1 00:00:02,560 --> 00:00:07,040 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. 2 00:00:08,480 --> 00:00:10,200 Speaker 2: This is Bloomberg Law. 3 00:00:10,360 --> 00:00:12,880 Speaker 3: Congress can have no say in making an office independent. 4 00:00:12,920 --> 00:00:16,600 Speaker 4: I think all agencies need a degree of autonomy. It 5 00:00:16,680 --> 00:00:19,159 Speaker 4: really tests whether the amendments to the law have. 6 00:00:19,280 --> 00:00:23,119 Speaker 2: Keith interviews with prominent attorneys and Bloomberg legal experts. 7 00:00:23,200 --> 00:00:26,480 Speaker 5: Joining me is Constitutional law professor David Super, Bloomberg News, 8 00:00:26,480 --> 00:00:28,680 Speaker 5: Supreme Court reporter Greg Store. 9 00:00:28,640 --> 00:00:32,720 Speaker 2: And analysis of important legal issues, cases and headlines. Apples 10 00:00:32,760 --> 00:00:33,480 Speaker 2: of Waltgarden. 11 00:00:33,640 --> 00:00:35,320 Speaker 4: They don't license their technology. 12 00:00:35,400 --> 00:00:37,920 Speaker 3: That is a valid basis to dismiss the case. 13 00:00:38,159 --> 00:00:42,280 Speaker 2: Bloomberg Law with June Grosso from Bloomberg Radio. 14 00:00:45,840 --> 00:00:49,000 Speaker 5: Welcome to the Bloomberg Law Show. I'm June Grosso. Ahead 15 00:00:49,000 --> 00:00:53,120 Speaker 5: in this hour, President Trump's battle with the Fed escalates 16 00:00:53,159 --> 00:00:57,440 Speaker 5: into an emergency court hearing. Can Trump jail protesters who 17 00:00:57,480 --> 00:01:01,280 Speaker 5: burn the American flag? And the Supreme Court allows the 18 00:01:01,320 --> 00:01:14,039 Speaker 5: administration to do what it wants again. It's an unprecedented 19 00:01:14,120 --> 00:01:20,360 Speaker 5: legal battle that could reshape the Federal Reserve's longstanding political independence. 20 00:01:20,800 --> 00:01:24,760 Speaker 5: President Trump is the first president in history to try 21 00:01:24,760 --> 00:01:28,480 Speaker 5: to oust a sitting FED governor. Trump says he's firing 22 00:01:28,560 --> 00:01:31,720 Speaker 5: Lisa Cook, the first black woman to serve as a 23 00:01:31,760 --> 00:01:35,800 Speaker 5: FED governor because she committed mortgage fraud by listing homes 24 00:01:35,800 --> 00:01:39,399 Speaker 5: in both Michigan and Georgia as her primary residence is 25 00:01:39,720 --> 00:01:42,320 Speaker 5: when she got mortgages in twenty twenty one. 26 00:01:42,959 --> 00:01:46,520 Speaker 1: She seems to have had an infraction, and she can't 27 00:01:46,520 --> 00:01:50,200 Speaker 1: have an infraction, especially that infraction, because she's in charge of, 28 00:01:50,320 --> 00:01:53,080 Speaker 1: if you think about it, mortgages, and we need people 29 00:01:53,080 --> 00:01:54,880 Speaker 1: that are one hundred percent above board. 30 00:01:55,480 --> 00:01:59,400 Speaker 5: Cook is fighting back by filing a lawsuit saying Trump 31 00:01:59,480 --> 00:02:02,760 Speaker 5: doesn't have the power to remove her from office and 32 00:02:02,800 --> 00:02:05,520 Speaker 5: that he violated the federal law that allows him to 33 00:02:05,560 --> 00:02:09,800 Speaker 5: remove a FED governor only for cause. Cook's lawsuit is 34 00:02:09,800 --> 00:02:13,359 Speaker 5: a major escalation in the growing clash between the White 35 00:02:13,360 --> 00:02:16,799 Speaker 5: House and the FED, which has resisted Trump's demands for 36 00:02:16,919 --> 00:02:21,320 Speaker 5: lower interest rates. It presents novel issues and will almost 37 00:02:21,360 --> 00:02:24,400 Speaker 5: certainly end up at the Supreme Court. It's just a 38 00:02:24,400 --> 00:02:28,000 Speaker 5: matter of when. Cook is seeking an emergency in junction 39 00:02:28,280 --> 00:02:31,840 Speaker 5: to block her firing and confirm her status as a 40 00:02:31,840 --> 00:02:35,320 Speaker 5: member of the Fed's governing board. Federal Judge Ga Cobb 41 00:02:35,440 --> 00:02:39,120 Speaker 5: held an emergency hearing on Friday, but her decision isn't 42 00:02:39,320 --> 00:02:43,120 Speaker 5: likely until next week or perhaps even later joining me 43 00:02:43,160 --> 00:02:48,160 Speaker 5: is Bloomberg Intelligence senior litigation analyst Elliott Stein. Elliot tell 44 00:02:48,200 --> 00:02:51,600 Speaker 5: us about Cook's arguments for why Trump can't fire her 45 00:02:51,720 --> 00:02:55,639 Speaker 5: for these mortgage fraud allegations that took place before she 46 00:02:55,680 --> 00:02:57,280 Speaker 5: became a Fed governor. 47 00:02:57,840 --> 00:03:02,120 Speaker 6: Well, the first argument is that the four cause requirement 48 00:03:02,440 --> 00:03:07,000 Speaker 6: hasn't been met. And their argument is that cause requires 49 00:03:07,000 --> 00:03:12,079 Speaker 6: more than mere allegations on truth's social that you know, 50 00:03:12,200 --> 00:03:16,240 Speaker 6: you look to the Humphreys executor's standard, which is that 51 00:03:16,280 --> 00:03:19,240 Speaker 6: there has to be some sort of inefficiency, neglective duty, 52 00:03:19,360 --> 00:03:23,120 Speaker 6: or malfeasance in office. These allegations don't rise. So that 53 00:03:23,400 --> 00:03:26,600 Speaker 6: and in any event, she wasn't given an opportunity to 54 00:03:26,639 --> 00:03:30,280 Speaker 6: be heard on this and to contest the allegations. End 55 00:03:30,320 --> 00:03:34,000 Speaker 6: is that she has a right to receive notice of 56 00:03:34,040 --> 00:03:36,080 Speaker 6: the accusations and to contest them. 57 00:03:36,480 --> 00:03:41,360 Speaker 5: And is the administration's main argument that basically the president 58 00:03:41,680 --> 00:03:44,680 Speaker 5: is the president and the courts have to defer to him. 59 00:03:45,000 --> 00:03:47,240 Speaker 6: Yeah, that's a lot of it. I mean, their argument 60 00:03:47,480 --> 00:03:51,360 Speaker 6: first is that the statutory text only refers to cause, 61 00:03:51,400 --> 00:03:54,840 Speaker 6: it doesn't refer to inefficiency, neglective duty, or malfeasance in office, 62 00:03:54,880 --> 00:03:58,160 Speaker 6: So that gives him a broader removal authority, and then 63 00:03:58,200 --> 00:04:00,960 Speaker 6: there's also nothing in the statute. The case law is 64 00:04:00,960 --> 00:04:04,960 Speaker 6: their argument that a court can even review that determination. 65 00:04:05,120 --> 00:04:07,880 Speaker 6: That the statute gives the president the right to determine 66 00:04:07,920 --> 00:04:10,560 Speaker 6: if there was cause, and that's not reviewable, and that 67 00:04:10,600 --> 00:04:14,680 Speaker 6: there's also nothing about giving the person the notice or 68 00:04:14,760 --> 00:04:17,880 Speaker 6: an opportunity to be heard. And in fact, the case law, 69 00:04:18,000 --> 00:04:21,400 Speaker 6: they argue, goes against Liza Cook's argument on that. And 70 00:04:21,600 --> 00:04:24,440 Speaker 6: if notice was required, she got noticed because she was 71 00:04:24,480 --> 00:04:27,240 Speaker 6: aware for several days about these allegations before she was 72 00:04:27,279 --> 00:04:31,640 Speaker 6: actually terminated, and she never tried to rebut the allegations factually, 73 00:04:31,960 --> 00:04:34,120 Speaker 6: and in that event, you know, a hearing. This is 74 00:04:34,160 --> 00:04:36,720 Speaker 6: the government's argument. The hearing seems like it would be 75 00:04:37,160 --> 00:04:41,200 Speaker 6: unnecessary because she hasn't even contested the allegations and given 76 00:04:41,560 --> 00:04:45,000 Speaker 6: a reason for why these documents would have been filled 77 00:04:45,000 --> 00:04:46,320 Speaker 6: out in the way that they were. 78 00:04:47,080 --> 00:04:51,320 Speaker 5: The only sort of explanation she gave in her papers 79 00:04:51,839 --> 00:04:55,520 Speaker 5: was that there might have been an unintentional clerical error 80 00:04:55,880 --> 00:05:00,000 Speaker 5: in her mortgage application, a mislabeling, but no real life 81 00:05:00,040 --> 00:05:03,840 Speaker 5: explanation beyond that. And as far as the administration's claimed 82 00:05:03,920 --> 00:05:09,160 Speaker 5: that Trump's truth, social posts constituted notice of the allegations. 