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Speaker 1: This is Bloomberg Law with June Grossel from Bloomberg Radio.

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Speaker 2: Nearly two thousand National Guard troops are now in d

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Speaker 2: C as federal authorities deployed checkpoints around the city and

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Speaker 2: sometimes ask people for their immigration status after stopping them.

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Speaker 2: And tonight, President Trump visited with police and National Guard

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Speaker 2: units that are patrolling d C. Hey guys, how you

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Speaker 2: doing yesterday? Chance of free DC could be heard as

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Speaker 2: Vice President jd Vance delivered Hamburgers to National Guard troops

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Speaker 2: at Amtrak's Union station.

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Speaker 3: I think you hear these guys out outside your screening

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Speaker 3: at US.

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Speaker 1: Of course, these are a bunch of crazy protesters.

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Speaker 2: Top Trump aid Stephen Miller had some harsher words.

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Speaker 3: Any stupid white hippies that all need to go home

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Speaker 3: and take a nap because they're all over ninety years old.

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Speaker 2: Immigration enforcement has been a core part of the crackdown

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Speaker 2: in DC, rattling people in some of the city's neighborhoods.

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Speaker 2: My guest is immigration law expert Leon Fresco, a partner

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Speaker 2: at Hollanden Knight. Leon. DC is a sanctuary city, but

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Speaker 2: the Metropolitan Police Departments is now required to share information

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Speaker 2: with immigration officials and even assistant transporting detainees, according to

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Speaker 2: a director from the police chief. So does that sort

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Speaker 2: of destroy the sanctuary city status.

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Speaker 1: There's the law, and there's the policy, and there's what's

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Speaker 1: actually happening. And so, yes, the DC City Council had

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Speaker 1: this order, entered this provision that said that they would

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Speaker 1: not report during arrest information to ICE. But now if

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Speaker 1: the police chief is saying they are going to do this,

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Speaker 1: then the question is going to be, fine, will there

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Speaker 1: be an organization within DC that sues about this? And

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Speaker 1: this has also a bit complicated because if it's the

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Speaker 1: DC police chief that's doing it, then does the DC

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Speaker 1: Attorney General sue or an individual immigrants rights group sou

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Speaker 1: But the point is for now, if you are stopped

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Speaker 1: in a traffic stop in DC and the DC police

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Speaker 1: believe there's some reasonable suspicion that you are not here

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Speaker 1: in the United States lawfully, they can extend the time

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Speaker 1: of your stop and call ICE to determine if you

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Speaker 1: are here lawfully or not. And so that is happening

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Speaker 1: as we speak, and they are claiming on a daily

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Speaker 1: basis that they're arresting some number of people who are

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Speaker 1: here unlawfully and they're placing them into the removal process

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Speaker 1: or you know, in detention because they've already been ordered removed.

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Speaker 1: So that is something that is happening in DC, and

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Speaker 1: the only way that that would stop at this point

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Speaker 1: would be to get a judicial order in joining it.

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Speaker 2: So, despite this huge push, you know, crack down, arrest

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Speaker 2: by US immigration agents dropped by nearly twenty percent in July.

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Speaker 2: And by the way, the Trump administration disputes that data,

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Speaker 2: as they have been disputing a lot of data lately.

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Speaker 2: Why would it go down.

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Speaker 1: I think there's a couple of reasons, and I don't

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Speaker 1: think they're necessarily indicative of a reduction overall and immigration enforcement.

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Speaker 1: It's just what happens is a couple of things happen

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Speaker 1: at the same time. Number one, there was that moment

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Speaker 1: where there was this sort of ramp up in arrest

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Speaker 1: and then the money sort of dried out until the

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Speaker 1: quote unquote big Beautiful Bill was passed and now the

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Speaker 1: money is starting to ramp back up so they can

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Speaker 1: actually start making more arrest. That's number one. But number two,

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Speaker 1: they were able to put more people into the removal

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Speaker 1: process without meaning to actually make an arrest, so to speak.

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Speaker 1: So if they were giving people papers at USCIS, or

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Speaker 1: they were getting people papers in court or whatever, the

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Speaker 1: arrests are tied into whether you have detention capacity or not.

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Speaker 1: And because all of the detention facilities were full, they

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Speaker 1: weren't really able to make more arrests in the sense

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Speaker 1: of actually arresting someone, putting them in a detention facility

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Speaker 1: and holding them. But they are putting many, many more

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Speaker 1: people into the removal process, even if they aren't effectuating

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Speaker 1: an arrest and a detention. And so from that standpoint,

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Speaker 1: I think these numbers, it's such as they're right or

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Speaker 1: they're wrong, it's that they're all representing different snapshots in

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Speaker 1: the process. But what I can tell you, and I

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Speaker 1: think no one really would dispute this, is that the

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Speaker 1: panoply of enforcement is much greater today than it's been

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Speaker 1: in the last decade. And so even if that doesn't

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Speaker 1: mean that in July particularly, there were more arrests that

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Speaker 1: led to detention because again there was not space that

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Speaker 1: would have been available at that moment to put people in,

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Speaker 1: that space is starting to ramp up. Those detention bed

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Speaker 1: will be available, which means more arrest can be done

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Speaker 1: to put people in those detention beds and then written

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Speaker 1: large more people are being placed into the removal process

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Speaker 1: than before.

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Speaker 2: On the topic of sanctuary cities, last week, Attorney General

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Speaker 2: Pam Bondi sent a letter to officials in nineteen cities,

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Speaker 2: four counties, and twelve states that Justice Department accuses of

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Speaker 2: engaging in sanctuary policies and practices, threatening to revoke federal

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Speaker 2: funding and press criminal charges if they don't identify immediate

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Speaker 2: initiatives they're taking to eliminate laws, policies, and practices that

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Speaker 2: impede federal immigration enforcement. She set Tuesday as the deadline

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Speaker 2: for their response. So far, there appeared to be no cities, counties,

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Speaker 2: or states that complied with that deadline, and in fact,

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Speaker 2: some cities like Boston, have been defiant. What do you

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Speaker 2: think will happen in this standoff between the Trump administration

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Speaker 2: and sanctuary cities.

