1 00:00:03,200 --> 00:00:08,719 Speaker 1: This is Bloomberg Law with June Grosso from Bloomberg Radio. 2 00:00:09,440 --> 00:00:13,200 Speaker 2: During the Supreme Court arguments over whether former President Donald 3 00:00:13,240 --> 00:00:17,239 Speaker 2: Trump is immune from criminal charges for illegally trying to 4 00:00:17,320 --> 00:00:21,440 Speaker 2: overturn the results of the twenty twenty election, Justice Samuel 5 00:00:21,440 --> 00:00:25,400 Speaker 2: Alito stood out from the other justices with his repeated 6 00:00:25,480 --> 00:00:29,320 Speaker 2: concerns about opening presidents up to criminal prosecution. 7 00:00:29,880 --> 00:00:32,159 Speaker 1: Today, I understand you to say, well, you know, if 8 00:00:32,159 --> 00:00:34,440 Speaker 1: he makes a mistake, he makes a mistake, he subject 9 00:00:34,760 --> 00:00:37,599 Speaker 1: to the criminal laws just like anybody else. You don't 10 00:00:37,640 --> 00:00:42,240 Speaker 1: think he's in a special, a peculiarly precarious. 11 00:00:41,520 --> 00:00:47,479 Speaker 3: Position, but that the president may be criminally prosecuted by 12 00:00:47,520 --> 00:00:53,160 Speaker 3: a bitter political opponent. Will that not lead us into 13 00:00:53,760 --> 00:00:58,760 Speaker 3: a cycle that destabilizes the functioning of our country as. 14 00:00:58,600 --> 00:01:03,040 Speaker 2: A Democracytional Democrats have asked Aledo to recuse himself from 15 00:01:03,080 --> 00:01:06,280 Speaker 2: that case and another case that could have implications for 16 00:01:06,319 --> 00:01:10,280 Speaker 2: the Trump prosecution, not because of the questioning, but because 17 00:01:10,360 --> 00:01:14,520 Speaker 2: flags flown outside Aledo's homes are associated with the pro 18 00:01:14,680 --> 00:01:18,600 Speaker 2: Trump mob that attacked the capital on January sixth, creating 19 00:01:18,640 --> 00:01:23,680 Speaker 2: an appearance of impropriety for the conservative justice. An upside 20 00:01:23,680 --> 00:01:27,280 Speaker 2: down American flag associated with the Stop the Steel Movement 21 00:01:27,680 --> 00:01:31,240 Speaker 2: was flown outside Aledo's Virginia home, and an Appeal to 22 00:01:31,319 --> 00:01:35,680 Speaker 2: Heaven flag, a symbol of Christian nationalism, was flown outside 23 00:01:35,720 --> 00:01:40,080 Speaker 2: Aledo's beach residence in New Jersey. Similar flags were carried 24 00:01:40,120 --> 00:01:44,600 Speaker 2: by the January sixth rioters, but Alito has flatly refused 25 00:01:44,640 --> 00:01:48,160 Speaker 2: to recuse himself from the cases, blaming his wife for 26 00:01:48,240 --> 00:01:52,640 Speaker 2: the flag flying. What's more, the Chief Justice has said 27 00:01:52,840 --> 00:01:56,400 Speaker 2: he's not getting involved. It's a pattern we've seen before 28 00:01:56,440 --> 00:01:59,880 Speaker 2: with Aledo, who has a history of stirring up political contra. 29 00:02:01,240 --> 00:02:04,680 Speaker 2: Joining me is an expert in constitutional law, David Super, 30 00:02:04,800 --> 00:02:08,919 Speaker 2: a professor at Georgetown Law. Justice Alito says there was 31 00:02:08,960 --> 00:02:12,040 Speaker 2: an upside down flag flying at his house for days, 32 00:02:12,600 --> 00:02:14,680 Speaker 2: and he was not aware of it until it was 33 00:02:14,760 --> 00:02:17,480 Speaker 2: called his attention, and then he tried to get his 34 00:02:17,520 --> 00:02:20,280 Speaker 2: wife to take it down, but she refused for days. 35 00:02:20,800 --> 00:02:23,040 Speaker 2: Does that pass the Laft test? 36 00:02:23,560 --> 00:02:26,680 Speaker 4: Not for me, I don't think for most people. It's 37 00:02:26,720 --> 00:02:30,320 Speaker 4: his house. We are responsible for what's on display in 38 00:02:30,400 --> 00:02:35,480 Speaker 4: our houses, and if it is his house, as co 39 00:02:35,560 --> 00:02:38,120 Speaker 4: owner with her, he has every right to take it down. 40 00:02:38,560 --> 00:02:40,360 Speaker 4: She probably then would have a right to put it 41 00:02:40,400 --> 00:02:43,600 Speaker 4: back up, but he doesn't need her approval to take 42 00:02:43,639 --> 00:02:45,640 Speaker 4: it down as a co owner of the house. 43 00:02:46,000 --> 00:02:50,359 Speaker 2: What was really odd was he went into detail about 44 00:02:50,360 --> 00:02:53,680 Speaker 2: the ownership of the two houses. I just thought that 45 00:02:53,680 --> 00:02:55,960 Speaker 2: that was unnecessary and odd. 46 00:02:56,840 --> 00:03:00,840 Speaker 4: It is he protests a way too much. Which he 47 00:03:01,120 --> 00:03:04,360 Speaker 4: is a co owner of the house under whatever ownership 48 00:03:04,480 --> 00:03:09,240 Speaker 4: arrangement there is, he has the ability to change the 49 00:03:09,360 --> 00:03:13,200 Speaker 4: house and what is displayed on it. And if he couldn't, 50 00:03:13,600 --> 00:03:17,560 Speaker 4: he surely must recognize that reasonable people would feel that 51 00:03:17,560 --> 00:03:21,560 Speaker 4: that casts a question on his impartiality. Most people don't 52 00:03:21,680 --> 00:03:26,919 Speaker 4: understand the intricacies of property ownership. It would assume quite 53 00:03:26,960 --> 00:03:29,880 Speaker 4: reasonably that a flag displayed in front of his house 54 00:03:29,960 --> 00:03:31,040 Speaker 4: tells us what he thinks. 55 00:03:31,600 --> 00:03:35,320 Speaker 2: Initially, he denied the flag was hung upside down as 56 00:03:35,360 --> 00:03:37,640 Speaker 2: a political protest. He said it was flown by his 57 00:03:37,720 --> 00:03:41,160 Speaker 2: wife in response to a neighbour's yard signs that were 58 00:03:41,200 --> 00:03:44,960 Speaker 2: critical of Trump, saying Trump is a fascist, etc. So 59 00:03:45,200 --> 00:03:48,320 Speaker 2: there was a political reason, then tied to the former 60 00:03:48,440 --> 00:03:51,840 Speaker 2: president who was accused of taking part in a coup attempt, 61 00:03:52,040 --> 00:03:54,840 Speaker 2: you know, days earlier to the flying of the flag. 62 00:03:55,520 --> 00:03:59,280 Speaker 4: Yes, that's obviously political. What you or I think about 63 00:03:59,360 --> 00:04:04,400 Speaker 4: the president United States or a former president is inevitably political, 64 00:04:04,760 --> 00:04:08,720 Speaker 4: and it's political relating to cases that he was deciding. 65 00:04:09,520 --> 00:04:13,600 Speaker 2: As far as the Appeal to Heaven flag flown outside 66 00:04:13,680 --> 00:04:17,080 Speaker 2: his beach residence in New Jersey, he said he wasn't 67 00:04:17,120 --> 00:04:20,279 Speaker 2: familiar with the flag's meaning. I was not aware of 68 00:04:20,320 --> 00:04:23,479 Speaker 2: any connection between the historic flag and the Stop the 69 00:04:23,520 --> 00:04:26,960 Speaker 2: Steel movement, and neither was my wife. So he's just 70 00:04:27,000 --> 00:04:28,000 Speaker 2: feigning ignorance. 71 00:04:28,600 --> 00:04:31,560 Speaker 4: This is a very smart justice, a very learned justice, 72 00:04:31,560 --> 00:04:35,280 Speaker 4: a very well read justice, and a justice who, in 73 00:04:35,440 --> 00:04:39,039 Speaker 4: his opinions, in his interventions in oral argument, shows a 74 00:04:39,040 --> 00:04:42,000 Speaker 4: great deal of knowledge about a great many things. I 75 00:04:42,120 --> 00:04:45,039 Speaker 4: don't know what he does or does not know, but 76 00:04:45,440 --> 00:04:48,359 Speaker 4: I know a reasonable person would assume that he knows 77 00:04:48,400 --> 00:04:52,360 Speaker 4: what that means, and would assume that that indicates a 78 00:04:52,520 --> 00:04:57,560 Speaker 4: pre commitment. In cases involving January sixth, he cited. 79 00:04:57,160 --> 00:05:01,000 Speaker 2: The recently adopted Code of conduct by this Court. A 80 00:05:01,240 --> 00:05:04,960 Speaker 2: justice should disqualify himself for herself in a proceeding in 81 00:05:05,000 --> 00:05:09,839 Speaker 2: which the justice's impartiality might reasonably be questioned. That is, 82 00:05:09,880 --> 00:05:12,839 Speaker 2: we're an unbiased and reasonable person who's aware of all 83 00:05:12,960 --> 00:05:17,400 Speaker 2: relevant circumstances would doubt that the Justice could fairly discharge 84 00:05:17,480 --> 00:05:20,279 Speaker 2: his or her duties, and he said that these two 85 00:05:20,320 --> 00:05:24,320 Speaker 2: incidents of flag flying don't meet the conditions for recusal. 86 00:05:24,760 --> 00:05:30,120 Speaker 2: But we have people, lawmakers and others saying that this 87 00:05:30,279 --> 00:05:34,320 Speaker 2: puts his impartiality in question. So it seems like it 88 00:05:34,400 --> 00:05:35,440 Speaker 2: does satisfy it. 89 00:05:35,960 --> 00:05:40,400 Speaker 4: Oh, it certainly satisfies it. This is something that, if 90 00:05:40,440 --> 00:05:44,200 Speaker 4: the shoes were on the other foot, would be subject 91 00:05:44,200 --> 00:05:49,800 Speaker 4: to enormous outrage. Much more tangential indications of commitment have 92 00:05:49,960 --> 00:05:54,000 Speaker 4: been cited by former President Trump and many others as 93 00:05:54,080 --> 00:05:58,479 Speaker 4: signs of bias, And indeed, a liberal Supreme Court Justice A. 94 00:05:58,680 --> 00:06:02,200 Speaker 4: Ford Us was put off the court in significant part 95 00:06:02,360 --> 00:06:07,279 Speaker 4: because of perceptions of bias in favor of the Johnson 96 00:06:07,320 --> 00:06:09,159 Speaker 4: administration that were much weaker than this. 97 00:06:09,800 --> 00:06:12,080 Speaker 2: What does it say about that ethics code that the 98 00:06:12,320 --> 00:06:16,279 Speaker 2: Justice is adopted last year, which they get to enforce themselves. 99 00:06:16,360 --> 00:06:19,120 Speaker 2: I mean, is it worth the paper it was printed on? 100 00:06:19,560 --> 00:06:24,360 Speaker 4: No, it's completely worthless. The lack of independent and forcibility 101 00:06:24,720 --> 00:06:28,680 Speaker 4: or even independent fact finding makes it worthless right there. 