WEBVTT - Google Antitrust & Student Loan Relief Blocked

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<v Speaker 1>This is Bloomberg Law with June Brusso from Bloomberg Radio.

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<v Speaker 1>It was the biggest antitrust showdown between the federal government

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<v Speaker 1>and a US tech giant in a quarter century, and

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<v Speaker 1>a stunning defeat for Google when a federal judge ruled

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<v Speaker 1>last week that it's a monopolist and that the search

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<v Speaker 1>giant broke the law by exploiting its dominance to squash

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<v Speaker 1>competition and stifle innovation. The finding that Google illegally monopolized

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<v Speaker 1>the market for general search services and search text advertising

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<v Speaker 1>is just the first part. Next comes a trial to

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<v Speaker 1>determine what the consequences will be for Google, and that

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<v Speaker 1>could be anything from a breakup to unwinding its exclusive deals.

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<v Speaker 1>Of course, Google says it will appeal the decision. Joining

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<v Speaker 1>me now to discuss the case is Jonathan Canter, Assistant

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<v Speaker 1>Attorney General for the Department of Justice Anti Trust Division.

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<v Speaker 1>What does the Google decision signify for the Justice Department?

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<v Speaker 1>Is it a game changer or something less?

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<v Speaker 2>The Google decision usb Google signifies that the anti trust

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<v Speaker 2>laws apply to the Internet. This is the biggest case

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<v Speaker 2>about the Internet since the Internet, and so to the

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<v Speaker 2>extent there are any questions about whether in a world

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<v Speaker 2>where certain parts of a product offered for free or

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<v Speaker 2>monetized with advertising, or a world where internet technology companies operate,

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<v Speaker 2>whether the anti trust laws still apply just as they

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<v Speaker 2>did against Microsoft AT and Standard Oil. I think we

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<v Speaker 2>have an answer to that question.

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<v Speaker 1>What kind of changes do you envision this decision will

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<v Speaker 1>bring about eventually?

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<v Speaker 2>Well, I think that remains to be determined. The way

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<v Speaker 2>the process here works is that we first had a

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<v Speaker 2>trial to address liability to determine specifically whether Google violated

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<v Speaker 2>the anti trust laws. Once it's determined that Google did

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<v Speaker 2>violate the ani trust laws, and the court opted to

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<v Speaker 2>bifurcate the proceedings, which means now there's a second proceeding

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<v Speaker 2>that will address the appropriate remedies in light of the

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<v Speaker 2>liability finding.

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<v Speaker 1>And so there'll be a hearing on the remedies, which

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<v Speaker 1>could include the breakup of Google to something much more

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<v Speaker 1>minor what kind of remedies will the Justice Department be

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<v Speaker 1>asking for.

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<v Speaker 2>So the process is ongoing. The court has ordered a

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<v Speaker 2>hearing in early September, and we're going to respect that process.

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<v Speaker 2>And so I can't speak specifically about the remedies that

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<v Speaker 2>we will seek or that the court will likely order

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<v Speaker 2>in this particular case. But what I can say is

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<v Speaker 2>that generally we take remedies very seriously and in all

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<v Speaker 2>of our cases, we want to make sure that any remedy,

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<v Speaker 2>whether it's in a monopolization case or other cases, meet

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<v Speaker 2>the market where it is today and have an impact

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<v Speaker 2>in light of the conduct, both in terms of how

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<v Speaker 2>the market functions today but also how it's likely to

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<v Speaker 2>function in the immediate future.

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<v Speaker 1>Can you tell us what kind of remedies are available

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<v Speaker 1>so the.

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<v Speaker 2>Courts have a wide range of discretion in terms of

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<v Speaker 2>ordering remedies. I think there's a long line of cases

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<v Speaker 2>going back many many years that may out the different

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<v Speaker 2>range of remedies. And in an anti trust case, you

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<v Speaker 2>can have remedies as broad and it's severe as a

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<v Speaker 2>breakup of a company, or you can have remedies that

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<v Speaker 2>prohibit a company from engaging in certain kinds of practices

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<v Speaker 2>and everything in between.

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<v Speaker 1>One thing that came up at trial was that Window users,

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<v Speaker 1>when they were defaulted to Microsoft's Edge browser and bing Search,

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<v Speaker 1>eighty percent of them chose to switch to Google Search anyway.

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<v Speaker 1>So how much of an impact on consumers do you

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<v Speaker 1>think this decision could have? If it's upheld.

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<v Speaker 2>Well, I think in any decision, whether it's in this

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<v Speaker 2>case or any other, has to consider both the evidence

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<v Speaker 2>that was put forward a trial, but also the market realities.

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<v Speaker 2>And so one of the things that we discussed in

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<v Speaker 2>a pretty innovative way in the trial is we put

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<v Speaker 2>on the stand a behavioral expert, someone who can explain

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<v Speaker 2>the power of defaults and help particulate how consumers behave

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<v Speaker 2>in light of certain things that they might see on

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<v Speaker 2>a screen.

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<v Speaker 3>And so all of those.

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<v Speaker 2>Kinds of questions are likely to be relevant in this

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<v Speaker 2>or any other case.

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<v Speaker 1>Do you think the decision is appeal proof?

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<v Speaker 2>That's not a decision for us to make. We feel

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<v Speaker 2>very confident in the outcome, and the decision is very

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<v Speaker 2>thoughtful and deliberate. And you know, if there's something that

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<v Speaker 2>we need to address as part of an appeal by Google,

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<v Speaker 2>then we'll do tone writing.

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<v Speaker 1>So the federal government has launched a series of cases

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<v Speaker 1>against Google, Meta, Amazon, and Apple. You're going to trial

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<v Speaker 1>against Google, I believe a second time next month in

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<v Speaker 1>a related case, and your anti trust lawsuit against Apple

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<v Speaker 1>bears some similarities to the Google search case. Does the

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<v Speaker 1>Google case give you a blueprint in any respect for

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<v Speaker 1>how to handle these other cases.

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<v Speaker 2>Yeah, I think it's important to take a step back,

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<v Speaker 2>and I trust monopolization cases brought by the Department of

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<v Speaker 2>Justice against companies is not something that happens every day.

