safety of 0:05:27.520 --> 0:05:31.839 the show was already in jeopardy and all of that 0:05:31.960 --> 0:05:37.279 should be foreseeable to those in management. Did they sell 0:05:37.320 --> 0:05:39.359 too many tickets? Did they let too many people in? 0:05:39.880 --> 0:05:45.560 All of this is going to be closely investigated and 0:05:45.960 --> 0:05:49.480 these civil suits will continue to pop up because there 0:05:49.480 --> 0:05:54.559 were so many injuries and so many deaths, and Live 0:05:54.720 --> 0:05:58.279 Nation has already been linked to hundreds of deaths and 0:05:58.440 --> 0:06:02.560 injuries in the past fifty years. According to the Houston Chronicle, 0:06:03.040 --> 0:06:05.680 they've been connected to about two hundred deaths and at 0:06:05.720 --> 0:06:09.960 least seven fifty injuries since two thousand six. Does that 0:06:10.040 --> 0:06:13.080 come in in a trial, It all comes in. I mean, 0:06:13.120 --> 0:06:17.080 of course, it matters what kinds of deaths those were, 0:06:17.480 --> 0:06:23.480 Were they related to crowd management, what kinds of venues 0:06:23.800 --> 0:06:28.560 that those deaths and injuries took place. What is standard 0:06:28.600 --> 0:06:32.880 in the industry is what our Live Nations numbers better 0:06:33.080 --> 0:06:38.080 than other company numbers as it relates to concert injuries 0:06:38.240 --> 0:06:41.880 and deaths. All of that will be closely looked at. 0:06:42.040 --> 0:06:46.279 The concerts are a high risk business in some ways, 0:06:46.440 --> 0:06:49.760 and so there will always be some sort of injury 0:06:50.600 --> 0:06:57.000 or deaths unfortunately associated with live events with large crowds. 0:06:57.040 --> 0:06:59.800 So it just comes into play. What were they doing 0:07:01.080 --> 0:07:07.040 to react to each of these possible safety issues and 0:07:07.080 --> 0:07:11.160 safety management issues for each of their events? What were 0:07:11.200 --> 0:07:14.320 they doing in response to each of the other incidents, 0:07:14.480 --> 0:07:17.680 or do they know things and they're specifically not addressing 0:07:17.720 --> 0:07:20.520 them because it would cost too much money, or they 0:07:20.520 --> 0:07:22.960 couldn't promote the show in the way they wanted. So 0:07:23.640 --> 0:07:28.520 it is a large scale investigation and discovery process as 0:07:28.560 --> 0:07:32.000 it relates to these civil lawsuits. There are allegations that 0:07:32.080 --> 0:07:35.400 people begged the security guards that were hired by Live 0:07:35.520 --> 0:07:42.040 Nation for help, but we're ignored. So it's wondering what 0:07:42.520 --> 0:07:47.280 they could have done, why they weren't doing anything. Perhaps 0:07:47.320 --> 0:07:51.640 the security guard could not help one person because he 0:07:51.800 --> 0:07:54.800 had if he left to help one person to see 0:07:54.840 --> 0:07:57.840 other people would be in jeopardy. All of this will 0:07:57.880 --> 0:08:00.680 come down to a lot of witness that pounds. There 0:08:00.680 --> 0:08:06.440 will be many, many witness accounts. There's video footage, concert goers, 0:08:06.880 --> 0:08:10.960 security guards, the people that put the plans in place. 0:08:11.200 --> 0:08:19.040 This is a very large legal issue and issues this 0:08:19.040 --> 0:08:22.000 This will be going on four years. Do you know 0:08:22.080 --> 0:08:27.360 of any other cases like this? I was able to find. 0:08:28.080 --> 0:08:32.840 Gwen Stefani was sued by a concert goer who was 0:08:32.880 --> 0:08:35.360 injured at one of her concerts and she was sued 0:08:35.400 --> 0:08:38.480 along with Live Nation, and I believe the judge dismissed 0:08:38.520 --> 0:08:43.000 Live Nation from that suit, but said that Gwen Stefani 0:08:43.120 --> 0:08:49.040 could be held liabel. This kind of issue, with this 0:08:49.360 --> 0:08:54.760 mass amount of casualties and injuries is new for our country. 