102 00:06:28,839 --> 00:06:32,719 Speaker 4: But then when you look deeper, the substance of it 103 00:06:32,800 --> 00:06:36,800 Speaker 4: is completely flimsy. It is for the sake of quieting 104 00:06:36,839 --> 00:06:40,200 Speaker 4: public outrage, not for actually improving the ethical standards of 105 00:06:40,240 --> 00:06:40,599 Speaker 4: the court. 106 00:06:41,040 --> 00:06:43,960 Speaker 2: Is it rare for justices to get into this back 107 00:06:44,000 --> 00:06:47,960 Speaker 2: and forth with lawmakers, you know, writing letters responding to them. 108 00:06:48,279 --> 00:06:51,680 Speaker 2: I mean, does it show that Alito might be concerned 109 00:06:51,720 --> 00:06:54,560 Speaker 2: about public reaction for once to. 110 00:06:54,440 --> 00:06:59,240 Speaker 4: Some extent, yes, Justice Alito has been more willing to 111 00:06:59,400 --> 00:07:03,680 Speaker 4: engage in the popular media than most Supreme Court justices 112 00:07:03,760 --> 00:07:06,479 Speaker 4: of the modern era have been. And this it's consistent 113 00:07:06,560 --> 00:07:07,919 Speaker 4: with those tendencies. 114 00:07:08,640 --> 00:07:12,560 Speaker 2: So Senator Dick Durbin, the chair of the Judiciary Committee, 115 00:07:12,640 --> 00:07:16,119 Speaker 2: and Senator Sheldon Whitehouse wrote a letter to the Chief 116 00:07:16,280 --> 00:07:19,640 Speaker 2: Justice Roberts asking him to make certain that Alito recuses 117 00:07:19,720 --> 00:07:22,440 Speaker 2: himself in any case is related to the twenty twenty 118 00:07:22,680 --> 00:07:26,120 Speaker 2: presidential election in the January sixth attack on the Capitol, 119 00:07:26,400 --> 00:07:29,800 Speaker 2: and they also requested a meeting with Roberts as soon 120 00:07:29,840 --> 00:07:34,040 Speaker 2: as possible, and Roberts refused on both counts. He refused 121 00:07:34,080 --> 00:07:37,640 Speaker 2: to meet with the senators, saying, apart from ceremonial events, 122 00:07:37,680 --> 00:07:41,080 Speaker 2: only on rare occasions in our nation's history has a 123 00:07:41,160 --> 00:07:45,120 Speaker 2: sitting chief justice met with legislators, and he refused to 124 00:07:45,120 --> 00:07:48,280 Speaker 2: get involved in the request for Alito to recuse it all, 125 00:07:48,880 --> 00:07:53,000 Speaker 2: saying members of the Supreme Court recently reaffirmed the practice 126 00:07:53,040 --> 00:07:55,520 Speaker 2: we have followed for two hundred and thirty five years 127 00:07:55,880 --> 00:08:00,880 Speaker 2: pursue into which individual justices decide recusal issue chose. This 128 00:08:01,000 --> 00:08:02,840 Speaker 2: is the second time in less than a year that 129 00:08:02,880 --> 00:08:07,960 Speaker 2: there have been ethical controversies surrounding Justice Alito. Isn't it 130 00:08:08,000 --> 00:08:09,720 Speaker 2: time for Roberts to get involved? 131 00:08:10,160 --> 00:08:14,680 Speaker 4: He certainly could step in. The Other justices on occasions 132 00:08:14,720 --> 00:08:20,520 Speaker 4: in the past, have chosen to prevent justices who they 133 00:08:20,560 --> 00:08:24,880 Speaker 4: thought were impaired from participating in decisions. There are seven 134 00:08:25,160 --> 00:08:28,480 Speaker 4: justices that do not have these questions about them, and 135 00:08:28,600 --> 00:08:32,560 Speaker 4: they could simply decide that they will not hand down 136 00:08:32,679 --> 00:08:36,520 Speaker 4: any decisions in which Justice Alito's vote is decisive, or 137 00:08:37,000 --> 00:08:40,199 Speaker 4: if they are similarly concerned with the ethical questions about 138 00:08:40,320 --> 00:08:42,640 Speaker 4: Justice Thomas in which either of their votes are decided. 139 00:08:43,200 --> 00:08:47,319 Speaker 4: If they do that, they still have a solid conservative majority, 140 00:08:47,920 --> 00:08:52,360 Speaker 4: and the outcomes of cases might well not change, but 141 00:08:52,520 --> 00:08:54,960 Speaker 4: the public confidence certainly would be much higher. 142 00:08:55,240 --> 00:09:00,000 Speaker 2: Democratic Senator Richard Blumenthal has also suggested that the Chief 143 00:09:00,040 --> 00:09:04,440 Speaker 2: Chief Justice should just refuse to assign opinions to Alito 144 00:09:04,600 --> 00:09:05,280 Speaker 2: and Thomas. 145 00:09:06,120 --> 00:09:10,160 Speaker 4: That's completely within the Chief justices authority, but I'm not 146 00:09:10,200 --> 00:09:14,280 Speaker 4: sure what that accomplishes. Justices on the Supreme Court to 147 00:09:14,360 --> 00:09:18,480 Speaker 4: exercise much of their power through their votes, and unless 148 00:09:18,920 --> 00:09:24,520 Speaker 4: the individual justice refuses themselves or the other justices refuse 149 00:09:24,640 --> 00:09:29,800 Speaker 4: to allow that justice's vote to be decisive, then the 150 00:09:30,400 --> 00:09:33,480 Speaker 4: compromise justice will still be able to participate and still 151 00:09:33,520 --> 00:09:34,240 Speaker 4: have great power. 152 00:09:35,000 --> 00:09:38,600 Speaker 2: Senator Durbin said he's not going to hold any hearings 153 00:09:38,640 --> 00:09:42,200 Speaker 2: on this or do anything further. But unless Congress does 154 00:09:42,240 --> 00:09:45,640 Speaker 2: something further, this is going to continue, isn't it? With 155 00:09:45,960 --> 00:09:50,000 Speaker 2: justices not recusing themselves when it seems apparent they should. 156 00:09:50,360 --> 00:09:54,400 Speaker 2: Another example is Justice Clarence Thomas taking part in January 157 00:09:54,440 --> 00:09:57,680 Speaker 2: sixth case is when his wife had some involvement there. 158 00:09:58,000 --> 00:09:59,920 Speaker 2: I mean, there seems to be no way to force 159 00:10:00,160 --> 00:10:05,400 Speaker 2: ethical obligations on these justices when they're deciding for themselves, 160 00:10:05,480 --> 00:10:07,000 Speaker 2: and no one is overlooking that. 161 00:10:07,679 --> 00:10:07,959 Speaker 5: Well. 162 00:10:08,040 --> 00:10:10,600 Speaker 4: There are several people that could impose us f coal 163 00:10:10,640 --> 00:10:13,840 Speaker 4: obligations on them, but none are willing. The Justice themselves 164 00:10:14,280 --> 00:10:19,240 Speaker 4: could do so. There's ample precedent of not engaging in 165 00:10:19,760 --> 00:10:23,240 Speaker 4: over political activity when you're sitting on the court and 166 00:10:23,440 --> 00:10:27,400 Speaker 4: not taking valuable gifts from parties with interests in front 167 00:10:27,440 --> 00:10:29,960 Speaker 4: of the court so that justice could do it themselves. 168 00:10:29,960 --> 00:10:34,000 Speaker 4: The others have injustices could do it for them by 169 00:10:34,480 --> 00:10:39,560 Speaker 4: refusing to allow those two to cast siding votes in 170 00:10:39,679 --> 00:10:44,559 Speaker 4: cases where they're compromised. Congress could do it by passing legislation. 171 00:10:45,160 --> 00:10:49,280 Speaker 4: The Constitution says that the Supreme Court's jurisdiction is subject 172 00:10:49,320 --> 00:10:52,959 Speaker 4: to any exceptions Congress wishes to make, and Congress could 173 00:10:53,000 --> 00:10:56,960 Speaker 4: simply say that the Court has no jurisdiction in cases 174 00:10:57,000 --> 00:11:01,960 Speaker 4: in which justices are compromised, and Congress could impeach and 175 00:11:02,080 --> 00:11:05,880 Speaker 4: remove one or more justices. The fact is that Congress 176 00:11:05,960 --> 00:11:08,760 Speaker 4: isn't going to do that because the voters have not 177 00:11:09,520 --> 00:11:13,800 Speaker 4: demanded that Congress do that and have not insisted that 178 00:11:14,240 --> 00:11:17,760 Speaker 4: their representatives in Congress be willing to hold the Court 179 00:11:17,800 --> 00:11:18,720 Speaker 4: to a higher standard. 180 00:11:19,120 --> 00:11:21,920 Speaker 2: Reading Alito's letter, it just seemed to me that he's 181 00:11:22,200 --> 00:11:25,320 Speaker 2: just not self aware. He may be smart, he may 182 00:11:25,360 --> 00:11:28,560 Speaker 2: be brilliant, even but he's not self aware. He writes 183 00:11:28,600 --> 00:11:31,320 Speaker 2: this about his wife. She makes her own decisions, and 184 00:11:31,360 --> 00:11:34,280 Speaker 2: I have always respected her right to do so, And 185 00:11:34,360 --> 00:11:37,720 Speaker 2: it seems so ironic to me, considering his decision to 186 00:11:37,840 --> 00:11:41,600 Speaker 2: take away every woman's right to choose to decide what 187 00:11:41,760 --> 00:11:43,280 Speaker 2: to do with her own body. 188 00:11:43,480 --> 00:11:48,680 Speaker 4: Well, it is, and the notion of hiding behind one's 189 00:11:49,040 --> 00:11:55,600 Speaker 4: wife to excuse one's conduct is one that unfortunately, men 190 00:11:55,720 --> 00:11:59,640 Speaker 4: have used throughout the years, not to empower women, but 191 00:11:59,720 --> 00:12:03,680 Speaker 4: to exploit them. And in that sense this fits with 192 00:12:04,120 --> 00:12:09,559 Speaker 4: the pattern. It's also striking that he expresses such ambivalence 193 00:12:10,160 --> 00:12:16,880 Speaker 4: about what these flags mean when quite recently he wrote 194 00:12:16,880 --> 00:12:22,400 Speaker 4: a concurring opinion in a case about flying flags in 195 00:12:22,920 --> 00:12:26,679 Speaker 4: Boston City Hall in which he said flags are very important. 196 00:12:26,480 --> 00:12:29,600 Speaker 2: And in this one he said, my wife likes flying flags. 197 00:12:29,720 --> 00:12:33,960 Speaker 4: I don't, which suggests that flags are not very important. 198 00:12:34,080 --> 00:12:34,719 Speaker 4: So which is it? 199 00:12:35,000 --> 00:12:35,320 Speaker 6: Justice? 