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<v Speaker 2>The last case before USB Google was USB Microsoft, which

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<v Speaker 2>was filed in nineteen ninety eight. Both were victorious, and

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<v Speaker 2>both were significant, not just because they involved massive companies

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<v Speaker 2>that have a major impact on society, but because they

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<v Speaker 2>represent an opportunity for courts and companies to understand how

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<v Speaker 2>antitrust law is applied in these markets, these technology markets,

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<v Speaker 2>and how they are applied against the backdrop of a

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<v Speaker 2>modern economy. So absolutely, given the significance of the case

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<v Speaker 2>in terms of size and scope and the rarity of

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<v Speaker 2>a case like this being decided by a court, it's

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<v Speaker 2>going to, i think hopefully, be an important statement on

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<v Speaker 2>the state of the antitrust laws today and its applicability

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<v Speaker 2>to companies in today's markets.

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<v Speaker 1>Do you think the Justice Department has sort of a

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<v Speaker 1>momentum here with the willingness of JUDGMENTA to crack down

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<v Speaker 1>on a tech giant. So do you feel a sort

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<v Speaker 1>of momentum going your way?

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<v Speaker 2>Well, we feel the momentum is that we have the

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<v Speaker 2>facts in the law on our side. We brought a

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<v Speaker 2>case that we believe was the right case to bring,

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<v Speaker 2>and we made sure to prove that to a court,

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<v Speaker 2>and we did that. We did that successfully. But we've

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<v Speaker 2>had a number of successes, and so if you look

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<v Speaker 2>at the back of our basebook card, you'll see a

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<v Speaker 2>lot of wins of late, including in merger cases, including

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<v Speaker 2>on summary judgment motions, including on motions to dismiss. We've

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<v Speaker 2>had a very significant run of success and I think

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<v Speaker 2>that's because we're picking our cases carefully and we were

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<v Speaker 2>litigating them skillfully.

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<v Speaker 1>So then do you think that the antitrust laws are

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<v Speaker 1>flexible enough to address the tech giants that you have the.

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<v Speaker 2>Tools you need, the anti trust laws are flexible enough

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<v Speaker 2>to address any company in today's modern markets. The anti

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<v Speaker 2>trust laws have been able to stand the test of

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<v Speaker 2>time because they address a principle that remains core to

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<v Speaker 2>our free market system, which is that competition drives companies

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<v Speaker 2>do better. Competition drives prices down, competition drives wages up,

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<v Speaker 2>competition drives companies to innovate, and so anti trust protects

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<v Speaker 2>competition the competitive process, and that's something that continues to apply,

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<v Speaker 2>and it continues to be central to one of the

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<v Speaker 2>things that makes our economy so great and so powerful

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<v Speaker 2>and so significant, not just in this country but world over.

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<v Speaker 2>And so I do yes, I believe that's the case. Now.

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<v Speaker 2>At the same time, there are always opportunities to clarify

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<v Speaker 2>the ani trust laws. The anti trust laws are written

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<v Speaker 2>by Congress. We enforce them, we don't write them. And

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<v Speaker 2>it's always the progative Congress to write new laws and

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<v Speaker 2>to update laws. And we've weighed in, for example, in

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<v Speaker 2>love of Congress on some updates relating to technology and

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<v Speaker 2>competition and anti trust. But in the interim, at least

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<v Speaker 2>until we see anything additional from Congress. Our job is

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<v Speaker 2>to enforced law faithfully and when we believe it's meritorious.

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<v Speaker 1>Was there one moment at trial or one piece of

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<v Speaker 1>evidence that you considered the most important?

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<v Speaker 2>So listen, these cases are not built on any one

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<v Speaker 2>witness or any one document, right, good anti trust cases

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<v Speaker 2>are built on a body of evidence and a wide

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<v Speaker 2>range of facts. But one of the things that I

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<v Speaker 2>will point out that I think is significant and innovative

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<v Speaker 2>is on the first day of trial, we put on

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<v Speaker 2>the stand a behavioral scientist, and to my knowledge, this

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<v Speaker 2>is the first time in the US government and an

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<v Speaker 2>anti trust case has put on the standard behavioral scientists,

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<v Speaker 2>somebody who is not talking necessarily about dollars and cents,

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<v Speaker 2>but talking about how people in the real world react

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<v Speaker 2>to real information, how people behave when they see something

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<v Speaker 2>on a screen. This is a new important area of science.

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<v Speaker 2>It's a rigorous area of study that focuses on the

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<v Speaker 2>realities of how users function in a world where we

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<v Speaker 2>have screens, and we have prompts, and we have stimuli

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<v Speaker 2>that may or may not cause us to behave certain ways.

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<v Speaker 2>And I think, you know, consumers behave often in idiosyncratic

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<v Speaker 2>ways that might not necessarily be rational according to a

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<v Speaker 2>standard economic model, but nonetheless it happens because people are

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<v Speaker 2>again idiosyncratic, they're human. And I think that it was

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<v Speaker 2>an important aspect of our case in USB Google, but

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<v Speaker 2>it's an important aspect of our program going forward, which

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<v Speaker 2>is to say that if we want to be relevant

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<v Speaker 2>in a modern economy, we have to make sure that

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<v Speaker 2>we are putting the expertise that we can bring to

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<v Speaker 2>bear to understand not just how humans behave in theory,

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<v Speaker 2>but how they.

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<v Speaker 3>Behave in practice.

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<v Speaker 1>So does that mean you'll be introducing that kind of

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<v Speaker 1>evidence at other anti trust trials if.

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<v Speaker 2>It's relevant, if it helps us in a court understand

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<v Speaker 2>how markets function and how consumers actually behave in the wild.

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<v Speaker 1>And absolutely well, thanks so much for joining me on

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<v Speaker 1>the show. That's Jonathan Canter, Assistant Attorney General for the

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<v Speaker 1>Department of Justice Antitrust Division, coming up next on the

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<v Speaker 1>Bloomberg Law Show. The Eighth Circuit has blocked the Save program,

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<v Speaker 1>a student loan repayment program that ties how much someone

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<v Speaker 1>pays each month to their income, leaving eight million borrowers

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<v Speaker 1>with more questions than answers. This is Bloomberg.

