WEBVTT - SCOTUS Doesn't Decide & New Delaware Law 0:00:02.759 --> 0:00:07.000 This is Bloomberg Law with June Brossel from Bloomberg Radio. 0:00:08.760 --> 0:00:12.080 President Donald Trump has started his second term with a 0:00:12.200 --> 0:00:16.520 torrent of executive orders designed to transform the government and 0:00:16.600 --> 0:00:20.800 assert sweeping presidential power. In the first of many legal 0:00:20.840 --> 0:00:24.319 fights expected to end up at the Supreme Court, the 0:00:24.640 --> 0:00:29.160 justices have decided not to decide. With a bare majority 0:00:29.200 --> 0:00:33.080 of five justices, the Court said in an unsigned order 0:00:33.120 --> 0:00:36.839 that Hampton Dellinger, head of the Office of Special Counsel, 0:00:37.200 --> 0:00:40.760 should remain in his job at least until Wednesday. That's 0:00:40.800 --> 0:00:45.080 when a lower court order temporarily protecting him expires. So 0:00:45.200 --> 0:00:49.400 the Court neither granted nor rejected the administration's request to 0:00:49.520 --> 0:00:53.680 let Trump fire Dellinger, who heads the independent US agency 0:00:53.760 --> 0:00:58.320 that protects government whistleblowers. Joining me is constitutional law expert 0:00:58.400 --> 0:01:02.400 Harold Krant, a professor, Chicago Kent College of Law. How 0:01:02.440 --> 0:01:06.119 will you explain the issue around the firing of Dellinger? 0:01:06.600 --> 0:01:11.319 In creating offices, Congress often has protected the officeholder from 0:01:11.680 --> 0:01:15.320 the plenary removal of the president and limited the president's 0:01:15.400 --> 0:01:18.200 reasons for being able to remove the officer, usually to 0:01:18.720 --> 0:01:22.880 neglective duties or for cause. And the Office of Special Counsel, 0:01:22.959 --> 0:01:26.399 which is in charge of protecting whistleblowers against the government, 0:01:26.720 --> 0:01:33.200 is focused on trying to protect employees who complain about 0:01:33.200 --> 0:01:36.160 what's happening in their government job as government waste, et cetera. 0:01:36.640 --> 0:01:40.360 So Congress decided in creating this special office to protect 0:01:40.360 --> 0:01:43.600 the head of it from at will removal and the 0:01:43.640 --> 0:01:47.240 independence Congress thought was necessary in order to protect the 0:01:47.560 --> 0:01:51.600 independence of the office, because oftentimes the office Special Council 0:01:51.680 --> 0:01:54.280 protects employees against their bosses. 0:01:54.880 --> 0:01:59.800 Was the question here a procedural question, really whether or 0:01:59.840 --> 0:02:04.480 not the tro issued by the lower court judge could 0:02:04.520 --> 0:02:05.200 be appealed. 0:02:05.640 --> 0:02:09.000 That was the narrow issue that the court decided, and 0:02:09.040 --> 0:02:11.880 the court decided better to wait until there was a 0:02:11.919 --> 0:02:16.440 more clearly a final order before they decided the case. 0:02:16.919 --> 0:02:19.920 The case is complicated for a number of reasons, and 0:02:19.919 --> 0:02:22.240 I think the press has missed at least one of them. 0:02:22.240 --> 0:02:25.520 I think the most obvious legal issue is the Trump 0:02:25.560 --> 0:02:30.480 administration's movement to be able to fire any individual worker 0:02:30.919 --> 0:02:35.240 or officer at will in order to maintain the unitary 0:02:35.360 --> 0:02:40.320 executive ideal. But the other issue, which is connected is 0:02:40.840 --> 0:02:44.160 even if you can't remove someone for any reason at all, 0:02:44.919 --> 0:02:49.519 what's it like to reinstate someone against the president's will. So, 0:02:49.520 --> 0:02:54.240 in other words, there might be a claim for back pay, 0:02:54.360 --> 0:02:57.560 as there was in the famous Humphreys executive case several 0:02:57.560 --> 0:03:00.200 generations ago, which is the lead case uphold up the 0:03:00.240 --> 0:03:04.079 independence of agencies, But in that case the court never 0:03:04.160 --> 0:03:07.720 had to force an officer in that case and Federal 0:03:07.720 --> 0:03:11.359 Trade Commissioner back into office. Here, this would be the 0:03:11.400 --> 0:03:14.799 first