200 00:12:35,600 --> 00:12:38,800 Speaker 2: You want to have it both ways, I guess Congressman 201 00:12:38,920 --> 00:12:42,160 Speaker 2: Jamie Raskin saying that you know, the Justice Department can 202 00:12:42,200 --> 00:12:43,640 Speaker 2: do something if it wants to. 203 00:12:43,960 --> 00:12:47,400 Speaker 4: What is he referring to, Well, there is a statute 204 00:12:47,520 --> 00:12:53,080 Speaker 4: part of the Judiciary Act that requires justices to recuse 205 00:12:53,160 --> 00:12:59,280 Speaker 4: themselves if a reasonable person could regard them as being 206 00:12:59,360 --> 00:13:04,000 Speaker 4: biased particular case, and that requires them to refuse themselves 207 00:13:04,480 --> 00:13:08,120 Speaker 4: if they have or their spouses have certain kinds of 208 00:13:08,480 --> 00:13:11,960 Speaker 4: connections with the parties or the interests or the outcome 209 00:13:12,000 --> 00:13:16,840 Speaker 4: in the case. This statute pretty clearly is implicated by 210 00:13:17,760 --> 00:13:21,440 Speaker 4: Justice Alito's flag flying and by some of the valuable 211 00:13:21,480 --> 00:13:24,360 Speaker 4: gifts that he and Justice Thomas have received by parties 212 00:13:24,360 --> 00:13:27,199 Speaker 4: with interest in front of the court. This statute does 213 00:13:27,240 --> 00:13:32,199 Speaker 4: not require anyone to file any emotions. Historically, as Justice 214 00:13:32,280 --> 00:13:37,160 Speaker 4: Roberts says, individual judges and justices have taken upon themselves 215 00:13:37,240 --> 00:13:41,480 Speaker 4: to recuse themselves. But the Justice Department, as a party 216 00:13:41,960 --> 00:13:46,120 Speaker 4: to these cases, is certainly able to file emotion for 217 00:13:46,160 --> 00:13:48,360 Speaker 4: the refusal of these justices. 218 00:13:48,280 --> 00:13:51,560 Speaker 2: But unlikely too, because of the repercussions. 219 00:13:52,679 --> 00:13:55,880 Speaker 4: Very unlikely too. It would be refusal in just a 220 00:13:55,880 --> 00:13:59,200 Speaker 4: few cases, and the Justice Department appears in front of 221 00:13:59,200 --> 00:14:02,559 Speaker 4: the Court on dozens of cases every year and would 222 00:14:02,559 --> 00:14:07,160 Speaker 4: not want to alienate two of the nine justices for 223 00:14:07,360 --> 00:14:10,800 Speaker 4: all of those other cases by pressed seeing a recusal 224 00:14:10,840 --> 00:14:16,000 Speaker 4: in this one. And in fact, the likelihood that either 225 00:14:16,200 --> 00:14:20,160 Speaker 4: justice would recuse themselves when they've so far refused to 226 00:14:20,200 --> 00:14:22,200 Speaker 4: do so is infinitesimal. 227 00:14:22,760 --> 00:14:26,680 Speaker 2: During the oral arguments on the presidential immunity case, some 228 00:14:26,800 --> 00:14:32,360 Speaker 2: of Justice Alito's comments were supportive of presidential immunity. In 229 00:14:32,800 --> 00:14:36,200 Speaker 2: first of all, they've delayed this so long and then 230 00:14:36,240 --> 00:14:38,760 Speaker 2: decided to take it and then did it on the 231 00:14:38,840 --> 00:14:41,800 Speaker 2: last day of the session, and now probably there won't 232 00:14:41,840 --> 00:14:44,840 Speaker 2: be a decision until the end of June. I mean, 233 00:14:44,880 --> 00:14:47,240 Speaker 2: how do you think the public will receive it if 234 00:14:47,440 --> 00:14:51,040 Speaker 2: it's again a six to three vote down ideological lines. 235 00:14:51,560 --> 00:14:51,720 Speaker 5: Oh. 236 00:14:51,760 --> 00:14:55,520 Speaker 4: I think the public will be quite troubled because the 237 00:14:55,560 --> 00:14:58,680 Speaker 4: Supreme Court has shown on numerous occasions its ability to 238 00:14:58,720 --> 00:15:02,360 Speaker 4: move very very sat when important issues are at stake. 239 00:15:02,720 --> 00:15:09,360 Speaker 4: They took cases involving the restrictions under the pandemic very quickly. 240 00:15:09,960 --> 00:15:15,200 Speaker 4: They've engaged very quickly in challenges to things that President 241 00:15:15,240 --> 00:15:18,480 Speaker 4: Trump did about immigration about Muslims. They can move fast 242 00:15:18,480 --> 00:15:21,280 Speaker 4: if they want to. Their choice to move slowly, and 243 00:15:21,360 --> 00:15:26,120 Speaker 4: particularly if the final decision is one that requires a 244 00:15:26,200 --> 00:15:30,080 Speaker 4: remand and lengthy proceedings below which everybody knows will then 245 00:15:30,160 --> 00:15:34,000 Speaker 4: get further appealed. I think a great many voters will 246 00:15:34,040 --> 00:15:36,640 Speaker 4: believe that the majority the Court is running out the 247 00:15:36,680 --> 00:15:40,400 Speaker 4: clock for the President to allow him to avoid going 248 00:15:40,440 --> 00:15:41,640 Speaker 4: to trial before the election. 249 00:15:42,360 --> 00:15:46,800 Speaker 2: Thanks so much, David Best. Professor David Super of Georgetown Law. 250 00:15:47,160 --> 00:15:50,400 Speaker 2: In a unanimous decision, the Supreme Court cleared the way 251 00:15:50,520 --> 00:15:54,400 Speaker 2: for an NRA lawsuit against a former New York state official, 252 00:15:54,800 --> 00:16:00,000 Speaker 2: overclaimed she unconstitutionally pressured companies to blacklist the gun law 253 00:16:00,160 --> 00:16:04,440 Speaker 2: be Following the deadly twenty eighteen school shooting in Parkland, Florida, 254 00:16:05,120 --> 00:16:09,120 Speaker 2: Justice Sonya Sotomayor wrote that the critical takeaway is that 255 00:16:09,240 --> 00:16:13,720 Speaker 2: the First Amendment prohibits government officials from wielding their power 256 00:16:13,840 --> 00:16:18,200 Speaker 2: selectively to punish or suppress speech. Joining me his First 257 00:16:18,240 --> 00:16:22,160 Speaker 2: Amendment expert Eugene Volik, a professor at UCLA Law School. 258 00:16:22,600 --> 00:16:25,400 Speaker 2: He was counsel of record to the NRA before the 259 00:16:25,440 --> 00:16:29,080 Speaker 2: Supreme Court. Eugene, what many people may see as unusual 260 00:16:29,160 --> 00:16:32,960 Speaker 2: here is that a lawyer for the ACLU argued the 261 00:16:33,040 --> 00:16:36,200 Speaker 2: case for the NRA before the Supreme Court. 262 00:16:36,520 --> 00:16:40,480 Speaker 7: David Cole was a very experienced from court advocate. More importantly, 263 00:16:40,560 --> 00:16:44,280 Speaker 7: I think what was really helpful is that there were 264 00:16:44,360 --> 00:16:48,280 Speaker 7: the NRA and the ACLU before the Court together. I 265 00:16:48,280 --> 00:16:51,520 Speaker 7: think that sends an important message about the significance of 266 00:16:51,520 --> 00:16:54,720 Speaker 7: the case and about the breadth of the First Amendment issue. 267 00:16:54,960 --> 00:16:57,920 Speaker 2: Start by telling us, know what you think the significance 268 00:16:57,960 --> 00:16:58,760 Speaker 2: of this case is. 269 00:16:59,400 --> 00:17:03,640 Speaker 7: So let's say the government falls up, some intermediary maybe 270 00:17:03,640 --> 00:17:06,520 Speaker 7: calls up a bookstore or calls up a billboard owner 271 00:17:06,880 --> 00:17:09,320 Speaker 7: or calls up an insurance company and says, you know, 272 00:17:09,840 --> 00:17:14,080 Speaker 7: we think that the advocacy groups you're dealing with, or 273 00:17:14,119 --> 00:17:17,560 Speaker 7: the books that you're distributing, or the group that is 274 00:17:17,640 --> 00:17:20,520 Speaker 7: buying space on your billboard, we think that its messages 275 00:17:20,560 --> 00:17:24,359 Speaker 7: are bad messages. We think they're bad for society in 276 00:17:24,440 --> 00:17:28,720 Speaker 7: various ways, and we'd like you to stop doing that. 277 00:17:29,080 --> 00:17:31,840 Speaker 7: And what's more, we have power over you. We could 278 00:17:31,960 --> 00:17:35,360 Speaker 7: be the police department, or the Justice Department, or financial 279 00:17:35,400 --> 00:17:39,399 Speaker 7: regulatory thought that could have a profoundly coercive effect on 280 00:17:39,440 --> 00:17:43,919 Speaker 7: these intermediaries that even without actual prosecution or a civil 281 00:17:44,040 --> 00:17:47,639 Speaker 7: case against the actual speaker, these kinds of threats to 282 00:17:47,720 --> 00:17:51,520 Speaker 7: intermediaries can do a lot to make it harder for 283 00:17:51,600 --> 00:17:54,639 Speaker 7: the speakers to speak because they won't be able to 284 00:17:54,720 --> 00:17:57,840 Speaker 7: distribute their books through certain bookstores, or they won't have 285 00:17:57,960 --> 00:18:00,960 Speaker 7: financial services that they need in order to So the 286 00:18:01,080 --> 00:18:04,840 Speaker 7: NRA alleged that that's what the New York Department of 287 00:18:04,880 --> 00:18:10,679 Speaker 7: Financial Services did, that it pressured various financial companies insurance companies, banks, 288 00:18:10,680 --> 00:18:13,960 Speaker 7: and the like to stop doing business with the NRA 289 00:18:14,160 --> 00:18:16,439 Speaker 7: and thus make it farther for the NRA to engage 290 00:18:16,480 --> 00:18:19,000 Speaker 7: in its advocacy. But of course this isn't a second 291 00:18:19,040 --> 00:18:21,760 Speaker 7: amendent case. It's a first Amendment case. It applies to everybody. 292 00:18:21,800 --> 00:18:23,800 Speaker 7: It could equally be some other state try to do 293 00:18:23,840 --> 00:18:26,760 Speaker 7: the same to plant Parenthoot, or some state trying to 294 00:18:26,800 --> 00:18:30,280 Speaker 7: do the same to a Propoalestinian organization or a pro 295 00:18:30,359 --> 00:18:34,000 Speaker 7: Israeli organization. So this is a broad first Amendment question 296 00:18:34,359 --> 00:18:37,880 Speaker 7: that the courts dealt with and unanimously resolved in favor 297 00:18:37,960 --> 00:18:40,600 Speaker 7: of the speakers and said, look, if it can be 298 00:18:40,680 --> 00:18:43,480 Speaker 7: shown that the government was engaging in such coersion. At 299 00:18:43,520 --> 00:18:46,000 Speaker 7: this point, it's just alleged. This is just an emotion 300 00:18:46,119 --> 00:18:49,560 Speaker 7: to dismiss. So nothing has improved yet. But if it 301 00:18:49,640 --> 00:18:53,040 Speaker 7: could be shown in court that the government was pressuring 302 00:18:53,119 --> 00:18:57,360 Speaker 7: intermediaries to stop doing business with organizations because of those 303 00:18:57,440 --> 00:19:01,680 Speaker 7: organization speech, that would be potentially a first to women violation. 