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<v Speaker 2>Starting a day.

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<v Speaker 1>We're canceling student debts for borrowers who are enrolled in

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<v Speaker 1>the Save plan and have been paying student loans for

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<v Speaker 1>as little as ten years. Back in February, President Joe

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<v Speaker 1>Biden unveiled the Save program, a student loan repayment program

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<v Speaker 1>that ties how much someone pays each month to their income.

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<v Speaker 1>But the eight million borrowers currently enrolled in Save have

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<v Speaker 1>endured up and down legal decisions on the program since June.

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<v Speaker 1>That's because two lawsuits filed by Republican states, one in

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<v Speaker 1>Kansas and the other in Missouri, claimed that the Biden

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<v Speaker 1>administration didn't have authority from Congress to enact the save plan,

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<v Speaker 1>and on Friday, a panel of Republican judges on the

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<v Speaker 1>Eighth Circuit blocked the plan. The borrowers already enrolled in

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<v Speaker 1>the plan don't have to worry at this point because

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<v Speaker 1>the Education Department is placing all the borrowers in an

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<v Speaker 1>interest free forbearance while the Biden administration continues to defend

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<v Speaker 1>the plan in court. Joining me is constitutional law? Professor

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<v Speaker 1>Harold Krant of the Chicago Kent College of Law. Why

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<v Speaker 1>this continuing litigation over every Biden administration attempt to reduce

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<v Speaker 1>student loan debt.

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<v Speaker 3>I think the courts are the opinion that the Biden

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<v Speaker 3>administration is trying to circumvent the Supreme Court's decision limiting

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<v Speaker 3>the range of options that the administration has to either

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<v Speaker 3>forgive debts or to in essence, to practically limit the

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<v Speaker 3>amount of payment that needs to be made on student loans.

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<v Speaker 3>And in the current case, which is technical but based

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<v Speaker 3>upon this income contingent payment plan, the Biden administration altered

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<v Speaker 3>threshold which payments can be lessened and they lessen the

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<v Speaker 3>number of years which individuals would have to pay before

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<v Speaker 3>the loans could be forgiven, and in essence, the amount

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<v Speaker 3>that could be forgiven was very equivalent to the same

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<v Speaker 3>amount that the Supreme Court struck down in the student

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<v Speaker 3>loans case of last year. And so the courts there

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<v Speaker 3>was a split right now in the circuits. But some

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<v Speaker 3>of the courts are saying, wait, the Supreme Court told

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<v Speaker 3>you can't do that, and you basically tried to do

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<v Speaker 3>it in another way, But the tools you use aren't

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<v Speaker 3>going to clearly allow you, the administration to accomplish that goal.

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<v Speaker 3>It seems to me, and indeed clearly from reading at

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<v Speaker 3>least the most recently circuit decision, that the courts want

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<v Speaker 3>to limit the flexibility of the administration has in order

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<v Speaker 3>to limit student loan debt.

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<v Speaker 1>Just review for a moment for us the Supreme Court

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<v Speaker 1>decision the parameters of it.

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<v Speaker 3>So the Supreme Court rule that a statutory directive to

0:12:56.559 --> 0:13:02.560
<v Speaker 3>the Education Secretary basically to postpone or to minimize debt

0:13:02.880 --> 0:13:07.320
<v Speaker 3>was not equivalent to cancelation, and so the cancelation that

0:13:07.440 --> 0:13:10.440
<v Speaker 3>the administration tried to do did not fall within the

0:13:10.559 --> 0:13:14.079
<v Speaker 3>terms of the statute. The statute wasn't clear enough, and

0:13:14.120 --> 0:13:16.920
<v Speaker 3>the Court then use the kind of so called major

0:13:17.040 --> 0:13:20.800
<v Speaker 3>questions presumption to say that if we aren't clear that

0:13:20.880 --> 0:13:25.239
<v Speaker 3>Congress intended that an agency to make such a dramatic change,

0:13:25.320 --> 0:13:29.680
<v Speaker 3>we will read the statute narrowly. And so the Court said,

0:13:30.080 --> 0:13:34.520
<v Speaker 3>no power to or give loans in that particular satutory scheme,

0:13:34.520 --> 0:13:37.280
<v Speaker 3>which is slightly different than the one the administration tried

0:13:37.320 --> 0:13:41.120
<v Speaker 3>to accomplish. Here, there wasn't income based repayment, but it

0:13:41.240 --> 0:13:45.560
<v Speaker 3>was a contingent repayment system eliminitating the amounts that individuals

0:13:45.600 --> 0:13:47.920
<v Speaker 3>would have to pay depending upon how much money they

0:13:48.000 --> 0:13:51.640
<v Speaker 3>earned in the year, and their loans would be forgiven

0:13:51.720 --> 0:13:54.840
<v Speaker 3>after a period of time. So the question that the

0:13:54.920 --> 0:13:58.040
<v Speaker 3>Court had to and the Supreme Court likely to rule

0:13:58.080 --> 0:14:02.200
<v Speaker 3>on this is whether this is really similar to the

0:14:02.240 --> 0:14:06.079
<v Speaker 3>first case, even though there's slightly different types of plans

0:14:06.480 --> 0:14:10.960
<v Speaker 3>that basically no administration has ever used this plan to

0:14:10.960 --> 0:14:13.640
<v Speaker 3>such an extent. It has to an effect to forgive

0:14:13.760 --> 0:14:17.160
<v Speaker 3>something like four hundred and fifty billion dollars, and that's

0:14:17.240 --> 0:14:21.040
<v Speaker 3>not what Congress had mine by saying that the Secretary

0:14:21.080 --> 0:14:24.640
<v Speaker 3>could decide the length of time and the terms upon

0:14:24.720 --> 0:14:28.160
<v Speaker 3>which the contingent payments should be made to the administration.

