WEBVTT - Catalysts to Watch – AI Laws, PFAS Trial 0:00:11.600 --> 0:00:14.840 Hello, and welcome to the Votes and Verdicts podcast, hosted 0:00:14.880 --> 0:00:19.119 by the Litigation and policy team at Bloomberg Intelligence, the 0:00:19.160 --> 0:00:25.120 investment research platform of Bloomberg LP. This podcast series examines 0:00:25.160 --> 0:00:29.520 the intersection of business policy and law, and today we'll 0:00:29.520 --> 0:00:33.440 be looking at the litigation and policy catalysts that we're 0:00:33.440 --> 0:00:35.760 watching in June and that we think. 0:00:35.520 --> 0:00:38.480 Will impact companies across a number of different sectors. 0:00:39.320 --> 0:00:42.159 My name is Elliot Stein. I'm a senior litigation analyst 0:00:42.320 --> 0:00:45.680 covering litigation in the financial sector, and I'll be your 0:00:45.680 --> 0:00:49.800 host for today June second, twenty twenty three. If you 0:00:49.800 --> 0:00:52.360 have any questions about any of the matters that we'll 0:00:52.400 --> 0:00:55.639 be talking about today, please don't hesitate to reach out 0:00:55.680 --> 0:01:00.360 to us at your convenience with questions. We're going to 0:01:00.440 --> 0:01:05.399 be talking about a handful of sectors today. First, ding right, 0:01:05.520 --> 0:01:08.920 our senior healthcare policy analyst, will give us his post 0:01:08.959 --> 0:01:12.640 mortem on the debt ceiling drama, and he'll also talk 0:01:12.640 --> 0:01:17.480 about Medicaid renewals and what it means for health insurers. 0:01:18.080 --> 0:01:21.360 Matt Schuttenhelm, who covers TMT policy and litigation, will give 0:01:21.440 --> 0:01:25.360 us his thoughts on what AI regulation might look like 0:01:25.959 --> 0:01:29.280 in the US. And in Europe, and he'll also talk 0:01:29.319 --> 0:01:33.720 about an underappreciated potential legal threat to Uber and Lyft 0:01:33.920 --> 0:01:39.400 in California. After that, Holly from who covers consumer and 0:01:39.440 --> 0:01:43.319 industrial policy and litigation, will give us a preview of 0:01:43.600 --> 0:01:47.360 p FASK of a p FASK contamination Bell Weather trial 0:01:47.840 --> 0:01:51.240 against three M that starts on June fifth, and she'll 0:01:51.240 --> 0:01:54.080 also discuss an upcoming appeals. 0:01:53.680 --> 0:01:56.240 Court argument in buyer roundup litigation. 0:01:57.280 --> 0:02:01.280 After that, genre our antitrust litigation grew, we'll talk about 0:02:01.400 --> 0:02:07.200 the FTC likely beginning formal review of the Pfizer's Siegen deal, 0:02:07.800 --> 0:02:11.280 and an antitrust class action against Apple over the company's 0:02:11.360 --> 0:02:17.000 app store practices. Nathan Dean, our senior financials policy analyst, 0:02:17.080 --> 0:02:21.040 will then analyze and discuss in the anticipated proposal by 0:02:21.160 --> 0:02:25.880 financial regulators in the US to restrict banker bonuses. And 0:02:26.000 --> 0:02:29.440 I'll wrap up today's episode with some discussion of President 0:02:29.440 --> 0:02:33.640 Biden's student loan cancellation plan, which I expect the Supreme 0:02:33.680 --> 0:02:38.280 Court will strike down sometime in June. All of this 0:02:38.400 --> 0:02:42.880 research is available on the Bloomberg terminal under big and 0:02:43.120 --> 0:02:46.160 just a quick word about Bloomberg Intelligence for those who 0:02:46.200 --> 0:02:49.360 don't know. We are the investment research platform on the 0:02:49.360 --> 0:02:53.800 Bloomberg terminal, providing in depth research on industries, companies, and 0:02:53.880 --> 0:02:59.239 markets and delivering key data frombi analysts in their given industries. 0:03:00.200 --> 0:03:03.800 So with that, let's get started with the content and 0:03:03.960 --> 0:03:08.040 let's bring you in, Dwayne, to talk about the debt ceilings. 0:03:08.160 --> 0:03:11.600 Sounds like we're basically at the finish line, just waiting 0:03:11.639 --> 0:03:13.360 for President Biden to sign it. 0:03:13.440 --> 0:03:16.120 And at this point and by the time people listen 0:03:16.160 --> 0:03:19.040 to this and may already be signed, you've. 0:03:18.840 --> 0:03:20.720 Been on top of the story for weeks, if not 0:03:20.880 --> 0:03:22.880 months now, and it sounds like it turned. 