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Speaker 1: The issue with sanctuary cities and the Trump administration is

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Speaker 1: going to depend on what specific method and what specific

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Speaker 1: type of enforcement we're talking about here. If the only

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Speaker 1: thing that the cities are being penalized for is for

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Speaker 1: refusing to affirmatively cooperate with eyes, then those cities are

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Speaker 1: at least currently under the current existing precedent in the

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Speaker 1: courts of appeals knows that they aren't going to lose

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Speaker 1: their federal funding just for that, because they're Supreme Court

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Speaker 1: law that talks about anti commandeering, that says you can't

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Speaker 1: force states and localities to enforce federal law. And that

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Speaker 1: was within the context of criminal background checks back in

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Speaker 1: the day, where they wanted cities and states to actually

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Speaker 1: conduct background checks before people could sell guns, and there

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Speaker 1: were local officials that said, we don't believe in that,

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Speaker 1: we don't want to make those background checks, and the

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Speaker 1: Supreme Court agreed in the Prince case, and so this

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Speaker 1: has been held in the same concept of sanctuary cities,

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Speaker 1: that the states and the localities don't have the duty

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Speaker 1: to actually affirmatively cooperate with ice. Now, there is a

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Speaker 1: issue that is still pending in the Supreme Court that

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Speaker 1: they haven't fully decided yet, which is, even if that's

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Speaker 1: not affirmative cooperation, is it information sharing? Meaning if the

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Speaker 1: federal government says to a state, do you know when

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Speaker 1: Joe Smith is going to be released from the tension?

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Speaker 1: That if they don't give that information, perhaps they can

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Speaker 1: be penalized for that, because that's just information sharing as

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Speaker 1: opposed to affirmative cooperation. So that issue yet to be decided,

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Speaker 1: and I think that issue will go to the Supreme

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Speaker 1: Court and working to see what happens. Now. There are

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Speaker 1: other issues, which is, are there states and localities that

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Speaker 1: are actually assisting and quote unquote harboring or impeding the

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Speaker 1: enforcement of immigration laws and in those areas, then that's

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Speaker 1: where the Department of Justice is going to try to

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Speaker 1: either get injunctive or elief to prevent them from doing that,

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Speaker 1: or perhaps other sanctions with respect to doing that. And

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Speaker 1: they're going to be working with the Congress to try

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Speaker 1: to see if the Congress will pass laws that actually

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Speaker 1: place congressional restrictions on some of this grant money for

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Speaker 1: some of that type of behavior. But again, that's what's

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Speaker 1: going to be needed in order for the states and

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Speaker 1: localities to lose their funding, is there's going to need

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Speaker 1: to be specific congressional provisions that say they will lose

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Speaker 1: their funding. Those have to be tied because there's also

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Speaker 1: the Obamacare Sabilious decision that says that these kinds of

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Speaker 1: funding restricts have to be very very narrowly tied to

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Speaker 1: what the provision is. Otherwise they're considered like extorting the states. Essentially,

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Speaker 1: I think you're not allowed to do that, and so

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Speaker 1: it has to be very very closely tied together. So

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Speaker 1: things like transportation grants aren't going to work or housing

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Speaker 1: grants or these other type of things. They have to

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Speaker 1: be grants related to in some way immigration and immigration enforcement.

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Speaker 1: But then the issue will be is it just the

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Speaker 1: impeding that can be penalized or is it the lack

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Speaker 1: of sharing of information? But there will not be unless

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Speaker 1: the Supreme Court overturns its decision in prints an ability

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Speaker 1: to sanction these states for just not affirmatively helping ICE

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Speaker 1: or the Department of Homeland Security.

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Speaker 2: So this week also twenty states and DC sued the

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Speaker 2: Trump administration saying they're unlawfully requiring states to assist with

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Speaker 2: federal immigration enforcement efforts in order to receive grants that

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Speaker 2: fund resources for crime victims.

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Speaker 1: Correct, this is all in the same mode in that

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Speaker 1: those cases were very successful in the first Trump administration

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Speaker 1: to say that those grants that were restricted on the

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Speaker 1: basis of their law enforcement grants, and they're being restricted

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Speaker 1: on the basis of unwillingness to cooperate on immigration enforcement.

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Speaker 1: But that's not a basis to restrict the grant funding.

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Speaker 1: That there has to be something more than that. And

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Speaker 1: so number one, the states that to not qualify for

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Speaker 1: the grant in some way but just not cooperating with

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Speaker 1: ICE in terms of not affirmatively cooperating is not a

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Speaker 1: basis again under the anti commandeering laws to deny them

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Speaker 1: this money. But also again that these grants are not

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Speaker 1: narrowly tailored for that purpose. And so again, these same

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Speaker 1: lawsuits were filed at the first Trump administration. They were

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Speaker 1: successful on behalf of the states. In the cities, they

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Speaker 1: didn't get to the Supreme Court. We'll see what the

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Speaker 1: Supreme Court decides to change anything, either by overruling the

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Speaker 1: Prince case on anti commandeering or by saying, fine, the

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Speaker 1: states and the cities don't have to affirmatively cooperate with ICE,

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Speaker 1: but if I ask them for information that is readily

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Speaker 1: in their position, they have to at least do that

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Speaker 1: or they can lose their grand funding. So those are

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Speaker 1: the possibilities of where all these cases are going to end.

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Speaker 2: So on the ground, let's say the state isn't harboring

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Speaker 2: undocumented immigrants, but they're just refusing to cooperate with Ice.

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Speaker 2: How many more undocumented immigrants will ICE be able to

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Speaker 2: arrest if the state did cooperate.