83 00:05:09,640 --> 00:05:13,320 Speaker 5: Judge Cobbs said to the government's lawyer, you're not suggesting 84 00:05:13,360 --> 00:05:18,080 Speaker 5: what happened would satisfy due process requirements, and he replied 85 00:05:18,120 --> 00:05:18,680 Speaker 5: that he was. 86 00:05:19,600 --> 00:05:23,240 Speaker 6: Yeah. Their argument is that the truth Social posts do 87 00:05:23,400 --> 00:05:28,680 Speaker 6: provide sufficient notice, and as a result, if notice is required, 88 00:05:28,880 --> 00:05:31,880 Speaker 6: they satisfied it. And Abby Lowell had a sort of 89 00:05:32,000 --> 00:05:35,359 Speaker 6: funny line, you know, he said, notice shouldn't require having 90 00:05:35,480 --> 00:05:39,239 Speaker 6: to sign up for truth Social in order to see 91 00:05:39,640 --> 00:05:43,680 Speaker 6: the president's truth Social posts directly. And Abbie Lowell's argument is, 92 00:05:43,839 --> 00:05:46,359 Speaker 6: you know, it has to be something a little more 93 00:05:46,839 --> 00:05:51,039 Speaker 6: formal than that, not necessarily, you know, full blown investigation, 94 00:05:51,200 --> 00:05:54,720 Speaker 6: but some opportunity to butt the allegations. 95 00:05:55,440 --> 00:05:59,880 Speaker 5: In May, the Supreme Court blocked the reinstatement of nlr 96 00:06:00,080 --> 00:06:04,839 Speaker 5: the and Merit Systems Protection Board commissioners while their suits 97 00:06:04,839 --> 00:06:08,159 Speaker 5: played out, and did the same for Consumer Product Safety 98 00:06:08,160 --> 00:06:11,880 Speaker 5: Commission heads in July. So was there an argument that 99 00:06:11,960 --> 00:06:14,880 Speaker 5: this judge should follow that precedent here? 100 00:06:15,440 --> 00:06:17,520 Speaker 6: That did come up in a few contexts, one of 101 00:06:17,560 --> 00:06:21,400 Speaker 6: which was the irreparable harm argument, because you know, Lisa 102 00:06:21,440 --> 00:06:24,000 Speaker 6: Cook's argument is that if she can't continue to serve 103 00:06:24,440 --> 00:06:26,880 Speaker 6: on the Federal Reserve Board while the litigation plays out, 104 00:06:26,920 --> 00:06:29,880 Speaker 6: she'll be irreparably harmed because you know, she's unable to 105 00:06:29,920 --> 00:06:33,800 Speaker 6: perform her duties that she was appointed and confirmed to perform. 106 00:06:34,360 --> 00:06:37,760 Speaker 6: And the government cited all these cases, including Wilcox right 107 00:06:37,760 --> 00:06:41,200 Speaker 6: where the NRB and the Emerit Systems Protection Board commissioners 108 00:06:41,400 --> 00:06:44,440 Speaker 6: were not reinstated by the Supreme Court while those cases 109 00:06:44,480 --> 00:06:48,039 Speaker 6: played out, And you know, the government argued those cases 110 00:06:48,080 --> 00:06:51,240 Speaker 6: stand for the proposition that it's harmful to the president 111 00:06:51,279 --> 00:06:54,400 Speaker 6: if you know he's unable to perform his statutory duties 112 00:06:54,440 --> 00:06:58,200 Speaker 6: to remove federal officers. You know, the Wilcos case. Really 113 00:06:58,240 --> 00:07:00,360 Speaker 6: it's a good example of how it can be by 114 00:07:00,360 --> 00:07:02,000 Speaker 6: both sides to support their argument. 115 00:07:02,600 --> 00:07:06,720 Speaker 5: But a different factor here is the independence of the 116 00:07:06,760 --> 00:07:10,280 Speaker 5: Fed and that was a highlight of Cook's complaint. Did 117 00:07:10,280 --> 00:07:11,680 Speaker 5: it play in the hearing as well. 118 00:07:12,000 --> 00:07:16,120 Speaker 6: Judge cob herself alluded to it. It came up obviously 119 00:07:16,160 --> 00:07:20,440 Speaker 6: several times in Abby Lowell's arguments as well. And I 120 00:07:20,520 --> 00:07:23,360 Speaker 6: think you know it's relevant because the Supreme Court in 121 00:07:23,440 --> 00:07:26,280 Speaker 6: May and Wilcox sort of alluded to it in the 122 00:07:26,320 --> 00:07:28,600 Speaker 6: sense that the Federal Reserve is more of a quasi 123 00:07:28,640 --> 00:07:33,960 Speaker 6: private uniquely structured institution, whereas so much of the case 124 00:07:34,040 --> 00:07:38,360 Speaker 6: law deals with agencies, some of which don't even exist anymore. 125 00:07:38,680 --> 00:07:40,440 Speaker 6: The cases are from more than one hundred years ago, 126 00:07:40,680 --> 00:07:43,040 Speaker 6: so the context may be a little different. We'll just 127 00:07:43,080 --> 00:07:45,520 Speaker 6: see how much that actually matters to the various judges 128 00:07:45,560 --> 00:07:46,920 Speaker 6: that are going to hear this. 129 00:07:46,920 --> 00:07:50,560 Speaker 5: This was an emergency hearing. What turned it into not 130 00:07:50,680 --> 00:07:51,840 Speaker 5: so much of an emergency? 131 00:07:52,840 --> 00:07:57,400 Speaker 6: Yeah, well, where one side seeks a TRO a temper 132 00:07:57,520 --> 00:07:59,960 Speaker 6: or restaining order, but they're only good if they're granted. 133 00:08:00,000 --> 00:08:02,680 Speaker 6: They're only good for like ten days, maybe two weeks, 134 00:08:02,760 --> 00:08:05,440 Speaker 6: and then the party has to seek a preliminary injunction 135 00:08:05,560 --> 00:08:09,040 Speaker 6: in order to basically keep the status quo in place 136 00:08:09,200 --> 00:08:12,400 Speaker 6: for the rest of the litigation. And what often happens 137 00:08:12,480 --> 00:08:14,480 Speaker 6: I think is probably going to happen here is because 138 00:08:14,520 --> 00:08:17,320 Speaker 6: the issues are so similar per a tro and a 139 00:08:17,360 --> 00:08:19,440 Speaker 6: preliminary junction, the parties don't want to have to go 140 00:08:19,440 --> 00:08:22,400 Speaker 6: through the same motions twice. So the way the court 141 00:08:22,520 --> 00:08:26,040 Speaker 6: left it was that they're going to finish briefing the 142 00:08:26,120 --> 00:08:29,720 Speaker 6: tro on Tuesday at Leasta Cook will file her reply 143 00:08:29,880 --> 00:08:32,640 Speaker 6: to the President Trump's papers, and in the meantime, the 144 00:08:32,679 --> 00:08:37,360 Speaker 6: parties will talk about potentially basically converting the tro motion 145 00:08:37,559 --> 00:08:40,680 Speaker 6: to a preliminary in junction motion again, because the issues 146 00:08:40,800 --> 00:08:43,720 Speaker 6: basically are the same, and it would just allow the 147 00:08:43,840 --> 00:08:46,440 Speaker 6: ruling to stay in place longer, and it would allow 148 00:08:46,480 --> 00:08:48,080 Speaker 6: the rulining to be appealed. 