Speaker 1: This is Bloomberg Law with June Grossel from Bloomberg Radio.
Speaker 2: In a landmark decision, the Supreme Court divided down ideological
Speaker 2: lines upheld Tennessee's ban on gender affirming care for transgender miners,
Speaker 2: a stunning setback to transgender rights. Chief Justice John Roberts
Speaker 2: wrote the majority opinion for the six Conservatives, finding the
Speaker 2: law doesn't violate the Constitution's equal Protection clause, which requires
Speaker 2: the government to treat similarly situated people the same Roberts
Speaker 2: wrote that there are fierce scientific and policy debates about
Speaker 2: the medical treatments, and that quote, we leave questions regarding
Speaker 2: its policy to the people, their elected representatives, and the
Speaker 2: democratic process, echoing what the Chief had said during the
Speaker 2: oral arguments.
Speaker 3: You know, we might think that we're, you know, we
Speaker 3: can do just as good a job with respect to
Speaker 3: the the evidence here as Tennessee or anybody else. But
Speaker 3: my understanding is that the Constitution leaves that question to
Speaker 3: the people's representatives rather than to nine people, none of
Speaker 3: whom is the doctor.
Speaker 2: Justice Sonya Sotomayoa wrote a blistering descent for the court's
Speaker 2: three liberals, accusing the Conservatives of abandoning transgender children and
Speaker 2: their families to political whims. During the oral argument, she'd
Speaker 2: pointed out that the democratic process does not protect transgender
Speaker 2: people against bad laws.
Speaker 4: When you're one percent of the population or less, very
Speaker 4: hard to see how the democratic process is going to
Speaker 4: protect you, Well, are you. Blacks were a much larger
Speaker 4: part of the population, and it didn't protect them. It
Speaker 4: didn't protect women for whole centuries.
Speaker 2: The decision will affect transgender kids in half the states
Speaker 2: which have laws similar to the in Tennessee. Joining me
Speaker 2: is Kate Redburn, a professor at Columbia Law School whose
Speaker 2: expertise centers on the law of gender, sexuality, and religion.
Speaker 2: How much of a setback is this decision for transgender rights.
Speaker 5: It's a significant setback for transgender rights, especially regarding the
Speaker 5: availability and access to medically necessary treatments for gender dysphoria.
Speaker 5: So the opinion refers to SB one's Tennessee law, which
Speaker 5: essentially prohibits transgender youth from accessing gender from maing care
Speaker 5: while allowing all other youth to access the same treatments.
Speaker 5: He says, that's not a sex classification. What it doesn't do, however,
Speaker 5: is it doesn't hold that trans people are not a
Speaker 5: suspect class in general, So it looks like at least
Speaker 5: three justices were willing to go that far, and the
Speaker 5: opinion didn't go that far, So it doesn't necessarily reach
Speaker 5: as far as all transcrimination. And even though I think
Speaker 5: the Court clearly reached the wrong conclusion about whether or
Speaker 5: not SB one is a sex classic, it seems to
Speaker 5: have left open the possibility that it or other courts
Speaker 5: could be presented with evidence that laws like SB one
Speaker 5: are really fueled by anti trans sentiment. And so because
Speaker 5: that path remains open, I feel like this decision, while
Speaker 5: absolutely devastating for trans kids and their families and potentially
Speaker 5: for trans adults seeking care that is regulated, it is
Speaker 5: not the total destruction of equal protection law that it
Speaker 5: could have been, and that it appears at least three
Speaker 5: justices were willing to do.
Speaker 2: The three justices you're referring to being Clarence Thomas, Samuel Alito,
Speaker 2: and Amy Cony Barrett explain the central legal question here
Speaker 2: regarding the equal protection clause.
Speaker 5: So the question before the court was whether or not
Speaker 5: this law violated equal protection, and the United States under
Speaker 5: the prior administration really directed the court's attention to the
Speaker 5: question of whether or not this law constituted a sex classification.
Speaker 5: So does the law turn on sex? And the reason
Speaker 5: for that is because when laws do turn on sex,
Speaker 5: the court looks more closely at the law. They call
Speaker 5: that heightened scrutiny for sex discrimination. So the Court has
Speaker 5: said that certain kinds of classifications, race classifications paradigmatically.
Speaker 1: More into strict scrutiny.
Speaker 5: So the Court's going to look very hard. Sex classifications,
Speaker 5: the Court has previously said sometimes are permissible, it's sometimes
Speaker 5: okay for governments to distinguish between people on the basis
Speaker 5: of sex or make sex classifications, but because it sounds
Speaker 5: a little bit potentially suspicious, they're going to look more closely.
Speaker 5: And so the question here was is a sex classification?