304 00:19:02,040 --> 00:19:05,080 Speaker 7: That's an important holding. It reaffirms a principle that was 305 00:19:05,119 --> 00:19:07,880 Speaker 7: first announced by the court more than sixty years ago. 306 00:19:08,440 --> 00:19:11,040 Speaker 7: But it's an important principle that's worth reaffirming. 307 00:19:11,080 --> 00:19:15,080 Speaker 2: I think, so Eugene, was this case an easy one 308 00:19:15,119 --> 00:19:17,080 Speaker 2: for the justices to decide. 309 00:19:16,680 --> 00:19:20,240 Speaker 7: Then well, they were unanimous. There were concurrences from Justice 310 00:19:20,280 --> 00:19:23,800 Speaker 7: Gorsic and from Justice Jackson, but both of them joined 311 00:19:23,920 --> 00:19:26,240 Speaker 7: all the other justices, So I think at that level 312 00:19:26,240 --> 00:19:29,879 Speaker 7: it probably seemed pretty straightforward for the court. This having 313 00:19:29,880 --> 00:19:33,040 Speaker 7: been said, you know, the Second Circuit ruled the other way, 314 00:19:33,480 --> 00:19:35,760 Speaker 7: ruled against the NRA in this case and said, on 315 00:19:35,800 --> 00:19:40,159 Speaker 7: these facts, there's not enough allegation of coercion. So you know, 316 00:19:40,800 --> 00:19:43,680 Speaker 7: I like to think, I mean, I'm representing the NRA here, 317 00:19:44,560 --> 00:19:47,080 Speaker 7: I'm obviously not an impartial party here. I like to 318 00:19:47,080 --> 00:19:49,320 Speaker 7: think we have a very strong case, and the US 319 00:19:49,359 --> 00:19:51,560 Speaker 7: Supreme Court agreed with us. But at the same time, 320 00:19:51,680 --> 00:19:55,000 Speaker 7: this was something that lower courts, you know, had struggled 321 00:19:55,040 --> 00:19:57,520 Speaker 7: with in various kinds of cases, and I think this 322 00:19:57,680 --> 00:20:01,159 Speaker 7: is something that the Supreme Courts unanimous decision here is 323 00:20:01,240 --> 00:20:02,280 Speaker 7: going to provide more. 324 00:20:02,119 --> 00:20:05,800 Speaker 2: Guidance for lower What was the argument at the Supreme 325 00:20:05,880 --> 00:20:10,359 Speaker 2: Court of Maria Vulo, the New York state official who 326 00:20:10,520 --> 00:20:14,720 Speaker 2: was the former superintendent of the Department of Financial Services. 327 00:20:15,119 --> 00:20:17,320 Speaker 7: First of all, there were, as usual in these kinds 328 00:20:17,320 --> 00:20:21,440 Speaker 7: of cases, there is or usual various procedural arguments. The 329 00:20:21,560 --> 00:20:24,720 Speaker 7: lawyer's cruse superpower is that we can turn any question 330 00:20:24,800 --> 00:20:27,919 Speaker 7: into a question about procedures. The Supreme Court was not 331 00:20:28,000 --> 00:20:31,240 Speaker 7: impressed by their procedural arguments for various reasons. I won't 332 00:20:31,240 --> 00:20:33,720 Speaker 7: detain you further with them. I don't think your listeners 333 00:20:33,720 --> 00:20:36,199 Speaker 7: are going to be terribly interested. But a lot of 334 00:20:36,200 --> 00:20:39,639 Speaker 7: the argument was about this procedural bush substantively. One of 335 00:20:39,680 --> 00:20:42,480 Speaker 7: the things that New York said is, look, we're entitled 336 00:20:42,520 --> 00:20:45,560 Speaker 7: to speak out. We as the government, We're entitled to say, oh, 337 00:20:45,640 --> 00:20:49,040 Speaker 7: the NRA is bad, gun control is good. And the 338 00:20:49,080 --> 00:20:51,960 Speaker 7: Supreme Court agreed, and we agreed. Of course, the government 339 00:20:52,000 --> 00:20:54,880 Speaker 7: is entitled to express its views. But the Court said, 340 00:20:55,080 --> 00:20:58,240 Speaker 7: what was going on here, at least as alleged by 341 00:20:58,280 --> 00:21:03,120 Speaker 7: the NRA, was not just the government's self expression. It 342 00:21:03,200 --> 00:21:06,359 Speaker 7: was rather the government saying things in a way that 343 00:21:07,119 --> 00:21:11,480 Speaker 7: might be seen as coercive to a reasonable financial intermediate. 344 00:21:12,080 --> 00:21:14,879 Speaker 7: And once the government stops just trying to persuade and 345 00:21:14,960 --> 00:21:18,639 Speaker 7: begins kind of pressure that could be coercive, well that's 346 00:21:18,680 --> 00:21:22,480 Speaker 7: where the government's right to speak stops, and the NRAs 347 00:21:22,480 --> 00:21:25,080 Speaker 7: and other such groups for First Amendment right to start. 348 00:21:25,400 --> 00:21:27,359 Speaker 7: Another thing that the New York argued is that the 349 00:21:27,480 --> 00:21:31,720 Speaker 7: NRA had participated in various insurance transactions that were illegal 350 00:21:31,840 --> 00:21:35,760 Speaker 7: under New York insurance law, and for the purposes of 351 00:21:35,800 --> 00:21:38,439 Speaker 7: this case, the Supreme Courts was willing to assume that 352 00:21:38,520 --> 00:21:41,760 Speaker 7: this was so. But the Court said it doesn't matter. Obviously, 353 00:21:41,800 --> 00:21:45,320 Speaker 7: if the NRA had violated some rules, then those rules 354 00:21:45,359 --> 00:21:47,800 Speaker 7: could be enforced against the NRA and could be punished 355 00:21:47,840 --> 00:21:51,080 Speaker 7: in various ways, could find and such. But what the 356 00:21:51,400 --> 00:21:53,320 Speaker 7: New York government was trying to do is not just 357 00:21:53,359 --> 00:21:57,240 Speaker 7: imposifying on the NRA for past contact, but was trying 358 00:21:57,280 --> 00:22:02,280 Speaker 7: to pressure, at least as alleged to pressure financial intermediaries 359 00:22:02,800 --> 00:22:05,240 Speaker 7: to stop doing business with the enteray in the future 360 00:22:05,280 --> 00:22:10,320 Speaker 7: as well, including for perfectly legal transactions. So the Court acknowledged, 361 00:22:10,359 --> 00:22:13,680 Speaker 7: of course, the government has the power to speak. Of course, 362 00:22:13,720 --> 00:22:17,680 Speaker 7: the government has the power to enforce neutral conduct restrictions, 363 00:22:17,680 --> 00:22:21,640 Speaker 7: such as restrictions on certain kinds of insurance practices. What 364 00:22:21,680 --> 00:22:25,080 Speaker 7: the government can't do is try to use those powers 365 00:22:25,280 --> 00:22:28,280 Speaker 7: as a means of trying to punish or deter or 366 00:22:28,320 --> 00:22:30,960 Speaker 7: otherwise interfere with constitutionally protected speech. 367 00:22:32,000 --> 00:22:36,080 Speaker 2: Did you and the ACLU take this case in order 368 00:22:36,160 --> 00:22:42,639 Speaker 2: to support the broad principle of free speech for all organizations, 369 00:22:42,680 --> 00:22:46,639 Speaker 2: no matter what they represent this is going back to 370 00:22:46,680 --> 00:22:51,000 Speaker 2: the lower courts. But there's a qualified immunity argument that 371 00:22:51,040 --> 00:22:55,960 Speaker 2: the Supreme Court didn't discuss. Could that actually stop the 372 00:22:56,000 --> 00:22:57,160 Speaker 2: case from going forward? 373 00:22:57,800 --> 00:23:01,240 Speaker 7: Well, so there's a qualified immunity argument here which says 374 00:23:01,280 --> 00:23:03,560 Speaker 7: that in any case, Ania shouldn't be able to get 375 00:23:03,680 --> 00:23:06,880 Speaker 7: damages because the law wasn't clearly settled. The Supreme Court 376 00:23:06,880 --> 00:23:09,400 Speaker 7: didn't reach that. It said, look, we've resolved the substance 377 00:23:09,400 --> 00:23:11,600 Speaker 7: of First Amendment argument. We're going to leave it to 378 00:23:11,640 --> 00:23:15,640 Speaker 7: lower courts deal further with any qualified immunity claims. They're 379 00:23:15,640 --> 00:23:18,960 Speaker 7: also injunctive claims that in this case that wouldn't be 380 00:23:19,000 --> 00:23:21,040 Speaker 7: subject to qualified immunity in any event. 381 00:23:20,840 --> 00:23:25,120 Speaker 2: Of the like the Court is considering similar issues in 382 00:23:25,160 --> 00:23:30,320 Speaker 2: a fight over the Biden administration's communications with social media companies. 383 00:23:30,520 --> 00:23:34,360 Speaker 2: Does this decision at all indicate how that case might 384 00:23:34,400 --> 00:23:35,080 Speaker 2: be decided. 385 00:23:35,760 --> 00:23:37,879 Speaker 7: It does not speak to that case. This is the 386 00:23:37,960 --> 00:23:40,760 Speaker 7: mercy the Missouri case, and I think the Court bard 387 00:23:40,840 --> 00:23:45,120 Speaker 7: deliberately didn't dip its hand. It tries not to disclose 388 00:23:45,480 --> 00:23:47,520 Speaker 7: upfront what it's going to be deciding, even in a 389 00:23:47,560 --> 00:23:52,159 Speaker 7: couple of weeks. This case involved a pretty straightforward application. 390 00:23:52,320 --> 00:23:54,679 Speaker 7: This principle set forth over sixty years ago. In this 391 00:23:54,720 --> 00:23:57,480 Speaker 7: case called Bantam Books be solid. It involved a claim 392 00:23:57,680 --> 00:24:01,520 Speaker 7: that the government was coercing inter dearies to stop doing 393 00:24:01,560 --> 00:24:04,800 Speaker 7: business with speakers. And the real question was was there 394 00:24:04,920 --> 00:24:08,879 Speaker 7: enough alleged to find that kind of courson in mercy? 