149 00:08:48,840 --> 00:08:53,560 Speaker 5: We're at a very early stage of this litigation, But 150 00:08:54,240 --> 00:08:57,880 Speaker 5: after the hearing, do you think Trump or Cook has 151 00:08:57,920 --> 00:08:58,559 Speaker 5: the edge? 152 00:08:59,120 --> 00:09:02,920 Speaker 6: Well, this is such a close case. I think President 153 00:09:02,960 --> 00:09:06,920 Speaker 6: Trump has very good arguments based on the text of 154 00:09:06,960 --> 00:09:09,920 Speaker 6: the Federal Reserve Act, which only says for cause and 155 00:09:10,000 --> 00:09:13,520 Speaker 6: doesn't say anything more than that case law. I think 156 00:09:13,600 --> 00:09:19,000 Speaker 6: also in large measure helps President Trump. But you have 157 00:09:19,080 --> 00:09:22,199 Speaker 6: to overlay over all that that we're talking about the 158 00:09:22,240 --> 00:09:26,840 Speaker 6: Federal Reserve here, and the Supreme Court in the Wilcox 159 00:09:26,960 --> 00:09:30,319 Speaker 6: decision in May, went out of its way to distinguish 160 00:09:30,480 --> 00:09:32,760 Speaker 6: the Federal Reserve when it comes to a lot of 161 00:09:32,840 --> 00:09:36,080 Speaker 6: these issues, and so much of the case law that 162 00:09:36,200 --> 00:09:39,839 Speaker 6: is being discussed deals with agencies that really fall more 163 00:09:39,880 --> 00:09:43,719 Speaker 6: clearly under executive authority. So it's going to really be 164 00:09:43,800 --> 00:09:45,320 Speaker 6: up to the various courts that are going to hear 165 00:09:45,360 --> 00:09:48,560 Speaker 6: this to decide how much they want to distinguish the 166 00:09:48,559 --> 00:09:53,200 Speaker 6: Federal Reserve from all that precedent, and you know, I 167 00:09:53,280 --> 00:09:56,360 Speaker 6: think Judge Cobb alluded to that. You know, she said 168 00:09:56,400 --> 00:09:59,840 Speaker 6: she has to map Federal Reserve independence over all these issues. 169 00:10:00,200 --> 00:10:02,800 Speaker 6: To me, that suggests Lisa Cook has a good shot 170 00:10:03,160 --> 00:10:07,120 Speaker 6: at winning before Judge Cobb, at least at this early stage. 171 00:10:07,440 --> 00:10:09,960 Speaker 6: And then you know, from there, we'll go up to 172 00:10:10,000 --> 00:10:12,520 Speaker 6: the DC Circuit and then the Supreme Court, and we'll 173 00:10:12,520 --> 00:10:15,560 Speaker 6: see how they deal with their Wilcox decision. From May 174 00:10:16,080 --> 00:10:16,920 Speaker 6: Elliott tell. 175 00:10:16,840 --> 00:10:20,000 Speaker 5: Us what the fed's response to the lawsuit has been. 176 00:10:20,600 --> 00:10:25,080 Speaker 6: The FED is sort of staying silent and not picking 177 00:10:25,080 --> 00:10:28,520 Speaker 6: aside and saying they'll bide by any court decision, which 178 00:10:28,559 --> 00:10:33,120 Speaker 6: is why Lisa Cook's complaint names the Federal Reserve Board governors, 179 00:10:33,120 --> 00:10:36,400 Speaker 6: both collectively and in their individual capacity as defendants, along 180 00:10:36,440 --> 00:10:37,600 Speaker 6: with FED chair J. Powell. 181 00:10:37,960 --> 00:10:41,360 Speaker 5: Explain why timing might be important for Trump here in. 182 00:10:41,320 --> 00:10:44,439 Speaker 6: The near term. You have an FMC meeting in mid September, 183 00:10:44,559 --> 00:10:47,360 Speaker 6: right where everyone's expecting some sort of rate cuts. It 184 00:10:47,440 --> 00:10:50,160 Speaker 6: seems I actually don't think that's the most important date 185 00:10:50,280 --> 00:10:53,880 Speaker 6: because for that date, Lisa Cook is just one seat 186 00:10:53,920 --> 00:10:57,040 Speaker 6: on the FMC out of twelve. In July, when they 187 00:10:57,080 --> 00:10:59,400 Speaker 6: met and they did at lower rates. You only had 188 00:10:59,440 --> 00:11:02,040 Speaker 6: two dissenting votes, So I don't think her vote is 189 00:11:02,400 --> 00:11:05,560 Speaker 6: necessarily going to sway anything in September. But to me, 190 00:11:05,679 --> 00:11:08,280 Speaker 6: the more important dates to keep in mind are the 191 00:11:08,440 --> 00:11:12,200 Speaker 6: end of February, when the Federal Reserve Board gets to 192 00:11:12,320 --> 00:11:17,360 Speaker 6: reappoint or block reappointment of the regional Federal Reserve Bank 193 00:11:17,559 --> 00:11:22,960 Speaker 6: presidents who rotate onto the FOMC. So if the President 194 00:11:23,160 --> 00:11:28,480 Speaker 6: can elst least a cook by February, he essentially on 195 00:11:28,520 --> 00:11:32,360 Speaker 6: the Federal Reserve Board will have three sympathetic votes and 196 00:11:32,400 --> 00:11:36,679 Speaker 6: on the other side, you'd have three votes you know 197 00:11:36,840 --> 00:11:40,000 Speaker 6: that probably don't align with the President Powell, Michael Barr, 198 00:11:40,120 --> 00:11:43,000 Speaker 6: and Vice Jared Jefferson, and you wouldn't have all these 199 00:11:43,040 --> 00:11:45,600 Speaker 6: other Regional Reserve Bank presidents who for the most part 200 00:11:45,640 --> 00:11:50,480 Speaker 6: have been voting consistently with Jay Powell against lowering rates. 201 00:11:50,720 --> 00:11:54,320 Speaker 6: So you know, February is important because it starts to 202 00:11:54,400 --> 00:11:59,400 Speaker 6: potentially change the composition of the FOMC in a direction 203 00:11:59,480 --> 00:12:01,320 Speaker 6: that's more fai or both to President Trump. 204 00:12:01,559 --> 00:12:05,920 Speaker 5: And Trump is continuing to fire board members. On Wednesday, 205 00:12:05,960 --> 00:12:09,680 Speaker 5: he fired one of two Democratic members of the US 206 00:12:09,800 --> 00:12:13,080 Speaker 5: Service Transportation Board to break a two to two tie 207 00:12:13,080 --> 00:12:17,840 Speaker 5: before the board considers the largest railroad merger ever proposed. 208 00:12:18,120 --> 00:12:20,000 Speaker 6: You know, I think the hallmark of this when the 209 00:12:20,080 --> 00:12:24,560 Speaker 6: history books are written, is its efforts to expand executive 210 00:12:24,679 --> 00:12:28,120 Speaker 6: authority over almost every aspect of the government. You know, 211 00:12:28,320 --> 00:12:30,800 Speaker 6: we do have this Supreme Court decision in May that 212 00:12:30,920 --> 00:12:33,640 Speaker 6: suggested the Federal Reserve is a little different. We'll sort 213 00:12:33,640 --> 00:12:34,800 Speaker 6: of see how that plays out. 214 00:12:35,000 --> 00:12:39,880 Speaker 5: Thanks, Elliot. That's Bloomberg Intelligence senior litigation analyst Elliott Stein. 215 00:12:40,160 --> 00:12:44,240 Speaker 5: Coming up next. Trump wants to jail flag burners. I'm 216 00:12:44,320 --> 00:12:46,960 Speaker 5: June Grosso. When you're listening to Bloomberg. 217 00:13:00,600 --> 00:13:06,920 Speaker 2: This is Bloomberg Law with June Grossel from Bloomberg Radio, and. 218 00:13:07,160 --> 00:13:09,600 Speaker 7: What the penalty is going to be. If you burn 219 00:13:09,640 --> 00:13:15,240 Speaker 7: a flag, you get one year in jail, no early exits, 220 00:13:15,280 --> 00:13:17,120 Speaker 7: no nothing. You get one year in jail. If you're 221 00:13:17,120 --> 00:13:20,040 Speaker 7: burn a flag, you get And what it does is 222 00:13:20,280 --> 00:13:21,200 Speaker 7: insight to write it. 223 00:13:21,600 --> 00:13:25,640 Speaker 5: President Trump signed an executive order on Monday directing the 224 00:13:25,800 --> 00:13:30,600 Speaker 5: US Attorney General to prosecute people for burning the American flag. 225 00:13:30,920 --> 00:13:34,959 Speaker 5: But flag burning is protected under the First Amendment under 226 00:13:35,040 --> 00:13:39,320 Speaker 5: well settled Supreme Court precedence. In fact, none other than 227 00:13:39,360 --> 00:13:44,040 Speaker 5: the late Justice Antonin Scalia, a conservative icon, was part 228 00:13:44,040 --> 00:13:47,120 Speaker 5: of the majority in the nineteen eighty nine case that 229 00:13:47,400 --> 00:13:51,920 Speaker 5: established that the Constitution protects burning the flag as a 230 00:13:51,960 --> 00:13:53,520 Speaker 5: form of symbolic speech. 