0:14:28.600 --> 0:14:31.680
<v Speaker 3>And yes, there was an open ended delegation. But the

0:14:31.840 --> 0:14:34.920
<v Speaker 3>question is whether the Supreme Court, if it decides the case,

0:14:35.240 --> 0:14:38.000
<v Speaker 3>will say that the open ended delegation has to be

0:14:38.080 --> 0:14:42.400
<v Speaker 3>read in context and meaning like twenty to fifteen years

0:14:42.920 --> 0:14:45.480
<v Speaker 3>or two hundred and twenty five percent of above the

0:14:45.480 --> 0:14:48.880
<v Speaker 3>poverty line versus two hundred and fifty percent above the

0:14:48.920 --> 0:14:52.560
<v Speaker 3>poverty line, and not make such a dramatic change. And

0:14:52.840 --> 0:14:56.120
<v Speaker 3>what I think that this case reveals is a great

0:14:56.160 --> 0:15:01.920
<v Speaker 3>administrative conundrum in that Congress often is flexibility to agencies

0:15:02.120 --> 0:15:05.720
<v Speaker 3>because Congress doesn't know the details itself, and Congress doesn't

0:15:05.760 --> 0:15:08.680
<v Speaker 3>know what kind of situation the agency will find itself in.

0:15:09.200 --> 0:15:11.840
<v Speaker 3>And what's the court going to do then, with all

0:15:11.880 --> 0:15:16.440
<v Speaker 3>of these open ended delegations, Well, piecemeal decide that agencies

0:15:16.640 --> 0:15:21.840
<v Speaker 3>can't regulate under these open ended delegations when Congress itself

0:15:21.880 --> 0:15:24.640
<v Speaker 3>hasn't been more clear. And that's the issue that's going

0:15:24.720 --> 0:15:28.080
<v Speaker 3>to I think, cut across court term after court term,

0:15:28.400 --> 0:15:31.520
<v Speaker 3>because we simply are in a situation we don't know

0:15:31.920 --> 0:15:34.080
<v Speaker 3>when Congress is allowed to get away with that kind

0:15:34.080 --> 0:15:36.160
<v Speaker 3>of open ended delegation. And when it can't.

0:15:36.320 --> 0:15:38.160
<v Speaker 1>Just going back to the Supreme Court decision for a

0:15:38.200 --> 0:15:41.400
<v Speaker 1>minute before we move forward, do you think that that

0:15:41.640 --> 0:15:44.880
<v Speaker 1>was a decision where they knew what they wanted to

0:15:44.920 --> 0:15:48.360
<v Speaker 1>accomplish and they just worked their way backwards to accomplish that,

0:15:48.520 --> 0:15:50.720
<v Speaker 1>or do you think that was a fair reading of

0:15:50.760 --> 0:15:53.400
<v Speaker 1>the statute because I believe that was a six to

0:15:53.400 --> 0:15:57.200
<v Speaker 1>three decision right with the conservatives and the majority and

0:15:57.240 --> 0:15:58.440
<v Speaker 1>the liberals and the minority.

0:15:58.960 --> 0:16:02.440
<v Speaker 3>Yeah, it was. And I think that the Supreme Court

0:16:02.840 --> 0:16:06.880
<v Speaker 3>read into this idea of deference to agencies a limitation

0:16:07.360 --> 0:16:10.840
<v Speaker 3>called a major questions limitation, and that is suggesting that

0:16:10.880 --> 0:16:13.800
<v Speaker 3>if the agency does something unexpected or it seems to

0:16:13.800 --> 0:16:17.920
<v Speaker 3>exercise more power than was intended, that's a reason to

0:16:17.960 --> 0:16:22.680
<v Speaker 3>read the delegation narrowly. It's a way, according to the Court,

0:16:22.760 --> 0:16:27.800
<v Speaker 3>to preserve majoritarian rule and limit the power of administrative agencies.

0:16:27.840 --> 0:16:32.160
<v Speaker 3>But fast forward, after the student loans decision, the Supreme

0:16:32.200 --> 0:16:35.720
<v Speaker 3>Court held that this kind of Chevron difference or difference

0:16:35.760 --> 0:16:39.880
<v Speaker 3>to agency's interpretation of statutes no longer exists as a

0:16:39.880 --> 0:16:43.280
<v Speaker 3>special function. So the question that is raised by the

0:16:43.440 --> 0:16:48.240
<v Speaker 3>current Eighth Circuit decision is should this so called major

0:16:48.360 --> 0:16:54.240
<v Speaker 3>questions limitation Should that be applied to a statute even

0:16:54.280 --> 0:16:58.440
<v Speaker 3>when there is no question about deference to the agency's interpretation,

0:16:58.760 --> 0:17:02.640
<v Speaker 3>because now it's the court responsibility to interpret the statute.

0:17:02.880 --> 0:17:05.679
<v Speaker 3>And so if the statute is open ended, shouldn't the

0:17:05.760 --> 0:17:09.000
<v Speaker 3>Court read it in a fair way and make a

0:17:09.080 --> 0:17:12.800
<v Speaker 3>determination that Congress intended a statue to be open ended

0:17:12.840 --> 0:17:15.880
<v Speaker 3>and flexible, which would mean that they intended to give

0:17:15.880 --> 0:17:19.080
<v Speaker 3>the agency the flexibility to do what the agency thinks

0:17:19.359 --> 0:17:22.160
<v Speaker 3>it needs to do. So one of the open ended

0:17:22.240 --> 0:17:26.119
<v Speaker 3>questions left over the Supreme Court's term this year is

0:17:26.160 --> 0:17:31.360
<v Speaker 3>whether this so called major questions limitations on delegated authority,

0:17:31.840 --> 0:17:36.200
<v Speaker 3>should that still be a operative principle given that Chubron

0:17:36.280 --> 0:17:40.480
<v Speaker 3>deference has been jettisoned. And I think this case illustrates

0:17:40.520 --> 0:17:45.719
<v Speaker 3>it well because technically you may have a similar type

0:17:45.760 --> 0:17:50.320
<v Speaker 3>of interpretive canon to use understanding what Congress means want

0:17:50.359 --> 0:17:54.120
<v Speaker 3>to give such broad delegations to the agencies. But it's

0:17:54.160 --> 0:17:56.800
<v Speaker 3>not the major Questions doctor anymore, because that should have

0:17:56.840 --> 0:17:59.320
<v Speaker 3>been thrown to the dustbin of history when the Court

0:17:59.320 --> 0:18:00.000
<v Speaker 3>got rid of shock.