395 00:24:08,960 --> 00:24:12,240 Speaker 7: The facts are very different, So there's a separate question 396 00:24:12,320 --> 00:24:15,879 Speaker 7: there was enough alleged there to show that there was 397 00:24:16,040 --> 00:24:19,800 Speaker 7: coersion by the government of social media platforms, And the 398 00:24:19,880 --> 00:24:22,240 Speaker 7: court may very well say in that case, yes there 399 00:24:22,320 --> 00:24:25,760 Speaker 7: was or there wasn't. But the decision in this case 400 00:24:26,400 --> 00:24:29,680 Speaker 7: likely wouldn't affect much but what it decided there. Likewise, 401 00:24:29,720 --> 00:24:32,720 Speaker 7: in the Mirthy case, there's also a separate question, which is, 402 00:24:32,800 --> 00:24:36,720 Speaker 7: even if there's no coercion, was there enough entanglement between 403 00:24:37,400 --> 00:24:41,160 Speaker 7: the government and the social media platforms that even kind 404 00:24:41,160 --> 00:24:45,480 Speaker 7: of non coercive requests were on constitution non coursive request 405 00:24:45,520 --> 00:24:48,720 Speaker 7: that platforms removed certain material that was not an issue 406 00:24:48,720 --> 00:24:49,240 Speaker 7: that was pressing. 407 00:24:49,800 --> 00:24:52,800 Speaker 2: I mean, the Roberts Court has been, would you say, 408 00:24:52,920 --> 00:24:56,200 Speaker 2: very receptive to First Amendment claims. 409 00:24:56,640 --> 00:25:00,560 Speaker 7: Well, so there are different kinds of First and claims, 410 00:25:00,560 --> 00:25:02,480 Speaker 7: and even if we focus just on free speech claims, 411 00:25:02,480 --> 00:25:05,040 Speaker 7: there different kinds of free speech claims. There are different 412 00:25:05,160 --> 00:25:08,480 Speaker 7: legal theories involved in them, some of them involved, for example, 413 00:25:08,600 --> 00:25:10,639 Speaker 7: claims there was a case last year having to do 414 00:25:10,720 --> 00:25:15,920 Speaker 7: with alleged solicitation of criminal conduct. Well, no, Robert score 415 00:25:16,000 --> 00:25:18,880 Speaker 7: isn't very friendly to claims that someone has a First 416 00:25:18,920 --> 00:25:22,040 Speaker 7: Amendment right to urge people to commit certain kinds of 417 00:25:22,119 --> 00:25:25,640 Speaker 7: very specific crime, whereas here it's a very different kind 418 00:25:25,680 --> 00:25:28,879 Speaker 7: of first amenation. Likewise, a lot turns on the facts. 419 00:25:29,040 --> 00:25:31,200 Speaker 7: I think that the facts in this case, again as 420 00:25:31,240 --> 00:25:35,320 Speaker 7: alleged by the plaintiffs, were really quite strong under existing 421 00:25:35,359 --> 00:25:38,040 Speaker 7: well settled precedent president going back of course to the 422 00:25:38,040 --> 00:25:42,360 Speaker 7: Warren Court right nineteen sixty three. So I don't think 423 00:25:42,400 --> 00:25:44,960 Speaker 7: this has to do much with whether the Robert scord 424 00:25:45,040 --> 00:25:47,960 Speaker 7: is particularly free speech friendly or not. And again you 425 00:25:48,040 --> 00:25:50,399 Speaker 7: see here both the liberals on the Court and the 426 00:25:50,400 --> 00:25:53,320 Speaker 7: conservatives of the Court reaching the same view. I think, 427 00:25:53,480 --> 00:25:57,600 Speaker 7: just on the well settled legal doctrine in this case, 428 00:25:58,040 --> 00:26:02,520 Speaker 7: without any real need to dive further elaborated further, I 429 00:26:02,560 --> 00:26:05,240 Speaker 7: think the NA has a very strong claim and that's 430 00:26:05,240 --> 00:26:06,480 Speaker 7: what Supreme Court concludes. 431 00:26:07,080 --> 00:26:08,760 Speaker 2: So he's a pleasure to have you on Eugene and 432 00:26:08,800 --> 00:26:13,760 Speaker 2: congratulations on the Supreme Court win. That's Professor Eugene Vollik 433 00:26:13,880 --> 00:26:17,200 Speaker 2: of UCLA Law School coming up next on the Bloomberg 434 00:26:17,280 --> 00:26:21,400 Speaker 2: Lawn Show. In another unanimous decision, the Court gave homeowners 435 00:26:21,480 --> 00:26:25,280 Speaker 2: another chance in an ESCRO dispute with the Bank of America. 436 00:26:25,760 --> 00:26:29,960 Speaker 2: I'm June Grosso and you're listening to Bloomberg. In a 437 00:26:30,080 --> 00:26:34,800 Speaker 2: unanimous decision on Thursday, the Supreme Court basically punted on 438 00:26:34,880 --> 00:26:38,480 Speaker 2: the question of whether the Bank of America must pay 439 00:26:38,640 --> 00:26:42,960 Speaker 2: interest on New York mortgage borrowers' ESCRO accounts, which state 440 00:26:43,040 --> 00:26:47,200 Speaker 2: law requires, but the Court did give homeowners another chance 441 00:26:47,280 --> 00:26:50,320 Speaker 2: to force that bank and other large banks to pay 442 00:26:50,359 --> 00:26:54,080 Speaker 2: that interest. The Court threw out the Second Circuits ruling 443 00:26:54,160 --> 00:26:56,760 Speaker 2: in favor of the bank, which has refused to pay 444 00:26:56,880 --> 00:27:00,280 Speaker 2: interest on the money it collects to pay borrowers, insuranceants, 445 00:27:00,280 --> 00:27:03,920 Speaker 2: and property tax bills. Bank of America and the Office 446 00:27:03,920 --> 00:27:07,680 Speaker 2: of the Controller of the Currency, the federal regulator overseeing 447 00:27:07,760 --> 00:27:11,680 Speaker 2: national banks, had argued that national banks are exempt from 448 00:27:11,760 --> 00:27:15,639 Speaker 2: state consumer protection laws under the National Bank Act, but 449 00:27:15,720 --> 00:27:19,480 Speaker 2: the Justice Department was on the opposite side of the argument, 450 00:27:20,000 --> 00:27:24,359 Speaker 2: supporting the homeowner's position. Something Justice is Neil Gorsich and 451 00:27:24,400 --> 00:27:30,440 Speaker 2: Brett Kavanaugh pointed to when questioning Deputy Solicitor General Malcolm Stewart. 452 00:27:30,440 --> 00:27:33,480 Speaker 5: In fact, we have exactly the regulation you say, if 453 00:27:33,520 --> 00:27:35,040 Speaker 5: they did this, they did it. 454 00:27:35,480 --> 00:27:36,199 Speaker 6: They said there are no. 455 00:27:36,359 --> 00:27:40,240 Speaker 3: ESCRO regulations, they're permissible, understated, they're all preempted. 456 00:27:40,760 --> 00:27:42,639 Speaker 7: But you're not defending that regulation. 457 00:27:42,760 --> 00:27:43,760 Speaker 6: You're disavowing it. 458 00:27:43,840 --> 00:27:45,679 Speaker 7: You flipped flopped positions on it. 459 00:27:45,720 --> 00:27:48,200 Speaker 5: And I'm asking, is the OCC ever going to get 460 00:27:48,200 --> 00:27:51,400 Speaker 5: around to doing that which God Frank directs it to do? Well, 461 00:27:51,960 --> 00:27:55,320 Speaker 5: I think I would say God Frank authorizes, but doesn't 462 00:27:55,320 --> 00:27:58,600 Speaker 5: direct it to do this. Now, if the petitioner's position 463 00:27:58,800 --> 00:28:02,760 Speaker 5: in this case veils, and if the court holds that 464 00:28:02,880 --> 00:28:07,320 Speaker 5: some inquiry into practical impacts is necessary with respect to 465 00:28:07,359 --> 00:28:10,480 Speaker 5: the individual state law, then it's very possible that the 466 00:28:10,560 --> 00:28:14,439 Speaker 5: OCC will start making these case by case determinations, because, 467 00:28:14,720 --> 00:28:18,720 Speaker 5: independent of legal expertise, the OCC has expertise in the 468 00:28:18,720 --> 00:28:22,199 Speaker 5: way that national banks operate and can bring that expertise 469 00:28:22,240 --> 00:28:25,800 Speaker 5: to bear in determining. If it has expertise, why are. 470 00:28:25,640 --> 00:28:28,120 Speaker 4: You disagreeing with its long standing position? 471 00:28:28,359 --> 00:28:31,600 Speaker 5: I think the two or three reasons. 472 00:28:31,640 --> 00:28:35,320 Speaker 2: In the majority opinion, Justice Kavanaugh wrote that the Appeals 473 00:28:35,359 --> 00:28:39,720 Speaker 2: Court did not perform the kind of nuanced analysis required 474 00:28:39,760 --> 00:28:43,600 Speaker 2: by federal law and prior Supreme Court decisions to determine 475 00:28:43,600 --> 00:28:46,960 Speaker 2: if a state law must give way to a federal statute, 476 00:28:47,200 --> 00:28:49,800 Speaker 2: and the court sent the case back to the Second 477 00:28:49,880 --> 00:28:54,400 Speaker 2: Circuit for that analysis. Joining me is Aaron Bryan. She's 478 00:28:54,440 --> 00:28:57,920 Speaker 2: co chair of the Consumer Financial Services Group at Dorsey 479 00:28:58,000 --> 00:29:01,320 Speaker 2: and Whitney. Tell us about the case, Karn, what. 480 00:29:01,200 --> 00:29:05,160 Speaker 6: This case was about at a factual level, with state 481 00:29:05,320 --> 00:29:09,520 Speaker 6: interest on escro laws. What those are are state laws 482 00:29:09,640 --> 00:29:13,720 Speaker 6: that require banks to pay a certain percentage of interest 483 00:29:14,040 --> 00:29:18,160 Speaker 6: on escro accounts that they're maintaining for mortgage borrowers. Those 484 00:29:18,240 --> 00:29:21,360 Speaker 6: vary by state. Not every state has those requirements. The 485 00:29:21,440 --> 00:29:24,920 Speaker 6: specific interest rates can vary, and so that becomes a 486 00:29:25,120 --> 00:29:29,160 Speaker 6: compliance burden for banks to manage the different requirements in 487 00:29:29,200 --> 00:29:32,840 Speaker 6: all of these different states. So, in this particular case, 488 00:29:33,320 --> 00:29:38,480 Speaker 6: a borrower challenged Bank of America's practices on this instead, 489 00:29:38,560 --> 00:29:42,200 Speaker 6: Bank of America needed to follow the state law in 490 00:29:42,280 --> 00:29:45,360 Speaker 6: New York that required the payment of interest on escrow. 491 00:29:45,920 --> 00:29:49,400 Speaker 6: Bank of America's position was, we are a national bank. 492 00:29:49,520 --> 00:29:53,520 Speaker 6: This is preempted under the National Bank Act. We can't 493 00:29:53,560 --> 00:29:56,760 Speaker 6: be expected to comply with us in every state, and 494 00:29:57,320 --> 00:30:00,640 Speaker 6: so this ended up being litigated, went up to the 495 00:30:00,680 --> 00:30:03,800 Speaker 6: Second Circuit, and eventually it went up to the Supreme Court. 496 00:30:04,280 --> 00:30:08,840 Speaker 6: And the legal issue here was whether these state laws, 497 00:30:08,920 --> 00:30:13,239 Speaker 6: which can very considerably state to state, are pre empted 498 00:30:13,280 --> 00:30:16,360 Speaker 6: by Section ten forty four of the Dodd Frank Act, 499 00:30:16,520 --> 00:30:20,800 Speaker 6: which was enacted in twenty ten. This followed the financial crisis. 