231 00:13:53,800 --> 00:13:56,439 Speaker 8: Yeah, if I were king, I would not allow people 232 00:13:56,440 --> 00:13:59,320 Speaker 8: to go about burning the American flag. However, we have 233 00:13:59,360 --> 00:14:04,520 Speaker 8: a First Amendment which says that the right of free 234 00:14:04,520 --> 00:14:08,160 Speaker 8: speech shall not be abridged, and it is addressed in 235 00:14:08,200 --> 00:14:11,719 Speaker 8: particular to speech critical of the government. I mean that 236 00:14:11,800 --> 00:14:14,480 Speaker 8: was the main kind of speech that tyrants would seek 237 00:14:14,520 --> 00:14:18,920 Speaker 8: to suppress. Burning the flag is a form of expression. 238 00:14:19,120 --> 00:14:22,920 Speaker 5: Trump call the justices who made that decision a quote 239 00:14:23,520 --> 00:14:27,400 Speaker 5: very sad court. And the order directs the Attorney General 240 00:14:27,480 --> 00:14:31,800 Speaker 5: to pursue litigation to challenge that. Nineteen eighty nine President, 241 00:14:32,280 --> 00:14:32,720 Speaker 5: you get. 242 00:14:32,600 --> 00:14:35,120 Speaker 7: One year in jail, and it goes on your record, 243 00:14:36,000 --> 00:14:38,320 Speaker 7: and you will see flag burning stopping immediately. 244 00:14:38,680 --> 00:14:42,720 Speaker 5: But just two hours later, a combat veteran burned an 245 00:14:42,760 --> 00:14:46,320 Speaker 5: American flag across the street from the White House to 246 00:14:46,440 --> 00:14:49,920 Speaker 5: protest the executive order targeting flag burning. 247 00:14:50,480 --> 00:14:56,440 Speaker 6: I'm burning flag the progress that illegal fast as president, 248 00:14:56,520 --> 00:14:57,160 Speaker 6: that's sits. 249 00:14:56,920 --> 00:14:57,560 Speaker 9: In that house. 250 00:14:57,920 --> 00:15:01,360 Speaker 5: My guest is David Cole, a professor at Georgetown law. 251 00:15:01,640 --> 00:15:04,200 Speaker 5: He represented the men who burned the flags in the 252 00:15:04,240 --> 00:15:08,240 Speaker 5: two leading Supreme Court cases. David, there's a long history 253 00:15:08,280 --> 00:15:13,000 Speaker 5: in this country of desecrating or burning the flag as 254 00:15:13,040 --> 00:15:15,920 Speaker 5: a form of political protest that goes back to the 255 00:15:15,960 --> 00:15:20,160 Speaker 5: Civil War. But states and even Congress have passed laws 256 00:15:20,240 --> 00:15:23,640 Speaker 5: to prevent flag burning. Tell us about the Seminole case 257 00:15:23,720 --> 00:15:27,280 Speaker 5: the Supreme Court decided in nineteen eighty nine, where you 258 00:15:27,400 --> 00:15:29,520 Speaker 5: represented Gregory Lee Johnson. 259 00:15:29,920 --> 00:15:35,280 Speaker 3: Sure so. Gregory Johnson burned an American flag in Dallas, Texas, 260 00:15:35,520 --> 00:15:40,600 Speaker 3: in a protest outside of the Republican National Convention that year, 261 00:15:40,840 --> 00:15:44,200 Speaker 3: and was prosecuted under a Texas statute that made it 262 00:15:44,240 --> 00:15:46,960 Speaker 3: a crime to burn the flag in a way that 263 00:15:47,080 --> 00:15:52,280 Speaker 3: would deeply offend onlookers. He was convicted in the trial court. 264 00:15:52,600 --> 00:15:56,560 Speaker 3: That conviction was overturned by the highest court in Texas, 265 00:15:56,600 --> 00:15:59,320 Speaker 3: but Texas took the case up to the Supreme Court, 266 00:15:59,400 --> 00:16:03,040 Speaker 3: and the Supreme Court in Texas versus Johnson, ruled that 267 00:16:03,120 --> 00:16:08,720 Speaker 3: the government may not criminalize expression through the burning of 268 00:16:08,760 --> 00:16:13,280 Speaker 3: a flag simply because people find that message offensive. 269 00:16:13,640 --> 00:16:16,480 Speaker 5: It was a five to four decision, but it didn't 270 00:16:16,520 --> 00:16:21,000 Speaker 5: divide the court down ideological lines. In fact, conservative icon 271 00:16:21,200 --> 00:16:24,600 Speaker 5: Justice Antonin Scalia was in the majority. Why do you 272 00:16:24,640 --> 00:16:26,960 Speaker 5: think it didn't go down ideological lines? 273 00:16:27,480 --> 00:16:30,200 Speaker 3: So that's a great question. We won the case with 274 00:16:30,320 --> 00:16:35,600 Speaker 3: the votes of two Republican appointees, Justice Kennedy and Justice Scalia. 275 00:16:36,120 --> 00:16:38,600 Speaker 3: Both of them, I think, you know, over time, showed 276 00:16:38,600 --> 00:16:42,280 Speaker 3: themselves to be committed to the First Amendment. Justice Stevens 277 00:16:42,360 --> 00:16:46,640 Speaker 3: also a committed First Amendment. Justice dissented. I think in 278 00:16:46,840 --> 00:16:49,120 Speaker 3: his case it came down to the fact that he 279 00:16:49,200 --> 00:16:53,600 Speaker 3: was a veteran World War Two. He clearly was deeply 280 00:16:54,080 --> 00:16:57,920 Speaker 3: offended by the very practice of burning a flag and 281 00:16:58,080 --> 00:17:01,200 Speaker 3: therefore dissented. But over time, I think, you know, if 282 00:17:01,200 --> 00:17:04,960 Speaker 3: you look back at the cases that preceded Texas sersus. Johnson, 283 00:17:05,600 --> 00:17:12,440 Speaker 3: many justices, including liberal justices, expressed some reservation about whether 284 00:17:12,640 --> 00:17:15,800 Speaker 3: or not flag burning should be protected by the First Amendment. 285 00:17:15,880 --> 00:17:19,199 Speaker 3: So it's not something that has divided the country along 286 00:17:19,359 --> 00:17:20,200 Speaker 3: partisan lines. 287 00:17:20,440 --> 00:17:23,600 Speaker 5: And will you explain the thinking of the justices in 288 00:17:23,640 --> 00:17:25,280 Speaker 5: the majority and in the descent. 289 00:17:25,880 --> 00:17:31,760 Speaker 3: So the majority held that the justification for throwing someone 290 00:17:31,800 --> 00:17:36,240 Speaker 3: in jail for burning the flag is that the message 291 00:17:36,560 --> 00:17:40,520 Speaker 3: sent by engaging in that conduct is offensive. And the 292 00:17:40,560 --> 00:17:44,040 Speaker 3: court held that under the First Amendment. The government has 293 00:17:44,119 --> 00:17:49,040 Speaker 3: to maintain neutrality in the field of expression. Can't punish 294 00:17:49,200 --> 00:17:54,439 Speaker 3: speech simply because it or a majority of people find 295 00:17:54,520 --> 00:17:57,680 Speaker 3: a particular message to be offensive. Once you go down 296 00:17:57,760 --> 00:18:02,280 Speaker 3: that road, virtually anything can be prohibited by the government 297 00:18:02,320 --> 00:18:07,080 Speaker 3: because one man's offense is another man's truth. The dissent argued, well, 298 00:18:07,160 --> 00:18:11,880 Speaker 3: this is really not so essential a form of expression. 299 00:18:12,119 --> 00:18:16,720 Speaker 3: Chief Justice Rank was called flag burning quote an inarticulate grunt. 300 00:18:17,200 --> 00:18:22,000 Speaker 3: And there's a very powerful interest in preserving the unity 301 00:18:22,240 --> 00:18:27,359 Speaker 3: that the symbol expresses, and therefore states should be permitted 302 00:18:27,440 --> 00:18:31,520 Speaker 3: to prescribe how people can use the flag. They can 303 00:18:31,560 --> 00:18:33,600 Speaker 3: waive it, but they can't burn it. 304 00:18:34,320 --> 00:18:38,240 Speaker 5: So President Trump is also with this executive order calling 305 00:18:38,280 --> 00:18:42,240 Speaker 5: for Attorney General Pam Bondi to pursue litigation to challenge 306 00:18:42,480 --> 00:18:46,760 Speaker 5: the Supreme Court's ruling in nineteen eighty nine. This Supreme 307 00:18:46,800 --> 00:18:50,600 Speaker 5: Court is very different from that Supreme Court. Do you 308 00:18:50,640 --> 00:18:53,920 Speaker 5: think that they would still uphold the president. 