Speaker 5: And then the danger was what had happened in the
Speaker 5: Sixth Circuit where in this case that court had said
Speaker 5: that this law was not a sex classification and sort
Speaker 5: of combined the analysis in a way that made people
Speaker 5: concern that the Court was going to find that even
Speaker 5: certain kinds of sex classifications don't warrant heightened scrutiny. So
Speaker 5: here what happened was the Robert's majority opinion says that
Speaker 5: this law is not a sex classification and therefore only
Speaker 5: warrant's rational basis review.
Speaker 2: Chief Justice Roberts, in his majority opinions talked about the
Speaker 2: fierce scientific and policy debates about the safety, efficacy, and
Speaker 2: propriety of medical treatments in an evolving field. Quote, we
Speaker 2: leave questions regarding its policy to the people, their elected
Speaker 2: representatives and the democratic process. Is that just the court
Speaker 2: looking for an out? I mean, they do make policy decisions.
Speaker 5: Yeah, So it sounds not dissimilar to what the Court
Speaker 5: said about Dobbs when it overturned roversus Wade, which was
Speaker 5: under the guise of changing doctrine, and that case quite significantly,
Speaker 5: you described itself as kicking the question back to the states.
Speaker 5: What is suspicious about that language in this context is
Speaker 5: that the heightened scrutiny is actually designed to make it
Speaker 5: possible for course to spend some time really looking at
Speaker 5: the justifications that the governments are using for regulating and
Speaker 5: classifying on sex, and then it also asks whether or
Speaker 5: not the means justify the ed. So it might be
Speaker 5: that there's a close relationship between the purpose of the
Speaker 5: law and its classification, but it's nevertheless not an acceptable
Speaker 5: purpose anyway. All that's to say that the existing doctrine
Speaker 5: is meant to give the court the opportunity to really
Speaker 5: weigh evidence. And what this decision does is it seems
Speaker 5: to open up the possibility of authorizing governments to regulate
Speaker 5: around medical procedures that touch on sex without courts even looking.
Speaker 1: To weigh the evidence. So it might be the.
Speaker 5: Case that the Court would have applied heightened scrutiny and
Speaker 5: still found that this particular law had on its view
Speaker 5: of sufficient evidentiary support, you know, in light of the
Speaker 5: purported medical controversy. But it might not have, and it
Speaker 5: really denied itself and potentially future courts from even looking
Speaker 5: into that.
Speaker 2: Justice Soto Mayor eroded descent for the three liberals. She
Speaker 2: read a summary of it from the bench, which the
Speaker 2: justices sometimes do when they feel strongly about a descent.
Speaker 2: Then she ended with in sadness I dissent. She talked
Speaker 2: about the majority abandoning transgender children and their families to
Speaker 2: political whims.
Speaker 5: I think that you know, her sadness stems from the
Speaker 5: fact that this is going to for were potentially trans
Speaker 5: kids and their families in half of the states where
Speaker 5: similar laws are on the books to relocate in order
Speaker 5: to simply live their lives.
Speaker 1: The state of the.
Speaker 5: Medical controversy about these issues, and the majority opinion is
Speaker 5: vastly overstated. Much of the history that it relies on,
Speaker 5: and some of the other concurring opinians rely on, it's
Speaker 5: just untrue. And so you know what I think Justice
Speaker 5: Sodomyor was trying to say is that the consequences for
Speaker 5: trans youth in particular are just really, really egregious.
Speaker 2: In her courtroom statement, she said that similar arguments were
Speaker 2: made to defend the Virginia law that prohibited interracial marriage
Speaker 2: that the Supreme Court struck down in nineteen sixty seven.
Speaker 5: Yeah, so we call those equal application laws. So in
Speaker 5: Loving versus Virginia, the argument was well for the law
Speaker 5: prohibited interracial marriage, and the justification for it that the
Speaker 5: state gave was this is not racial discrimination because white
Speaker 5: people are not allowed to marry people of color and
Speaker 5: people of color are not allowed to marry white people.
Speaker 5: In other words, everyone is equally prohibited. The said, No,
Speaker 5: it is still rooted in racial stereotypes that suggest that
Speaker 5: interracial marriage is bad and also animus towards racial minorities
Speaker 5: and trying to reinforce the racial hierarchy in the country.
Speaker 5: So the fact that you can find in that case
Speaker 5: white people and black people on both sides of the
Speaker 5: line that the regulation draws does not mean that it's
Speaker 5: not subject to heightened scrutiny. So there's a reading of
Speaker 5: the majority's opinion here that does exactly the same thing.
Speaker 5: And that's what she's saying that just because there are
Speaker 5: transgender miners on both sides of the line. In other words,
Speaker 5: transgender miners, according to the court, can still obtain sort
Speaker 5: of treatments if they're not for the purposes of addressing
Speaker 5: gender dysphoria. That doesn't mean that this is not motivated
Speaker 5: by animis towards transgender people and trying to reinforce as
Speaker 5: sex and gender hierarchy that suggest that there's something normatively
Speaker 5: preferable about not being transgender.