0:03:22.680 --> 0:03:25.600 Out basically exactly as you predicted. 0:03:25.760 --> 0:03:27.760 So maybe you know, come in, give us your post 0:03:27.800 --> 0:03:30.600 mortem thoughts on the deal and if there's anything in 0:03:30.639 --> 0:03:33.480 it that surprised you. And then I know you also 0:03:33.520 --> 0:03:36.200 want to talk about Medicaid renewals and how that might 0:03:36.280 --> 0:03:37.920 affect health insurers. 0:03:39.600 --> 0:03:45.920 Yeah, so thanks Elliott, very glad. This is almost behind us, 0:03:46.000 --> 0:03:48.880 just waiting for the President to sign, which I assume 0:03:48.920 --> 0:03:54.040 they'll do so over the weekend. Overall, let's say that 0:03:54.200 --> 0:03:58.640 bill is largely in line with expectations we knew going 0:03:58.680 --> 0:04:03.200 into this exercise that I mean, death ceiling bill was 0:04:03.320 --> 0:04:07.360 unlikely and was merely a negotiating tactic by the administration 0:04:08.240 --> 0:04:12.480 when near the Republican House. Past bill was unlikely given 0:04:12.520 --> 0:04:18.760 the deep cuts to discretionary spending provisions relating to Medicaid 0:04:18.800 --> 0:04:23.360 work requirements and some other things. We also knew at 0:04:23.360 --> 0:04:26.600 some point there'd be a partisan fight about spending or 0:04:27.000 --> 0:04:32.719 specifically tied to the annual appropriations process, So it was 0:04:32.800 --> 0:04:36.600 either when we look at the spending it was either 0:04:36.680 --> 0:04:38.599 now as part of the debt ceiling debate or later 0:04:38.680 --> 0:04:42.320 as part of an appropriations fight. So the spending cut 0:04:42.520 --> 0:04:47.520 is probably something Democrats would have agreed to anyway, and 0:04:47.600 --> 0:04:50.920 by doing so now as part of the debt ceiling fight, 0:04:51.000 --> 0:04:54.280 they were able to blend some of the impact on 0:04:54.320 --> 0:04:59.720 the discretionary program side, which Republicans targeted by throwing in 0:05:00.080 --> 0:05:04.520 some IRS funding that was included in the Inflation Reduction 0:05:04.600 --> 0:05:07.440 Act that probably might not have been on the table 0:05:07.520 --> 0:05:12.159 if we were going through the normal appropriations routes. The 0:05:12.240 --> 0:05:16.120 spending caps for two years are largely in line with 0:05:16.800 --> 0:05:21.599 previous budget battles. You recall that in twenty eleven, after 0:05:21.680 --> 0:05:26.880 the last major debt crisis, there was a deal, or 0:05:26.880 --> 0:05:30.360 at least because Congress can come up with spending cuts. 0:05:30.360 --> 0:05:32.480 There was a deal to cap spending for ten years, 0:05:33.240 --> 0:05:41.240 but Congress the preceding congresses later broke those caps through 0:05:41.400 --> 0:05:46.080 two year spending deals that ultimately blunted the impact of savings. 0:05:46.760 --> 0:05:48.920 And as much as it ties the hands of Congress 0:05:48.920 --> 0:05:51.520 and buying for the next one year and a half, 0:05:52.000 --> 0:05:54.680 it gives the next president in the next Congress ability 0:05:54.720 --> 0:05:58.240 to determine their own spending levels. So Republicans would say 0:05:58.279 --> 0:06:00.920 that's good for them because if Trump wins, then they 0:06:00.920 --> 0:06:04.240 can do what they want or Trump or another Republican, 0:06:04.680 --> 0:06:07.919 and the same goes for Democrats. I will say, though, 0:06:07.960 --> 0:06:13.640 that it was surprised that the automatic CR is in 0:06:13.720 --> 0:06:20.239 this bill, which basically says if there isn't a fiscal 0:06:20.320 --> 0:06:25.320 year funding agreement by October first, essentially we roll over 0:06:25.480 --> 0:06:28.919 the spending levels from the preceding year. It seems like 0:06:29.120 --> 0:06:31.320 both sides didn't have the stomach to go through another 0:06:31.640 --> 0:06:36.320 budget battle so soon, and so setting a CR if 0:06:36.360 --> 0:06:38.720 the funding bills aren't passed by the beginning of the 0:06:38.720 --> 0:06:42.159 fiscal year just says we're not dealing with any budget 0:06:42.160 --> 0:06:44.920 fights for the