0:08:55.000 --> 0:09:01.480 There's been soccer stampedes in other countries where over a 0:09:01.559 --> 0:09:04.880 hundred members of the crowd have died as a results, 0:09:05.360 --> 0:09:08.480 but those laws are different. Toward laws are different, and 0:09:08.520 --> 0:09:11.720 that's what a lot of this civil liability will absolutely 0:09:12.200 --> 0:09:17.160 hanging on. So there's not full precedent for this kind 0:09:17.520 --> 0:09:21.560 of map. There's been a lot of talk about whether 0:09:22.080 --> 0:09:26.320 there were drugs and it's a concert, so if there 0:09:26.360 --> 0:09:32.080 are drugs involved, could that be used against the plaintiffs? Right, 0:09:32.200 --> 0:09:35.319 So what will happen is if any of these cases 0:09:35.400 --> 0:09:39.880 make it to trial, what will happen is the venue 0:09:39.920 --> 0:09:43.880 will say it was the concert go resplved that there was, 0:09:44.120 --> 0:09:47.600 and these are this is part of the investigations. What 0:09:47.720 --> 0:09:51.320 was the concert go? We're doing him or herself to 0:09:51.480 --> 0:09:55.840 cause the injury? Were they intoxicated, were their drugs? Were 0:09:55.880 --> 0:10:02.280 they inciting violence? Were were by acting in a dangerous way? 0:10:02.520 --> 0:10:06.440 And if they were, how much of the responsibility for 0:10:06.559 --> 0:10:11.160 their own injury should they take. I think the one 0:10:11.240 --> 0:10:14.840 thing that is important here as it relates to possible 0:10:14.840 --> 0:10:19.920 criminal charges and the civil liability is under Texas law 0:10:20.800 --> 0:10:25.120 that if somebody is found to have committed a felony 0:10:25.200 --> 0:10:28.880 and they are one of many defendants, they can be 0:10:29.280 --> 0:10:33.280 on the hook for everything. So I think that what 0:10:33.400 --> 0:10:38.840 will happen is the criminal issues may play out if 0:10:38.920 --> 0:10:43.600 there are any charges made, that may come first before 0:10:43.720 --> 0:10:48.960 the civil issues conclude. Uh if anyone is charged with 0:10:49.000 --> 0:10:53.520 a crime, Thanks so much, Rachel. That's Racial Physe, managing 0:10:53.559 --> 0:10:59.199 partner of Sybeck, Physe and Coleman. Thanksgiving and Christmas may 0:10:59.200 --> 0:11:01.559 look a little dear Frint this year as the supply 0:11:01.720 --> 0:11:06.120 chain crisis threatens our holiday cheer, from toys to books 0:11:06.160 --> 0:11:09.960 to Christmas trees. Disruptions are making things harder to find 0:11:10.040 --> 0:11:14.480 and much more expensive, something President Joe Biden has acknowledged. 0:11:14.960 --> 0:11:18.400 COVID nineteen has stretched global supply chains like never before, 0:11:18.480 --> 0:11:20.840 and suddenly when you go to order a pair of 0:11:20.880 --> 0:11:23.720 sneakers or a bicycle or Christmas presents for the family, 0:11:24.200 --> 0:11:26.400 you're met with higher prices and long delays that they 0:11:26.400 --> 0:11:28.800 said they just don't have any at all. So what's 0:11:28.840 --> 0:11:32.480 the legal fallout here? To answer that question is Brian Gardner, 0:11:32.760 --> 0:11:36.640 a partner at Winston and Strong, describe the different kinds 0:11:36.800 --> 0:11:41.240 of legal fallout we're likely to see from this crunch 0:11:41.320 --> 0:11:44.080 on the supply chain. We've really got a perfect storm 0:11:44.120 --> 0:11:47.160 here in terms of the fragility of the supply chain 0:11:47.360 --> 0:11:49.920 and then the disruption that hit it. In terms of disputes, 0:11:49.960 --> 0:11:53.400 you've got two sort of areas. You could have shippers. 