Speaker 2: The government changed its position after President Trump took office,
Speaker 2: switching to supporting Tennessee's ban. Trump has seemed to target
Speaker 2: transgender people in various ways, from declaring there are only
Speaker 2: two sexes to kicking transgender service members out of the military.
Speaker 2: Why do you think there's so much emphasis on a
Speaker 2: group that represents less than one percent of the population.
Speaker 5: Basically, since it's a little bit after twenty sixteen, it's
Speaker 5: been a major priority among Republican state legislators, in particular
Speaker 5: to attack trans right. There's a lot of reasons why
Speaker 5: that could be the case. You know, one reason that
Speaker 5: having lost the gay marriage fight, there's an effort to
Speaker 5: find a different issue that touches on questions of traditional
Speaker 5: and non traditional gender and sexual role. The search for
Speaker 5: another issue became even stronger after Dobbs, after the Supreme
Speaker 5: Court overturned ro versus Ways, in part because abortions actually
Speaker 5: quite popular nationally, and so in order to create some
Speaker 5: kind of coalition that could win national elections, needed to
Speaker 5: find an issue which would connect to traditional gender and
Speaker 5: sexual values without touching on something popular like gay marriage
Speaker 5: or abortion. So a way to understand the effect of
Speaker 5: the Trump administration is really that it has accelerated a
Speaker 5: pre existing tendency, and it's turned what were state level
Speaker 5: efforts to make transgender life extremely difficult, if not impossible,
Speaker 5: into national policy. So the redefinition of sex, attempts to
Speaker 5: regulate medical treatments, access to bathrooms, access to sports teams,
Speaker 5: all of those efforts that we saw in the executive orders,
Speaker 5: and of course, you know, very important restrictions and attempted
Speaker 5: restrictions now in Congress on access to trans healthcare through
Speaker 5: various kinds of federal aid are reflecting the nationalization of
Speaker 5: what had been state level attacks.
Speaker 2: Does this decision hurt challenges to attempts to roll back
Speaker 2: transgender rights.
Speaker 5: It might, it might not. As I said, there is
Speaker 5: not a majority on the Court apparently to hold that
Speaker 5: anti transiscrimination, you know, is not visible to the Constitution.
Speaker 5: In other words, there are other kinds of anti transiscrimination
Speaker 5: that the Court seems to have held open the possibility
Speaker 5: for recognizing, and so it's going to really depend on
Speaker 5: what is characterized as a medical condition. In other words,
Speaker 5: this opinion says that SB one is discriminating on the
Speaker 5: basis of gender dysphoria and not transgender identity, and so
Speaker 5: other laws do not have that character of being ostensibly
Speaker 5: justified as medical regulations. Instead, I think the normative stakes
Speaker 5: of just trying to force people not to be transgender
Speaker 5: are even clearer in those other situations. And the Court
Speaker 5: hasn't totally eliminated the possibility of reading those arguments in
Speaker 5: the future.
Speaker 2: And we can expect the court's decision on the use
Speaker 2: of LGBTQ friendly books in the classroom next week. Thanks
Speaker 2: so much for joining me. That's Professor Kate Redburn of
Speaker 2: Columbia Law School. Coming up next on the Bloomberg Law Show,
Speaker 2: Karen Reid is acquitted of the murder of her Boston
Speaker 2: police officer boyfriend, and a juror is dismissed from the
Speaker 2: Sean Diddy Combs trial. I'm June Grasso, and you're listening
Speaker 2: to Bloomberg. Cheers from hundreds of Karen Reid's supporters outside
Speaker 2: the courthouse in Dedham, Massachusets as the jury's verdict acquitting
Speaker 2: her of murder and manslaughter charges was announced on Wednesday.
Speaker 2: Reid was accused of intentionally ramming her SUV into her
Speaker 2: Boston police officer boyfriend, John o'keef in a drunken rage
Speaker 2: after an argument, leaving him to die in a blizzard.
Speaker 2: The defense had argued that Reid was framed by police,
Speaker 2: and another jury nearly a year ago was deadlocked after
Speaker 2: five days of deliberations, leading to a mistrial. This jury
Speaker 2: in the retrial, deliberated twenty two hours over four days
Speaker 2: before reaching its verdict. Only finding reed guilty of drunken driving.
Speaker 2: A couple of the jurors later said that the police
Speaker 2: investigation was sloppy, leaving holes in the prosecution's case.
Speaker 6: As the weeks passed by, I just realized there was
Speaker 6: too many holes that we couldn't feel, and there's nothing
Speaker 6: that put her on the scene in our opinion, besides
Speaker 6: just dropping. John mcckeffe off.
Speaker 2: Thanked her supporters and said this.
Speaker 5: No one has fought carter for justice for John O'Keefe.
Speaker 7: And I have.
Speaker 2: Some of the key prosecution witnesses in the trial released
Speaker 2: a joint statement calling the not guilty verdict a devastating
Speaker 2: miscarriage of justice. My guest is former Palm Beach County
Speaker 2: State Attorney Dave Ehrenberg. Dave, were you surprised at the acquittal?