remainder of this Congress. Now there will 0:06:45.040 --> 0:06:53.200 honestly be fights over the cuts to the different appropriations bills, 0:06:53.600 --> 0:06:56.280 but they'll at least figure those out. Have a lot 0:06:56.320 --> 0:06:58.400 of time to figure that out, so I think generally 0:06:59.040 --> 0:07:01.520 there's relief that it's done and we can focus on 0:07:01.920 --> 0:07:04.680 other issues. But I think there's a reality that this 0:07:04.760 --> 0:07:09.600 bill doesn't change the overall fiscal dynamics for the country 0:07:09.680 --> 0:07:14.720 because Medicare, social Security weren't touched. The doors open to 0:07:15.080 --> 0:07:19.880 supplemental bills for defense and other spending that will likely 0:07:20.240 --> 0:07:23.720 drive down the overall savings from the bill, which CBO 0:07:23.840 --> 0:07:27.160 scored at one and a half trillion over ten years. 0:07:27.840 --> 0:07:31.640 Now in terms of some of those other policy areas 0:07:31.680 --> 0:07:36.119 that we will be looking at, wanted to talk about 0:07:36.280 --> 0:07:40.240 Medicaid renewals because that's a pretty big deal right now, 0:07:40.280 --> 0:07:46.120 and just the five second background, The COVID funding bills 0:07:46.160 --> 0:07:53.720 from twenty twenty pretty much allowed states to pause their 0:07:54.360 --> 0:08:00.400 Medicaid eligibility processes in exchange for getting some increased federal 0:08:00.480 --> 0:08:06.480 funding for their healthcare programs. That process, or that's moratorium 0:08:06.600 --> 0:08:12.400 ended this year, so states have started to re up 0:08:12.480 --> 0:08:18.640 their renewal process and management. Commentary going into this had 0:08:18.680 --> 0:08:22.560 been very nervous given the potential for a lot of 0:08:23.200 --> 0:08:28.559 medicaiding rollies to roll off of their health plans this year, 0:08:29.440 --> 0:08:34.600 but first quarter commentary suggests that the plans are a 0:08:34.600 --> 0:08:36.760 bit more positive in terms of the outlook for the 0:08:36.800 --> 0:08:40.239 near term, as redeterminations are going to be spread out 0:08:40.720 --> 0:08:43.679 over a twelve month period, so less of a headwind 0:08:43.679 --> 0:08:46.720 in twenty twenty three, slightly more of a headwind than 0:08:46.800 --> 0:08:51.480 twenty twenty four. But this was all predicated on in 0:08:52.440 --> 0:08:56.320 losing coverage and picking up other types of insurance like 0:08:56.920 --> 0:09:01.640 ESI employer sponsored insurance or Obamacare, and also predicated on 0:09:01.760 --> 0:09:06.160 state administrative processes limiting the number of people getting kicked 0:09:06.200 --> 0:09:11.719 off who would otherwise be eligible for Medicaid. And this 0:09:11.800 --> 0:09:16.240 process started in April and May with about nineteen states 0:09:16.880 --> 0:09:21.400 so far, and the evidence is mixed, some higher than 0:09:21.480 --> 0:09:26.120 expected terminations, some roughly in line. And as an example, 0:09:26.240 --> 0:09:31.120 there's evidence from one state where eighty percent of the 0:09:31.200 --> 0:09:35.000 people who lost coverage were dropped due to administrative reasons, 0:09:35.120 --> 0:09:39.439 not because they're not eligible, And so why do you 0:09:39.480 --> 0:09:42.240 help plans care about this? This impacts their top line. 0:09:42.800 --> 0:09:45.880 There's an expectation of who's going to remain eligible for 0:09:45.960 --> 0:09:49.680 Medicaid and who's going to shift over from Medicaid to 0:09:50.240 --> 0:09:55.760 other plans. If we see higher than expected disenrollment and 0:09:55.800 --> 0:09:59.680 lower than expected enrollment and other types of coverage, that's 0:09:59.720 --> 0:10:03.400 going to I have a pretty significant impact in terms 0:10:03.400 --> 0:10:06.840 of the near term outlook for these health plans. So 0:10:07.280 --> 0:10:10.120 it's too soon to say ultimately what the impact is 0:10:10.160 --> 0:10:12.160 going to be. We'll be keeping an eye on this 0:10:12.280 --> 0:10:17.400 as twenty two states began the process June first, and 0:10:17.520 --> 0:10:21.400 I think we'll be listening for some management commentary from 