309 00:18:54,640 --> 00:18:58,200 Speaker 3: Yes, this court is different from the court from nineteen 310 00:18:58,200 --> 00:19:01,320 Speaker 3: eighty nine to nineteen ninety but if anything, an even 311 00:19:01,440 --> 00:19:05,679 Speaker 3: stronger pro First Amendment court and Texas versus Johnson is 312 00:19:05,720 --> 00:19:08,680 Speaker 3: not just the kind of one off It is cited 313 00:19:08,880 --> 00:19:13,080 Speaker 3: again and again and again for this basic premise, probably 314 00:19:13,119 --> 00:19:16,800 Speaker 3: the most fundamental premise of pre speech law, which is 315 00:19:17,240 --> 00:19:21,400 Speaker 3: the fact that speech offends somebody is not a justification 316 00:19:21,520 --> 00:19:24,640 Speaker 3: for the government to throw the speaker in jail. And 317 00:19:24,680 --> 00:19:28,600 Speaker 3: that's ultimately what punishing flag burners is about. It's about 318 00:19:28,840 --> 00:19:31,880 Speaker 3: throwing them in jail because we would be, you know, 319 00:19:32,320 --> 00:19:35,400 Speaker 3: very pleased if they waive the flag. We are very 320 00:19:35,480 --> 00:19:38,480 Speaker 3: upset if they burn the flag. But either way, you 321 00:19:38,560 --> 00:19:41,639 Speaker 3: are using the flag to express a message, and the 322 00:19:41,720 --> 00:19:45,480 Speaker 3: government is not allowed to tell us what messages we 323 00:19:45,640 --> 00:19:49,400 Speaker 3: can and cannot express through symbolic speech or otherwise. 324 00:19:49,840 --> 00:19:54,119 Speaker 5: Now, Trump's executive order doesn't direct the Attorney General to 325 00:19:54,359 --> 00:19:58,600 Speaker 5: prosecute those who burn flags for the flag burning itself, 326 00:19:58,640 --> 00:20:01,440 Speaker 5: but it says the Justice this Department should bring cases 327 00:20:01,520 --> 00:20:06,560 Speaker 5: quote against acts of American flag desecration that violate applicable 328 00:20:06,760 --> 00:20:12,320 Speaker 5: content neutral laws while causing harm unrelated to expression, consistent 329 00:20:12,359 --> 00:20:15,439 Speaker 5: with the First Amendment. So the cases are going to 330 00:20:15,480 --> 00:20:20,800 Speaker 5: be limited to those where there's a violation of other laws. 331 00:20:21,240 --> 00:20:25,160 Speaker 3: So this executive order is I suppose, as befitting something 332 00:20:25,240 --> 00:20:30,560 Speaker 3: that is ultimately about symbols, almost entirely symbolic because it acknowledges, 333 00:20:30,720 --> 00:20:34,639 Speaker 3: as it must, that the Supreme Court has decisively ruled 334 00:20:34,800 --> 00:20:37,880 Speaker 3: that you can't punish someone for burning a flag. And 335 00:20:38,200 --> 00:20:40,920 Speaker 3: what it does is says, well, there may be some 336 00:20:41,040 --> 00:20:46,119 Speaker 3: circumstances in which one could where the reason you're engaged 337 00:20:46,320 --> 00:20:50,760 Speaker 3: in the prosecution is not the burning of the flag 338 00:20:50,960 --> 00:20:55,560 Speaker 3: per se, but some other interests altogether. So, for example, 339 00:20:55,760 --> 00:21:00,480 Speaker 3: many towns and cities prohibit burning of anything in public 340 00:21:00,560 --> 00:21:03,399 Speaker 3: without a permit. You can't burn leaves, you can't burn 341 00:21:03,440 --> 00:21:06,919 Speaker 3: wood in public without a permit. That law can be 342 00:21:06,960 --> 00:21:09,639 Speaker 3: applied to the burning of an American flag because the 343 00:21:09,720 --> 00:21:13,359 Speaker 3: law is not about speech. It's not about what burning 344 00:21:13,359 --> 00:21:17,960 Speaker 3: a flag communicates. It's an environmental law or fire safety 345 00:21:18,040 --> 00:21:20,840 Speaker 3: law that is neutral as to speech. And it's long 346 00:21:20,920 --> 00:21:23,200 Speaker 3: been the case that that kind of law. In fact, 347 00:21:23,240 --> 00:21:25,160 Speaker 3: the Supreme Court is said that kind of law would 348 00:21:25,160 --> 00:21:28,800 Speaker 3: be perfectly permissible. It is very rare that that is 349 00:21:29,160 --> 00:21:33,280 Speaker 3: sphasis for a flag desecration prosecution. However, and the other 350 00:21:33,359 --> 00:21:36,080 Speaker 3: example that Trump puts forth these as well, if somebody 351 00:21:36,160 --> 00:21:39,400 Speaker 3: burned a flag in such a way as it constituted 352 00:21:39,600 --> 00:21:44,760 Speaker 3: incitement to imminent lawless action or fighting words, those are 353 00:21:44,800 --> 00:21:48,040 Speaker 3: not protected by the First Amendment. Even pure speech, if 354 00:21:48,080 --> 00:21:52,040 Speaker 3: it constitutes incitement to eminent law of action or fighting words, 355 00:21:52,359 --> 00:21:55,200 Speaker 3: is not protected by the First Amendment. So if flag 356 00:21:55,240 --> 00:21:59,720 Speaker 3: burning fell into those very, very narrow categories, you could 357 00:21:59,720 --> 00:22:04,280 Speaker 3: probably that's true, but sort of trivial and largely irrelevant, 358 00:22:04,280 --> 00:22:08,960 Speaker 3: because people burn flags not to engage in fighting words, 359 00:22:09,040 --> 00:22:14,200 Speaker 3: not to incite some imminent lawless action, but to protest 360 00:22:14,400 --> 00:22:18,040 Speaker 3: what the American government is doing. That's why they burn flags, 361 00:22:18,200 --> 00:22:22,760 Speaker 3: and that is exactly why flag desecration laws were enacted, 362 00:22:23,080 --> 00:22:26,880 Speaker 3: and that the Supreme Court is held is an impermissible 363 00:22:27,040 --> 00:22:31,760 Speaker 3: justification for targeting any form of speech. So, yeah, if 364 00:22:31,760 --> 00:22:34,359 Speaker 3: you come up with a case, and I've not seen 365 00:22:34,400 --> 00:22:37,399 Speaker 3: one in my entire lifetime where someone burns a flag 366 00:22:37,800 --> 00:22:41,240 Speaker 3: in order to send a signal to some group that 367 00:22:41,400 --> 00:22:46,000 Speaker 3: is steeled to action to engage in illegal conduct, well sure, 368 00:22:46,240 --> 00:22:50,280 Speaker 3: just as you could criminalize that person from raising his 369 00:22:50,400 --> 00:22:55,000 Speaker 3: hand to incite that lawless action, you could penalize burning 370 00:22:55,040 --> 00:22:57,600 Speaker 3: a flag if it's being used for that purpose. But 371 00:22:58,040 --> 00:23:00,840 Speaker 3: it's really a null set And so I think at 372 00:23:00,840 --> 00:23:04,840 Speaker 3: the end of the day, Trump's executive order is itself 373 00:23:05,000 --> 00:23:08,000 Speaker 3: a kind of a nullity. It's a political act. It's 374 00:23:08,040 --> 00:23:11,760 Speaker 3: not going to have any real world effects, and it's 375 00:23:11,880 --> 00:23:16,960 Speaker 3: essentially theater engaged in by the president. Because it's good politics. 376 00:23:17,000 --> 00:23:20,840 Speaker 3: It's easy to be on the side of condemning the 377 00:23:20,880 --> 00:23:24,640 Speaker 3: burning of the American flag. That's why Democrats and Republicans 378 00:23:24,760 --> 00:23:27,600 Speaker 3: have done that for a long time. That's why forty 379 00:23:27,680 --> 00:23:32,440 Speaker 3: nine state legislatures voted to amend the Constitution after Texas 380 00:23:32,520 --> 00:23:35,560 Speaker 3: versus Johnson and the United States versus Aikman, and the 381 00:23:35,640 --> 00:23:39,679 Speaker 3: amendment effort only failed by a few votes in the Senate. 382 00:23:39,760 --> 00:23:44,280 Speaker 3: Because the easy political act is to condemn these kinds 383 00:23:44,320 --> 00:23:47,560 Speaker 3: of expressions. The hard thing, the courageous thing, is to 384 00:23:47,600 --> 00:23:50,880 Speaker 3: protect them, even if we find them, and even because 385 00:23:51,000 --> 00:23:52,960 Speaker 3: we find them detestable and offensive. 