Speaker 1: I was very surprised by it because I thought the
Speaker 1: prosecution this time did an excellent job and focusing the
Speaker 1: jury on the evidence, the data, the cell phone data,
Speaker 1: the evidence of the battery of the cell phone and
Speaker 1: when it started to weaken and when the phone started
Speaker 1: to freeze, the timing. I mean, this was not speculation.
Speaker 1: Data doesn't have any ax to grind. Data is data.
Speaker 1: And as a result, I thought the jury would listen
Speaker 1: to that. Instead, they got distracted by all the things
Speaker 1: and apparently found reasonable doubt.
Speaker 2: Obviously there were no eyewitness accounts, no direct evidence of
Speaker 2: the hit, but there were a series of experts to
Speaker 2: fill in the evidentiary picture. Do you think that testimony
Speaker 2: was too sophisticated for the jury.
Speaker 1: Whenever you get into a battle of experts, it's a
Speaker 1: problem for prosecution because jurors these days, they want eyewitnesses,
Speaker 1: they want the DNA, they want the conclusive smoking guns
Speaker 1: because they're used to seeing that on TV shows which
Speaker 1: are wrapped up in an hour at BSI and other shows.
Speaker 1: And if you don't have that, jurors will quickly find
Speaker 1: some reasonable doubt, especially if it becomes a battle of experts.
Speaker 1: But I thought that it was a defense that came
Speaker 1: up with a cockamamie alternative theory and thus raised the
Speaker 1: bar for the defense by saying that John O'Keefe entered
Speaker 1: the home. There's no evidence he entered the home, there's
Speaker 1: no evidence that anything happened, but he was hit by
Speaker 1: the car by a drunk, enraged woman who left dozens
Speaker 1: of angry voicemails on the victim's phone while he lay
Speaker 1: dying in the snow.
Speaker 2: And how did the defense explain Read's own words to
Speaker 2: paramedics afterwards, repeatedly saying I hit him.
Speaker 1: Yeah, her own words. I mean, she admitted it, but
Speaker 1: they were able to somehow frame it as maybe she
Speaker 1: was unsure, maybe she thought she did, but the witnesses
Speaker 1: said no, she said I hit him.
Speaker 5: I hit him.
Speaker 1: Her own lawyer when this case started said that she
Speaker 1: did hit him, that this was an accident. But then
Speaker 1: they changed their view to try to get away with
Speaker 1: it entirely, and she did.
Speaker 2: Would we call it a mixed verdict because they did
Speaker 2: convict her of operating under the influence of alcohol? Of course,
Speaker 2: the judge just gave her probation for that.
Speaker 1: Well, yeah, but they didn't find her guilty of leaving
Speaker 1: the scene of an accident, so they didn't even feel
Speaker 1: that it was conclusive that she caused an accident. So
Speaker 1: how did he die? It's a binary choice. Either she
Speaker 1: hit him or he went into the house and was
Speaker 1: murdered by law enforcement officers and soccer moms who got
Speaker 1: together in a conspiracy of silence. The murdered their friend
Speaker 1: and then dump his body on the front lawn. I
Speaker 1: don't even understand how anyone can think that makes sense.
Speaker 1: I mean, if you're a law enforcement officer and you're
Speaker 1: in cahoots with soccer moms, wouldn't you think you would
Speaker 1: just claim self defense if you wanted to kill another
Speaker 1: law enforcement officer, Or wouldn't you try to hide the body?
Speaker 1: Why would you throw the body onto the front lawns
Speaker 1: of your house unless it didn't happen, which it didn't happen.
Speaker 2: What some people say is the most powerful defense testimony
Speaker 2: was a snowplow driver who passed the home several times
Speaker 2: in the hours after the alleged collision and said he
Speaker 2: didn't see a two hundred and sixteen pounds six foot
Speaker 2: one man lying in the yard.
Speaker 7: Yeah, no one did.
Speaker 1: This snow was coming down, and no one did. The
Speaker 1: only person who found John O'Keefe, who was then the
Speaker 1: next morning buried under the snow. The only person who
Speaker 1: found John O'Keefe was the person who hit him, because
Speaker 1: she knew where his body was. Because she hit him,
Speaker 1: she knew what happened. No one else could find him.
Speaker 1: They were driving around looking for him, but she bought
Speaker 1: them from a while away. Because she's the one who
Speaker 1: hit him. So in this case, I feel the same
Speaker 1: way as I did after the Oj Simpson verdict or
Speaker 1: the Casey Anthony verdict, that he had a guilty person
Speaker 1: go free.
Speaker 2: Usually on a retrial, it's the prosecution that has the advantage.
Speaker 2: Why do you think it was different here?