0:10:21.400 --> 0:10:26.120 their second second quarter earnings to provide some clues on 0:10:26.240 --> 0:10:30.240 whether their first quarter outlook has been changed by some 0:10:30.320 --> 0:10:33.080 of the activity on the ground so far. So we'll 0:10:33.080 --> 0:10:34.800 have a lot more to say about this as the 0:10:34.840 --> 0:10:38.280 process unfolds over the coming months. And with that, I'll 0:10:38.320 --> 0:10:38.880 turn it back to you. 0:10:38.920 --> 0:10:40.040 Elliott, Great, thanks a lot. 0:10:40.080 --> 0:10:43.240 Dwaine, all right, Matt, let's bring you in to talk 0:10:43.280 --> 0:10:47.640 about artificial intelligence. It seems like every other headline these 0:10:47.720 --> 0:10:48.200 days has. 0:10:48.120 --> 0:10:51.600 To do with AI, and I think my favorite. 0:10:51.200 --> 0:10:54.319 Story from this past week was about the lawyer who 0:10:54.400 --> 0:10:59.439 used AI to write illegal brief and the brief wound 0:10:59.520 --> 0:11:03.800 up containing citations to cases that were totally made up 0:11:04.520 --> 0:11:06.679 by the AI machine. 0:11:07.760 --> 0:11:10.439 But you've been looking into what a regulatory framework might 0:11:10.440 --> 0:11:11.000 look like for. 0:11:11.000 --> 0:11:13.040 AI, so you know, come in and tell us your 0:11:13.040 --> 0:11:15.800 thoughts on that, and then also tell us about this 0:11:15.880 --> 0:11:20.760 case in California, UH involving uber and list and why 0:11:20.800 --> 0:11:23.920 you think there might be an underappreciated risk. 0:11:24.120 --> 0:11:27.000 Yeah, absolutely, Elliott thinks. So, yeah, yeah. Tamlin, Basin and 0:11:27.040 --> 0:11:30.640 I took an early look at what the regulatory risk 0:11:30.760 --> 0:11:35.000 facing artificial intelligence might look like, with Tamlin focusing on 0:11:35.040 --> 0:11:39.040 the EU, while I looked at the United States and 0:11:39.480 --> 0:11:41.960 on the on the EU side, it's there that we 0:11:42.040 --> 0:11:48.200 expect concrete developments. First. Tamlin outlines how the the AI 0:11:48.520 --> 0:11:52.920 Act in development there contemplates that that high risk systems 0:11:53.000 --> 0:11:58.400 would need to undergo an assessment and be registered before 0:11:58.440 --> 0:12:01.400 they're released. And he believed is that that sort of 0:12:01.400 --> 0:12:03.599 the heavy handed approach that the EU is taken to 0:12:03.760 --> 0:12:09.000 tech regulation could be replicated there. But but these obligations 0:12:09.000 --> 0:12:12.360 aren't likely to hit until late twenty twenty five, and 0:12:12.640 --> 0:12:16.000 he points out that that they're you know, it's early 0:12:16.080 --> 0:12:20.559 days still, and this is still in facing considerable negotiation 0:12:21.360 --> 0:12:23.640 and and so and I took a look on the 0:12:23.760 --> 0:12:27.240 US side on the Senate here held its first major 0:12:27.360 --> 0:12:32.199 hearing on a AI regulation last month, and what stood 0:12:32.200 --> 0:12:36.560 out was really the surprising level of optimism, the bipartisan 0:12:36.720 --> 0:12:43.120 optimism for regulating AI. But but again, I'm I'm pretty 0:12:43.160 --> 0:12:49.599 skeptical that that optimism will translate to actual material limits 0:12:49.840 --> 0:12:54.920 in the US anytime soon. Given how quickly this technology 0:12:55.000 --> 0:12:58.880 is developing and how fast moving it is, Congress itself 0:12:58.880 --> 0:13:02.160 doesn't have any chance to keep up with regulating it. 0:13:02.200 --> 0:13:05.600 The only logical approach would be to create a new 0:13:05.640 --> 0:13:12.040 federal agency to track it and to constantly modify its 0:13:12.080 --> 0:13:16.400 regulations to address it. But the political hurdles to do 0:13:16.480 --> 0:13:20.720 that I think are substantial. So for the near term, 0:13:20.880 --> 0:13:24.239 I think it's it should be good news for companies 0:13:24.400 --> 0:13:27.520 looking to develop this technology in the US. I don't 0:13:27.559 --> 0:13:32.800 really see concrete material regulation getting through the system anytime soon. 0:13:33.720 --> 0:13:35.640 And as you said, one other thing I wanted to 0:13:35.640 --> 0:13:40.120 