time, at least one of the first times that 0:03:15.040 --> 0:03:19.040 a court would actually reinstate someone and force the president 0:03:19.120 --> 0:03:21.960 to work with someone that the president doesn't want to work. 0:03:22.320 --> 0:03:24.799 So there's really two aspects of this case. You know, 0:03:24.880 --> 0:03:28.440 one is being pardon parcel, then of the president's ambition 0:03:28.560 --> 0:03:31.240 to be able to fire anybody at will. But the second, 0:03:31.360 --> 0:03:35.360 which is connected, is can a court force the government 0:03:35.800 --> 0:03:39.240 not only to pay back pay, but to take somebody 0:03:39.440 --> 0:03:42.400 and keep them on their job against the president's wishes? 0:03:43.240 --> 0:03:47.320 Was the Trump administration trying to make this an issue 0:03:47.360 --> 0:03:51.320 beyond this one firing? In other words, they said that 0:03:51.360 --> 0:03:56.040 the order exemplifies a broader trend by lower courts with 0:03:56.120 --> 0:04:00.800 plaintiffs challenging Trump's initiatives and persuading district worts to issue 0:04:00.840 --> 0:04:05.560 tros that intrude on presidential Article two powers, So were 0:04:05.600 --> 0:04:09.119 they trying to make this a bigger issue. 0:04:09.080 --> 0:04:12.040 In powered But I think this is also more of 0:04:12.080 --> 0:04:16.000 the mosaic that one can see from the presidents removing 0:04:16.120 --> 0:04:19.400 one of the NLRB members' National Labor Relations Board members, 0:04:19.440 --> 0:04:22.640 one of the MSPB, which is the Merit System's Protection 0:04:22.720 --> 0:04:27.039 Board officers. And not only that, just last week the 0:04:27.160 --> 0:04:32.000 executive order basically declares war on independent agencies and says 0:04:32.040 --> 0:04:34.440 that they really aren't going to be independent agencies. They 0:04:34.480 --> 0:04:37.719 all have to come for guidance from the President and 0:04:37.800 --> 0:04:40.640 from OMB from Office of Management Budget, and he's not 0:04:40.680 --> 0:04:44.520 going to respect the independence of any kind of agencies. 0:04:44.920 --> 0:04:50.120 And so the Solcier General wrote to Senator Durbin Judiciary 0:04:50.120 --> 0:04:54.039 Committee and said that the administration will no longer defend 0:04:54.400 --> 0:04:58.000 administrative agencies and indeed they're going to try to make 0:04:58.040 --> 0:05:02.040 them into what's called exact necative agencies or more dependent 0:05:02.160 --> 0:05:06.320 upon presidential leadership. So I think that yes, there is 0:05:06.400 --> 0:05:10.320 an interest in the Trump administration to try to minimize 0:05:10.360 --> 0:05:13.080 the number of tierros that have been entered against his 0:05:13.520 --> 0:05:17.360 executive orders and DOGE activities. But at the same time, 0:05:17.400 --> 0:05:19.800 this is very important to the administration to try to 0:05:20.400 --> 0:05:24.800 again sort of conform to this unitary executive ideal, which 0:05:24.839 --> 0:05:28.160 says Congress can have no say in making an office independent. 0:05:28.520 --> 0:05:31.720 Every office has to be totally dependent upon presidential will. 0:05:32.000 --> 0:05:34.800 So the Court decided not to decide, and it was 0:05:34.920 --> 0:05:39.040 basically the middle of the court, the Chief Justice and 0:05:39.320 --> 0:05:45.479 Justices Elena Kagan, Brett Kavanaugh, and Amy Coney Barrett. But surprise, surprise, 0:05:45.920 --> 0:05:51.000 Clarence Thomas, one of the most conservative justices, join them 0:05:51.120 --> 0:05:52.479 to make the fifth vote. 0:05:52.720 --> 0:05:55.800 So I'm very surprised about Justice Thomas because Justice Thomas 0:05:55.800 --> 0:05:59.960 has been on record as expressing skepticism about the independent 0:06:00.160 --> 0:06:03.239 agencies in the past. So I don't know what accounts 0:06:03.240 --> 0:06:05.800 for his Maybe he also believes and it's important to 0:06:05.800 --> 0:06:09.280 have final court action before any kind of appeal to 0:06:09.320 --> 0:06:11.920 the Supreme Court. That may be the basis of his 0:06:12.000 --> 0:06:15.280 agreement to join the middle in this particular issue. But 0:06:15.320 --> 0:06:17.440 it's a very narrow decision on all of saying is 0:06:17.520 --> 0:06:20.279 let's wait until there's a final decision that may come 0:06:20.279 --> 0:06:22.599 as soon as this week, and so the issue may 0:06:22.760 --> 0:06:26.119 yet again return to the Supreme Court in due course. 