0:11:53.520 --> 0:11:56.720 When I say shippers, I mean consumers of services like Walmartner, 0:11:56.960 --> 0:12:01.040 cost Co, right carriers being notion carriers like Marisker. I 0:12:01.080 --> 0:12:04.559 think you could see service contract breach actions brought by 0:12:04.679 --> 0:12:08.319 shippers against the carriers. And I think also really the 0:12:08.320 --> 0:12:10.600 big question form is going to be the Federal Maritime 0:12:10.600 --> 0:12:14.200 Commission and whether folks really start to ramp up complaints 0:12:14.280 --> 0:12:16.760 being filed with the Federal Maritime Commission for violation and 0:12:16.800 --> 0:12:19.160 the Shipping Act, or whether the Bureau of Enforcement, which 0:12:19.160 --> 0:12:21.920 is sort of like the prosecutorial arm of the Commission, 0:12:21.960 --> 0:12:24.320 whether they begin to take action on their own as 0:12:24.360 --> 0:12:27.040 they've telegraphed they're going to do, separately from those things 0:12:27.200 --> 0:12:29.920 case by case disputes. I think there's a big question 0:12:29.960 --> 0:12:32.560 as to whether legislative action is going to happen, and 0:12:32.679 --> 0:12:35.440 the Ocean Shipping Reform Act is one such piece of legislation. 0:12:35.440 --> 0:12:37.480 That's been introduced in the House and is quickly gathering 0:12:37.480 --> 0:12:41.840 sponsors with something like this COVID, which no one anticipated. 0:12:42.600 --> 0:12:46.360 Where is the blame to be placed, Well, it's going 0:12:46.400 --> 0:12:49.960 to be placed everywhere, right, So, certainly folks are looking 0:12:50.000 --> 0:12:53.520 at carriers and saying the carriers are violating the Shipping 0:12:53.520 --> 0:12:56.800 Act or service contracts. There's a couple of different things 0:12:56.880 --> 0:12:59.520 in play. If you're a shipper, a furniture importer on 0:12:59.559 --> 0:13:01.240 the West coat Post, and you're a small shipper and 0:13:01.240 --> 0:13:04.719 you're not getting the capacity that the box carriers, you know, 0:13:04.760 --> 0:13:07.200 the container carriers promised you, you will blame them for 0:13:07.280 --> 0:13:11.160 violating your contract in terms of delay if goods arrive 0:13:11.320 --> 0:13:13.640 late because they got rolled from one vessel to another. 0:13:13.840 --> 0:13:17.200 And almost all carrier contracts do not promise that the 0:13:17.240 --> 0:13:20.280 goods will arrive at any particular time, for any particular purpose, 0:13:20.400 --> 0:13:22.520 or to meet any deadline under most bills of lading 0:13:22.520 --> 0:13:25.720 in contracts, so there's blame on the carriers for delay 0:13:25.840 --> 0:13:28.400 or for not our in commitments. There's blame on the truckers, 0:13:28.440 --> 0:13:31.000 the drage struckers who moved the boxes from the yard 0:13:31.040 --> 0:13:34.280 to inland points for not responding, not having the capacity 0:13:34.360 --> 0:13:37.720 there's blame for chassis providers, which is the truck chassis 0:13:37.720 --> 0:13:39.760 that goes underneath the box. There's simply not enough to 0:13:39.800 --> 0:13:42.240 go around, or they're in the wrong place. If there's 0:13:42.280 --> 0:13:46.640 no contractual promise that goods will arrive on time, how 0:13:46.640 --> 0:13:49.440 do you sue the carriers if you do eventually get 0:13:49.480 --> 0:13:53.080 the goods. I think anybody bringing a suit, a contractual 0:13:53.080 --> 0:13:55.880 suit against the carrier for having goods that don't arrive 0:13:55.920 --> 0:13:57.800 on time is going to have a difficult time if 0:13:57.800 --> 0:14:00.360 they have the standard contract. I think you could bring 0:14:00.679 --> 0:14:03.160 a Shipping Act cause of action. The Shipping Act makes 0:14:03.240 --> 0:14:08.640 unlawful unreasonable practices and it makes unlawful discrimination against shippers. 