touch on quickly in terms of a June catalyst for investors, 0:13:40.120 --> 0:13:45.960 and particularly for investors in Lyft. This impacts all gig 0:13:46.000 --> 0:13:50.080 economy companies, but particularly those that are have a big 0:13:50.080 --> 0:13:53.000 focus in California. It's a big deal. And Lift is 0:13:53.040 --> 0:13:57.640 a company like that, and I think the market could 0:13:57.720 --> 0:14:01.760 be underappreciating what a sig significant risk this could be 0:14:01.840 --> 0:14:05.079 to the company. The issue concerned how the company's drivers 0:14:05.120 --> 0:14:10.360 are classified, whether they're employees or contractors. And three years ago, 0:14:10.400 --> 0:14:13.959 in twenty twenty, California voters passed an initiative. There was 0:14:14.000 --> 0:14:17.880 a big win for Lyft it said the company's drivers 0:14:17.880 --> 0:14:24.560 are contractors. But quietly, a case challenging that that ballot 0:14:24.600 --> 0:14:27.680 initiative has been making its way through the California court 0:14:27.720 --> 0:14:30.800 system with sort of mixed results, and we're sort of 0:14:30.840 --> 0:14:34.720 at a showdown point for that case. The data circle 0:14:34.760 --> 0:14:39.040 on your calendar here is June fifteenth. Possible that slips 0:14:39.040 --> 0:14:42.200 to June twenty second, but that's the day that the 0:14:42.280 --> 0:14:46.160 California Supreme Court is due to tell us whether it's 0:14:46.200 --> 0:14:50.200 going to take up this case. That court denies ninety 0:14:50.240 --> 0:14:53.120 five percent of petitions of cases. 0:14:52.720 --> 0:14:54.080 It's asked to take. 0:14:54.600 --> 0:14:57.400 I think that the risk here is much higher. I 0:14:57.440 --> 0:15:01.520 think investors should be thinking more of forty percent risk 0:15:01.640 --> 0:15:04.400 that the court takes the case, and then that would 0:15:04.440 --> 0:15:08.040 be bad news for LIFT. That would significantly raise its 0:15:08.240 --> 0:15:11.040 risk because it won at the latest stage of the case. 0:15:11.720 --> 0:15:15.200 And so the fact that the California Supreme Court would 0:15:15.240 --> 0:15:19.680 be taking. It would signal considerable risk that they might 0:15:19.680 --> 0:15:22.920 be looking to change the result and potentially strike down 0:15:22.960 --> 0:15:26.520 that voter initiative. Now, I think LIFT can actually prevail, 0:15:27.040 --> 0:15:29.720 So you know, I want a caution not to overreact 0:15:29.880 --> 0:15:33.480 if that happens on June fifteenth or June twenty second, 0:15:34.680 --> 0:15:38.920 But it could be a considerable risk if the court 0:15:38.960 --> 0:15:41.600 decides to take the case. With that, let me toss 0:15:41.600 --> 0:15:42.520 it back to you, Elliott. 0:15:44.640 --> 0:15:47.640 Great, Thanks Matt. All Right, Holly, let's bring you in 0:15:47.680 --> 0:15:52.920 to talk mass TOWRT litigation. First, in three MP fast litigation, 0:15:53.000 --> 0:15:56.040 it sounds like we're reaching a critical milestone with a 0:15:56.160 --> 0:16:01.040 bell Weathered jury trial starting June fifth, and you've written 0:16:01.320 --> 0:16:03.800 that you think three M is a heavy underdog in that, 0:16:04.480 --> 0:16:07.680 and then you're also going to be watching an appeals 0:16:07.720 --> 0:16:12.480 court oral argument in buy er roundup litigation. So maybe 0:16:12.480 --> 0:16:15.080 come in tell us about both those cases and what 0:16:15.120 --> 0:16:16.160 you're going to be watching for. 0:16:17.000 --> 0:16:20.200 Yep, thanks Elliott. So three M faces the first test 0:16:20.200 --> 0:16:23.800 trial in thousands of cases alleging p FAS contamination from 0:16:23.880 --> 0:16:26.920 fire fighting film. That case is scheduled to go to 0:16:27.000 --> 0:16:30.200 trial June fifth, before the South Carolina Federal Court judge 0:16:30.200 --> 0:16:33.960 presiding over the multi district litigation. It's expected to last 0:16:34.000 --> 0:16:36.040 five to six weeks and we expect a verdict by 0:16:36.120 --> 0:16:39.400 late July. The plaintiff is the City of Stuart, which 0:16:39.520 --> 0:16:43.080 alleges contamination from a fire rescue training facility and