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Speaker 1: I mean, it would be dramatic in terms of numbers,

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Speaker 1: because it's a lot less resource intensive to go into

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Speaker 1: a jail and take someone who's already handcuffed and place

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Speaker 1: them into ICE custody than it is as you see

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Speaker 1: on the street. Some of these operations, for whatever reason,

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Speaker 1: take ten twenty agents, and you know, one could say,

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Speaker 1: all it's for state, or I don't know what the

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Speaker 1: reasons are that some of these operations are so resource intensive.

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Speaker 1: But sometimes you see, like I said, ten to twenty

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Speaker 1: agents getting one person. So from that perspective, if you

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Speaker 1: had one or two agents that could take someone in

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Speaker 1: a jail, as opposed to having a situation where again

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Speaker 1: you need it to start grabbing people in either work

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Speaker 1: flights or where they live or somewhere else, that would

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Speaker 1: be freeing up of many more people to be arrested.

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Speaker 1: And then the issue would just be, well, okay, how

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Speaker 1: many spaces are there into detention facilities or how much

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Speaker 1: room is there in the court system to actually finish

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Speaker 1: these cases. But it actually would increase the number significantly,

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Speaker 1: because again you wouldn't need so many agents to achieve

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Speaker 1: a specific arrest or removal in a case where someone

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Speaker 1: had been arrested or was coming out of prison, who

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Speaker 1: was in the non citizen population?

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Speaker 2: Coming up next, why it might be harder to get

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Speaker 2: your citizen. This is bloomberg. In addition to cracking down

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Speaker 2: on immigration, the Trump administration also seems to be cracking

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Speaker 2: down on the pathways to citizenship. According to a recent

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Speaker 2: policy memo, US citizenship and Immigration services officers must consider

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Speaker 2: the positive attributes and contributions of immigrants seeking citizenship rather

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Speaker 2: than just the absence of misconduct. Those positive attributes can

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Speaker 2: include factors like community involvement, family caregiving, and educational attainment.

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Speaker 2: I've been talking to immigration attorney Leon Fresco of hollanden Knight. So, Leon,

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Speaker 2: what is this change about?

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Speaker 1: This is very interesting. So this is for citizenship applications,

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Speaker 1: and when someone applies for citizenship, that means they've basically

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Speaker 1: done everything correctly and now they're applying for citizenship and

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Speaker 1: there's a question in there, a consideration that is does

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Speaker 1: the person have good moral character? And the interesting thing

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Speaker 1: is that good moral character is actually defined in the

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Speaker 1: statute and it has a negative definition, meaning it says

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Speaker 1: that you have good moral character unless you have certain

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Speaker 1: negative things. So the negative things are what make you

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Speaker 1: not have good moral character, but absent those negative things,

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Speaker 1: you have good moral character. And so what uscis is

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Speaker 1: doing is it's going to actually test this definition a

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Speaker 1: little bit and try to see if it can get

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Speaker 1: it to a more extreme definition, which is to say,

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Speaker 1: good moral character is not going to be something that

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Speaker 1: is just an absence of negative factors, but it's going

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Speaker 1: to also include something positive about your characteristic. Now, what's

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Speaker 1: interesting is some of these things that they talk about,

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Speaker 1: you know, these are in the eye of the beholder.

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Speaker 1: If you have family, well, maybe if you have family,

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Speaker 1: that's taking more resources. So why is it better that

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Speaker 1: you have family. Maybe it's better that you don't have

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Speaker 1: family and you're taking less resources. Some of these things

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Speaker 1: are pretty subjective in terms of those things that they're

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Speaker 1: looking at, and so from that perspective, I think that

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Speaker 1: if that ends up getting challenged in the court of law,

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Speaker 1: they're going to have a pretty tough time trying to

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Speaker 1: say that these positive factors are necessary. Now, what may

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Speaker 1: happen is in a case where there are some negative

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Speaker 1: factors that don't actually lead to a denial, so to speak,

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Speaker 1: because they can't legally. So for instance, you were arrested

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Speaker 1: a bunch of times but never convicted. They may then

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Speaker 1: try to say, okay, well, you have all these negative factors,

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Speaker 1: so you need something positive to get you over the

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Speaker 1: limit here. But again, I just think that because of

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Speaker 1: the way the negative definition is written, I don't say

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Speaker 1: I think that it's going to end up being something

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Speaker 1: that they're going to be able to push too much

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Speaker 1: further there. With regard to needing it. Now, there are

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Speaker 1: some crimes where then it's in the discretion of USCIS

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Speaker 1: to decide whether to give you the citizenship or not,

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Speaker 1: and so there they may want the way if you

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Speaker 1: have more positive factors, such as community service or family

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Speaker 1: or other contributions that you've made in the United States.

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Speaker 1: But again, I just think someone who's never been a criminal,

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Speaker 1: who's never done anything wrong, who's done everything they're supposed

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Speaker 1: to do, they're not going to now suddenly need to

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Speaker 1: have thirty hours of community service in order to get

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Speaker 1: a naturalization. I think if that's at it, the courts

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Speaker 1: will overturn that.

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Speaker 2: I was just going to say, if you're planning to

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Speaker 2: apply for citizenship, start doing community service. The memo also

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Speaker 2: says that other disqualifying actions could include behavior that is

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Speaker 2: technically lawful but is inconsistent with civic responsibility within the community,

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Speaker 2: like habitual traffic infractions. Do people often appeal when they're

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Speaker 2: denied citizenship.

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Speaker 1: Well, yes, if you are denied citizenship, the way it

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Speaker 1: works is there's first an administrative appeal that you can take,

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Speaker 1: which is, you know, I've actually won those cases, even

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Speaker 1: though they're kind of tough because it's literally one person

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Speaker 1: in the office reviewing the decision of another person in

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Speaker 1: the office, and they're just these are colleagues that work together,

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Speaker 1: and you don't necessarily know how likely you are to

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Speaker 1: suddenly get somebody else to overturn what their colleague did.

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Speaker 1: But that doesn't exist. And then if that's denied, you

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Speaker 1: can go to a federal court where a district judge

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Speaker 1: actually has the novo review and they just start from scratch.