500 00:30:21,160 --> 00:30:25,320 Speaker 6: And what that section does is it codifies an earlier 501 00:30:25,360 --> 00:30:29,840 Speaker 6: Supreme Court case called Barnet Bank. And Barnet Bank was 502 00:30:30,000 --> 00:30:34,880 Speaker 6: a preemption case that basically required that courts look at 503 00:30:34,880 --> 00:30:38,440 Speaker 6: the specific facts to determine whether a state law is 504 00:30:38,520 --> 00:30:43,840 Speaker 6: interfering with a national banking power. So, in other words, 505 00:30:44,080 --> 00:30:47,320 Speaker 6: if the bank is permitted to do something under its 506 00:30:47,440 --> 00:30:51,200 Speaker 6: national bank charter, but maybe operating in different states, the 507 00:30:51,280 --> 00:30:55,440 Speaker 6: courts look at whether the particular state requirements that the 508 00:30:55,480 --> 00:30:58,600 Speaker 6: state is asking the national banks to comply with are 509 00:30:58,640 --> 00:31:01,400 Speaker 6: going to be preempted or not. And so that's what 510 00:31:01,520 --> 00:31:04,360 Speaker 6: that case was. It got codified as part of DoD Frank. 511 00:31:04,760 --> 00:31:09,200 Speaker 6: The OCC which is the primary prudential regulator for national banks, 512 00:31:09,240 --> 00:31:13,400 Speaker 6: also issued regulations under that but this was the first 513 00:31:13,400 --> 00:31:15,760 Speaker 6: time that the Supreme Court had a chance to take 514 00:31:15,760 --> 00:31:19,320 Speaker 6: a look at this. They've had other opportunities, they've declined sart. 515 00:31:19,800 --> 00:31:21,760 Speaker 6: This was the first time we got to hear what 516 00:31:21,800 --> 00:31:26,120 Speaker 6: the Court thinks about whether that standard articulated and DoD 517 00:31:26,160 --> 00:31:30,760 Speaker 6: Frank changed the previous standard, narrated, expanded it, or kept 518 00:31:30,760 --> 00:31:31,840 Speaker 6: things exactly the same. 519 00:31:32,200 --> 00:31:36,120 Speaker 2: So it was a unanimous decision written by Justice Brett Cavin. Also, 520 00:31:36,200 --> 00:31:38,240 Speaker 2: what did he say? What did the court actually find? 521 00:31:38,520 --> 00:31:42,320 Speaker 6: So the Court was resolving a circuit split with this case. 522 00:31:42,760 --> 00:31:47,240 Speaker 6: We had an older case Lousmac versus Bank of America 523 00:31:47,560 --> 00:31:51,000 Speaker 6: that dates back to twenty eighteen. In twenty nineteen, the 524 00:31:51,040 --> 00:31:54,480 Speaker 6: Supreme Court had denied start on that, and these two 525 00:31:54,480 --> 00:32:00,360 Speaker 6: cases basically articulated different preemption standards and so and in 526 00:32:00,400 --> 00:32:03,000 Speaker 6: this case is the Supreme Court gave us a little 527 00:32:03,000 --> 00:32:05,520 Speaker 6: bit of what the industry was looking for, but not 528 00:32:05,600 --> 00:32:08,040 Speaker 6: all of it. The Court came to this and said, 529 00:32:08,640 --> 00:32:12,440 Speaker 6: we're looking at the National Bank Act, which codified Barnet 530 00:32:12,440 --> 00:32:14,920 Speaker 6: Bank in order to apply that, We're going to actually 531 00:32:14,960 --> 00:32:17,160 Speaker 6: look at Barnet Bank and look at the reasoning that 532 00:32:17,200 --> 00:32:20,280 Speaker 6: the Court had reached in the Barnet Bank decision. And 533 00:32:20,360 --> 00:32:23,280 Speaker 6: what they said was there's no bright line test here. 534 00:32:23,720 --> 00:32:27,120 Speaker 6: This is always going to be a fact specific inquiry, 535 00:32:27,560 --> 00:32:29,560 Speaker 6: both for the banks and for the courts that are 536 00:32:29,560 --> 00:32:34,080 Speaker 6: applying this. They will have to actually look at whether 537 00:32:34,240 --> 00:32:39,880 Speaker 6: there is significant interference with the national banks banking powers 538 00:32:39,880 --> 00:32:43,760 Speaker 6: caused by the state law at issue. And so the 539 00:32:43,800 --> 00:32:46,320 Speaker 6: court is not going to say something like they've done 540 00:32:46,320 --> 00:32:49,920 Speaker 6: an immigration law where they say any state law, almost 541 00:32:49,960 --> 00:32:52,880 Speaker 6: any state law touching immigration is preempted by federal law. 542 00:32:53,200 --> 00:32:56,200 Speaker 6: They did not go that direction. They said, this is narrow, 543 00:32:56,320 --> 00:32:59,200 Speaker 6: this is fact specific. You were going to have to 544 00:32:59,240 --> 00:33:03,240 Speaker 6: look under our previous precedents, even before Barnett Bank and 545 00:33:03,360 --> 00:33:08,440 Speaker 6: analyze whether a state law significantly interferes with the bank's powers. 546 00:33:09,160 --> 00:33:12,520 Speaker 2: So basically they're sending it back to the Second Circuit 547 00:33:12,720 --> 00:33:16,480 Speaker 2: for redo and saying, redo this. We didn't like the 548 00:33:16,480 --> 00:33:19,280 Speaker 2: way you analyzed this, or you didn't analyze this well enough. 549 00:33:19,800 --> 00:33:23,000 Speaker 6: Yes, that's exactly what they did. They said, you applied 550 00:33:23,000 --> 00:33:25,080 Speaker 6: the wrong standard, so we want you to go back 551 00:33:25,080 --> 00:33:27,880 Speaker 6: and apply the right standard. What the Second Circuit had 552 00:33:27,920 --> 00:33:31,440 Speaker 6: done was close to a field preemption standard, where they said, 553 00:33:31,480 --> 00:33:34,880 Speaker 6: if there's any interference with the national banks powers, we're 554 00:33:34,920 --> 00:33:38,760 Speaker 6: going to treat that as significant interference, and so essentially 555 00:33:38,800 --> 00:33:41,880 Speaker 6: the Supreme Court said that is taking things a little 556 00:33:41,880 --> 00:33:44,560 Speaker 6: bit too far. We need to return to this fact 557 00:33:44,680 --> 00:33:48,800 Speaker 6: specific inquiry. But they did not reach the ultimate issue 558 00:33:49,160 --> 00:33:54,000 Speaker 6: of whether the specific interest on escro law was preempted. Instead, 559 00:33:54,000 --> 00:33:58,320 Speaker 6: they said, okay, Second Circuit, here is the correct formulation 560 00:33:58,440 --> 00:34:01,080 Speaker 6: of this test. We want you to go back and 561 00:34:01,120 --> 00:34:03,520 Speaker 6: look at this again under that standard. 562 00:34:04,200 --> 00:34:08,400 Speaker 2: Did the Court give in Justice Kavanaugh's opinion, did they 563 00:34:08,440 --> 00:34:11,960 Speaker 2: give enough guidance to the Second Circuit? 564 00:34:12,600 --> 00:34:15,719 Speaker 6: I think so. You know, time will tell. It's hard 565 00:34:15,719 --> 00:34:17,920 Speaker 6: to say whether we're going to see more litigation on 566 00:34:17,960 --> 00:34:21,720 Speaker 6: these issues going forward. What the Court has done is said, 567 00:34:21,880 --> 00:34:24,839 Speaker 6: our prior precedents on this are still good law, and 568 00:34:24,920 --> 00:34:28,160 Speaker 6: so these are older cases. But there are cases that 569 00:34:28,160 --> 00:34:31,560 Speaker 6: are well known in the banking industry. And so I 570 00:34:31,600 --> 00:34:34,520 Speaker 6: do think that there's enough there, and there's enough specificity 571 00:34:34,520 --> 00:34:38,400 Speaker 6: in the opinion about what significant interference means that the 572 00:34:38,440 --> 00:34:42,960 Speaker 6: Second Circuit should be well positioned to do the analysis. Now, 573 00:34:43,680 --> 00:34:46,880 Speaker 6: it is probably likely that we're going to continue to 574 00:34:46,960 --> 00:34:50,840 Speaker 6: see disputes over the application of that test because it 575 00:34:50,880 --> 00:34:54,120 Speaker 6: is fact specific, and so you know, two people can 576 00:34:54,160 --> 00:34:57,080 Speaker 6: look at the same set of facts through a different 577 00:34:57,160 --> 00:35:01,400 Speaker 6: lens and sometimes reach different conclusions. But ultimately they have 578 00:35:01,560 --> 00:35:04,080 Speaker 6: told the Second Circuit exactly how they want them to 579 00:35:04,120 --> 00:35:08,040 Speaker 6: look at these issues, without directing what the outcome should 580 00:35:08,080 --> 00:35:09,680 Speaker 6: be on this particular law. 581 00:35:10,200 --> 00:35:13,000 Speaker 2: In this case, so Bank of America and the OCC 582 00:35:13,080 --> 00:35:16,160 Speaker 2: were on one side, and the Solicitor General and the 583 00:35:16,239 --> 00:35:20,520 Speaker 2: Justice Department were on the other, which is unusual. Why 584 00:35:20,560 --> 00:35:22,239 Speaker 2: were they not in tune. 585 00:35:23,200 --> 00:35:26,720 Speaker 6: It's a great question. They were not in tune because 586 00:35:27,480 --> 00:35:30,680 Speaker 6: the Solicitor General and the Justice Department were looking at 587 00:35:30,680 --> 00:35:35,600 Speaker 6: this lightly differently. So the OCC, as I had mentioned earlier, 588 00:35:36,160 --> 00:35:41,480 Speaker 6: they are the primary prudential regulator for national banks, and 589 00:35:42,200 --> 00:35:45,560 Speaker 6: the OCC has its own regulations. They have their own 590 00:35:45,560 --> 00:35:49,239 Speaker 6: position on these things. Their position is a little bit 591 00:35:49,280 --> 00:35:53,200 Speaker 6: more to the middle of both what the Court and 592 00:35:53,280 --> 00:35:55,640 Speaker 6: the Second Circuit in Canta did and what the Court 593 00:35:55,719 --> 00:35:58,680 Speaker 6: and LUSNAC did. I think they felt that this was 594 00:35:58,880 --> 00:36:02,080 Speaker 6: just not the right case for this to come up, 595 00:36:02,200 --> 00:36:04,040 Speaker 6: that there wasn't a need to revisit this. 596 00:36:04,640 --> 00:36:07,759 Speaker 2: Consumer advocates were they hoping that the Supreme Court would 597 00:36:07,800 --> 00:36:11,840 Speaker 2: set some kind of a bright line rule that state 598 00:36:11,960 --> 00:36:15,320 Speaker 2: consumer protection laws can apply to national banks. 