seeks 0:16:43.080 --> 0:16:46.120 one hundred and five million. We've said this case could settle, 0:16:46.120 --> 0:16:48.560 but if it doesn't, we expect causation will be relatively 0:16:48.600 --> 0:16:51.320 easy to show and the issues will center more on 0:16:51.360 --> 0:16:54.480 what the correct measure of damages are. We expect more 0:16:54.520 --> 0:16:57.840 bell Weather trials and two h including the selection of 0:16:57.840 --> 0:17:01.360 personal injury cases for trial. And so there's been big 0:17:01.400 --> 0:17:03.840 news this morning, and there was big news yesterday. There 0:17:03.840 --> 0:17:06.280 was one hundred million dollars settlement announced related to City 0:17:06.280 --> 0:17:09.360 of Rome's lawsuit against three M DuPont and others. And 0:17:09.480 --> 0:17:12.240 Dupon and Comores announced a one point two billion dollars 0:17:12.240 --> 0:17:15.239 settlement with what are authorities this morning they announced it. 0:17:15.480 --> 0:17:17.399 We said that, you know, we don't think that's the 0:17:17.440 --> 0:17:19.760 final tally because they're likely will be holdouts and there 0:17:19.760 --> 0:17:24.040 are significant lawsuits remaining, particularly in North Carolina. We haven't 0:17:24.080 --> 0:17:26.640 changed our estimate for three M based on this reported deal, 0:17:26.960 --> 0:17:29.520 we said three M could pay thirty to forty billion 0:17:29.560 --> 0:17:33.640 total for pfast lawsuits. In litigation against fire over weed 0:17:33.720 --> 0:17:36.560 killer roundup, Buyer faces a crucial hearing before the Eleventh 0:17:36.600 --> 0:17:40.359 Circuit Court of Appeals on June thirteenth. Buyer still faces 0:17:40.359 --> 0:17:44.199 about forty thousand lawsuits over claims the weed killer causes cancer. 0:17:44.800 --> 0:17:47.560 Buyer has argued failure to warren claims are barred or 0:17:47.560 --> 0:17:50.960 preempted by federal law, and twenty twenty two, Buyer lost 0:17:51.000 --> 0:17:53.800 its petition to this US Supreme Court to review a 0:17:53.920 --> 0:17:56.960 Ninth Circuit Court of Appeals rolling finding cleans were not preempted. 0:17:57.359 --> 0:18:00.359 But Bayer has been pursuing another appeal over similar issues 0:18:00.359 --> 0:18:03.760 in the Eleventh Circuit Court of Appeals. The original Eleventh 0:18:03.760 --> 0:18:08.760 Circuit Appeals panel before which Buyer argued this rejected Buyer's 0:18:08.840 --> 0:18:11.800 argument in July twenty twenty two, but Buyer files a 0:18:11.800 --> 0:18:14.440 petition for the full panel to hear its appeal. What's 0:18:14.440 --> 0:18:17.560 called a petition for on bank review, and that was granted. 0:18:17.920 --> 0:18:20.520 And what's remarkable about that is those reviews are rarely 0:18:20.520 --> 0:18:22.920 granted and require a majority of judges on the panel 0:18:22.960 --> 0:18:26.000 to vote in favor of granting it oral arguments before 0:18:26.000 --> 0:18:29.080 the full panels to be held June thirteenth. That was 0:18:29.119 --> 0:18:31.840 the important hearing we spoke about earlier, and we think, 0:18:31.840 --> 0:18:34.639 based on Buyers securing a full panel to review its case, 0:18:35.080 --> 0:18:37.360 it has enough votes to win the appeal, and if 0:18:37.359 --> 0:18:39.919 it wins at the Eleventh Circuit, that creates a circuit 0:18:39.960 --> 0:18:42.639 split with the Ninth Circuit. A circuit split would make 0:18:42.680 --> 0:18:45.840 it likelier that the Supreme Court reviews Buyer's case if 0:18:45.840 --> 0:18:48.760 it petitions the Supreme Court for again for review, and 0:18:48.800 --> 0:18:53.040 in the meantime, Buyer has also also has another appeal 0:18:53.040 --> 0:18:55.600 pending in the Third Circuit Court of Appeals. With that, 0:18:55.640 --> 0:18:57.679 i'll turn it back to you, Elliott. 0:18:58.920 --> 0:19:01.960 Great, Thanks Holly. All right, Jen Ree, let's bring you 0:19:02.000 --> 0:19:06.240 in to talk antitrust. Never a dull moment in antitrust. 