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Speaker 1: They don't look at anything that was done in the

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Speaker 1: administrative thing, and they decide the citizenship case. And so

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Speaker 1: it would be in that scenario where you would actually

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Speaker 1: then test the legal definitions here of good moral character

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Speaker 1: and depending those could work their way up to a

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Speaker 1: court of appeals or a Supreme Court if decides wanted

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Speaker 1: to keep fighting on the basis of that issue. But again,

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Speaker 1: for instance, to say that a bunch of traffic offenses

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Speaker 1: is going to lead to a sort of bad moral

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Speaker 1: character finding is again probably stretching the statue beyond what

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Speaker 1: it's able to accomplish. But will have to wait and see.

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Speaker 2: So I found this very interesting. The budget bill that

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Speaker 2: Congress approved set aside almost forty seven billion dollars for

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Speaker 2: continued border wall construction and maintenance, and Christome, Homeland Security Secretary,

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Speaker 2: said that President Trump has ordered that the border wall

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Speaker 2: be painted black to make the metal hotter and deter migrants.

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Speaker 2: This despite the fact that Trump this week's a congratulations

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Speaker 2: Texas that July border statistics were in and it's the

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Speaker 2: lowest number of border crossings in history. To paint the

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Speaker 2: wall black, well, I mean.

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Speaker 1: He gave the reason, which is that the third people

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Speaker 1: from coming in, if they try to touch the wall,

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Speaker 1: they'll be much otter, so they'll be more painful. But

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Speaker 1: the question is what will that accomplish, And so you

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Speaker 1: got to be very careful when you start actually saying

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Speaker 1: that that's your intent, because there is state created danger,

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Speaker 1: which says that if the government actually tries to lawfully

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Speaker 1: create that dangerous condition by which you can be injured,

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Speaker 1: you can sue the government for that. So, for instance,

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Speaker 1: you know, if a male delivery person suddenly starts taking

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Speaker 1: the mail and throwing it into your house with a

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Speaker 1: brick on it or something, you could sue the government

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Speaker 1: and say, hey, that's dangerous. This new practice of using

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Speaker 1: a brick to attach the mail to to throw it

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Speaker 1: is causing a lot of problems, and so you could

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Speaker 1: sue under that. And so somebody is saying that they

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Speaker 1: are trying to deliberately make something inflicting of harm. That

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Speaker 1: does create a potential issue that the government needs to

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Speaker 1: be sensitive to. Now, there are instances of people cutting

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Speaker 1: holes through the fencing that was done, or trying to

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Speaker 1: climb or trying to build tunnels under the defence, but

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Speaker 1: most people who cross the border tried to look for

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Speaker 1: some of the areas that didn't have fencing so they

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Speaker 1: could cross through and just ask for asylum seeming they

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Speaker 1: would see that someone was there. They would actually see

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Speaker 1: a border patrol person that was there, and they would

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Speaker 1: just walk to the border patrol agent and ask for asylum.

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Speaker 1: At the moment, the Trump administration has said anyone who

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Speaker 1: asks for asylum won't be allowed to do so, they'll

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Speaker 1: just be sent back. That is currently still being challenged

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Speaker 1: in the courts, and so it's unclear if a year

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Speaker 1: from now there will still be able to be this

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Speaker 1: ban where you literally just can't ask for asylum by

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Speaker 1: crossing the border. We're in that temporary period where that's

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Speaker 1: permitted because it's working their way through the courts, but

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Speaker 1: I don't know that that will always be the case.

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Speaker 1: If that is the case, then people won't be able

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Speaker 1: to do that, and then they might actually be incentivized

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Speaker 1: to the extent needed to touch the fence, either to

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Speaker 1: cut it or to try to climb it. But at

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Speaker 1: this point that's not really happening. And then we can

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Speaker 1: also talk about sort of twenty second century now that

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Speaker 1: we're in twenty twenty five. You know, people always talked

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Speaker 1: about twenty first century, but you know, twenty second century issues.

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Speaker 1: You have all of these drones and paragliding and everything else.

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Speaker 1: Soon the idea of a fence is really not going

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Speaker 1: to be an issue because you'll be able to use

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Speaker 1: any device you want to sort of fly over this fence.

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Speaker 1: And so I don't know long term, the forty billion

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Speaker 1: or whatever that's being spent in the fence is probably

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Speaker 1: not going to be able to keep up with modern

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Speaker 1: technology in terms of all the devices people will be

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Speaker 1: able to have to either fly or navigate above or

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Speaker 1: around these. But again, that may not be for twenty

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Speaker 1: twenty five, but it may be for twenty thirty at

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Speaker 1: this point. Who knows.

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Speaker 2: Yeah, Andnoam also said that more is going to be

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Speaker 2: added to the wall as far as technology, camera, sensors,

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Speaker 2: a water borne infrastructure, and they've been building about half

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Speaker 2: a mile of barrier of wall every day. I mean

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Speaker 2: with the Rio Grand, there is it even possible to

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Speaker 2: have wall built across every inch of the border.

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Speaker 1: There's a couple of issues. So some of the fencing

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Speaker 1: at the moment is inside of Texas, meaning there are

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Speaker 1: parts of Texas that are on the Mexico side of

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Speaker 1: the border fence, even though they're on the US side

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Speaker 1: of the Rio Grand. So you have Mexico, you have

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Speaker 1: the Rio Grand, you have Texas. So you would want

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Speaker 1: the fence to be right where the Rio Grand is,

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Speaker 1: so that there isn't some parts of Texas that are

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Speaker 1: on the Mexican side of the Rio Grand where the

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Speaker 1: fence is, But you do have some of that, and

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Speaker 1: the question is what happens when people reach there. And

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Speaker 1: again at the moment, people are being turned back who

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Speaker 1: reach those places because they're not being allowed to apply

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Speaker 1: for asylum. During the Biden administration, they were being allowed

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Speaker 1: to apply for asylum except during the last six months

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Speaker 1: of the administration when these asylum bands started. So they

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Speaker 1: started under Biden and they were continued and extended under

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Speaker 1: the Trump administration and made even stronger. And so from

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Speaker 1: that perspective, the question is going to be what happens.