0:14:08.800 --> 0:14:11.520 So for example of if a carrier is providing all 0:14:11.520 --> 0:14:14.600 the good service, the speed, the capacity to a large 0:14:14.600 --> 0:14:17.880 shipper and scriminate against small shippers, that could potentially be 0:14:17.880 --> 0:14:20.240 a violation of the Act and the actionable. Where I'm 0:14:20.280 --> 0:14:22.440 seeing a lot of traction in this area is with 0:14:22.520 --> 0:14:25.440 demerging detention charges, and this is a big issue and 0:14:25.520 --> 0:14:28.520 it's a friction point in the community. Demerge is the 0:14:28.640 --> 0:14:32.080 charge that the container carrier, the ocean carrier, charges the shippers, 0:14:32.160 --> 0:14:34.920 say Walmart, for not picking up their container on time 0:14:34.920 --> 0:14:36.760 at the yard. It sits there too long, they get 0:14:36.800 --> 0:14:39.040 to say ten days of free time. And if it 0:14:39.080 --> 0:14:41.280 doesn't get picked up because it's too congested, they just 0:14:41.320 --> 0:14:43.880 can't get there, whatever the reason. They can't find a trucker, 0:14:43.920 --> 0:14:45.960 the truckers are too busy, they can't get in, it's 0:14:45.960 --> 0:14:49.200 too crowded, it's blocked in. They get charged X dollars 0:14:49.240 --> 0:14:52.000 per day, and if they don't return that container back 0:14:52.040 --> 0:14:54.400 to where it's supposed to go, they get charged another 0:14:54.400 --> 0:14:56.840 fee white dollars per day. The first one is demerged 0:14:56.920 --> 0:14:59.040 is the cost of not picking up the container on time, 0:14:59.080 --> 0:15:01.400 and detention is the cau us not returning it on time. 0:15:01.760 --> 0:15:04.400 That mounts into the millions or tens of millions of dollars, 0:15:04.600 --> 0:15:07.120 particularly in this environment where there's so much congestion and problems, 0:15:07.120 --> 0:15:10.160 and the carriers are charging that, and often the yard 0:15:10.240 --> 0:15:12.440 charges the carrier, and the carrier may market up and 0:15:12.520 --> 0:15:14.960 charges the shipper, and so not only are the goods 0:15:15.000 --> 0:15:17.000 not arriving on time, but then the shippers, you know 0:15:17.040 --> 0:15:19.000 you're a Walmarts and so forth, they're being stuck with 0:15:19.040 --> 0:15:21.480 these huge bills for what they view is poor service. 0:15:21.560 --> 0:15:24.400 And then on top of that, the ocean carriers are saying, well, 0:15:24.440 --> 0:15:26.480 if you really wanted it to get to a certain 0:15:26.480 --> 0:15:28.880 place at a particular time, you can buy one of 0:15:28.880 --> 0:15:31.040 our premium end to end products. You know, It's kind 0:15:31.080 --> 0:15:33.360 of like we're all familiar with the airlines, and you know, 0:15:33.400 --> 0:15:35.240 we were buying airline seats and we thought we were 0:15:35.240 --> 0:15:37.000 supposed to get a seat to go from A to 0:15:37.040 --> 0:15:39.200 B at a particular time. And now the airlines are 0:15:39.240 --> 0:15:40.680 telling us, well, you know, if you really want to 0:15:40.680 --> 0:15:42.240 get there on time, you really want to get a seat, 0:15:42.280 --> 0:15:43.560 you really want to have a place to put your 0:15:43.560 --> 0:15:46.440 carry ons, you can pay extra. People don't receive that well, 0:15:46.480 --> 0:15:48.840 and shippers are the same way with these premium products. 0:15:48.880 --> 0:15:53.360 Are shippers suing at this point? So yes, some UM 0:15:53.400 --> 0:15:56.400 there have been some actions filed the Federal Maritime Commission, 0:15:56.480 --> 0:15:59.000 far fewer than we would expect. And the real reason 0:15:59.080 --> 0:16:02.920 that we've seen and that the Commission themselves have identified 0:16:03.280 --> 0:16:08.120 is a fear of retaliation the ocean carriers. It's almost 0:16:08.200 --> 0:16:13.440 all collected in say nine or ten painter carriers, all 0:16:13.520 --> 0:16:16.360 the all the capacity, and then they in turn are 0:16:16.760 --> 0:16:22.600 organized into three UM shipping conferences and you know in 0:16:22.640 --> 0:16:25.960 many ways it's an oligopoli, and you know the antitrust laws. 0:16:26.120 --> 0:16:30.200 They have antitrust immunity in the industry in exchange for 0:16:30.320 --> 0:16:33.000 being monitored by the Commission. So people are just afraid 0:16:33.040 --> 0:16:35.240 