0:06:26.760 --> 0:06:31.000 You had the two most liberal justices Sonya Sotomayor and 0:06:31.240 --> 0:06:34.200 Katanji Brown Jackson, saying that they would have turned the 0:06:34.279 --> 0:06:38.320 president down. And then you had two justices Neil Gorsitch 0:06:38.400 --> 0:06:43.080 and Samuel Alito, considered two of the most conservative, saying 0:06:43.160 --> 0:06:47.120 they would have granted Trump's request. Gorstch wrote a dissent, 0:06:47.600 --> 0:06:50.520 did it support the unitary executive theory. 0:06:50.880 --> 0:06:53.880 It's a signal that he would support that, and that 0:06:53.880 --> 0:06:57.200 would be consistent with I think his ideology as well 0:06:57.200 --> 0:07:01.120 as that of Justice Alito. And it's no surprise given 0:07:01.200 --> 0:07:05.320 the recent decisions by the Supreme Court in both the 0:07:05.520 --> 0:07:09.040 cell law case and an accounts case, that the writing 0:07:09.120 --> 0:07:12.600 had been on the wall with respect to the ability 0:07:12.800 --> 0:07:16.320 of independent agencies to continue. So I think their views 0:07:16.320 --> 0:07:19.680 are not surprising, but it's not clear yet. If I 0:07:19.720 --> 0:07:21.720 had a bet, I would bet that the Court was 0:07:21.800 --> 0:07:25.000 leaning towards over ruling Humphrey's executor and getting rid of 0:07:25.120 --> 0:07:28.200 so called independent agencies. But that's not a for sure thing, 0:07:28.640 --> 0:07:31.400 and it may be that some of the conservative justices 0:07:31.440 --> 0:07:34.160 are taking a deep breath and saying, maybe we should 0:07:34.160 --> 0:07:37.000 hold the line because they are looking around them and 0:07:37.200 --> 0:07:40.360 concerned about what the unitary executive might bring to the country. 0:07:40.600 --> 0:07:44.240 In his papers, Dellinger did warn that you're going to 0:07:44.280 --> 0:07:48.160 be overwhelmed by Trump filings and a rocket ducket straight 0:07:48.240 --> 0:07:52.840 to the court. And in his first administration he sometimes 0:07:52.880 --> 0:07:55.720 skipped over the appellate courts and went straight to the 0:07:55.720 --> 0:07:58.800 Supreme Court. So could this set a precedent? 0:07:59.480 --> 0:08:03.000 Sure if the Court decides to hear this next week 0:08:03.320 --> 0:08:07.240 without having a full appellate process, then this would be 0:08:07.480 --> 0:08:10.600 a signal that the Court is willing to bend its 0:08:10.680 --> 0:08:14.440 rules and to take cases quickly in order to figure 0:08:14.480 --> 0:08:17.560 out whether or not to uphold President Trump's agenda. I 0:08:17.560 --> 0:08:19.520 don't think the Court would like that. I think the 0:08:19.560 --> 0:08:23.800 Court usually wants to benefit from percolation and from getting 0:08:23.920 --> 0:08:29.239 the benefit of individual judge's opinions below. And this isn't 0:08:29.280 --> 0:08:32.040 like a huge national security case. It has to do 0:08:32.320 --> 0:08:37.240 just with again a narrow question of presidential removal authority. 0:08:37.440 --> 0:08:39.680 But who knows. Maybe they want to take this case, 0:08:39.720 --> 0:08:42.439 and maybe they will and try to expedite the case 0:08:42.679 --> 0:08:43.240 on the docket. 