599 00:36:16,400 --> 00:36:19,279 Speaker 6: Yes, let me say no, one was completely happy with 600 00:36:19,280 --> 00:36:20,040 Speaker 6: this decision. 601 00:36:20,719 --> 00:36:22,200 Speaker 2: Maybe that means it's a good decision. 602 00:36:22,200 --> 00:36:25,719 Speaker 6: I don't know, it might yeah, So a lot of 603 00:36:25,760 --> 00:36:30,680 Speaker 6: consumer advocates were really hoping that the Supreme Court would 604 00:36:31,160 --> 00:36:35,399 Speaker 6: would come out and really narrow preemption. If the Court 605 00:36:35,440 --> 00:36:38,480 Speaker 6: had taken a position that says, there are very narrow 606 00:36:38,520 --> 00:36:42,440 Speaker 6: circumstances where we're going to find a federal preemption of 607 00:36:42,520 --> 00:36:46,920 Speaker 6: state consumer laws. That would be good for consumer advocates 608 00:36:46,960 --> 00:36:50,400 Speaker 6: because it gives them more of an ability to challenge 609 00:36:50,640 --> 00:36:54,520 Speaker 6: bank's abilities to shield themselves from some of these state laws. 610 00:36:55,000 --> 00:37:00,000 Speaker 6: So some consumer advocates were certainly hoping for that outcome. 611 00:37:00,000 --> 00:37:03,879 Speaker 6: Consumer advocates have been happy with this decision because, at 612 00:37:03,880 --> 00:37:08,400 Speaker 6: the very least, it didn't expand preemption, which would have 613 00:37:08,440 --> 00:37:12,040 Speaker 6: made it more difficult for them to force banks to 614 00:37:12,040 --> 00:37:15,839 Speaker 6: comply with state laws. But it also didn't give them 615 00:37:15,880 --> 00:37:18,400 Speaker 6: everything they wanted because the Court did not reach the 616 00:37:18,520 --> 00:37:22,279 Speaker 6: ultimate issue on this particular case. It didn't expand the 617 00:37:22,320 --> 00:37:26,120 Speaker 6: doctrine at all. So while there's some celebration, I don't 618 00:37:26,120 --> 00:37:29,319 Speaker 6: think that consumer advocates are one hundred percent thrilled with 619 00:37:29,400 --> 00:37:29,840 Speaker 6: us either. 620 00:37:30,640 --> 00:37:33,440 Speaker 2: So, I mean, does this mean more litigation in the 621 00:37:33,480 --> 00:37:35,040 Speaker 2: future for national banks. 622 00:37:35,600 --> 00:37:38,920 Speaker 6: I expect this to be about the same amount of litigation, 623 00:37:39,520 --> 00:37:43,040 Speaker 6: because what this is doing is really saying the law 624 00:37:43,080 --> 00:37:47,640 Speaker 6: that you all thought applied does apply. Luznak and Cantaro 625 00:37:47,920 --> 00:37:50,680 Speaker 6: confused things a little bit, so there had been an 626 00:37:50,800 --> 00:37:55,439 Speaker 6: understanding that the Barnet Bank standard would apply, and what 627 00:37:55,480 --> 00:37:59,480 Speaker 6: that meant. With the circuit split, that became more complicated. 628 00:38:01,040 --> 00:38:05,160 Speaker 6: For the most part, national banks have continued to analyze 629 00:38:05,160 --> 00:38:08,360 Speaker 6: these issues under the Barnett Bank standard, and so I 630 00:38:08,360 --> 00:38:10,560 Speaker 6: don't think this is going to change much in terms 631 00:38:10,600 --> 00:38:15,319 Speaker 6: of day to day practices, but you know, time will 632 00:38:15,360 --> 00:38:19,680 Speaker 6: tell anytime you have a change to how consumer laws 633 00:38:19,719 --> 00:38:25,400 Speaker 6: are interpreted. There's certainly interest in bringing new challenges, bringing 634 00:38:25,719 --> 00:38:29,000 Speaker 6: creative arguments that might cause the court to look at 635 00:38:29,000 --> 00:38:32,920 Speaker 6: it from a slightly different perspective, But I personally am 636 00:38:32,960 --> 00:38:34,879 Speaker 6: not thinking that this is going to have a huge 637 00:38:34,880 --> 00:38:35,600 Speaker 6: effect on that. 638 00:38:36,480 --> 00:38:38,880 Speaker 2: Coming up next on the Bloomberg Law Show, I'll continue 639 00:38:38,920 --> 00:38:44,000 Speaker 2: this conversation with Aaron Bryan of Dorsey and Whitney and 640 00:38:44,080 --> 00:38:48,080 Speaker 2: we'll discuss the implications of this decision for the occ 641 00:38:49,600 --> 00:38:53,359 Speaker 2: Also an update on the Hunter Biden criminal case, which 642 00:38:53,400 --> 00:38:57,040 Speaker 2: began today. Remember you can always get the latest legal 643 00:38:57,040 --> 00:39:00,239 Speaker 2: news by listening to our Bloomberg Lawn podcast. You can 644 00:39:00,239 --> 00:39:04,479 Speaker 2: find them on Apple Podcasts, Spotify, and it www dot 645 00:39:04,480 --> 00:39:09,480 Speaker 2: Bloomberg dot com, slash podcast, Slash Law. I'm June Grosso, 646 00:39:09,640 --> 00:39:13,560 Speaker 2: and you're listening to Bloomberg. I've been talking to Aaron Bryan, 647 00:39:13,840 --> 00:39:17,040 Speaker 2: co chair of the Consumer Financial Services Group at Dorsey 648 00:39:17,080 --> 00:39:20,680 Speaker 2: and Whitney. Erin Justice Gorsach had a lot of questions 649 00:39:20,719 --> 00:39:24,880 Speaker 2: about the OCC. Will this decision have any implications for 650 00:39:24,960 --> 00:39:25,680 Speaker 2: the OCC? 651 00:39:26,520 --> 00:39:29,120 Speaker 6: At this point, I don't see any major implications for 652 00:39:29,200 --> 00:39:33,040 Speaker 6: the OCC. The message to them appears to be business 653 00:39:33,040 --> 00:39:37,880 Speaker 6: as usual, although obviously they will be monitoring developments on 654 00:39:38,000 --> 00:39:41,160 Speaker 6: this as it goes back to the Second Circuit, potentially 655 00:39:41,200 --> 00:39:43,759 Speaker 6: if it comes back to the Supreme Court for a 656 00:39:43,800 --> 00:39:46,480 Speaker 6: second time, or if other challenges work their way up 657 00:39:46,520 --> 00:39:50,200 Speaker 6: in different cases, they will be monitoring it. But I 658 00:39:50,239 --> 00:39:54,120 Speaker 6: would not expect any major changes to the way that 659 00:39:54,200 --> 00:39:57,040 Speaker 6: they regulate banks based on this decision because it is 660 00:39:57,080 --> 00:40:00,440 Speaker 6: fairly consistent with their prior view and. 661 00:40:00,960 --> 00:40:03,759 Speaker 2: There was a circuit split between the Ninth Circuit and 662 00:40:03,800 --> 00:40:06,440 Speaker 2: the Second Circuit. So is the Court saying that what 663 00:40:06,480 --> 00:40:10,800 Speaker 2: the Ninth Circuit did was correct and the Second Circuit 664 00:40:10,840 --> 00:40:11,240 Speaker 2: was wrong. 665 00:40:12,080 --> 00:40:14,520 Speaker 6: The court is saying that they both got it a 666 00:40:14,520 --> 00:40:17,840 Speaker 6: little bit wrong. The Court is saying we have to 667 00:40:17,920 --> 00:40:21,799 Speaker 6: look for significant interference and that that's going to be 668 00:40:21,880 --> 00:40:25,520 Speaker 6: fact specific. So you can't just say if the law 669 00:40:25,719 --> 00:40:28,879 Speaker 6: can theoretically be complied with by a bank in all 670 00:40:28,920 --> 00:40:32,440 Speaker 6: fifty states, then it's not significant interference, which is more 671 00:40:32,520 --> 00:40:35,720 Speaker 6: like what Lusnak said. At the same time, you can't 672 00:40:35,760 --> 00:40:39,720 Speaker 6: say that if there's any interference, then it's significant, which 673 00:40:39,760 --> 00:40:43,520 Speaker 6: is more like what Cancerro said. They're really drawing a 674 00:40:43,560 --> 00:40:47,640 Speaker 6: line down the middle and saying significant interference is going 675 00:40:47,680 --> 00:40:49,799 Speaker 6: to depend on the facts. The court needs to look 676 00:40:49,840 --> 00:40:52,080 Speaker 6: at what is the bank saying about, how this is 677 00:40:52,160 --> 00:40:56,040 Speaker 6: significant interference? How does this fit with prior precedence? Is 678 00:40:56,080 --> 00:40:58,160 Speaker 6: just an issue that the courts have looked at before. 679 00:40:58,880 --> 00:41:02,040 Speaker 6: What is the law in all of those have to 680 00:41:02,080 --> 00:41:06,120 Speaker 6: be examined. So although in some ways they're using similar 681 00:41:06,200 --> 00:41:09,000 Speaker 6: words to both the Second Circuit and the Ninth Circuit, 682 00:41:09,520 --> 00:41:11,360 Speaker 6: they're telling both of them that they got it a 683 00:41:11,360 --> 00:41:13,560 Speaker 6: little bit wrong and that ultimately this has to be 684 00:41:13,640 --> 00:41:15,320 Speaker 6: a more effect specific inquiry. 685 00:41:15,840 --> 00:41:19,720 Speaker 2: And only about a dozen states have mortgagees grow account 686 00:41:19,840 --> 00:41:23,920 Speaker 2: interest rules similar to new York's. I'm surprised. I thought 687 00:41:23,920 --> 00:41:24,600 Speaker 2: it would be more. 688 00:41:25,080 --> 00:41:28,640 Speaker 6: Well, it may be more after this that's certainly getting 689 00:41:28,640 --> 00:41:32,000 Speaker 6: a lot of attention, so that could be one possible change. 690 00:41:32,400 --> 00:41:34,759 Speaker 6: You know, these are very small amounts though that we're 691 00:41:34,760 --> 00:41:37,640 Speaker 6: talking about. The kind of interest on these accounts and 692 00:41:37,719 --> 00:41:40,600 Speaker 6: the aggregate it can make a big difference. But you know, 693 00:41:40,719 --> 00:41:43,240 Speaker 6: for the average consumer it may be a few dollars 694 00:41:43,280 --> 00:41:46,280 Speaker 6: a year. It's not an incredibly large amount of money. 