0:19:07.040 --> 0:19:09.919 In the anti trust world these days, it seems like, 0:19:10.200 --> 0:19:13.320 you know, every day there's like major headlines that you 0:19:13.400 --> 0:19:16.280 have to react to. But you wrote that you think 0:19:16.320 --> 0:19:19.680 the FTC will begin anti trust review of the Peiser 0:19:19.760 --> 0:19:25.400 Siegen deal, you know, in mid June, and then you're 0:19:25.400 --> 0:19:28.760 also going to be watching hearing where Apple is trying 0:19:28.880 --> 0:19:33.840 to block class certification and litigation by customers. 0:19:33.200 --> 0:19:35.399 Complaining about Apple's app store. 0:19:35.760 --> 0:19:38.520 So come in and tell us about both those cases. 0:19:39.280 --> 0:19:42.560 Sure, thanks, Elliott. Right, So, starting with the Peiser siege 0:19:42.600 --> 0:19:46.439 and deal, we absolutely expect the FTC to start an 0:19:46.480 --> 0:19:50.159 in depth investigation with this acquisition. The companies had agreed 0:19:50.200 --> 0:19:53.000 to the deal in March for forty three billion dollars 0:19:53.040 --> 0:19:55.320 and they filed it with the FTC on May twelfth, 0:19:55.600 --> 0:19:58.760 and that May twelfth date triggered a thirty day on 0:19:58.880 --> 0:20:01.879 sort of pre look by the FDC, and after the 0:20:01.960 --> 0:20:05.280 thirty days expire, so sometime in mid June, they'll launch 0:20:05.320 --> 0:20:08.360 what are called issue what are called second requests, which 0:20:08.440 --> 0:20:11.399 launches the investigation. And what this really means is that 0:20:11.480 --> 0:20:14.000 the timeline for the deal gets extended by at least 0:20:14.000 --> 0:20:16.159 eight months, and probably in this case a little bit 0:20:16.200 --> 0:20:19.840 longer than that. And news often of an in depth 0:20:19.880 --> 0:20:23.879 investigation when it becomes public, has a tendency to negatively 0:20:23.920 --> 0:20:27.359 impact the stock of the seller Siege in here, but 0:20:27.480 --> 0:20:29.360 it may not in this case, because I think it's 0:20:29.359 --> 0:20:31.800 pretty widely expected that the FDC is going to take 0:20:31.800 --> 0:20:33.840 a hard look, and even if it does it, it 0:20:33.960 --> 0:20:37.359 usually bounces back because it is anticipated that a review 0:20:37.400 --> 0:20:39.800 is going to be opened up. Now, the thing here 0:20:39.880 --> 0:20:43.760 on the ultimate outcome is really uncertain. We have an 0:20:43.800 --> 0:20:47.320 FTC today that's highly sensitive to any kind of consolidation 0:20:47.400 --> 0:20:50.280 at all in the pharma and biotech spaces. So in 0:20:50.320 --> 0:20:53.440 an effort to try to curb and slow that consolidation, 0:20:53.840 --> 0:20:56.840 they're taking novel approaches to these deals and adopting brand 0:20:56.880 --> 0:21:00.000 new theories of harm. So it's very difficult to anticipate 0:21:00.160 --> 0:21:02.880 what they're going to do. Because this pisor Sigen deal 0:21:02.920 --> 0:21:05.840 from an antitrust perspective, in my view, looks quite clean. 0:21:06.640 --> 0:21:10.000 And do you consider how these deals historically have been analyzed, 0:21:10.040 --> 0:21:13.280 which is looking at sort of drug by drug competitive 0:21:13.320 --> 0:21:18.000 overlaps between the companies. Now, the two had one potential 0:21:18.000 --> 0:21:20.960 competitive overlap, but that has been eliminated because it was 0:21:21.000 --> 0:21:23.399 a Pfizer drug that it shared with Merk and it 0:21:23.520 --> 0:21:26.679 seeded all the rights to that drug to work, So 0:21:26.720 --> 0:21:30.120 it kind of eliminated that one overlap. And you would 0:21:30.119 --> 0:21:33.000 expect this to get clearance, but we saw that the 0:21:33.080 --> 0:21:37.000 FTC just challenged a different deal, am Gen's potential acquisition 0:21:37.040 --> 0:21:41.480 of Horizon, both biotech companies, to try to stop that deal, 0:21:42.000 --> 0:21:44.240 and in that case, the companies also didn't have any 0:21:44.240 --> 0:21:46.959 competitive overlap, so the same thing could happen with Pfizer 0:21:47.000 --> 0:21:49.800 and Cigen, But again it's eight months or more down 0:21:49.840 --> 0:21:53.359 the road from now. Now turned into a whole different 0:21:53.400 --> 0:21:58.040 matter Apple and its app store, Apple and Google as well, 0:21:58.040 --> 0:22:00.359 but I'm focusing today on an Apple case. It's been 0:22:00.440 --> 0:22:04.440 under threat for years now by anti trust legal challenges 0:22:04.480 --> 0:22:07.399 that come from various plaintiffs and plaintiffs groups, and so 0:22:07.560 --> 0:22:10.880 far Apple has mostly been successful in warding off outcomes 0:22:10.880 --> 0:22:14.199 that would significantly dent the revenues that obtains through its 0:22:14.200 --> 0:22:17.440 app store, through the sales of apps and in app purchases. 