0:08:43.640 --> 0:08:48.280 Recent Supreme Court decisions don't they suggest that Congress can 0:08:48.400 --> 0:08:52.320 interfere with the president's power to remove subordinates? I mean, 0:08:52.400 --> 0:08:54.680 didn't we see that in the CFPB case. 0:08:55.160 --> 0:08:58.440 And what was very striking was in Chief Justice Roberts 0:08:58.559 --> 0:09:03.040 opinion in the Community case, he talked about the removal 0:09:03.080 --> 0:09:06.640 of power is one of these core executive powers that 0:09:07.120 --> 0:09:12.520 Congress could not interfere with, suggesting that for cause protections 0:09:12.800 --> 0:09:16.200 might be unconstitutional, as indeed he ruled in the CFPB 0:09:16.400 --> 0:09:20.360 case that you mentioned, it's possible, you know, it's possible 0:09:20.440 --> 0:09:22.880 that they believe it. And what is striking is they've 0:09:22.960 --> 0:09:27.280 never really articulated why Congress can't have any kind of 0:09:27.360 --> 0:09:31.560 say in creating an office, whether that office should be 0:09:31.679 --> 0:09:35.160 somewhat independent, as in the Special Council case, because the 0:09:35.160 --> 0:09:38.240 Special Council is protecting whistleblowers and when there is this 0:09:38.360 --> 0:09:42.439 perceived conflict of interest within an executive branch, isn't independence 0:09:42.720 --> 0:09:46.160 an option that Congress can try to establish if it 0:09:46.240 --> 0:09:49.560 thinks it's appropriate for the country. And the Court just 0:09:49.880 --> 0:09:52.560 blinks at that and says Article two Executive power, Article 0:09:52.559 --> 0:09:56.000 two executive power, and they've given no credit to Congress 0:09:56.440 --> 0:09:57.760 is interest in this case. 0:09:58.679 --> 0:10:02.600 I'm wondering if they're going to try to walk that 0:10:03.320 --> 0:10:07.800 immunity decision back a bit. It was hastily written and 0:10:07.840 --> 0:10:11.480 as I believe you. Certainly other people have said it 0:10:11.600 --> 0:10:13.200 was not the most reasoned decision. 0:10:13.360 --> 0:10:15.480 It was not the most reason decision. I think it's 0:10:15.559 --> 0:10:19.920 not directly relevant to the question of removal forty, but 0:10:20.080 --> 0:10:23.320 certainly there are seeds of the fact that you need 0:10:23.360 --> 0:10:26.000 to have protect the president when the president wants to 0:10:26.080 --> 0:10:29.600 fire someone. In that decision, and again, it's all possible. 0:10:29.720 --> 0:10:31.600 No one sucussed the yet that that court. We try 0:10:31.640 --> 0:10:35.400 to split it by saying we won't reinstate because that 0:10:35.640 --> 0:10:39.480 is what trench upon presidential progatives. But we will say 0:10:39.520 --> 0:10:43.520 it's an unconstitutional action and back pay has to be awarded. 0:10:43.920 --> 0:10:46.080 And so that's at least a signal that if the 0:10:46.360 --> 0:10:49.439 compadministration wants to fire all these people, they're going to 0:10:49.520 --> 0:10:52.080 have to come up with the money somehow because they 0:10:52.600 --> 0:10:54.920 violated the congressional restriction. 0:10:55.360 --> 0:10:58.920 When the case is of all the federal employees being 0:10:59.040 --> 0:11:03.720 fired and the agencies being shuddered except in name only 0:11:04.200 --> 0:11:06.480 get to the court, how do you think they'll rule. 0:11:07.040 --> 0:11:10.320 It's clear that President Trump believes the Civil Service Act 0:11:10.440 --> 0:11:13.400 is unconstitutional. So I do think that that a case 0:11:13.520 --> 0:11:16.199 or a variance of it will get to the Supreme Court. 0:11:16.360 --> 0:11:17.920 And I think the Supreme Court is going to have 0:11:18.000 --> 0:11:21.480 a hard time saying, given all that Penalton Act and 0:11:21.559 --> 0:11:24.559 all the history of one hundred and twenty five years 0:11:24.559 --> 0:11:26.600 of the civil Service, that that's just going to go 0:11:26.720 --> 0:11:30.800 up in smoke. I think they'll say that president has 0:11:30.840 --> 0:11:34.920 to have some control over policymakers. And I think that's 0:11:34.960 --> 0:11:38.320 a line that's at least far more defensible, depending on 0:11:38.360 --> 0:11:41.640 how you interpret it, than the idea that the entire 0:11:41.679 --> 0:11:45.080 civil service is unconstitutional. But that's just my prediction. One 0:11:45.080 --> 0:11:45.800 can never judge. 