Speaker 1: I thought the prosecution did a really good job. I
Speaker 1: don't have any issues with him. I think the defense
Speaker 1: was able to capitalize on this content with police, as
Speaker 1: all it takes his futures would have issues with police.
Speaker 1: And here the accusation was that there was a police
Speaker 1: cover up and that the police officers were too close
Speaker 1: to the family inside the house, and the police officers
Speaker 1: were not only incompetent in collecting the evidence. That's the
Speaker 1: defense talking, not me, but also that the lead investigator,
Speaker 1: who was not even called to the stand, but that
Speaker 1: the lead investigator was such discussing individual with his comments
Speaker 1: about Karen Reid, and he did make offensive comments that
Speaker 1: the whole thing was tainted. And I think that has
Speaker 1: some residents of the jury. I think they perhaps want
Speaker 1: to know why the lead investigator did not testify. Maybe
Speaker 1: they were hiding something which they weren't. They just thought
Speaker 1: that this guy was a side show distraction because of
Speaker 1: his comments.
Speaker 2: Yeah, and the defense seemed to emphasize that in the
Speaker 2: closing arguments. Did the defense improve over the first trial
Speaker 2: where it just presented a day and a half of
Speaker 2: defense witnesses.
Speaker 1: I thought the defense did a really good job as
Speaker 1: they did in the first trial. I mean, anytime you
Speaker 1: are able to get a guilty client acquitted, it's a
Speaker 1: real feed for the defense and they deserve credit. They're
Speaker 1: great lawyers, and it is my belief that she was guilty,
Speaker 1: and I think the evidence conclusively establishes that. But when
Speaker 1: you're a defense learning able to create a side show
Speaker 1: distraction and it works with the jury, then you're doing
Speaker 1: your job. That's a shame for the victims' family. That's
Speaker 1: what it is.
Speaker 2: Read, of course, is free of all criminal charges in
Speaker 2: the case can't be retried, but she still faces a
Speaker 2: civil wrongful death case by O'Keefe's family, and the standard
Speaker 2: of proof there is much lower, so she could be
Speaker 2: held liable for damages there.
Speaker 1: Right In a civil case, the standard is just proponents
Speaker 1: of the evidence. It's much easier to prove and you
Speaker 1: just have to proved negligence, which is.
Speaker 7: A lower burden.
Speaker 1: So all around, it's easier to prove that case of
Speaker 1: the evidence just means, is it more likely than not
Speaker 1: that Ken Reid did something wrong here committed a tourt.
Speaker 1: You don't have to prove anything beyond a reasonable doubt.
Speaker 2: So is the logical conclusion after this verdict that the
Speaker 2: murderer is still out there?
Speaker 1: Yeah? I guess she and Odo Simpson will go search
Speaker 1: for the real killers. That's really what this is, right,
Speaker 1: This was a binary choice. Either she hit him with
Speaker 1: the car or he went inside the house and was
Speaker 1: murdered by law enforcement officers and soccer mom, and then
Speaker 1: they threw their friend's body arms of their front law
Speaker 1: doesn't make any sense.
Speaker 2: So, Dave, what do you make of her supporters? I mean,
Speaker 2: there were crowds of people outside the courthouse waiting for
Speaker 2: the verdict. I mean why she.
Speaker 1: Became a culture personality. I think that the narrative that
Speaker 1: was fed by bloggers was that here's this sweet innocent
Speaker 1: woman who's being framed for a crime she didn't commit
Speaker 1: by the corrupt law enforcement officers. And I just feel
Speaker 1: for those law enforcement officers and the families for having
Speaker 1: their names dragged through the mud when they didn't deserve that.
Speaker 1: They lost a loved one, and John o'keith was a
Speaker 1: good man. And now, in my mind, a guilty defendant
Speaker 1: walks free.
Speaker 2: When Reid came out of the courthouse, she made this
Speaker 2: statement that struck me as odd. No one has fought
Speaker 2: harder for justice for John o'keef than I have.
Speaker 1: That's her, oj Simpson, I'm going to find the real
Speaker 1: killers moment and just tells you all you need to
Speaker 1: know about her. I mean to make a statement like that,
Speaker 1: What an install to the family. Now, what an insult?
Speaker 1: It rubbed salt in the wounds to say something like that.
Speaker 1: Just go on with your life and this family is
Speaker 1: suffering enough.
Speaker 2: Thanks for being here, Dave. That's day Arenberg, former Palm
Speaker 2: Beach County State Attorney, and in another high profile trial,
Speaker 2: jurors may begin deliberating towards the end of next week.
Speaker 2: Sean Diddy Combs is entrumph for racketeering, conspiracy, and sex trafficking.
Speaker 2: The prosecution is expected to rest its case on Monday,
Speaker 2: and the defense says it expects to put on its
Speaker 2: case on Wednesday and Thursday. There was some jury drama
Speaker 2: this week as the judge dismissed a juror, despite the
Speaker 2: defense raising concerns that putting in a white alternate juror
Speaker 2: for the black juror would make the jury less diverse.