0:18:00.960 --> 0:18:05.280
<v Speaker 1>This is extremely conservative court, a panel of three Republican

0:18:05.320 --> 0:18:08.960
<v Speaker 1>appointed judges, not a surprise since the Circuit only has

0:18:09.040 --> 0:18:12.560
<v Speaker 1>one Democratic appointee. Explain their reasoning here.

0:18:13.560 --> 0:18:16.200
<v Speaker 3>Well, the first question was was there standing to challenge

0:18:16.240 --> 0:18:19.280
<v Speaker 3>this new interpretation by the administration. I think the court

0:18:19.320 --> 0:18:22.399
<v Speaker 3>correctly held that there was because the same kind of

0:18:22.560 --> 0:18:26.600
<v Speaker 3>loan handler that had standing in the earlier Supreme Court

0:18:26.680 --> 0:18:30.240
<v Speaker 3>case for Missouri was a plaintiff in this case as well.

0:18:30.359 --> 0:18:33.960
<v Speaker 3>The theory is that if there's fewer loans to process,

0:18:34.240 --> 0:18:36.800
<v Speaker 3>they will lose money. Not the best standing case, but

0:18:36.840 --> 0:18:41.160
<v Speaker 3>the Supreme Court earlier said it meets the Article three threshold.

0:18:41.560 --> 0:18:43.520
<v Speaker 3>And then the question is what about this is an

0:18:43.520 --> 0:18:47.280
<v Speaker 3>injunction case, so what's the likelihood of success? And they're

0:18:47.359 --> 0:18:51.320
<v Speaker 3>the court, because of the statutory interpretation issue that we raised,

0:18:51.640 --> 0:18:55.879
<v Speaker 3>held that they didn't believe Congress intended in this Contingent

0:18:56.040 --> 0:19:00.720
<v Speaker 3>Repayment Plan delegation to the Secretary of Education, that Congress

0:19:00.760 --> 0:19:05.199
<v Speaker 3>didn't intend for the Secretary to adjust the program so

0:19:05.600 --> 0:19:09.480
<v Speaker 3>dramatically as to result in four hundred and fifty billion

0:19:09.520 --> 0:19:13.280
<v Speaker 3>dollars of forgiven loans. And so they said that it's

0:19:13.280 --> 0:19:15.399
<v Speaker 3>at least a fair not for sure, but least that

0:19:15.480 --> 0:19:18.639
<v Speaker 3>fair reading would be that Congress did not intend to

0:19:18.880 --> 0:19:22.000
<v Speaker 3>delegate that much authoritiy agency. And then the third part

0:19:22.080 --> 0:19:25.120
<v Speaker 3>of the decision is, well, what about the balance of hardships?

0:19:25.400 --> 0:19:29.960
<v Speaker 3>And the court is mysterious as to the balance of hardships.

0:19:30.080 --> 0:19:33.040
<v Speaker 3>It seems to say that there's no real hardship to

0:19:33.119 --> 0:19:37.920
<v Speaker 3>the plaintiff from waiting till the Supreme Court takes the case.

0:19:38.160 --> 0:19:41.600
<v Speaker 3>The only harm that I think really discern from reading

0:19:41.600 --> 0:19:45.560
<v Speaker 3>the decision is to the Eighth Circuit itself. The Court

0:19:45.640 --> 0:19:49.240
<v Speaker 3>said that because the administration is doing a run around

0:19:49.560 --> 0:19:53.960
<v Speaker 3>its earlier opinion, that itself constituted a harm. That's not

0:19:54.000 --> 0:19:56.960
<v Speaker 3>a harm to the plaintiff, that's a harm to the

0:19:57.040 --> 0:20:00.080
<v Speaker 3>self respect of the court. And so that to me

0:20:00.359 --> 0:20:03.560
<v Speaker 3>was a real head scratcher. At the end of the opinion.

0:20:03.640 --> 0:20:08.639
<v Speaker 1>What kind of loan forgiveness plans are allowed under the

0:20:08.640 --> 0:20:12.280
<v Speaker 1>Supreme Court decision? What kind are absolutely allowed?

0:20:12.760 --> 0:20:17.240
<v Speaker 3>Any So, yeah, sure, the administration is continuing to apply

0:20:17.640 --> 0:20:20.840
<v Speaker 3>both in this case, the income contingent re payment plan

0:20:21.240 --> 0:20:24.679
<v Speaker 3>is continuing to apply in the prior case, the income

0:20:24.680 --> 0:20:28.800
<v Speaker 3>based repayment plan. There was slightly slightly different plans and

0:20:29.200 --> 0:20:33.080
<v Speaker 3>there's no problem with that. The question is how dramatically

0:20:33.119 --> 0:20:37.280
<v Speaker 3>they can change the terms under which those student loan

0:20:37.520 --> 0:20:42.879
<v Speaker 3>programs are administered so as to minimize the amount of

0:20:43.480 --> 0:20:46.119
<v Speaker 3>and obviously the administration by tinkering with a number of

0:20:46.200 --> 0:20:49.680
<v Speaker 3>years that someone has to pay on a contingent based program,

0:20:49.920 --> 0:20:54.480
<v Speaker 3>or by changing at what level of income you want

0:20:54.600 --> 0:20:58.240
<v Speaker 3>qualifies for these plans, it can make a huge impact

0:20:58.720 --> 0:21:03.119
<v Speaker 3>upon how much repayment will be made across the board.

0:21:03.600 --> 0:21:08.360
<v Speaker 3>And so the issue isn't whether the administration can implement

0:21:08.400 --> 0:21:12.920
<v Speaker 3>the programs. The issues whether the administration can make such

0:21:13.040 --> 0:21:17.480
<v Speaker 3>changes to the programs as will dramatically change the amount

0:21:17.720 --> 0:21:19.520
<v Speaker 3>of student debt that needs.