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Speaker 1: I mean, there's also another part of Arizona that is

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Speaker 1: an Indian reservation that belongs to the tajonah Otum tribe

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Speaker 1: that they would need to give you the content to

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Speaker 1: build fence on their Indian reservation, and they hadn't been

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Speaker 1: willing to do that either. So those gaps exist, and

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Speaker 1: I don't know how they're going to solve that problem,

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Speaker 1: but they will theoretically be able to put sense if

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Speaker 1: they're willing to spend enough money on all the other

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Speaker 1: parts of the two thousand mile border between Mexico and

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Speaker 1: the United States.

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Speaker 2: I would think that forty seven billion dollars will go

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Speaker 2: a long way, but you never know. Thanks so much, Leon.

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Speaker 2: That's Leon Fresco of Honda Knight. President Trump has made

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Speaker 2: his dislike for New York Attorney General Letitia James clear

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Speaker 2: over the years, including a few months ago in the

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Speaker 2: Oval office.

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Speaker 3: She's a disaster for New York. She's a horrible, horrible

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Speaker 3: human being, and I think she's a total crook. There's

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Speaker 3: no question about it. But that's just my opinion. Pam's

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Speaker 3: gonna have to do what she wants. She's a very

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Speaker 3: bad person. She's a very bad person who campaigned solely

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Speaker 3: on I'm gonna get Donald Trump over and over again.

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Speaker 3: She's a sick person.

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Speaker 2: Well, today, Trump won a victory over James when a

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Speaker 2: New York appeals court struck down the nearly half a

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Speaker 2: billion dollar front penalty against him in the civil case

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Speaker 2: brought by James. The split five member court did uphold

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Speaker 2: the ruling that Trump and his two eldest sons perpetrated

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Speaker 2: a decade's long business fraud by inflating the value of

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Speaker 2: assets to get favorable terms on loans, but the court

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Speaker 2: found that the amount of the fine was unconstitutionally excessive,

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Speaker 2: joining me is constitutional law. Professor Harold Krent of the

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Speaker 2: Chicago Kent College of Law hell. There were concurrences, concurrences

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Speaker 2: in part sense descents in part. The judges seemed to

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Speaker 2: disagree on more than they agreed on.

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Speaker 4: The court was incredibly split, and it's hard to discern

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Speaker 4: exactly what the dules are going forward in a three

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Speaker 4: hundred and three page decision, But the essence is that

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Speaker 4: the fraud determination has been upheld, but that the remedy,

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Speaker 4: the disgorgement remedies of five hundred million dollars were excessive

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Speaker 4: under the constitution, the court held, and so the size

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Speaker 4: of the fine recalculated.

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Speaker 2: So would that be done by an appeal?

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Speaker 4: Ultimately would be done by the trial court, But that

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Speaker 4: won't happen immediately because there's so many other legal issues

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Speaker 4: that went into it. For instance, what are the number

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Speaker 4: of cases that can be consideratified That was disputed in

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Speaker 4: the opinion in terms of the inflated values of the

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Speaker 4: properties and in terms of which ones could be considered

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Speaker 4: there's disagreement on. So it's such a fractured opinion that

437
00:26:28,720 --> 00:26:31,240
Speaker 4: the next logical step for both parties would be to

438
00:26:31,280 --> 00:26:33,040
Speaker 4: go to the highest core of the New York the

439
00:26:33,080 --> 00:26:37,360
Speaker 4: Court of Appeals, for determinations of remaining legal issues, and

440
00:26:37,400 --> 00:26:41,000
Speaker 4: then ultimately the lower court would then make a new

441
00:26:41,040 --> 00:26:43,800
Speaker 4: determination of what kind of fine to impose.

442
00:26:45,040 --> 00:26:48,199
Speaker 2: And the Age has already said that she's going to

443
00:26:48,600 --> 00:26:51,879
Speaker 2: appeal this decision to the New York Court of Appeals.

444
00:26:52,520 --> 00:26:56,439
Speaker 2: Will you explain why the court found that the fine

445
00:26:56,720 --> 00:26:57,639
Speaker 2: was excessive?

446
00:26:58,119 --> 00:27:01,040
Speaker 4: In essence, to simplify it, that the lower court didn't

447
00:27:01,080 --> 00:27:05,280
Speaker 4: make a tailored opinion about how much the inflation of

448
00:27:05,320 --> 00:27:09,800
Speaker 4: the property values actually resulted in ill gotten games. In short,

449
00:27:09,920 --> 00:27:13,840
Speaker 4: the Pelt Court stated that just because there was an

450
00:27:14,280 --> 00:27:19,119
Speaker 4: inflated valuation doesn't show the extent to which the Trump

451
00:27:19,160 --> 00:27:23,639
Speaker 4: forces were able to benefit financially from that inflation. Without

452
00:27:23,640 --> 00:27:28,159
Speaker 4: that kind of tailored proportional remedy, the aggregate saw of

453
00:27:28,160 --> 00:27:30,280
Speaker 4: three hundred and fift million was simply accessive.

454
00:27:31,040 --> 00:27:33,240
Speaker 2: I mean, what does it take for a court to

455
00:27:33,359 --> 00:27:37,119
Speaker 2: find a fine violates the Eighth Amendment.

456
00:27:37,119 --> 00:27:39,080
Speaker 4: Under the sense of fines clause that the Supreme War

457
00:27:39,200 --> 00:27:41,560
Speaker 4: is held it It has to be some kind of proportionality.