0:11:46.040 --> 0:11:49.199 We try to, Thanks hal. That's Professor Harold crant To 0:11:49.240 --> 0:11:53.079 the Chicago Kent College of Law. Coming up next. Changes 0:11:53.120 --> 0:11:58.160 ahead in Delaware law. This is Bloomberg Elon Musk went 0:11:58.240 --> 0:12:02.000 to war with Delaware after a judge there shot down 0:12:02.080 --> 0:12:05.920 his massive Tesla pay package, and he moved his companies 0:12:05.960 --> 0:12:09.199 to Texas. Delaware is the corporate home to more than 0:12:09.280 --> 0:12:13.240 two million businesses, including more than sixty percent of Fortune 0:12:13.280 --> 0:12:17.200 five hundred companies in corporation fees generate more than a 0:12:17.320 --> 0:12:21.280 fourth of the state's annual budget, so state legislators are 0:12:21.320 --> 0:12:26.920 proposing drastic changes to Delaware's business statutes following recent defections 0:12:26.960 --> 0:12:30.920 by companies moving their in corporation to Texas or Nevada 0:12:31.320 --> 0:12:34.560 in search of friendli er legal treatment. Joining me is 0:12:34.600 --> 0:12:38.800 business law professor Eric Talley of Columbia Law School. I mean, 0:12:38.840 --> 0:12:43.800 have there been that many defections of companies to Texas 0:12:43.840 --> 0:12:47.840 and Nevada that it's a real cause of concern in Delaware. 0:12:49.000 --> 0:12:52.640 Well, thus far, the rate of defections has not been 0:12:52.679 --> 0:12:56.560 that much bigger than it has been in prior years, 0:12:56.600 --> 0:13:00.400 and in fact, there have been importations as well to 0:13:00.559 --> 0:13:03.080 Delaware that have been going on. At the same time, 0:13:03.440 --> 0:13:06.880 there are larger companies, right that are more notable, particularly 0:13:06.880 --> 0:13:09.679 Tesla that defected, and so that some ways that has 0:13:09.760 --> 0:13:13.679 cast a huge shadow over this debate. The numbers thus far, though, 0:13:13.800 --> 0:13:17.679 seem relatively modest compared to you know, at least by 0:13:17.880 --> 0:13:20.120 measurement against historical trends. 0:13:20.360 --> 0:13:22.680 Is this all about Elon Musk? 0:13:23.480 --> 0:13:26.080 Well, I think probably Elon Musk plays a big role 0:13:26.120 --> 0:13:29.880 in this story, right that he is definitely, after having 0:13:30.360 --> 0:13:33.840 lost at least at the trial level, his compensation case, 0:13:33.920 --> 0:13:37.760 he's been kind of on the warpath against Delaware, and 0:13:37.800 --> 0:13:41.240 I think in some ways that has probably you know, caused. 0:13:40.920 --> 0:13:43.000 A little bit of celebrity around the. 0:13:43.120 --> 0:13:45.960 Question of, you know, where's the best state to incorporate. 0:13:46.240 --> 0:13:49.360 That doesn't necessarily mean that when you start looking around, 0:13:49.400 --> 0:13:52.760 you're going to find choices that are, you know, substantially 0:13:53.040 --> 0:13:57.840 better or easier to predict, but that probably did get 0:13:57.960 --> 0:14:00.760 this conversation started, because a lot of what is being 0:14:00.840 --> 0:14:04.280 put behind the new proposed regulations is sort of a 0:14:04.360 --> 0:14:07.560 sense of there's an exigency that we really have to 0:14:07.880 --> 0:14:11.360 take care of right away, but thus far the numbers 0:14:11.440 --> 0:14:15.040 don't really quite back that up at least yet. That 0:14:15.080 --> 0:14:17.400 doesn't mean that it's not a cause of concern, because 0:14:17.480 --> 0:14:20.160 you know, absolutely, you know, Tesla is a big company, 0:14:20.200 --> 0:14:23.640 Mister Musk is a very influential person, and so you 0:14:23.640 --> 0:14:26.640 know it no doubt helps get some of the ball rolling, 0:14:26.680 --> 0:14:30.280 which probably on some level explains both the breadth of 0:14:30.320 --> 0:14:33.080 these new proposed changes and the fact that they didn't 0:14:33.080 --> 0:14:36.680 really take the usual course that various types of statutory 0:14:36.760 --> 0:14:38.480 reforms take in Delaware. 0:14:38.960 --> 0:14:42.440 Looking at it as a whole, what's the most important 0:14:42.480 --> 0:14:45.720 or most significant change. 