386 00:23:53,400 --> 00:23:57,240 Speaker 5: A combat veteran burned a flag outside the White House 387 00:23:57,320 --> 00:24:02,679 Speaker 5: on Monday in protest of Trump's executive order targeting flag burning. 388 00:24:03,160 --> 00:24:06,639 Speaker 5: He was detained by Secret Service for igniting an object, 389 00:24:06,840 --> 00:24:10,159 Speaker 5: then turned over the US Park Police and arrested. He 390 00:24:10,240 --> 00:24:13,720 Speaker 5: was issued two citations, not for burning the flag, but 391 00:24:13,880 --> 00:24:16,919 Speaker 5: for setting a fire in an unsecured place and for 392 00:24:17,080 --> 00:24:21,320 Speaker 5: damaging park property. Does he have a defense that he's 393 00:24:21,359 --> 00:24:26,359 Speaker 5: being selectively prosecuted or is that a straightforward citation? 394 00:24:27,080 --> 00:24:30,600 Speaker 3: So I think in the absence of Trump's executive order, 395 00:24:30,920 --> 00:24:34,119 Speaker 3: it would be a straightforward citation. That is, of course, 396 00:24:34,200 --> 00:24:37,280 Speaker 3: the federal government is permitted to ban burning things on 397 00:24:37,359 --> 00:24:41,199 Speaker 3: federal property, and it can ban burning flags along with 398 00:24:41,280 --> 00:24:44,359 Speaker 3: burning leaves or anything else on federal property, and that 399 00:24:44,400 --> 00:24:48,240 Speaker 3: wouldn't raise a serious First Amendment objection even if someone 400 00:24:48,440 --> 00:24:51,400 Speaker 3: burned a flag for protest. But now that Trump has 401 00:24:51,560 --> 00:24:55,560 Speaker 3: issued this executive order and basically announced as the president 402 00:24:55,640 --> 00:24:59,600 Speaker 3: I states, I am directing the Justice Department to prosecute 403 00:24:59,680 --> 00:25:05,720 Speaker 3: flag Why because flag burning expresses an offensive message that 404 00:25:05,880 --> 00:25:11,040 Speaker 3: essentially gives this protester evidence of selective prosecution. He can 405 00:25:11,320 --> 00:25:14,840 Speaker 3: introduce as exhibit A in his defense the fact that 406 00:25:14,880 --> 00:25:19,159 Speaker 3: the President announced the day before he was arrested that 407 00:25:19,240 --> 00:25:23,959 Speaker 3: the government would target people who burn flags using other laws, 408 00:25:24,200 --> 00:25:28,760 Speaker 3: but doing so because the President disapproves of the message 409 00:25:28,760 --> 00:25:31,160 Speaker 3: that is sent. And so he now has a defense 410 00:25:31,440 --> 00:25:34,240 Speaker 3: that he wouldn't have had had the President not issued 411 00:25:34,280 --> 00:25:35,280 Speaker 3: that executive order. 412 00:25:35,600 --> 00:25:38,359 Speaker 5: And he already has a lawyer and says he welcomes 413 00:25:38,440 --> 00:25:42,040 Speaker 5: the legal challenge. Thanks so much, David. That's Georgetown law 414 00:25:42,080 --> 00:25:45,920 Speaker 5: professor David Cole coming up next. The Supreme Court hands 415 00:25:45,960 --> 00:25:50,359 Speaker 5: Trump another victory. I'm June GROSSEO. When you're listening to Bloomberg. 416 00:25:52,920 --> 00:25:58,040 Speaker 2: This is Bloomberg Law with June Grossel from Bloomberg Radio. 417 00:25:58,760 --> 00:26:01,879 Speaker 9: I ordered the end to all of the lawless diversity 418 00:26:01,920 --> 00:26:07,400 Speaker 9: equity and inclusion nonsense policies across the government and all 419 00:26:07,440 --> 00:26:09,760 Speaker 9: across the private sector and the military. 420 00:26:10,160 --> 00:26:14,480 Speaker 5: President Trump has tried to wipe out diversity, equity and 421 00:26:14,520 --> 00:26:18,919 Speaker 5: inclusion programs in both the public and private sectors, and 422 00:26:19,080 --> 00:26:23,199 Speaker 5: early this year, the National Institutes of Health began terminating 423 00:26:23,320 --> 00:26:27,040 Speaker 5: thousands of medical research grants that don't align with the 424 00:26:27,080 --> 00:26:32,919 Speaker 5: president's policies. On DEI, more than a dozen states researchers, universities, 425 00:26:32,960 --> 00:26:36,800 Speaker 5: and public health organizations sued, saying the cuts would set 426 00:26:36,880 --> 00:26:41,480 Speaker 5: back crucial research by years, if not decades. They won 427 00:26:41,600 --> 00:26:44,879 Speaker 5: at the district court level and at the appellate court level, 428 00:26:45,119 --> 00:26:48,240 Speaker 5: but the Supreme Court, in a five to four decision, 429 00:26:48,600 --> 00:26:51,800 Speaker 5: sided with the Trump administration, clearing the way for it 430 00:26:51,840 --> 00:26:56,280 Speaker 5: to cut nearly eight hundred million dollars in medical research grants. 431 00:26:56,440 --> 00:26:59,399 Speaker 5: While legal battles over the funding play out in the 432 00:26:59,440 --> 00:27:03,439 Speaker 5: lower courts, sorts joining me is constitutional law expert David super, 433 00:27:03,560 --> 00:27:07,560 Speaker 5: a professor at Georgetown Law. David what kinds of grants 434 00:27:07,600 --> 00:27:08,720 Speaker 5: were cut here? 435 00:27:09,680 --> 00:27:17,359 Speaker 4: The administration canceled thousands of grants the NIH had provided 436 00:27:17,520 --> 00:27:22,960 Speaker 4: for research on a wide range of topics. Ostensibly, these 437 00:27:23,119 --> 00:27:28,720 Speaker 4: grants were cut off because they related to diversity, equity, 438 00:27:29,080 --> 00:27:34,600 Speaker 4: and inclusion, or because they related to gender or gender 439 00:27:34,720 --> 00:27:39,240 Speaker 4: identity as understood by the administration. In fact, it took 440 00:27:39,440 --> 00:27:43,840 Speaker 4: little more than having the word diversity or equity in 441 00:27:43,880 --> 00:27:47,520 Speaker 4: the name of the project to get it cut off. 442 00:27:47,920 --> 00:27:51,760 Speaker 4: Some projects that had nothing to do with race or 443 00:27:51,920 --> 00:27:56,720 Speaker 4: racial equity or racial inclusion were cut off, but the 444 00:27:56,760 --> 00:28:01,560 Speaker 4: district court found that disproportionately research into health problems that 445 00:28:01,600 --> 00:28:04,960 Speaker 4: affect people of color were target of this cutoff. 446 00:28:05,400 --> 00:28:09,679 Speaker 5: Federal Judge William Young, a Reagan appointee, said, following a 447 00:28:09,720 --> 00:28:14,679 Speaker 5: bench trial, this represents racial discrimination and discrimination against America's 448 00:28:14,840 --> 00:28:18,720 Speaker 5: LGBTQ community. I would be blind not to call it out. 449 00:28:18,880 --> 00:28:19,120 Speaker 6: Yes. 450 00:28:19,440 --> 00:28:25,600 Speaker 4: He also found that the cutoffs showed remarkable insensitivity to 451 00:28:25,840 --> 00:28:27,600 Speaker 4: the health problems affecting women. 452 00:28:28,080 --> 00:28:33,240 Speaker 5: In the past, have administrations cut off grants for arbitrary 453 00:28:33,280 --> 00:28:37,240 Speaker 5: reasons or because they don't comply with the administration's objectives. 454 00:28:37,840 --> 00:28:41,480 Speaker 4: This is almost unheard of. Sure, if someone is taking 455 00:28:41,520 --> 00:28:43,720 Speaker 4: a grant and they're not doing the work, they get 456 00:28:43,760 --> 00:28:47,120 Speaker 4: cut off. But the notion that we wouldn't have given 457 00:28:47,160 --> 00:28:49,640 Speaker 4: this grant, so we're simply going to cut it off 458 00:28:50,040 --> 00:28:54,080 Speaker 4: is extraordinarily wasteful, and administrations at both parties in the 459 00:28:54,200 --> 00:28:55,800 Speaker 4: past have refrained from doing it. 460 00:28:56,360 --> 00:28:59,520 Speaker 5: Explain the Supreme Court's ruling, which was five to four. 461 00:29:00,160 --> 00:29:04,000 Speaker 4: The question came to the Supreme Court whether to stay 462 00:29:04,200 --> 00:29:09,200 Speaker 4: whether to suspend the order that the District Court judge 463 00:29:09,240 --> 00:29:12,080 Speaker 4: had issued. And the District Court judge did two things. 