458
00:27:41,800 --> 00:27:45,040
Speaker 4: So it's a kind of loose general test that the

459
00:27:45,080 --> 00:27:48,239
Speaker 4: find and post had to be some way proportional to

460
00:27:48,520 --> 00:27:51,800
Speaker 4: the harm created, and then you look at other kinds

461
00:27:51,840 --> 00:27:55,320
Speaker 4: of finds cases in the past to determine whether that

462
00:27:55,440 --> 00:27:57,959
Speaker 4: metric has been breached or not. And I think the

463
00:27:58,320 --> 00:28:01,560
Speaker 4: court here and did a good faith assessment looking at

464
00:28:01,680 --> 00:28:05,320
Speaker 4: the kind of damage that was created by the fraud

465
00:28:05,680 --> 00:28:08,440
Speaker 4: and said that whatever it was, it didn't come close

466
00:28:08,520 --> 00:28:11,760
Speaker 4: to reaching the three hundred and fifty million of steps.

467
00:28:11,920 --> 00:28:16,240
Speaker 2: Normally appeals are decided in weeks or even a few months.

468
00:28:16,600 --> 00:28:19,560
Speaker 2: This took nearly eleven months for the Appellate Division to

469
00:28:19,600 --> 00:28:23,640
Speaker 2: reach this decision. Looking at the three hundred pages, does

470
00:28:23,680 --> 00:28:25,720
Speaker 2: that indicate why it took so long?

471
00:28:26,320 --> 00:28:29,160
Speaker 4: The court was badly split. I mean you can see

472
00:28:29,200 --> 00:28:31,800
Speaker 4: that from the type of language that was used in

473
00:28:31,880 --> 00:28:35,840
Speaker 4: the opinions and from the disagreements and themselves, and so

474
00:28:35,920 --> 00:28:38,400
Speaker 4: I think the court was in a good faith measure

475
00:28:38,560 --> 00:28:41,960
Speaker 4: trying to get kind of a uniform approach, but it

476
00:28:42,080 --> 00:28:45,480
Speaker 4: just broke down. They disagreed on numbers of issues, and

477
00:28:45,560 --> 00:28:48,800
Speaker 4: so it really would be impossible for the lower court

478
00:28:48,880 --> 00:28:51,400
Speaker 4: to put the pieces back together, which is why I

479
00:28:51,440 --> 00:28:54,920
Speaker 4: think both parties are in better position if this goes

480
00:28:54,920 --> 00:28:58,200
Speaker 4: to the highest Court of New York two resolve the

481
00:28:58,600 --> 00:29:01,080
Speaker 4: many legal reaments that still exist.

482
00:29:01,440 --> 00:29:03,680
Speaker 2: So would you say a huge victory for Trump and

483
00:29:03,720 --> 00:29:07,120
Speaker 2: a huge loss for the ag Letitia James.

484
00:29:07,800 --> 00:29:10,120
Speaker 4: I would think it's huge, but I think it's substantial.

485
00:29:10,440 --> 00:29:14,880
Speaker 4: Certainly puts off any kind of requirement to pay the fine.

486
00:29:15,000 --> 00:29:16,840
Speaker 4: I mean, there's so many other legal issues to on

487
00:29:16,880 --> 00:29:19,200
Speaker 4: earth that the day of reckoning is not going to

488
00:29:19,200 --> 00:29:21,640
Speaker 4: come for a long time. But at the bottom there's

489
00:29:21,680 --> 00:29:25,240
Speaker 4: still a finding of fraud and that has not been displaced.

490
00:29:25,760 --> 00:29:30,360
Speaker 2: Does it complicate things at all that the Justice Department

491
00:29:30,600 --> 00:29:36,960
Speaker 2: is investigating Letitia James for civil rights violations for bringing

492
00:29:37,000 --> 00:29:40,120
Speaker 2: this suit against Trump? Or is that separate?

493
00:29:40,440 --> 00:29:44,160
Speaker 4: I think it's separate unless the investigation casts a chill

494
00:29:44,240 --> 00:29:47,000
Speaker 4: or a pall upon the Attorney General's office, and that's

495
00:29:47,000 --> 00:29:50,640
Speaker 4: something that obviously the Trump administration would like to happen.

496
00:29:50,760 --> 00:29:52,240
Speaker 4: But I don't think they're directly linked.

497
00:29:52,400 --> 00:29:55,120
Speaker 2: Let's turn out to this ruling by the Fifth Circuit,

498
00:29:55,600 --> 00:29:59,680
Speaker 2: that court order is freezing unfair labor practice cases against

499
00:29:59,720 --> 00:30:04,920
Speaker 2: Space and two other companies can remain in place while

500
00:30:04,960 --> 00:30:10,520
Speaker 2: they litigate their constitutional challenges to the National Labor Relations Board.

501
00:30:10,960 --> 00:30:14,280
Speaker 4: So this is a typical challenge to a functioning of

502
00:30:14,280 --> 00:30:18,240
Speaker 4: the National Labor Relations Board under the National Labor Relations Act.

503
00:30:18,600 --> 00:30:21,280
Speaker 4: Under the Act, the Board is supposed to determine whether

504
00:30:21,400 --> 00:30:24,440
Speaker 4: or not there is an unfair labor practice committed by

505
00:30:24,480 --> 00:30:27,480
Speaker 4: the union or by the employer. In this case the employer,

506
00:30:27,520 --> 00:30:29,760
Speaker 4: of course, it is Elon musk space Ax and any

507
00:30:30,200 --> 00:30:34,440
Speaker 4: unfairlyre practices can span from the questions of not bargaining

508
00:30:34,480 --> 00:30:38,479
Speaker 4: in good faith to firing somebody without cause and so

509
00:30:38,560 --> 00:30:40,840
Speaker 4: forth and so on. So in this case, after an

510
00:30:40,880 --> 00:30:44,640
Speaker 4: unfair labor practice was determined, there was a challenge to

511
00:30:44,960 --> 00:30:50,480
Speaker 4: the constitutionality of the National Labor Relations Board in two respects.