to file is what we've seen a lot. I think 0:16:35.240 --> 0:16:37.280 a lot of things you've been settled offline. Some people 0:16:37.360 --> 0:16:42.560 have filed. There was a furniture importer called MCS Industries 0:16:42.720 --> 0:16:46.560 filed a suit against Costco Chin Ocean Shipping with the 0:16:46.560 --> 0:16:49.040 Commission and that just settled recently. I know that there 0:16:49.040 --> 0:16:52.920 are others in the pipeline as well. So in this chain, 0:16:53.520 --> 0:16:57.040 who is likely to get sued if Walmart doesn't get 0:16:57.320 --> 0:17:00.880 the products that it needs, If Mark doesn't get the 0:17:00.880 --> 0:17:04.280 products because they're not getting the capacity that was contractually 0:17:04.320 --> 0:17:06.800 promised to them by the Ocean Carry, the Ocean Carry 0:17:06.800 --> 0:17:09.320 will get suited. If it's because their truckers don't pick 0:17:09.400 --> 0:17:11.920 up the goods, there may be a breach of contract 0:17:11.920 --> 0:17:14.760 action against the trucker. But I think what's really going 0:17:14.840 --> 0:17:18.199 to happen is that the Christmas goods or you know, 0:17:18.200 --> 0:17:20.119 whatever it's it is. It's a issue, right, we're all 0:17:20.119 --> 0:17:22.480 talking about Christmas presents. Now they're just gonna be late. 0:17:22.520 --> 0:17:24.840 There's going to be a fewer of them, and ultimately 0:17:24.960 --> 0:17:27.280 the shipping public and the consumer will pay the price 0:17:27.320 --> 0:17:30.080 in terms of less quality, and people are gonna start rethinking. 0:17:31.359 --> 0:17:34.840 There's seven thousand miles supply chain. People are gonna start rethinking, 0:17:34.840 --> 0:17:37.240 particularly an era of great power competition, whether they want 0:17:37.280 --> 0:17:40.720 to have a sole source with China seven thousand miles away. 0:17:40.920 --> 0:17:43.679 You add to that just in time inventory, you know, 0:17:43.960 --> 0:17:47.960 which which everybody learned from the Japanese starting in the eighties. 0:17:48.920 --> 0:17:51.919 You've got a really fragile situation and all it takes 0:17:52.160 --> 0:17:54.400 is the beating of a butterfly's wings for the whole 0:17:54.400 --> 0:17:58.080 thing to go to hell or their force masure provisions 0:17:58.119 --> 0:18:04.000 in these contracts that COVID would fall under. So maybe, right, 0:18:04.119 --> 0:18:07.080 I mean, you could try. Um, you know, we maritime 0:18:07.160 --> 0:18:10.040 lawyers have been writing pretty good contracts for ocean carriers 0:18:10.080 --> 0:18:12.240 for a long time, and they're pretty they're pretty solid, 0:18:12.880 --> 0:18:15.840 and you know, I would say that probably somebody trying 0:18:15.880 --> 0:18:20.639 to bring a force masure um claim. We're trying to 0:18:20.800 --> 0:18:23.920 sert first and forced masure here is going to have 0:18:24.000 --> 0:18:26.480 a hard time. Um. You know, first of all, I 0:18:26.480 --> 0:18:29.760 mean the ocean carriers are disclaiming delay right in the contract, 0:18:30.600 --> 0:18:34.399 and to claim force the masure here, it's going to 0:18:34.480 --> 0:18:36.400 be difficult because it's so foreseeable. I mean, the fact 0:18:36.400 --> 0:18:38.119 that you and I are sitting here talking about this 0:18:38.160 --> 0:18:41.840 shows how foreseeable you know, it really is. So I 0:18:41.840 --> 0:18:45.000 don't think a force masure claim is gonna lie. What 0:18:45.119 --> 0:18:49.320 would an action on a service contract look like? So 0:18:49.440 --> 0:18:52.359 there's a contract, right, So you've got a service contract. 0:18:52.560 --> 0:18:55.000 So carriers can operate on a tariff, which is basically 0:18:55.040 --> 0:18:57.679 like a posted bill of prices, and then they have 0:18:57.680 --> 0:18:59.919 a bill of lading, which is their contract of carriacter. 