695 00:41:46,320 --> 00:41:49,480 Speaker 6: That can make a big difference for some people's budgets, 696 00:41:49,520 --> 00:41:52,480 Speaker 6: of course, but this isn't a way that the banks 697 00:41:52,480 --> 00:41:55,239 Speaker 6: tend to make a lot of money. I think from 698 00:41:55,280 --> 00:41:58,320 Speaker 6: the bank's perspective, this is really more of a compliance issue, 699 00:41:58,400 --> 00:42:01,719 Speaker 6: but it can be very challenge. Escrow honestly is one 700 00:42:01,719 --> 00:42:04,799 Speaker 6: of the most challenging parts of mortgage servicing to begin with, 701 00:42:05,360 --> 00:42:08,239 Speaker 6: and so the more variations you have on how you 702 00:42:08,320 --> 00:42:11,800 Speaker 6: need to handle escrow accounts, the more complicated it becomes 703 00:42:11,840 --> 00:42:15,320 Speaker 6: and the more likely errors are. So from the bank's perspective, 704 00:42:15,360 --> 00:42:18,400 Speaker 6: you know, this is really about the challenges of complying 705 00:42:18,640 --> 00:42:23,560 Speaker 6: with very different laws and different jurisdictions. The preference, obviously 706 00:42:23,600 --> 00:42:26,440 Speaker 6: would be to have one set of laws that applies everywhere. Now, 707 00:42:26,480 --> 00:42:29,200 Speaker 6: one thing that Congress could do is to say we 708 00:42:29,239 --> 00:42:31,480 Speaker 6: are going to specifically pass the law. You know that 709 00:42:31,560 --> 00:42:35,720 Speaker 6: overrides us, but basically could codifies preemption specifically for interest 710 00:42:35,800 --> 00:42:37,960 Speaker 6: on escrow. So it's probably not going to happen, but 711 00:42:38,000 --> 00:42:40,120 Speaker 6: that would be one other way that this could be resolved. 712 00:42:41,040 --> 00:42:44,080 Speaker 2: The attorney for the homeowners call this a big win 713 00:42:44,239 --> 00:42:47,680 Speaker 2: for American consumers. But is it a big win? 714 00:42:48,200 --> 00:42:51,319 Speaker 6: Well, it may be a win for a plaintiffs' attorneys. 715 00:42:51,440 --> 00:42:53,880 Speaker 6: I don't see this as a big win for either 716 00:42:54,239 --> 00:42:58,400 Speaker 6: consumers or banks. I think that from the bank's perspective, 717 00:42:58,560 --> 00:43:02,000 Speaker 6: in a perfect world, or might have decided to expand 718 00:43:02,120 --> 00:43:06,120 Speaker 6: preemption towards something more like field preemption, which we talked 719 00:43:06,120 --> 00:43:09,640 Speaker 6: about earlier, and some in the banking industry had pushed 720 00:43:09,680 --> 00:43:12,040 Speaker 6: for that. But I just don't think that was ever 721 00:43:12,120 --> 00:43:17,120 Speaker 6: going to happen. The outcome we got was right down 722 00:43:17,120 --> 00:43:19,480 Speaker 6: the middle. I don't think that it makes either side 723 00:43:19,480 --> 00:43:21,759 Speaker 6: really happy. I don't see this as a huge win 724 00:43:21,960 --> 00:43:24,200 Speaker 6: for consumers. I also don't see it as a huge 725 00:43:24,200 --> 00:43:28,040 Speaker 6: win for banks. I think ultimately this is a decision 726 00:43:28,160 --> 00:43:32,440 Speaker 6: that reaffirms the status quo consumers are not going to 727 00:43:32,440 --> 00:43:35,200 Speaker 6: get rich off of this. We're huge amounts of money 728 00:43:35,280 --> 00:43:37,680 Speaker 6: that they'll be getting an interest on their escor accounts, 729 00:43:37,719 --> 00:43:41,520 Speaker 6: even in those states. So I don't see this as 730 00:43:41,520 --> 00:43:44,799 Speaker 6: a huge win for consumers. It's not necessarily bad news 731 00:43:44,840 --> 00:43:47,880 Speaker 6: for them either, But this is really just down the middle. 732 00:43:49,120 --> 00:43:51,319 Speaker 2: Aaron, This may be a little in the weeds, but 733 00:43:51,480 --> 00:43:56,239 Speaker 2: tell us about what you've called this provocative footnote. 734 00:43:56,239 --> 00:43:59,319 Speaker 6: The Court did have a really interesting footnote. So the 735 00:43:59,360 --> 00:44:04,000 Speaker 6: Court common that on remand the Second Circuit could consider 736 00:44:04,080 --> 00:44:08,240 Speaker 6: the significance if there is any of the OCC's preemption rules. 737 00:44:08,719 --> 00:44:11,680 Speaker 6: So that's interesting because although it was discussed at one 738 00:44:11,719 --> 00:44:14,800 Speaker 6: point earlier in the case, that was not an issue 739 00:44:14,800 --> 00:44:17,359 Speaker 6: before the Supreme Court, So for them to specifically call 740 00:44:17,440 --> 00:44:20,239 Speaker 6: that out in a footnote, all that says, we want 741 00:44:20,280 --> 00:44:23,600 Speaker 6: you to consider this right. And then the other thing 742 00:44:23,640 --> 00:44:26,920 Speaker 6: that they noted was that the Second Circuit could also 743 00:44:27,000 --> 00:44:30,600 Speaker 6: consider the potential relevance of a Dodd Frank Act provision 744 00:44:31,200 --> 00:44:35,160 Speaker 6: that recognizes preemption of state consumer finance laws under other 745 00:44:35,200 --> 00:44:38,359 Speaker 6: federal statutes. So again, this was something that came up 746 00:44:39,280 --> 00:44:43,640 Speaker 6: earlier in the case was not litigated at this stage. 747 00:44:44,280 --> 00:44:47,960 Speaker 6: But it is curious that the Court specifically highlighted this. 748 00:44:48,440 --> 00:44:51,719 Speaker 6: It's almost teasing that they would like the court to 749 00:44:51,719 --> 00:44:54,200 Speaker 6: look at these issues, but they would like another chance 750 00:44:54,320 --> 00:44:56,920 Speaker 6: to consider it. So hard to say what that means 751 00:44:57,000 --> 00:44:59,239 Speaker 6: if the Court is leaning one direction or the other. 752 00:44:59,760 --> 00:45:03,640 Speaker 6: But also interesting that they that they flagged that for 753 00:45:03,760 --> 00:45:05,279 Speaker 6: the parties involved with us. 754 00:45:06,680 --> 00:45:08,920 Speaker 2: What's the big takeaway here for banks? 755 00:45:10,080 --> 00:45:12,319 Speaker 6: The takeaway here for banks they're going to have to 756 00:45:12,360 --> 00:45:15,239 Speaker 6: continue to monitor this. In the short terms, they're going 757 00:45:15,280 --> 00:45:18,480 Speaker 6: to have to continue to assume that there may not 758 00:45:18,560 --> 00:45:21,000 Speaker 6: be preemption for some of these state laws that are 759 00:45:21,040 --> 00:45:25,040 Speaker 6: not specifically called out in federal statutes. But we'll see 760 00:45:25,080 --> 00:45:27,320 Speaker 6: what the Second Circuit does with this. It may be 761 00:45:27,480 --> 00:45:30,160 Speaker 6: that this interest on ESCO issue goes away now that 762 00:45:30,520 --> 00:45:33,480 Speaker 6: there's agreement about how the test should be applied, but 763 00:45:34,000 --> 00:45:36,880 Speaker 6: banks to continue to monitor this because we have not 764 00:45:36,960 --> 00:45:39,520 Speaker 6: reached the ultimate issue yet and there is still potential 765 00:45:39,640 --> 00:45:41,520 Speaker 6: for new direction on the topic. 766 00:45:42,080 --> 00:45:44,960 Speaker 2: Thursday was not a good day for the Second Circuit. 767 00:45:45,000 --> 00:45:48,520 Speaker 2: It was reversed in two cases. Thanks so much, Aaron. 768 00:45:48,800 --> 00:45:52,080 Speaker 2: That's Aaron Bryan, co chair of the Consumer Financial Services 769 00:45:52,120 --> 00:45:55,280 Speaker 2: Group at Dorsey and Whitney. In other legal news today, 770 00:45:55,880 --> 00:45:58,680 Speaker 2: a jury has been seated in the federal gun case 771 00:45:59,000 --> 00:46:03,480 Speaker 2: against Hunter Biden, President Biden's son. The jury of six 772 00:46:03,600 --> 00:46:07,840 Speaker 2: men and six women will hear opening statements tomorrow. Hunter 773 00:46:07,920 --> 00:46:11,520 Speaker 2: Biden has been charged in Delaware with three felonies stemming 774 00:46:11,520 --> 00:46:15,320 Speaker 2: from a twenty eighteen firearms purchase when he was, according 775 00:46:15,360 --> 00:46:19,120 Speaker 2: to his memoir, in the throes of crack addiction. He's 776 00:46:19,160 --> 00:46:22,560 Speaker 2: been accused of lying to a federally licensed gun dealer, 777 00:46:22,920 --> 00:46:26,359 Speaker 2: making a false claim on the application by saying he 778 00:46:26,480 --> 00:46:29,640 Speaker 2: was not a drug user, and illegally having the gun 779 00:46:29,719 --> 00:46:33,800 Speaker 2: for eleven days. The case has had a tortured history. 780 00:46:34,160 --> 00:46:37,000 Speaker 2: It's going to trial following the collapse of a plea 781 00:46:37,080 --> 00:46:40,160 Speaker 2: deal that would have avoided the spectacle of a trial 782 00:46:40,239 --> 00:46:43,600 Speaker 2: so close to the twenty twenty four election. Hunter Biden 783 00:46:43,640 --> 00:46:46,880 Speaker 2: has pleaded not guilty and has argued he's being unfairly 784 00:46:47,000 --> 00:46:50,960 Speaker 2: targeted by the Justice Department. The questions to the potential 785 00:46:51,080 --> 00:46:54,839 Speaker 2: jurors tested their knowledge of the case, their thoughts about 786 00:46:54,920 --> 00:46:58,480 Speaker 2: gun ownership, and whether they or anyone close to them 787 00:46:58,560 --> 00:47:03,320 Speaker 2: have struggled with substance abuse or addiction. Other questions focused 788 00:47:03,320 --> 00:47:06,000 Speaker 2: on the role politics may have played in the charges. 789 00:47:06,680 --> 00:47:09,640 Speaker 2: One potential durer who was sent home, said she didn't 790 00:47:09,640 --> 00:47:12,840 Speaker 2: know whether she could be impartial because of the opinion 791 00:47:12,920 --> 00:47:16,880 Speaker 2: she'd formed about Hunter Biden based on media reports quote 792 00:47:17,000 --> 00:47:19,920 Speaker 2: It's not a good one. In a statement today, the 793 00:47:20,000 --> 00:47:23,880 Speaker 2: President said he has boundless love for his son, confidence 794 00:47:23,920 --> 00:47:27,040 Speaker 2: in him, and respect for his strength. And that's it 795 00:47:27,120 --> 00:47:30,080 Speaker 2: for this edition of the Bloomberg Law Podcast. Remember you 796 00:47:30,080 --> 00:47:32,799 Speaker 2: can always get the latest legal news by subscribing and 797 00:47:32,880 --> 00:47:36,440 Speaker 2: listening to the show on Apple Podcasts, Spotify, and at 798 00:47:36,440 --> 00:47:40,760 Speaker 2: Bloomberg dot com, Slash podcast, Slash Law. I'm June Grosso 799 00:47:40,960 --> 00:47:42,440 Speaker 2: and this is Bloomberg