0:22:17.840 --> 0:22:20.560 The particular suit I'm talking about today is a consumer 0:22:20.600 --> 0:22:23.000 action in which a group of consumers are trying to 0:22:23.000 --> 0:22:26.439 get class status right now, and they're seeking about ten billion, 0:22:26.520 --> 0:22:29.040 or at least up to ten billion in damages for 0:22:29.119 --> 0:22:31.919 what they say are alleged overpayments on apps and in 0:22:31.960 --> 0:22:35.000 app purchases that the developers passed on the big fee 0:22:35.000 --> 0:22:39.040 Apple charges developers to the consumers. Now, ten billion is 0:22:39.040 --> 0:22:41.199 a lot, but we think Apple could probably settle for 0:22:41.280 --> 0:22:44.240 under five hundred million even if the consumers actually win 0:22:44.320 --> 0:22:47.040 class status, because after that they have a lot of 0:22:47.160 --> 0:22:50.000 hurdles down the road to actually prove their claims to 0:22:50.119 --> 0:22:54.040 prove liability under federal landing trust laws, given past rulings 0:22:54.040 --> 0:22:56.720 by the same judge and basically identical cases that we're 0:22:56.720 --> 0:23:00.119 ahead of this one and brought by different plaintiffs. So 0:23:00.160 --> 0:23:02.959 the hearing on class status is in June. We expect 0:23:02.960 --> 0:23:05.680 a decision in the second half. And I should note 0:23:05.680 --> 0:23:08.840 that these consumers were already denied their efforts to certify 0:23:08.840 --> 0:23:11.280 a class in the first quarter of twenty twenty two, 0:23:11.640 --> 0:23:13.720 but they'll judge is letting them try again, and we 0:23:13.800 --> 0:23:16.840 think they probably cured the deficiencies that killed them the 0:23:16.840 --> 0:23:19.400 first time, and that they'll be able to move forward. 0:23:19.560 --> 0:23:21.879 If they don't get class status, the case will probably 0:23:21.920 --> 0:23:24.520 just fall apart. If they get class datus, which is 0:23:24.560 --> 0:23:27.600 more likely, we think the cases will probably settle in 0:23:27.600 --> 0:23:31.480 twenty twenty four. So with that, back to you, Elliott. 0:23:33.880 --> 0:23:34.679 Great, thanks a lot. 0:23:34.800 --> 0:23:34.960 Jen. 0:23:35.240 --> 0:23:38.840 All right, Nathan, let's bring you in to talk financials policy. 0:23:39.880 --> 0:23:44.440 Banker bonuses in particular. It's always a topic that garners 0:23:44.480 --> 0:23:47.919 a lot of interest from Bloomberg terminal clients for reasons 0:23:47.920 --> 0:23:51.000 that I think are obvious and it sounds like US 0:23:51.040 --> 0:23:54.480 regulators are signaling that they'll be proposing a rule to 0:23:54.520 --> 0:23:57.680 restrict banker bonuses. So maybe come in and tell us 0:23:57.960 --> 0:23:58.879 your thoughts on that. 0:23:59.119 --> 0:24:01.760 Yeah, you know, if there's way to get great readership 0:24:01.800 --> 0:24:03.679 on the Bloomberg terminal, it's to have a headline with 0:24:03.720 --> 0:24:07.119 bankers bonuses and restrictions. And so what I want to 0:24:07.160 --> 0:24:09.879 do is tell a story of why this is actually 0:24:09.880 --> 0:24:12.040 coming about. So if you go back to Dodd Frank, 0:24:12.280 --> 0:24:15.440 you know, signed into law July twenty ten, there was 0:24:15.480 --> 0:24:19.040 a provision in there that says that the six US regulators, 0:24:19.080 --> 0:24:21.920 so this is the Federal Reserve, the SEC, the National 0:24:21.920 --> 0:24:28.120 Credit Union FAHFA, OCC, and the FDIC have to come 0:24:28.160 --> 0:24:32.639 together and create a proposal restricting banker bonuses. And the 0:24:33.000 --> 0:24:35.480 Dodd Frank Act required that this thing would have to 0:24:35.480 --> 0:24:38.199 be put in place by July twenty first, twenty eleven, 0:24:38.320 --> 0:24:40.600