0:21:19.359 --> 0:21:22.040
<v Speaker 1>To be repaid. Coming up next on the Bloomberg Alaun Show,

0:21:22.119 --> 0:21:25.199
<v Speaker 1>I'll continue this conversation with Professor Harold Krant to the

0:21:25.280 --> 0:21:29.160
<v Speaker 1>Chicago Kent College of Law. There's a split in the circuits.

0:21:29.480 --> 0:21:35.400
<v Speaker 1>Will the Supreme Court take this case? Student loan borrowers

0:21:35.440 --> 0:21:39.520
<v Speaker 1>could get dizzy from all the sea sawing decisions by

0:21:39.560 --> 0:21:43.680
<v Speaker 1>the courts. Just last Friday, a Biden administration debt relief

0:21:43.720 --> 0:21:47.800
<v Speaker 1>plan that could cancel billions in student loans was halted

0:21:47.840 --> 0:21:51.240
<v Speaker 1>by a federal appeals court in Missouri. The Eighth Circuit

0:21:51.280 --> 0:21:55.000
<v Speaker 1>granted a Republican led state coalition's request for the court

0:21:55.040 --> 0:21:59.200
<v Speaker 1>to temporarily block the program while the US Education Department

0:21:59.240 --> 0:22:02.919
<v Speaker 1>appeals al lower court ruling against the plan. I've been

0:22:02.920 --> 0:22:06.440
<v Speaker 1>talking to constitutional law professor Harold Krant of the Chicago

0:22:06.600 --> 0:22:10.520
<v Speaker 1>Kent College of Law. Is this a conservative liberal issue

0:22:10.840 --> 0:22:15.600
<v Speaker 1>or is this a question of Republican judges not wanting

0:22:15.760 --> 0:22:18.760
<v Speaker 1>Biden's forgiveness plan to go through.

0:22:19.440 --> 0:22:22.480
<v Speaker 3>I think the loan forgiveness programs really sort of reveals

0:22:22.840 --> 0:22:25.520
<v Speaker 3>the sort of sea change we're having now about not

0:22:25.600 --> 0:22:31.119
<v Speaker 3>trusting administrative agencies, because in these cases, the judges can

0:22:31.320 --> 0:22:36.800
<v Speaker 3>see the impact of the Ministry of agency's actions so clearly.

0:22:37.000 --> 0:22:39.560
<v Speaker 3>In the first case, the Supreme Court case, there was

0:22:39.640 --> 0:22:43.520
<v Speaker 3>something like four hundred and fifty billion dollar estimate of

0:22:43.600 --> 0:22:46.640
<v Speaker 3>the impact on the economy, and in this case, according

0:22:46.640 --> 0:22:49.720
<v Speaker 3>to one estimate, the estimate was a four hundred and

0:22:49.800 --> 0:22:54.120
<v Speaker 3>seventy five billion impact on the economy. And the sea

0:22:54.200 --> 0:22:56.560
<v Speaker 3>change then, is that the judge are saying, why should

0:22:56.640 --> 0:23:01.200
<v Speaker 3>agencies be making decisions with such an impact on the economy.

0:23:01.600 --> 0:23:04.880
<v Speaker 3>Isn't that what Congress is for? And so they're finding

0:23:05.119 --> 0:23:09.879
<v Speaker 3>ways to limit agency action when there's such a huge

0:23:09.920 --> 0:23:13.159
<v Speaker 3>impact upon the economy and that stems from distrust of

0:23:13.200 --> 0:23:18.680
<v Speaker 3>administrative agencies and theoretically from a greater insistence that Congresses

0:23:18.960 --> 0:23:22.080
<v Speaker 3>do more than posture and actually make hard decisions and

0:23:22.160 --> 0:23:24.440
<v Speaker 3>give clearer guidance to agencies.

0:23:24.640 --> 0:23:30.240
<v Speaker 1>So two different sets of Republican states brought lawsuits against

0:23:30.240 --> 0:23:33.439
<v Speaker 1>the safe Plan arguing that the Biden administration didn't have

0:23:33.520 --> 0:23:37.960
<v Speaker 1>authority from Congress to enact it, one filed in Kansas

0:23:38.160 --> 0:23:42.720
<v Speaker 1>and one filed in Missouri. The Eighth Circuit, which handles Missouri,

0:23:43.119 --> 0:23:46.360
<v Speaker 1>put the injunction in place, but the tenth Circuit, which

0:23:46.400 --> 0:23:50.119
<v Speaker 1>handles Kansas, did not put an injunction in place, so

0:23:50.280 --> 0:23:54.920
<v Speaker 1>split in the circuits. Why bring these lawsuits in two

0:23:55.000 --> 0:23:59.200
<v Speaker 1>different jurisdictions knowing that it could lead to conflicting decisions.

0:23:59.640 --> 0:24:03.359
<v Speaker 3>No, I think that the states often tried to file

0:24:04.119 --> 0:24:07.879
<v Speaker 3>broad based actions against the administration in different jurisdictions in

0:24:07.960 --> 0:24:10.840
<v Speaker 3>the hope that they will get at least one jurisdiction

0:24:11.040 --> 0:24:13.760
<v Speaker 3>go their way, knowing that if they have one, then

0:24:13.800 --> 0:24:16.679
<v Speaker 3>there's likely to be at least they split in the circuits,

0:24:16.880 --> 0:24:19.200
<v Speaker 3>which would then elevate the case to the Supreme Court.

0:24:19.520 --> 0:24:21.959
<v Speaker 3>And they of course have good reason to believe that

0:24:22.000 --> 0:24:24.159
<v Speaker 3>if the case goes to the Supreme Court, the Supreme

0:24:24.200 --> 0:24:27.440
<v Speaker 3>Court will be friendly to their side of the case.

0:24:27.760 --> 0:24:31.160
<v Speaker 3>So as a strategic matter, it makes a great deal

0:24:31.160 --> 0:24:33.600
<v Speaker 3>of sense to me, and I would advise the Republican

0:24:33.640 --> 0:24:36.000
<v Speaker 3>Attorney's General to do the same thing. Is not to

0:24:36.040 --> 0:24:38.600
<v Speaker 3>bet on just one jurisdiction unless you're in the Eastern

0:24:38.680 --> 0:24:42.640
<v Speaker 3>District of Texas the Western District detection storry, but instead

0:24:42.720 --> 0:24:44.239
<v Speaker 3>to fly.