0:14:45.200 --> 0:14:47.400 Well, they come from a bunch of different directions, but 0:14:47.480 --> 0:14:50.520 one of the things that probably unifies all of them 0:14:50.640 --> 0:14:54.520 is that these changes do not necessarily just sort of 0:14:54.560 --> 0:14:57.520 pick off one or two Delaware precedents. I was trying 0:14:57.600 --> 0:15:00.840 to count them up myself, and it's easy lee into 0:15:01.040 --> 0:15:03.560 the thirties, if not the forties in terms of the 0:15:03.640 --> 0:15:08.400 number of Delaware Supreme Court opinions that these changes would 0:15:08.440 --> 0:15:12.880 substantially roll back. Now, they are fairly sweeping, but probably 0:15:12.920 --> 0:15:16.720 the core of them relates to a provision in the 0:15:16.800 --> 0:15:21.880 Delaware Code that concerns conflicts of interest right situations where 0:15:21.920 --> 0:15:25.680 there's a decision or a transaction made by a company 0:15:26.000 --> 0:15:30.800 that benefits either a corporate fiduciary or a big shareholder 0:15:30.920 --> 0:15:33.800 of the company. And there there have been probably five 0:15:33.880 --> 0:15:37.440 or six sweeping changes. Probably the most important one over 0:15:37.440 --> 0:15:41.280 the last couple of years is to lighten the pressure 0:15:41.800 --> 0:15:46.600 on controlling stockholders, who really have gotten most of the 0:15:46.640 --> 0:15:51.239 scrutiny in recent years in Delaware, including in mister Musk's 0:15:51.360 --> 0:15:55.560 compensation case. And that change would essentially basically say, for 0:15:55.760 --> 0:15:58.920 most types of transactions, we're not going to make it 0:15:58.920 --> 0:16:02.520 as hard for you to get essentially a hall pass 0:16:02.840 --> 0:16:06.960 and not be subject to liability for conflicts of interests 0:16:07.160 --> 0:16:09.440 types of transactions involving a controller. 0:16:09.960 --> 0:16:13.560 So then it basically alters the balance of power between 0:16:13.960 --> 0:16:16.600 minority shareholders and corporate leaders. 0:16:17.720 --> 0:16:21.120 That seems to be the intended effect here, and you know, 0:16:21.360 --> 0:16:24.080 one can definitely debate about where that balance of power 0:16:24.080 --> 0:16:26.320 should be. And in fact, that's part of the discussion 0:16:26.360 --> 0:16:29.080 about you know, competition between states, right. You know, they're 0:16:29.160 --> 0:16:31.680 essentially trying to turn up or turn down that dial 0:16:31.800 --> 0:16:36.440 on how much scrutiny they give officers and directors and 0:16:36.480 --> 0:16:40.040 so forth. And Delaware had, you know, had provided ways 0:16:40.080 --> 0:16:43.040 that even a controlling shareholder could escape scrutiny, but you 0:16:43.120 --> 0:16:44.520 kind of had to do it in the right way, 0:16:44.560 --> 0:16:46.960 and you had to get the appropriate votes and permissions, 0:16:47.280 --> 0:16:49.320 and it had to be set up from the very beginning. 0:16:49.400 --> 0:16:53.560 And the new statutory proposal makes it less necessary to 0:16:53.560 --> 0:16:56.120 set something up from the beginning and doesn't really require 0:16:56.160 --> 0:16:59.040 as many hoops to jump through. But the other thing 0:16:59.080 --> 0:17:01.200 that's kind of interesting, and you know, I think when 0:17:01.200 --> 0:17:05.479 you talk to most practitioners and professors and judges, one 0:17:05.480 --> 0:17:07.720 of the things that has made Delaware specials that it's 0:17:07.760 --> 0:17:11.880 got a relatively you know, large amount of case law 0:17:12.000 --> 0:17:15.160 and expert judges that you can make you pretty good 0:17:15.160 --> 0:17:17.680 predictions on how various cases are going to come out. 0:17:17.760 --> 0:17:21.199 And this is one of the potential problems, or at 0:17:21.280 --> 0:17:24.480 least a risk factor with these new statutes is that 0:17:24.560 --> 0:17:27.520 a lot of that case law now is being overturned 0:17:27.520 --> 0:17:30.080 by statute. So it's kind of like, you know, stars 0:17:30.080 --> 0:17:32.520 that you were kind of guiding your ship by at night, 0:17:32.640 --> 0:17:35.640 you know a large portion of them now have basically disappeared, 0:17:35.880 --> 0:17:38.760 and we don't have any track record of interpreting this 0:17:38.840 --> 0:17:42.440 new broad sweeping statute. And in addition, it sets up 0:17:42.560 --> 0:17:46.399 much more kind of formulaic rules that leave less to 0:17:46.480 --> 0:17:49.720 the discretion of the expert judiciary. So now one of 0:17:49.760 --> 0:17:52.800 the things that's going to be a little bit more complicated. 