Speaker 2: Joining me is former federal prosecutor Robert Mintz, a partner
Speaker 2: Macarter In English, Bob tell us what happened with Juror
Speaker 2: number six?
Speaker 8: Even before we got to the close of the trial
Speaker 8: and deliberations in front of the jury, one of the jurors,
Speaker 8: jur number six, was removed from the panel by the
Speaker 8: judge after it was determined that the juror had been
Speaker 8: less than candid about where he resided during the jury
Speaker 8: selection process. He apparently indicated that he lived in the Bronx,
Speaker 8: which is part of the Southern District of New York,
Speaker 8: the district where the trial is taking place, but later
Speaker 8: information surfaced that he actually lived with his girlfriend in
Speaker 8: New Jersey, which is not within the Southern District of
Speaker 8: New York. And the court will say that you cannot
Speaker 8: be sitting on the jury unless you reside within the district.
Speaker 8: So that was ground to remove the juror, and the
Speaker 8: judge found that there was nothing that could be done
Speaker 8: to repair the juror's credibility, since, according to the judge,
Speaker 8: he had apparently been less than candid about where he
Speaker 8: was living.
Speaker 2: The trial is in its sixth week. Do the attorneys
Speaker 2: have a feel for which jurors may be leaning in
Speaker 2: their direction.
Speaker 8: Throughout the trial? It's typical for the defense and the
Speaker 8: prosecution to be forming opinions about which jurors they think
Speaker 8: may be favoring their case. Of course, nobody really knows
Speaker 8: what's going on, but based upon their body language, perhaps
Speaker 8: based upon the eye contact that they're making with witnesses,
Speaker 8: eye contact they may be making with a defendant, just
Speaker 8: the way they conduct themselves in the jury box during
Speaker 8: the trial, it's inevitable that both the prostitution and the
Speaker 8: defense formed some belief as the which jurors may be
Speaker 8: favoring them as the trial unfold. In this case, when
Speaker 8: the judge decided that jurors number six had to be removed,
Speaker 8: there was an objection by the Comb's defense team. This
Speaker 8: was only one of two black men that was on
Speaker 8: the panel, and in this case, what you had was
Speaker 8: the removal of a black, middle aged man who was
Speaker 8: now replaced by the ultimate who happened to be an
Speaker 8: older white man. The defense argued that that was unfair,
Speaker 8: that it created a racial in the jury, but the
Speaker 8: judge rule that race is not something that he can
Speaker 8: consider in terms of removal of jur is something that
Speaker 8: is beyond the scope of what is relevant for consideration
Speaker 8: as to whether this juror can continue to sit on
Speaker 8: the jury panel, and he therefore removes thejur is over
Speaker 8: the objections of the defense.
Speaker 2: This will likely be inn a pellet issue if he's convicted.
Speaker 2: Thanks Bob. That's Robert Mince of Macarter and English. Coming
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Speaker 2: celebrity endorsers. We're an obvious target from massive class action
Speaker 2: lawsuit by investors who sued them for promoting FTX as
Speaker 2: a trustworthy platform and allegedly enabling FTX to engage in fraud.
Speaker 2: Shaquille O'Neil is no longer all in on FTX. In fact,
Speaker 2: he's the first celebrity who's decided to take himself out
Speaker 2: of the equation, walking away from the case by agreeing
Speaker 2: to pay one point eight million dollars to settle. Joining
Speaker 2: me is entertainment attorney Ron Beanstock, a partner at Scarinsey Hollinbeck.
Speaker 2: Ron tell us about the lawsuits filed against FTX celebrity endorsers,
Speaker 2: including Tom Brady, Steph Curry, Gisel Bunchen, Naomi Osaka, David Ortiz,
Speaker 2: and Larry David.
Speaker 7: So let me begin by explaining. If you can imagine
Speaker 7: putting a frozen dinner into the microwave and it explodes
Speaker 7: and gets onto everybody and everything. That's what's happened here.
Speaker 7: So we have to go back a couple of years.
Speaker 7: Sam Bankman, Freed and other people decide that they want
Speaker 7: to create a cryptocurrency exchange, right they want to compete
Speaker 7: with other well known cryptocurrency exchanges of a Haamian based company.
Speaker 7: Hintin that should has already told somebody something and FTX
Speaker 7: gets formed with investment capital and to create the largest
Speaker 7: if you will, but also the rabatas of it being serious.
Speaker 7: Who do we turn to return to media people, sports figures,
Speaker 7: celebrities to if you will become ambassadors. You can't see
Speaker 7: my hands, but hand quotes in the air, ambassadors for
Speaker 7: the brand, and in return people would get either shares
Speaker 7: or get paid. So Tom Brady gets fifty five million
Speaker 7: dollars in stock and is now ex wife Giselle Bundes
Speaker 7: gets nineteen point eight. The problem with all of that
Speaker 7: is is that this is not true normal endorsement degree.