0:24:43.400 --> 0:24:46.560
<v Speaker 1>The District of Texas it goes to the Fifth Circuit, right.

0:24:46.920 --> 0:24:50.240
<v Speaker 3>Right, That's true to file in a variety of districts.

0:24:50.240 --> 0:24:52.720
<v Speaker 3>I mean in this case they were somewhat limited, of course,

0:24:52.960 --> 0:24:56.439
<v Speaker 3>because they had to find at least one plaintiff with

0:24:56.520 --> 0:25:00.280
<v Speaker 3>conventional Article three standing. And that's why the mos every

0:25:00.320 --> 0:25:03.639
<v Speaker 3>planeff was so critical in this particular case, but in

0:25:03.720 --> 0:25:06.840
<v Speaker 3>other related cases. Again, as a strategy, it makes sense

0:25:06.880 --> 0:25:10.040
<v Speaker 3>to a file and hope for the best, because if

0:25:10.080 --> 0:25:12.640
<v Speaker 3>you get explored the circuits, then you have a much

0:25:12.640 --> 0:25:14.359
<v Speaker 3>better chance of getting Supreme Court review.

0:25:15.320 --> 0:25:19.280
<v Speaker 1>Do you have one circuit, the eighth Circuit, putting the

0:25:19.320 --> 0:25:22.320
<v Speaker 1>plan on hold, then you have the tenth Circuit saying

0:25:22.320 --> 0:25:25.080
<v Speaker 1>it could go forward. I mean, the federal government is

0:25:25.160 --> 0:25:28.119
<v Speaker 1>just going to follow what the Eighth Circuit said, or

0:25:28.200 --> 0:25:30.280
<v Speaker 1>why couldn't the federal government just say, well, the Tenth

0:25:30.280 --> 0:25:32.600
<v Speaker 1>Circuit said, it's okay.

0:25:31.840 --> 0:25:33.639
<v Speaker 3>If there are those issues. It has to do with

0:25:33.680 --> 0:25:37.199
<v Speaker 3>the scope of the injunction that is placed. And in

0:25:37.480 --> 0:25:41.920
<v Speaker 3>a circuit's context, the court issued a injunction that was

0:25:42.000 --> 0:25:47.040
<v Speaker 3>quite broad, and so that really overlapped with the decision

0:25:47.080 --> 0:25:51.400
<v Speaker 3>of the Tenth Circuit. So theoretically the Eighth Circuit can't,

0:25:51.440 --> 0:25:55.760
<v Speaker 3>of course rebut what the Tenth Circuit has said, so

0:25:55.840 --> 0:26:01.879
<v Speaker 3>that the administration could in fact apply different rules in

0:26:01.960 --> 0:26:04.600
<v Speaker 3>different circuits. It doesn't like doing that because of the

0:26:05.080 --> 0:26:09.480
<v Speaker 3>ideal of uniformity. Theoretically, it's possible in those kinds of situations.

0:26:10.000 --> 0:26:13.200
<v Speaker 3>That's happened many times in the past that different regulatory

0:26:13.240 --> 0:26:16.480
<v Speaker 3>programs are ministered differently in different circuits. In this case, however,

0:26:16.560 --> 0:26:19.639
<v Speaker 3>the Education Secretary said that they'll put everything on hold

0:26:19.760 --> 0:26:22.520
<v Speaker 3>pending for the review. So I think that's probably a

0:26:22.640 --> 0:26:27.120
<v Speaker 3>rational response and that the administration will join in asking

0:26:27.200 --> 0:26:30.479
<v Speaker 3>for my guests is joined in asking for a plennary

0:26:30.480 --> 0:26:31.560
<v Speaker 3>review by the Supreme Court.

0:26:32.080 --> 0:26:38.320
<v Speaker 1>Yeah, because student borrowers are just confused about all these

0:26:38.359 --> 0:26:42.280
<v Speaker 1>different court decisions and there are all kinds of different

0:26:42.840 --> 0:26:47.200
<v Speaker 1>loan forgiveness plans out there, and I'm sure it's mind

0:26:47.240 --> 0:26:50.280
<v Speaker 1>boggling to try to figure out what's going on.

0:26:50.960 --> 0:26:53.520
<v Speaker 3>Yeah, there are a guide to the perplexed, and there

0:26:53.520 --> 0:26:56.960
<v Speaker 3>are certain kinds of sites which try to give help

0:26:57.000 --> 0:26:59.320
<v Speaker 3>to people. But even to understand the difference between the

0:27:00.400 --> 0:27:05.000
<v Speaker 3>back forgiveness program as opposed to a contingent income program

0:27:05.040 --> 0:27:07.919
<v Speaker 3>as in this case, it can be somewhat daunting for

0:27:07.960 --> 0:27:11.719
<v Speaker 3>the average student loan person to follow in there. So

0:27:12.000 --> 0:27:15.520
<v Speaker 3>there are hotlines that have sprung up to give advice

0:27:15.600 --> 0:27:18.240
<v Speaker 3>to students so they know which way to apply in

0:27:18.359 --> 0:27:20.760
<v Speaker 3>order to either extend the amount of time they have

0:27:20.840 --> 0:27:23.040
<v Speaker 3>to pay back or limit the amount of money that

0:27:23.359 --> 0:27:25.960
<v Speaker 3>has to be paid back each term. I'm sure there's

0:27:25.960 --> 0:27:27.600
<v Speaker 3>some people that get tripped up, but I think the

0:27:28.000 --> 0:27:31.400
<v Speaker 3>administration and some public interstcruture are doing a great job

0:27:31.440 --> 0:27:35.520
<v Speaker 3>and trying to help students understand their rights, particularly in

0:27:35.600 --> 0:27:38.080
<v Speaker 3>light of these conflicting of polic court decisions.