0:17:52.800 --> 0:17:55.680 It seems to me if these proposed reforms go through, 0:17:56.160 --> 0:17:58.560 is not just the question of how much, you know, 0:17:58.560 --> 0:18:01.920 where do you set the bal bals of preferences between 0:18:02.320 --> 0:18:06.760 minority shareholders and controlling shareholders, but the number of stars 0:18:06.840 --> 0:18:10.359 left to reckon by are much fewer, and the judge, 0:18:10.359 --> 0:18:12.159 if you want to liken that to the captain of 0:18:12.200 --> 0:18:14.600 the ship, it doesn't have as many places that they're 0:18:14.640 --> 0:18:17.800 allowed to go. And so in some ways, you know, 0:18:17.920 --> 0:18:20.520 I guess I have, you know, some concerns that in 0:18:20.720 --> 0:18:23.080 you know, sort of trying to move really quickly to 0:18:23.200 --> 0:18:27.439 deal with this panic about Delaware exit that may or 0:18:27.440 --> 0:18:30.480 may not even be going on. Some of the biggest 0:18:30.520 --> 0:18:34.720 benefits of being incorporated in Delaware, the expert judiciary, the 0:18:35.000 --> 0:18:38.280 large stock of case law to guide yourself by, are 0:18:38.320 --> 0:18:41.120 now also being weakened, and so some clear that even 0:18:41.160 --> 0:18:45.000 if you like the idea of giving you controlling stockholders 0:18:45.040 --> 0:18:49.640 more authority or more freedom than they have historically had 0:18:49.720 --> 0:18:51.959 or had in the last couple of years, it is 0:18:52.400 --> 0:18:55.880 necessarily going to be the best move to also say, well, 0:18:56.080 --> 0:18:58.119 you know, guess what, a lot of the precedents of 0:18:58.160 --> 0:19:00.440 Delaware now no longer count. We're going to have to 0:19:00.480 --> 0:19:02.960 start building them up from the ground up, or at 0:19:03.040 --> 0:19:05.639 least from you know, a lower level up. And you 0:19:05.680 --> 0:19:09.200 know that, quite frankly, could give states other than Delaware 0:19:09.240 --> 0:19:12.440 an end to say, hey, look, if you no longer 0:19:12.440 --> 0:19:14.960 are depending on your expert judges as much as you 0:19:15.040 --> 0:19:18.040 used to, and if you don't have as many precedents 0:19:18.080 --> 0:19:21.520 to guide you as you did before these reforms, maybe 0:19:21.520 --> 0:19:23.560 this is a real time where a state could step 0:19:23.600 --> 0:19:25.920 in and say, you know, we're going to start building 0:19:26.000 --> 0:19:28.600 up precedents ourselves, and I think you know a lot 0:19:28.600 --> 0:19:31.199 of states, including Texas, including the VATA, and probably some 0:19:31.280 --> 0:19:33.639 other states as well, are starting to see this as 0:19:33.680 --> 0:19:37.720 a potential opening, even though the purported reason for it 0:19:37.800 --> 0:19:39.760 was to keep that from happening. And you know, I 0:19:39.800 --> 0:19:43.160 think you could make arguments in both directions, quite frankly, and. 0:19:43.240 --> 0:19:46.040 You wrote that this is a direct rebuke of the 0:19:46.080 --> 0:19:47.520 Delaware judiciary. 0:19:47.880 --> 0:19:50.040 It's really hard to read it as anything other than that. 0:19:50.160 --> 0:19:53.200 And in fact, even the proponents of it have basically said, yeah, 0:19:53.240 --> 0:19:56.160 we really really like Delaware law, but there's some opinions 0:19:56.200 --> 0:19:59.840 where Delaware has strayed onto the wrong path. And so 0:20:00.000 --> 0:20:03.400 so you know, on some level, you know, I think everyone, 0:20:04.040 --> 0:20:08.280 even the drafters and the proponents of this legislation, you know, 0:20:08.359 --> 0:20:11.280 we're basically doing this as a way to I don't know, 0:20:11.520 --> 0:20:13.520 you know, box in a little bit at least some 0:20:13.640 --> 0:20:17.760 judges that had authored opinions that every certain people didn't 0:20:17.760 --> 0:20:18.280 agree with. 0:20:18.600 --> 0:20:18.679 You. 0:20:19.600 --> 0:20:24.120 One definitely can disagree from opinion to opinion. In fact 0:20:24.200 --> 0:20:27.639 I do regularly, But the question then becomes what's the 0:20:27.640 --> 0:20:30.160 best way to disagree with an opinion? In this case, 0:20:30.600 --> 0:20:34.360 this seems to be a fairly substantial reform to the 0:20:34.400 --> 0:20:37.520 Delaware Code that didn't even go through the proper channels. 