Speaker 7: You know, if you're endorsing a product Breakfast Cereal, Wheaty's Box, right,
Speaker 7: the chances of things going wrong with the product itself
Speaker 7: are fairly minimalized. These are gems products. Once you get
Speaker 7: to services like this, where you've got a currency exchange
Speaker 7: service that you're telling people and this is the quote
Speaker 7: from the complaint is safe and reliable. I think that
Speaker 7: there's going to be an issue whether you were fully
Speaker 7: advised both by the ambassador of this serves or even
Speaker 7: your own people advising you as the ambassador, as the
Speaker 7: potential downfalls and pitfalls of this. So it starts with
Speaker 7: FTX rolling along becoming this sort of high investment package group.
Speaker 7: They get naming rights to a sports stadium in Miami.
Speaker 7: They sponsor a Formula One racing team all of the
Speaker 7: big money looking type things to show look how well
Speaker 7: we're doing, and then they don't make any money, and
Speaker 7: investors file in the Southern District of Florida in Federal Core.
Speaker 7: Obviously there's a now consolidated case. It's a five hundred
Speaker 7: page complaint that lays out that we as investors have
Speaker 7: been defrauded and that money went into this morass and
Speaker 7: did not come back out as profit for us, and
Speaker 7: you promised to profit on this unregulated cryptocurrency exchange.
Speaker 1: So there's a.
Speaker 7: Series of interlocking lawsuits and complaints all taking place at
Speaker 7: the same time. Well, what occurs bankruptcy and from that
Speaker 7: bankruptcy things just fall down the hill so fast.
Speaker 2: Explain Shaq's involvement.
Speaker 7: We don't know the inside story, but Shaq, along with
Speaker 7: Larry David, Naomi Osaka, Steph Curry, and Shohiotani are all involved.
Speaker 7: They all get paid. Now, this is not sort of
Speaker 7: your classic influencer deal. They're paid ambassadors of this and
Speaker 7: they put their own personal brand at stake by doing this.
Speaker 7: Shaq gets paid seven hundred and fifty thousand dollars to
Speaker 7: be an ambassador for the FTX and people are giving
Speaker 7: money in based upon the assurances that these really well
Speaker 7: known people, and Shack has reputation of being a very
Speaker 7: good business person, that they are sure that there'll be
Speaker 7: some successful outcome of this doesn't happen, goes into bankruptcy.
Speaker 7: So the lawsuits begin back in that consolidated case in Florida,
Speaker 7: and there's a serious emotions back and forth, and Shack
Speaker 7: opts out. He settles, and there is a judge's orders
Speaker 7: as to whether liability we expanded or curtailed involving mister
Speaker 7: Brady and all these other people. And Shack settled prior
Speaker 7: to the judge's order. And he settles for one point
Speaker 7: eight million and a release. And everybody's been saying, well,
Speaker 7: did he opt out too soon? I think that's a
Speaker 7: fair question. I think he opted out for a cap
Speaker 7: amount and a release, and he could walk away from this,
Speaker 7: even though this agreement still needs to be approved by
Speaker 7: the court, that at this point it looks like he'll
Speaker 7: get out for one point eight where just all the
Speaker 7: money he got plus another nearly a million dollars.
Speaker 2: Decades ago, the Ninth Circuit found that Steve Garvey, the
Speaker 2: star baseball player, couldn't be held liable for endorsing a
Speaker 2: weight loss system that claimed people could lose wait just
Speaker 2: by sitting around and doing nothing because he didn't know
Speaker 2: about material representations. So have celebrity endorsers generally not been
Speaker 2: found liable for the wrongful acts of the companies whose
Speaker 2: products they promote.
Speaker 7: It's the perfect question. The general follow is if you
Speaker 7: had a product and the product hurts somebody or something happens,
Speaker 7: you're generally indemnified. Right, I promoted the product, but you
Speaker 7: indemnified me if someone got hurt with the product. Here
Speaker 7: the harm was so substantial involving services that the harm
Speaker 7: can't even be calculated to some extent. But the general
Speaker 7: rule to follow is when you're an endorser of a product,
Speaker 7: you're generally capped. Generally think they're indemnified. You know, it's
Speaker 7: pretty straightforward.
Speaker 3: These thinks.
Speaker 7: They're done all the time. This is an unregulated business.
Speaker 7: And I've got to toss in one more thing. Shack
Speaker 7: had already been involved in an NFT promotion for those
Speaker 7: not familiar, non fungible token that he and his son started,
Speaker 7: and he settled for eleven million dollars. It was called
Speaker 7: the Astros project, and he settled late last year he
Speaker 7: was promoting it and he was one of the major
Speaker 7: figures in it, and he settled the class action for
Speaker 7: eleven million. Again an unregulated business. NFT's with this flash
Speaker 7: and of pan as we've all talked about, and then
Speaker 7: it's gone. It has no value, right the cryptocurrency exchanged
Speaker 7: world with SDX fell apart, no value. So the answer
Speaker 7: to that question is there are limitations as to major
Speaker 7: endorsement agreements with regulated business, food, beverages, things of that nature.