0:27:38.359 --> 0:27:40.520
<v Speaker 1>I know that it's daunting because I went on some

0:27:40.600 --> 0:27:43.879
<v Speaker 1>of those websites today to try to see what was

0:27:43.960 --> 0:27:47.000
<v Speaker 1>going on, and it's very confusing. I mean, it starts

0:27:47.040 --> 0:27:50.240
<v Speaker 1>out with the safe program is on hold, but then

0:27:50.359 --> 0:27:53.919
<v Speaker 1>talking about what you can do, so I feel sorry

0:27:54.000 --> 0:27:57.960
<v Speaker 1>for anyone who's trying to find alternatives. So do you

0:27:58.000 --> 0:28:01.520
<v Speaker 1>think that the Supreme Court would this split in the circuits,

0:28:02.280 --> 0:28:04.600
<v Speaker 1>is going to almost have to take the case.

0:28:04.720 --> 0:28:07.440
<v Speaker 3>Yeah, I think it extremely alctly that the Supreme Court

0:28:07.480 --> 0:28:09.879
<v Speaker 3>will take up the circuit. There's a lot of money

0:28:09.880 --> 0:28:14.480
<v Speaker 3>at to take. There's confusion, as you mentioned, and obviously

0:28:14.480 --> 0:28:17.200
<v Speaker 3>there's a split in the circuits, and that's a great

0:28:17.280 --> 0:28:19.840
<v Speaker 3>recipe for a CIRT grant.

0:28:20.720 --> 0:28:25.680
<v Speaker 1>The Education Department is moving forward with a broader student

0:28:25.840 --> 0:28:29.480
<v Speaker 1>loan forgiveness plan. It's going to send out emails about it.

0:28:30.359 --> 0:28:32.720
<v Speaker 1>I mean, do you think it's time that they took

0:28:32.720 --> 0:28:36.000
<v Speaker 1>a breath instead of going forward with these plans that

0:28:36.359 --> 0:28:38.800
<v Speaker 1>seem to get stuck in the courts.

0:28:39.400 --> 0:28:43.880
<v Speaker 3>I mean, obviously the Education departments dot asked for my advice,

0:28:43.920 --> 0:28:47.040
<v Speaker 3>but I think a pause is probably in order to

0:28:47.840 --> 0:28:51.080
<v Speaker 3>allow the court to give parameters and just give some

0:28:51.120 --> 0:28:54.240
<v Speaker 3>guidance in the next decision. But on the other hand,

0:28:54.320 --> 0:28:58.200
<v Speaker 3>the Congress has given the Education Department of a wide

0:28:58.280 --> 0:29:01.480
<v Speaker 3>variety of tools in terms of what kind of programs

0:29:01.520 --> 0:29:04.280
<v Speaker 3>exist and what kind of turns to impose on these

0:29:04.280 --> 0:29:07.400
<v Speaker 3>different student loan programs, and with how choices then students

0:29:07.360 --> 0:29:10.320
<v Speaker 3>should make in order to limit the amount that they

0:29:10.320 --> 0:29:13.040
<v Speaker 3>have to pay back. And so the administration is trying

0:29:13.080 --> 0:29:17.280
<v Speaker 3>to be aggressive in trying to help lift the burden

0:29:17.320 --> 0:29:19.520
<v Speaker 3>of student debts upon so many people in our country.

0:29:19.640 --> 0:29:22.239
<v Speaker 3>They're being aggressive. I mean, it's interesting how unaggressive they

0:29:22.240 --> 0:29:25.080
<v Speaker 3>were at the beginning, right, and now they guess they've

0:29:25.120 --> 0:29:27.640
<v Speaker 3>seen that they may only have six months left, they're

0:29:27.680 --> 0:29:30.760
<v Speaker 3>being incredibly aggressive. Yeah, and what tends again, maybe I've

0:29:30.800 --> 0:29:34.200
<v Speaker 3>missed something, But where is the irreparable harm here? The

0:29:34.280 --> 0:29:37.720
<v Speaker 3>court doesn't even really talk about it. It's so weird, right,

0:29:37.760 --> 0:29:39.680
<v Speaker 3>That's one of the standard things in any kind of

0:29:40.000 --> 0:29:45.360
<v Speaker 3>injunction situation is irreparable harm, and they're just really, isn't

0:29:45.400 --> 0:29:49.800
<v Speaker 3>any because you know, before a final judgment can come up,

0:29:49.840 --> 0:29:53.120
<v Speaker 3>there'll be a delay, sure, but that delay isn't going

0:29:53.200 --> 0:29:57.040
<v Speaker 3>to cause the student loan processor or not going to

0:29:57.040 --> 0:30:00.000
<v Speaker 3>even cause the taxpayer any kind of a reparable harm.

0:30:00.400 --> 0:30:05.760
<v Speaker 3>So it's a very I think politically motivated assessment of

0:30:06.040 --> 0:30:08.040
<v Speaker 3>the standards of women in junction issue.

0:30:08.240 --> 0:30:10.120
<v Speaker 1>Well, I don't even know. I don't even think the

0:30:10.160 --> 0:30:12.400
<v Speaker 1>standing is solid.

0:30:12.480 --> 0:30:14.160
<v Speaker 3>Well already held it.

0:30:14.760 --> 0:30:17.120
<v Speaker 1>I know they did, but I mean they were reaching.

0:30:17.520 --> 0:30:20.240
<v Speaker 1>So they won't have as many loans to process.

0:30:21.200 --> 0:30:23.360
<v Speaker 3>Yeah, so, and they get paid for each loan that

0:30:23.400 --> 0:30:25.280
<v Speaker 3>they process. That was the first decision.

0:30:25.800 --> 0:30:28.000
<v Speaker 1>Well, we'll see what happens next. Hel Thanks so much.

0:30:28.440 --> 0:30:31.680
<v Speaker 1>That's Professor Harold Krent of the Chicago Kent College of Law.

0:30:32.560 --> 0:30:34.880
<v Speaker 1>And that's it for this edition of the Bloomberg Law Show.

0:30:35.200 --> 0:30:37.560
<v Speaker 1>Remember you can always get the latest legal news on

0:30:37.600 --> 0:30:41.880
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0:30:42.080 --> 0:30:47.120
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0:30:47.520 --> 0:30:50.120
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0:30:50.160 --> 0:30:54.040
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0:30:54.200 --> 0:30:55.800
<v Speaker 1>and you're listening to Bloomberg