512
00:30:50,760 --> 00:30:54,200
Speaker 4: First that the members, because each member was protected from

513
00:30:54,240 --> 00:30:59,680
Speaker 4: app will removal, that they were unconstitously situated. And secondly

514
00:30:59,800 --> 00:31:02,960
Speaker 4: that the Ministry of Law judge or ALJ, who was

515
00:31:02,960 --> 00:31:07,440
Speaker 4: assigned to hear the unfair labor practice was also situated

516
00:31:07,640 --> 00:31:12,640
Speaker 4: unconstitutionally because the aljs were protected from at will dismissal.

517
00:31:13,040 --> 00:31:15,680
Speaker 4: So the court had to look at first of wall

518
00:31:15,680 --> 00:31:19,920
Speaker 4: where they had jurisdiction, and then whether these two constitutional

519
00:31:20,000 --> 00:31:24,760
Speaker 4: challenges were appropriate respect to jurisdiction. I think the Court

520
00:31:24,800 --> 00:31:28,400
Speaker 4: held correctly that under a recent United States Court president

521
00:31:28,680 --> 00:31:33,760
Speaker 4: structural challenges to agencies could interrupt agency proceedings and go

522
00:31:33,840 --> 00:31:37,200
Speaker 4: to court and get a court take on these structural challenges.

523
00:31:37,440 --> 00:31:40,360
Speaker 4: And this is very similar to the structural challenges that

524
00:31:40,440 --> 00:31:43,560
Speaker 4: the Supreme Court held could go on in a case

525
00:31:43,640 --> 00:31:46,600
Speaker 4: called Axon versus FTC. So I think the Court was

526
00:31:46,800 --> 00:31:50,600
Speaker 4: well positioned to make that judgment with respect to the aljs.

527
00:31:50,960 --> 00:31:54,400
Speaker 4: The Court held because the aljs were protected from at

528
00:31:54,400 --> 00:31:58,400
Speaker 4: will removal and because they're superiors and all be members

529
00:31:58,440 --> 00:32:02,400
Speaker 4: themselves were protected from dismissal, that the two layers of

530
00:32:02,400 --> 00:32:07,680
Speaker 4: insulation from presidential removal authority was excessive under Article two

531
00:32:07,720 --> 00:32:09,960
Speaker 4: of the Constitution. But it was an easy decision for

532
00:32:10,000 --> 00:32:12,720
Speaker 4: the Court because the Court had previously held that in

533
00:32:12,760 --> 00:32:15,520
Speaker 4: a case called Jocracy, which went to the Supreme Court,

534
00:32:15,560 --> 00:32:18,920
Speaker 4: but the Supreme Court ignored that issue. There was binding

535
00:32:19,000 --> 00:32:22,280
Speaker 4: Fifth Circuit President that said that the two layers of

536
00:32:22,320 --> 00:32:25,880
Speaker 4: insulation from the presidence removal authority and that would be

537
00:32:25,920 --> 00:32:31,480
Speaker 4: an unconstitutional structure, So that decision wasn't surprising. The more

538
00:32:31,520 --> 00:32:36,840
Speaker 4: important ruling, which was surprising is that the NLIB itself

539
00:32:37,040 --> 00:32:42,240
Speaker 4: was structured unconstitutionally, and to make that decision, the Court

540
00:32:42,280 --> 00:32:46,280
Speaker 4: said that what the Supreme Court has signaled, which is fair,

541
00:32:46,800 --> 00:32:50,840
Speaker 4: is that anything that looks like the Federal Trade Commission,

542
00:32:51,280 --> 00:32:55,080
Speaker 4: whose members are protected from that role dismissal, and the

543
00:32:55,080 --> 00:32:59,320
Speaker 4: Supreme Court and Humphrey's Executor had given its constitutional stample

544
00:32:59,320 --> 00:33:01,880
Speaker 4: of approval to it, that anything that looks like the

545
00:33:02,080 --> 00:33:06,720
Speaker 4: closely like the FTC is constitutional and those members can

546
00:33:06,800 --> 00:33:11,000
Speaker 4: be protected from that real removal authority, but that anything

547
00:33:11,000 --> 00:33:14,840
Speaker 4: that doesn't look exactly like the FTC model would be

548
00:33:14,840 --> 00:33:19,520
Speaker 4: subject to independent constitutional scrutiny. And the Court said that

549
00:33:19,560 --> 00:33:25,520
Speaker 4: there were several significant enough distinctions with respect to the

550
00:33:25,520 --> 00:33:29,080
Speaker 4: structure of the NLRB as opposed to the FTC.

551
00:33:29,840 --> 00:33:34,280
Speaker 2: How much is this about the Humphreys Executor case the

552
00:33:34,400 --> 00:33:40,200
Speaker 2: ninety year old president that supports the restrictions Congress imposed

553
00:33:40,240 --> 00:33:45,840
Speaker 2: on the president's power to dismiss independent agency officials, a

554
00:33:45,920 --> 00:33:50,680
Speaker 2: decision that conservatives have long wanted to get reversed.

555
00:33:51,120 --> 00:33:54,440
Speaker 4: And the Court's view is that the Supreme Court has

556
00:33:54,480 --> 00:33:58,640
Speaker 4: signaled that maybe Humphy's executive isn't going to be overturned,

557
00:33:59,400 --> 00:34:03,080
Speaker 4: almost everything else will be in terms of ensuring that

558
00:34:03,120 --> 00:34:07,480
Speaker 4: the president has removal authority over all officers in the

559
00:34:07,600 --> 00:34:10,160
Speaker 4: United States, and the outside of this is that the

560
00:34:10,160 --> 00:34:12,359
Speaker 4: Supreme Court's going to have to weigh end and make

561
00:34:12,400 --> 00:34:12,759
Speaker 4: a call.