Speaker 7: But in the unregulated world. This is where I can't
Speaker 7: make a flag red and big enough to waive to
Speaker 7: people to say, are you sure?
Speaker 2: What will the plaintiff investors have to show here that
Speaker 2: they relied on the celebrity endorser. And it's one thing
Speaker 2: to rely on a celebrities endors to buy beer or
Speaker 2: chips or face cream, But how reasonable is it to
Speaker 2: rely on a celebrities endorsement to invest your money? Does
Speaker 2: that matter?
Speaker 7: People have relied on celebrity endorsements for many decades. Think
Speaker 7: about it, cigarettes, that's an unsafe product. People have done
Speaker 7: car endorsements and there've been car crashes. So the difference
Speaker 7: is is that it's relatively regulated. You do have FBA,
Speaker 7: you would have you know, transportation issues, you've got regulations
Speaker 7: to some extent. There's oversight here, and when there's no oversight,
Speaker 7: I think that's the biggest question. What happens with non
Speaker 7: regulated oversight business where of course this is the big money, right,
Speaker 7: there's no end to it. People see pie in the sky.
Speaker 7: There's the lure of the unregulated billions. It captures people,
Speaker 7: including investors. And the complaint, like I said, stated that
Speaker 7: the ambassadors are claiming it's safe and reliable, but the
Speaker 7: complaint also says they knew the risks. Soquestion is shouldn't
Speaker 7: that same theory been imputed to the investor's sophisticated money
Speaker 7: people who would have known the risks of investing in
Speaker 7: a cryptocurrency exchange. And I think that's the question that
Speaker 7: we don't have the answer to. We will have it
Speaker 7: from the court to some extent, and we'll see how
Speaker 7: successful the claims go against the various people I mentioned before, Otani,
Speaker 7: David Osaka Curry the liability extent to them. But Shack
Speaker 7: got out because he saw a moment to cap it.
Speaker 7: And I think his attorneys may have had a relationship
Speaker 7: with Plank discouncil, and they may have known each other,
Speaker 7: and they're probably a little back door, you know, behind
Speaker 7: the scenes trading, and he got out for one point eight.
Speaker 2: As you mentioned before, a Florida federal judge dismissed a
Speaker 2: lot of the claims against the celebrities in the case,
Speaker 2: narrowing the scope of the litigation.
Speaker 7: He dismissed some of the potential liability aspects of it.
Speaker 7: And again we don't really know. The voluminous paperwork on
Speaker 7: this case is hard to explain. Like I said, complaint
Speaker 7: alone and men to complaint to five hundred pages and
Speaker 7: who knows can make it a third emend There are
Speaker 7: so many decisions to have been made involving the motions
Speaker 7: to dismiss back and forth. But at some point there
Speaker 7: was probably a series of claims here that the judge
Speaker 7: is going to feel, you know what, I'm going to
Speaker 7: curtail this. I want to get the case back under control.
Speaker 7: It's too broad, So I'm going to allow some of
Speaker 7: this liability to come through, and I think I'm going
Speaker 7: to dismiss other aspects of it.
Speaker 2: Do you see these lawsuits affecting celebrity endorsement deals in
Speaker 2: the future.
Speaker 7: I think so I think this is going to have
Speaker 7: some chilling effect.
Speaker 2: I do.
Speaker 7: And for you to be in a position you the
Speaker 7: average you know, superstar person, media celebrity, to be in
Speaker 7: a position where you can settle for one point eight
Speaker 7: million or in Shack's case, eleven million and then one
Speaker 7: point eight million, I suppose if you've got that liquidity
Speaker 7: to do that, then maybe things don't bother you. And
Speaker 7: maybe at that level of finance, you know, access to capital,
Speaker 7: maybe it doesn't. But I think it's going to have
Speaker 7: a chilling effect, and I would hope so on people
Speaker 7: making decisions, particularly in unregulated businesses like NFT, cryptocurrency exchange,
Speaker 7: Bitcoin which is a form of cryptocurrency, and other mean
Speaker 7: coins and think of this nature. I think that's where
Speaker 7: people are going to start to get a little bit
Speaker 7: more reluctant to lend their name to something, because now
Speaker 7: you're talking about your brand being damaged to support another brand,
Speaker 7: and we only have the one brand, and when it's tarnished,
Speaker 7: your ability to endorse high level things will diminish.
Speaker 2: We'll see if any other celebrities decide to take the
Speaker 2: settlement route like Shack. Thanks so much, Ron, that's Ron
Speaker 2: Beanstock a partner at Scarincy Holland Beck. And that's it
Speaker 2: for this edition of The Bloomberg Law Show. Remember you
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