464 00:29:12,280 --> 00:29:17,640 Speaker 4: He struck down the policy guidance the administration based its 465 00:29:17,720 --> 00:29:21,520 Speaker 4: terminations on, and it struck down the terminations. It fell 466 00:29:22,000 --> 00:29:26,240 Speaker 4: four justices, the three Liberals and the Chief Justice voted 467 00:29:26,320 --> 00:29:31,080 Speaker 4: to deny any interference with the District Court's order to 468 00:29:31,160 --> 00:29:36,400 Speaker 4: let the order take effect. Four justices voted to stay 469 00:29:36,480 --> 00:29:39,800 Speaker 4: the entirety of the court order, and the deciding vote 470 00:29:39,920 --> 00:29:45,200 Speaker 4: was cast by Justice Barrett, who said that she wanted 471 00:29:45,240 --> 00:29:50,960 Speaker 4: to stay the resumption of funding, but would not interfere 472 00:29:51,120 --> 00:29:55,440 Speaker 4: with the finding that the policy guidance was illegal. 473 00:29:55,880 --> 00:29:59,880 Speaker 5: And what was the reasoning of the majority in all 474 00:30:00,040 --> 00:30:02,880 Speaker 5: allowing the government to withhold the grant money. 475 00:30:03,040 --> 00:30:08,080 Speaker 4: Their reasoning was that anyone who'd had their grant cutoff 476 00:30:08,160 --> 00:30:11,320 Speaker 4: should have gone to the Court of Federal Claims, not 477 00:30:11,480 --> 00:30:15,400 Speaker 4: federal district court, and that's the place that it is 478 00:30:15,480 --> 00:30:18,600 Speaker 4: proper to pursue depths from the federal government. 479 00:30:19,400 --> 00:30:24,600 Speaker 5: Will you explain why? Justice Barrett came down differently on 480 00:30:24,640 --> 00:30:28,520 Speaker 5: the nih cutting the grants and on the policy. 481 00:30:29,200 --> 00:30:34,400 Speaker 4: Justice Barrett held that the federal district courts are completely 482 00:30:34,520 --> 00:30:39,280 Speaker 4: proper places to challenge the legality of guidance that is 483 00:30:39,280 --> 00:30:43,840 Speaker 4: issued by the administration. So if the challenge is that 484 00:30:43,880 --> 00:30:48,240 Speaker 4: this guidance is without solid legal basis, that it's contrary 485 00:30:48,280 --> 00:30:51,760 Speaker 4: to the federal government's legal obligations, that it violate civil 486 00:30:51,840 --> 00:30:55,360 Speaker 4: rights laws, those are proper claims to bring in federal 487 00:30:55,360 --> 00:30:58,280 Speaker 4: district court into get an injunction, she said. But she 488 00:30:58,440 --> 00:31:01,920 Speaker 4: said that if you actually we want money, that has 489 00:31:01,960 --> 00:31:04,400 Speaker 4: to come from the Court of Federal claim So. 490 00:31:04,280 --> 00:31:06,600 Speaker 5: That means that the challenges here would have to go 491 00:31:06,640 --> 00:31:09,800 Speaker 5: to two separate courts and bring two separate actions. 492 00:31:10,360 --> 00:31:14,600 Speaker 4: Yes, she said, there's precedent for that, and she asserted 493 00:31:14,640 --> 00:31:19,000 Speaker 4: that that was the result of Congress's passing the jurisdictional 494 00:31:19,040 --> 00:31:23,320 Speaker 4: statues they have and the Supreme Court's prior interpretations, the. 495 00:31:23,280 --> 00:31:26,800 Speaker 5: Court of Federal Claims is, to say the least, not 496 00:31:27,040 --> 00:31:29,920 Speaker 5: well known. Do you think Barrett and the other four 497 00:31:30,000 --> 00:31:32,760 Speaker 5: Conservatives were right about its jurisdiction. 498 00:31:33,560 --> 00:31:37,560 Speaker 4: No, I don't. The Court of Federal Claims is there 499 00:31:37,760 --> 00:31:42,160 Speaker 4: to handle a lot of routine matters where there's a 500 00:31:42,240 --> 00:31:45,840 Speaker 4: question about the quality of the paint job that was 501 00:31:45,880 --> 00:31:48,760 Speaker 4: done on a federal office building and the federal government's 502 00:31:48,800 --> 00:31:52,400 Speaker 4: refusing to pay, and the painting contractor wants to be paid. 503 00:31:52,760 --> 00:31:55,920 Speaker 4: There's a need for that, But that's very different from 504 00:31:55,960 --> 00:32:02,240 Speaker 4: a systematic violation of thousands of contract asserting a power 505 00:32:02,320 --> 00:32:06,120 Speaker 4: that has never previously been recognized. Those are the kinds 506 00:32:06,280 --> 00:32:11,400 Speaker 4: of statutory and constitutional issues that have long been the 507 00:32:11,440 --> 00:32:15,080 Speaker 4: province of the general federal court system, the district courts, 508 00:32:15,120 --> 00:32:16,479 Speaker 4: and the circuit courts of appeal. 509 00:32:16,760 --> 00:32:19,680 Speaker 5: Can the groups here, now that they have this decision 510 00:32:20,200 --> 00:32:22,920 Speaker 5: on the policy, can they now go to the Court 511 00:32:22,920 --> 00:32:25,080 Speaker 5: of Federal Claims and get the money? 512 00:32:25,560 --> 00:32:28,280 Speaker 4: If only it were that simple. This was not a 513 00:32:28,320 --> 00:32:32,480 Speaker 4: decision on the merits of those policies. It was simply 514 00:32:32,560 --> 00:32:37,720 Speaker 4: about how the litigation should proceed, and Justice Barrett, joining 515 00:32:37,760 --> 00:32:41,000 Speaker 4: with the Chief Justice and the three Liberals, held that 516 00:32:41,480 --> 00:32:46,600 Speaker 4: the litigation can continue in the first Circuit Court of 517 00:32:46,640 --> 00:32:52,400 Speaker 4: Appeals about whether or not those policy documents are legal, 518 00:32:52,920 --> 00:32:57,840 Speaker 4: and if they are struck down again in that court, 519 00:32:58,000 --> 00:33:01,360 Speaker 4: the Trump administration could appeal bater active Supreme Court on 520 00:33:01,440 --> 00:33:05,640 Speaker 4: the merits. She indicated that there were some open questions 521 00:33:05,680 --> 00:33:08,360 Speaker 4: in her mind that would need to be resolved before 522 00:33:08,400 --> 00:33:12,120 Speaker 4: a final decision could be made about the legitimacy of 523 00:33:12,160 --> 00:33:16,520 Speaker 4: those policy documents, so she was only keeping the litigation alive, 524 00:33:16,720 --> 00:33:19,920 Speaker 4: she wasn't resolving it in the favor of the challengers. 525 00:33:20,200 --> 00:33:23,880 Speaker 5: And the majority found that the government would be irreparably 526 00:33:23,960 --> 00:33:26,480 Speaker 5: harmed if it had to pay out this money. 527 00:33:26,960 --> 00:33:31,160 Speaker 4: How so, yes, that's a particularly disturbing part of it. 528 00:33:31,240 --> 00:33:35,920 Speaker 4: They said that because the recipients wouldn't be able to 529 00:33:35,960 --> 00:33:39,440 Speaker 4: repay the government if it was ultimately found that the 530 00:33:39,520 --> 00:33:42,480 Speaker 4: money was not owing, that the federal government shouldn't have 531 00:33:42,600 --> 00:33:46,640 Speaker 4: to pay out the money until after a final judgment 532 00:33:46,720 --> 00:33:49,720 Speaker 4: is issued, which, once appeals are accounted for, it could 533 00:33:49,720 --> 00:33:53,560 Speaker 4: take several years. This is treating the entire matter as 534 00:33:53,600 --> 00:33:58,720 Speaker 4: a debt collection issue rather than an issue of democratic governance. 