562
00:34:13,080 --> 00:34:16,000
Speaker 2: That was my next question. The Fifth Circuit has often

563
00:34:16,120 --> 00:34:20,880
Speaker 2: been as far as conservative opinions ahead of the Supreme Court,

564
00:34:20,880 --> 00:34:23,400
Speaker 2: and the Supreme Court has in the last couple of

565
00:34:23,480 --> 00:34:26,880
Speaker 2: terms cut back. What this Fifth Circuit has done. Is

566
00:34:26,920 --> 00:34:30,600
Speaker 2: this an instance where the Fifth Circuit again is out

567
00:34:30,600 --> 00:34:32,000
Speaker 2: ahead of the Supreme Court.

568
00:34:32,239 --> 00:34:34,680
Speaker 4: Well, the Fifth Circuit is forcing the Supreme Court's hand

569
00:34:34,880 --> 00:34:38,239
Speaker 4: in the shadow talcket a case in President Trump's discharge

570
00:34:38,280 --> 00:34:42,120
Speaker 4: of an MLRB member, the Court signaled that it may

571
00:34:42,200 --> 00:34:47,600
Speaker 4: well be on the merit that the MLRB is unconstitutionally structured.

572
00:34:47,840 --> 00:34:51,239
Speaker 4: It may come down to not only saying that the

573
00:34:51,320 --> 00:34:54,279
Speaker 4: m larb's on constitution structure, but may reverse itself from

574
00:34:54,360 --> 00:34:57,520
Speaker 4: Humphrey executor as well. So in this case, I think

575
00:34:58,080 --> 00:35:00,680
Speaker 4: the Fifth Circuit's not really ahead of the Supreme Court.

576
00:35:01,000 --> 00:35:04,240
Speaker 4: It's reading the tuts from the Supreme Court, which means

577
00:35:04,280 --> 00:35:06,200
Speaker 4: that the Supreme Court is going to I only have

578
00:35:06,239 --> 00:35:09,640
Speaker 4: to make that decision as to whether some set or

579
00:35:09,920 --> 00:35:13,520
Speaker 4: all agencies in the United States in the executive branch

580
00:35:14,000 --> 00:35:16,920
Speaker 4: that their heads have to be subject to at will removal.

581
00:35:17,320 --> 00:35:20,600
Speaker 4: And that's the theory of the unitary executive that the Supreme

582
00:35:20,600 --> 00:35:21,640
Speaker 4: Court has espoused.

583
00:35:22,160 --> 00:35:25,200
Speaker 2: Does the NLRB even want to appeal this to the

584
00:35:25,239 --> 00:35:28,759
Speaker 2: Supreme Court? I mean, this decision would only affect the

585
00:35:28,800 --> 00:35:29,880
Speaker 2: Fifth Circuit, right.

586
00:35:31,200 --> 00:35:35,200
Speaker 4: I think the NLRB does want to because I think

587
00:35:35,600 --> 00:35:39,920
Speaker 4: that the Sister General's Office Department Justice want the Supreme

588
00:35:39,920 --> 00:35:44,839
Speaker 4: Court to take up this case in order to make

589
00:35:44,880 --> 00:35:49,440
Speaker 4: a determination once or for all that all executive branch

590
00:35:49,520 --> 00:35:52,520
Speaker 4: agencies have to be headed by official subject to the

591
00:35:52,560 --> 00:35:57,560
Speaker 4: president's plenarymove authority. So in this case, the NLRB is

592
00:35:58,000 --> 00:35:59,759
Speaker 4: that the members who are left are likely going to

593
00:35:59,800 --> 00:36:03,960
Speaker 4: add as the best of the Trump administration and to

594
00:36:04,040 --> 00:36:06,440
Speaker 4: get a friendly hearing. And what they should do in

595
00:36:06,440 --> 00:36:08,520
Speaker 4: the Supreme Court, and what they should have done in

596
00:36:08,560 --> 00:36:12,960
Speaker 4: the Courts of Appeals, is to appoint somebody to argue

597
00:36:13,440 --> 00:36:17,239
Speaker 4: the other side, because otherwise you have a musk organization

598
00:36:17,960 --> 00:36:22,759
Speaker 4: against the Trump administration. But the Trump administration agrees with

599
00:36:22,840 --> 00:36:25,279
Speaker 4: the musk organization in this case, and so to have

600
00:36:25,360 --> 00:36:29,080
Speaker 4: any kind of fair adjudication, the court should follow its

601
00:36:29,080 --> 00:36:32,520
Speaker 4: practice which it has followed in the past from time

602
00:36:32,560 --> 00:36:38,520
Speaker 4: to time of appointing somebody to uphold the position that's

603
00:36:38,560 --> 00:36:41,719
Speaker 4: not going to be represented directly in court, namely that

604
00:36:42,360 --> 00:36:46,640
Speaker 4: it is perfectly fine for Congress to structure agencies to

605
00:36:46,719 --> 00:36:50,760
Speaker 4: create some modicum of independence from presidential control.

606
00:36:51,280 --> 00:36:54,920
Speaker 2: Humphrey's executor does seem to be on the chopping block,

607
00:36:55,480 --> 00:36:58,719
Speaker 2: thanks so much. Hal be'st Professor Harrold Krent other Chicago,

608
00:36:58,840 --> 00:37:01,960
Speaker 2: Kent College of Life. And that's it for this edition

609
00:37:01,960 --> 00:37:04,600
Speaker 2: of The Bloomberg Law Show. Remember you can always get

610
00:37:04,640 --> 00:37:07,799
Speaker 2: the latest legal news on our Bloomberg Law podcasts. You

611
00:37:07,800 --> 00:37:11,920
Speaker 2: can find them on Apple Podcasts, Spotify, and at www

612
00:37:12,040 --> 00:37:16,320
Speaker 2: dot bloomberg dot com, slash podcast Slash Law, and remember

613
00:37:16,360 --> 00:37:19,319
Speaker 2: to tune into The Bloomberg Law Show every weeknight at

614
00:37:19,320 --> 00:37:22,799
Speaker 2: ten pm Wall Street Time. I'm June Grosso and you're

615
00:37:22,880 --> 00:37:24,120
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