0:19:00.400 --> 0:19:02.359 The tariffs sets out the terms and includes the bill 0:19:02.440 --> 0:19:04.720 and that that's got all the protective language about we 0:19:04.720 --> 0:19:06.840 don't we don't pay for delays and all that kind 0:19:06.840 --> 0:19:08.840 of stuff, right, I mean, that could be a breach 0:19:08.880 --> 0:19:11.520 action for you know, not providing the quality. Most service 0:19:11.520 --> 0:19:13.840 contracts are just that, right, They promised a certain amount 0:19:13.840 --> 0:19:16.680 of quality at a certain rate. They can deviate from 0:19:16.680 --> 0:19:19.240 their posted tariff, right they can. They can charge somebody 0:19:19.320 --> 0:19:22.320 less in exchange, for example, for getting more volume, because 0:19:22.359 --> 0:19:25.000 carriers are typically chasing volume as opposed to running away 0:19:25.000 --> 0:19:27.000 from it like they are now, so there's a potentially 0:19:27.040 --> 0:19:29.680 contract action there, but those contract actions are lying courts. 0:19:29.720 --> 0:19:32.720 They don't lie before the Federal Maritime Commission. As I said, 0:19:32.760 --> 0:19:34.879 I don't I think at least with the perspect of 0:19:34.880 --> 0:19:36.560 the ocean carriers, and we can talk about the truck 0:19:36.560 --> 0:19:39.120 are separately, but at least with respect of the ocean carriers, 0:19:39.280 --> 0:19:40.880 what you can assume for if it's not a breach 0:19:40.920 --> 0:19:43.359 of the commitment, delay is going to be an uphill battle. 0:19:43.560 --> 0:19:46.360 But at the Commission you can sue for unreasonable practices 0:19:46.359 --> 0:19:49.480 and discrimination and emerging attention. I think it's going to 0:19:49.520 --> 0:19:51.320 be a big thing. As I mentioned earlier, you know, 0:19:51.400 --> 0:19:53.800 the Commission is very focused on this. The Ocean Shipping 0:19:53.800 --> 0:19:56.560 Reform Act, the piece of legislation I mentioned, is also 0:19:56.600 --> 0:20:00.880 focused on this. Um. The carriers have these pake many 0:20:00.880 --> 0:20:02.320 of them, not all of them, that have these very 0:20:02.359 --> 0:20:05.400 opaque billing practices with respect to emerging attention. And it's 0:20:05.440 --> 0:20:08.000 not clear you know, to the shippers, to the to 0:20:08.040 --> 0:20:10.720 the walmarts when they're gonna get hit with these charges, 0:20:11.440 --> 0:20:14.879 and so that that is an unreasonable practice if they 0:20:14.960 --> 0:20:17.359 if they're getting whacked with these charges for boxes that 0:20:17.400 --> 0:20:20.280 they couldn't pick up or they couldn't return beyond their control. 0:20:20.600 --> 0:20:23.080 It's an unreasonable practice and they can get sued for that. 0:20:23.280 --> 0:20:26.199 It has to promote freight fluidity because demerge charges. The 0:20:26.240 --> 0:20:28.760 reason they're justified is because they expect the movement of 0:20:28.800 --> 0:20:30.119 the boxes. They get them out of the port, they 0:20:30.119 --> 0:20:32.439 get them back, they keep things moving. If they're not 0:20:32.480 --> 0:20:35.240 doing that because you just can't get there, you can't 0:20:35.240 --> 0:20:37.560 get the container because there's too much congestion, how does 0:20:37.560 --> 0:20:41.880 that promote fre freight fluidity? So you anticipate seeing some 0:20:41.920 --> 0:20:46.160 action there in that area. Yeah, um, and I think 0:20:46.240 --> 0:20:48.680 you'll see some action by the Bureau of Enforcement as well. 0:20:49.160 --> 0:20:53.240 If things don't debate, if we don't see money shifting 0:20:53.280 --> 0:20:55.840 to services and the pressure keeps up on the supply chain, 0:20:56.560 --> 0:20:59.320 I think we're going to see a more muscular and 0:20:59.400 --> 0:21:03.360 more robust Federal Maritime Commission. They've already done a lot. 0:21:03.440 --> 0:21:05.879 I mean they've they've done a lot of inquiries. Commissioner 0:21:05.960 --> 0:21:09.640 dies been focused on fact finding. Twenty nine, they promulgated 0:21:09.680 --> 0:21:12.359 an interpretive rule, we're going to merge in detention. They 0:21:12.480 --> 0:21:15.160 laid down the law about this whole freight fluidity principle. 