0:20:37.680 --> 0:20:40.720 I'm not confident that it's actually going to accomplish what 0:20:40.760 --> 0:20:41.600 it's setting out to do. 0:20:41.720 --> 0:20:46.080 However, it just strikes me as odd that you don't 0:20:46.160 --> 0:20:49.120 like the way that some decisions have been coming out, 0:20:49.400 --> 0:20:52.400 what you said, like thirty and so the legislature makes 0:20:52.400 --> 0:20:54.280 a wholesale change in the law. 0:20:55.040 --> 0:20:58.679 Well, it definitely gives rise to a new form of 0:20:58.760 --> 0:21:00.760 instability that I think we're not used to. 0:21:00.960 --> 0:21:01.120 That. 0:21:01.200 --> 0:21:03.600 You know, there were always people who would disagree with 0:21:03.720 --> 0:21:06.520 various outcomes of cases, and there was an appeals process 0:21:06.600 --> 0:21:09.440 to do that. In fact, it turns out that even 0:21:09.440 --> 0:21:12.920 mister Musk's case has not been decided on appeal. But 0:21:13.040 --> 0:21:17.000 rather than wait for that appeal to occur, the Delaware 0:21:17.480 --> 0:21:22.520 legislature essentially has gotten kicked into action by proponents who 0:21:23.000 --> 0:21:25.240 you know, obviously have their own goals in mind. But 0:21:25.560 --> 0:21:28.080 it's an odd way to respond to one or two 0:21:28.160 --> 0:21:33.320 cases by essentially, you know, obscuring or nullifying you know, 0:21:33.400 --> 0:21:37.399 nearly three dozen cases from the Delaware Supreme Court. And 0:21:37.440 --> 0:21:40.359 so you know, we'll see where that ends up going. 0:21:40.560 --> 0:21:43.159 The other thing that's kind of interesting about this particular 0:21:43.200 --> 0:21:46.440 proposed reform June is that over the years, Delaware had 0:21:46.480 --> 0:21:49.600 sort of set up a system where it first consulted 0:21:50.000 --> 0:21:52.479 what's known as a council or a Delaware Corporate bar 0:21:52.640 --> 0:21:55.399 council that essentially is made up of practitioners in the 0:21:55.400 --> 0:21:59.320 field on both sides, defense side, planetoicides and they kind of, 0:21:59.359 --> 0:22:02.320 you know, try to hammer out some proposals that might 0:22:02.359 --> 0:22:05.480 make sense for the legislature to go after, and then those, 0:22:05.600 --> 0:22:07.520 you know, the ones that kind of make the cut. 0:22:07.560 --> 0:22:10.720 They are often then get put into a bill that 0:22:10.800 --> 0:22:13.520 is introduced to the General Assembly. That's not how this 0:22:13.560 --> 0:22:16.400 one took shape, however, as far as I can tell, 0:22:16.520 --> 0:22:21.000 the council was minimally involved in deliberating these things. Essentially, 0:22:21.040 --> 0:22:24.600 they have now been asked to comment on the proposals 0:22:24.600 --> 0:22:28.200 that are already pre baked, but they don't have obvious, 0:22:28.520 --> 0:22:31.600 you know, rights to redraft them or to say this 0:22:31.720 --> 0:22:34.040 is just a you know, a bad idea. I guess 0:22:34.080 --> 0:22:36.640 they could, but it's a kind of an odd inversion 0:22:36.680 --> 0:22:39.439 of the usual process that people are used to, and 0:22:39.480 --> 0:22:42.200 I think that's another you know, reason that people are 0:22:42.520 --> 0:22:45.440 kind of wondering whether this might give you know, maybe 0:22:45.480 --> 0:22:48.560 some short term satisfaction to people who would like to 0:22:48.600 --> 0:22:52.119 see a couple of precedents changed. But it is almost 0:22:52.160 --> 0:22:54.560 certainly going to have some collateral damage, the size of 0:22:54.600 --> 0:22:57.400 which we don't really know and. 0:22:57.359 --> 0:23:02.760 Who drafted this legislation, Were there any heavy hitters. 0:23:02.640 --> 0:23:06.919 The exact identity of the people has been not completely 0:23:07.840 --> 0:23:10.480 this goloes publicly. We do know that the law firm 0:23:10.560 --> 0:23:13.840 that has been representing mister Musk himself, who was doing 0:23:13.880 --> 0:23:17.600