535 00:33:59,080 --> 00:34:01,400 Speaker 4: It could be that at the end of the day, 536 00:34:01,800 --> 00:34:05,320 Speaker 4: the parties entitled to money will get some money, but 537 00:34:05,840 --> 00:34:10,080 Speaker 4: the research will long since has been abandoned, the employees 538 00:34:10,200 --> 00:34:13,440 Speaker 4: long since has been laid off. Many of the nonprofits 539 00:34:13,680 --> 00:34:18,120 Speaker 4: will have been bankrupted by the long delay. And this 540 00:34:18,280 --> 00:34:22,440 Speaker 4: is essentially saying that the federal government is too big 541 00:34:22,480 --> 00:34:25,120 Speaker 4: to comply rather than too big to fail. Too big 542 00:34:25,160 --> 00:34:28,080 Speaker 4: to comply because the size of the grants it gives 543 00:34:28,120 --> 00:34:30,919 Speaker 4: out and the importance of the grants it gives out 544 00:34:31,239 --> 00:34:34,200 Speaker 4: are such that the recipients don't have the money to 545 00:34:34,239 --> 00:34:34,920 Speaker 4: pay it back. 546 00:34:35,640 --> 00:34:38,400 Speaker 5: Justice Neil Gorse had sort of scolded the lower court 547 00:34:38,480 --> 00:34:42,920 Speaker 5: judges here for not following the Supreme Court's emergency ruling 548 00:34:43,000 --> 00:34:47,160 Speaker 5: in April that allowed the Trump administration to cancel sixty 549 00:34:47,200 --> 00:34:51,800 Speaker 5: five million dollars in teaching grants. Quote. Lower court judges 550 00:34:51,840 --> 00:34:55,919 Speaker 5: may sometimes disagree with this Court's decisions, but they are 551 00:34:56,080 --> 00:34:59,600 Speaker 5: never free to defy them. He also complained about two 552 00:34:59,640 --> 00:35:04,480 Speaker 5: other strict courts not following Supreme Court rulings quote. So 553 00:35:04,560 --> 00:35:06,640 Speaker 5: this is now the third time in a matter of 554 00:35:06,719 --> 00:35:10,440 Speaker 5: weeks this Court has to intercede in a case squarely 555 00:35:10,560 --> 00:35:13,799 Speaker 5: controlled by one of its precedents. But he's referring to 556 00:35:13,920 --> 00:35:17,480 Speaker 5: rulings on the shadow docket where there aren't full briefings 557 00:35:17,880 --> 00:35:21,040 Speaker 5: or oral arguments or sometimes even opinions. 558 00:35:21,520 --> 00:35:25,719 Speaker 4: Well, it's a very curious position they're taking. Most of 559 00:35:25,760 --> 00:35:30,279 Speaker 4: the history the Supreme Court has been through formal consideration 560 00:35:30,400 --> 00:35:35,280 Speaker 4: of cases, oral arguments, briefs, and thorough opinions from the justices. 561 00:35:35,640 --> 00:35:42,239 Speaker 4: Increasingly under the first Trump administration, the Bodi administration, and 562 00:35:42,440 --> 00:35:46,640 Speaker 4: now the Supreme Court is not accepting full briefs, not 563 00:35:46,800 --> 00:35:50,239 Speaker 4: listening to oral argument, not writing full opinion, sometimes not 564 00:35:50,280 --> 00:35:53,520 Speaker 4: writing any opinions at all. And what justice goursa you're 565 00:35:53,560 --> 00:35:57,040 Speaker 4: saying is, even when the Supreme Court is issuing an 566 00:35:57,040 --> 00:36:00,399 Speaker 4: emergency order, and even when it's not at all clear 567 00:36:00,480 --> 00:36:03,400 Speaker 4: what the basis for that order is, the lower courts 568 00:36:03,440 --> 00:36:07,360 Speaker 4: somehow must read the Supreme Court's mind. If the Supreme 569 00:36:07,400 --> 00:36:10,080 Speaker 4: Court wants lower courts to follow it, it needs to 570 00:36:10,120 --> 00:36:11,240 Speaker 4: tell them what it's doing. 571 00:36:11,800 --> 00:36:16,280 Speaker 5: Chief Justice Roberts joined the liberals in the case involving 572 00:36:16,280 --> 00:36:19,520 Speaker 5: the teaching related grants. And in this case, is that 573 00:36:19,680 --> 00:36:21,399 Speaker 5: surprising in any respect? 574 00:36:21,680 --> 00:36:21,879 Speaker 1: No. 575 00:36:22,120 --> 00:36:26,400 Speaker 4: Chief Justice Roberts has been very concerned about business climate 576 00:36:26,560 --> 00:36:30,760 Speaker 4: and allowing businesses to function freely, and the federal government 577 00:36:30,800 --> 00:36:33,839 Speaker 4: that isn't bound to comply with its contract is very 578 00:36:33,880 --> 00:36:39,239 Speaker 4: bad for business. Throughout the country's history, contract has been 579 00:36:39,480 --> 00:36:42,640 Speaker 4: a central part of its law and the notion that 580 00:36:42,719 --> 00:36:47,000 Speaker 4: the government above all complies with its contracts. It's been central. 581 00:36:47,120 --> 00:36:50,399 Speaker 4: We have a new administration that doesn't want to and 582 00:36:50,520 --> 00:36:53,440 Speaker 4: rather than bringing it to heal, this court has been 583 00:36:53,640 --> 00:36:57,560 Speaker 4: over backwards to accommodate it. If I were a private 584 00:36:57,560 --> 00:37:00,600 Speaker 4: business person, I would be doing anything I could to 585 00:37:00,719 --> 00:37:03,880 Speaker 4: avoid having a contract with the federal government because the 586 00:37:03,880 --> 00:37:07,000 Speaker 4: effect of these decisions isn't The contract isn't worth anything. 587 00:37:07,280 --> 00:37:10,759 Speaker 5: Is there any other avenue that the researchers and the 588 00:37:10,880 --> 00:37:15,480 Speaker 5: organizations and the states can pursue or is it just 589 00:37:15,600 --> 00:37:17,120 Speaker 5: the Court of Federal Claims? 590 00:37:17,480 --> 00:37:20,160 Speaker 4: They can go to the Court of Federal Claims, there 591 00:37:20,200 --> 00:37:25,399 Speaker 4: are significant obstacles to getting relief from that court. It's 592 00:37:25,800 --> 00:37:28,759 Speaker 4: a real court. People do win real judgments there. I 593 00:37:28,840 --> 00:37:31,120 Speaker 4: don't mean to disparage it in that way, but it's 594 00:37:31,160 --> 00:37:34,080 Speaker 4: going to be a very difficult way to proceed. Lots 595 00:37:34,120 --> 00:37:37,120 Speaker 4: of money that is owed probably will never be ordered 596 00:37:37,160 --> 00:37:41,240 Speaker 4: to be paid out of that court, and the result 597 00:37:41,280 --> 00:37:44,640 Speaker 4: of all of this is likely to be that many 598 00:37:45,040 --> 00:37:48,360 Speaker 4: of these programs are indeed disbanded. 599 00:37:48,000 --> 00:37:52,239 Speaker 5: Between this decision and the April decision. It's not good 600 00:37:52,320 --> 00:37:53,840 Speaker 5: news for those who have grants. 601 00:37:54,360 --> 00:37:57,040 Speaker 4: This isn't really a liberal conservative thing. This is just 602 00:37:57,080 --> 00:38:00,279 Speaker 4: a rule of law thing. And if the govern it 603 00:38:00,320 --> 00:38:03,120 Speaker 4: doesn't have to keep its contracts, no one should do 604 00:38:03,160 --> 00:38:04,280 Speaker 4: business with it. 605 00:38:04,280 --> 00:38:07,600 Speaker 5: It's always a pleasure, David, thanks so much. That's Professor 606 00:38:07,680 --> 00:38:11,279 Speaker 5: David Super of Georgetown Law. And that's it for this 607 00:38:11,440 --> 00:38:14,320 Speaker 5: edition of the Bloomberg Law Show. Remember you can always 608 00:38:14,320 --> 00:38:16,920 Speaker 5: get the latest legal news by listening to our Bloomberg 609 00:38:17,040 --> 00:38:20,839 Speaker 5: Law podcasts. You can find them on Apple Podcasts, Spotify, 610 00:38:21,040 --> 00:38:25,279 Speaker 5: and at Bloomberg dot com slash podcast Slash Law. I'm 611 00:38:25,360 --> 00:38:29,320 Speaker 5: June Grosso. Stay with us. Today's top stories and global 612 00:38:29,360 --> 00:38:32,080 Speaker 5: business headlines are coming up right now.