0:21:15.640 --> 0:21:18.479 And so they've they put down the markers, they've been 0:21:18.600 --> 0:21:23.439 conducting investigations, submitting information requests, you know, basically subpoenas to 0:21:23.480 --> 0:21:26.960 the carriers. So they're watching, they're waiting, and they're getting ready. 0:21:27.119 --> 0:21:29.520 There hasn't been a lot of activity yet in the docket, 0:21:29.600 --> 0:21:32.040 but you know, I think that they will because as 0:21:32.040 --> 0:21:34.640 I mentioned, there's a lot of shipper you know, Walmart, 0:21:34.840 --> 0:21:39.199 you know, Ocean, Ocean Service consumer fear of that they 0:21:39.200 --> 0:21:41.679 will be discriminated against, which of course would be a 0:21:41.760 --> 0:21:44.800 violation of the Shipping Act. But nevertheless, they they're afraid 0:21:44.840 --> 0:21:47.119 that if they come out against the ocean carriers, they 0:21:47.160 --> 0:21:49.880 won't get any any service at all, you know. So 0:21:50.000 --> 0:21:53.159 and also you know, it's very diffuse. The shippers are 0:21:53.240 --> 0:21:55.640 very diffused, right, I mean, they've got there's so many 0:21:55.680 --> 0:21:57.840 of them compared to the nine or ten carriers and 0:21:57.880 --> 0:22:02.480 three conferences, and it's factually very challenging, you know, because 0:22:02.760 --> 0:22:05.600 they might have one one container here, one container there, 0:22:06.119 --> 0:22:08.560 and there's so you know, each container is a different 0:22:08.640 --> 0:22:11.120 delay period, each one is a different move and so 0:22:11.680 --> 0:22:14.560 you know, unless you take a consolidated entity like to 0:22:14.600 --> 0:22:16.600 grow of enforcement, that's going to sort of stand up 0:22:16.640 --> 0:22:19.960 for everybody. There's a lower incentive to bring a cause 0:22:19.960 --> 0:22:23.280 of action for a shipper. And if if BOE doesn't, 0:22:23.280 --> 0:22:26.200 then and then Congress will, Congressman John Garamendi and Congressman 0:22:26.280 --> 0:22:28.400 Johnson will through their act, which has got sixty six 0:22:28.440 --> 0:22:33.240 co sponsors. What is their act do just broadly imposes 0:22:33.280 --> 0:22:36.280 new requirements to certify and explain and make more transparent 0:22:36.400 --> 0:22:40.720 these emerging detention charges and invoices. Another thing that it does, 0:22:40.760 --> 0:22:44.560 which is which is really interesting, it imposes new obligations 0:22:44.720 --> 0:22:48.119 for the carriers to furnish the facilities and instrumentalities to 0:22:48.200 --> 0:22:52.680 perform their services, including containers. So you know, as a consumer, 0:22:52.760 --> 0:22:55.520 you think they're going to get your stuff to you 0:22:55.880 --> 0:23:00.480 in say Peory, Illinois from l A Long Beach. But 0:23:00.720 --> 0:23:02.800 so the carrier, you know, they've kind of spun off 0:23:02.880 --> 0:23:05.040 everything after the port except for these end to end 0:23:05.080 --> 0:23:07.679 products which I was talking about earlier. So as I mentioned, 0:23:07.760 --> 0:23:09.800 it's like a huge problem is that the containers are 0:23:09.840 --> 0:23:12.800 just all in the wrong places and the chassis are 0:23:12.840 --> 0:23:14.560 in the wrong places or there aren't enough of them, 0:23:15.000 --> 0:23:16.840 and the carriers are saying, well, it's not my fault, 0:23:17.200 --> 0:23:20.240 you know, sorry, you know, you know, there's been reports 0:23:20.320 --> 0:23:24.800 that the carriers are sending back empty containers westbound to 0:23:24.960 --> 0:23:28.200 China because they can make ten or twenty or or 0:23:28.280 --> 0:23:35.000 more dollars to box on that eastbound import. Whereas before 0:23:35.080 --> 0:23:37.360