1 00:00:02,759 --> 00:00:07,520 Speaker 1: This is Bloomberg Law with June Grossel from Bloomberg Radio. 2 00:00:08,880 --> 00:00:12,399 Speaker 2: Juror drama at the Sean Diddy Combes trial even before 3 00:00:12,400 --> 00:00:17,960 Speaker 2: deliberations begin, the judge dismissed jural number six yesterday, despite 4 00:00:18,040 --> 00:00:21,799 Speaker 2: the defense's concerns that putting in a white alternate for 5 00:00:21,840 --> 00:00:25,160 Speaker 2: the black juror would make the jury less diverse and 6 00:00:25,239 --> 00:00:28,600 Speaker 2: another juror maybe in jeopardy for speaking about the case. 7 00:00:29,040 --> 00:00:32,519 Speaker 2: Joining me is former federal prosecutor Robert Mintz, a partner 8 00:00:32,560 --> 00:00:36,000 Speaker 2: maccarter in English, Bob tell us what happened with jural 9 00:00:36,120 --> 00:00:37,160 Speaker 2: number six. 10 00:00:37,640 --> 00:00:40,800 Speaker 3: Even before we got to the close of the trial 11 00:00:41,200 --> 00:00:44,360 Speaker 3: and deliberations in front of the jury. One of the jurors, 12 00:00:44,440 --> 00:00:48,519 Speaker 3: Jurer number six, was removed from the panel by the 13 00:00:48,640 --> 00:00:52,000 Speaker 3: judge after it was determined that the juror had been 14 00:00:52,080 --> 00:00:55,720 Speaker 3: less than candid about where he resided during the jury 15 00:00:55,760 --> 00:00:59,800 Speaker 3: selection process. He apparently indicated that he lived in the Bronx, 16 00:01:00,000 --> 00:01:02,080 Speaker 3: which is part of the Southern District of New York, 17 00:01:02,680 --> 00:01:06,399 Speaker 3: but later information surfaced that he actually lived with his 18 00:01:06,480 --> 00:01:09,959 Speaker 3: girlfriend in New Jersey, which is not within the Southern 19 00:01:10,000 --> 00:01:12,759 Speaker 3: District of New York and not even within the district 20 00:01:12,840 --> 00:01:16,320 Speaker 3: where the trial is taking place, and the court will 21 00:01:16,440 --> 00:01:19,000 Speaker 3: say that you cannot be sitting on the jury unless 22 00:01:19,000 --> 00:01:22,720 Speaker 3: you reside within the district. So that was ground to 23 00:01:22,840 --> 00:01:25,720 Speaker 3: remove the juror, and the judge found that there was 24 00:01:25,800 --> 00:01:30,559 Speaker 3: nothing that could be done to repair the juror's credibility since, 25 00:01:30,600 --> 00:01:33,600 Speaker 3: according to the judge, he had apparently been less than 26 00:01:33,680 --> 00:01:35,320 Speaker 3: candid about where he was living. 27 00:01:35,720 --> 00:01:38,920 Speaker 2: The trial is in its sixth week. Do the attorneys 28 00:01:38,959 --> 00:01:42,679 Speaker 2: have a feel for which jurors may be leaning in 29 00:01:42,760 --> 00:01:43,840 Speaker 2: their direction. 30 00:01:44,280 --> 00:01:47,600 Speaker 3: Throughout the trial? It's typical for the defense and the 31 00:01:47,640 --> 00:01:51,280 Speaker 3: prosecution to be forming opinions about which jurors they think 32 00:01:51,600 --> 00:01:54,920 Speaker 3: may be favoring their case. Of course, nobody really knows 33 00:01:54,960 --> 00:01:58,400 Speaker 3: what's going on, because the jurors aren't saying anything but 34 00:01:58,560 --> 00:02:01,720 Speaker 3: based upon their body laning, which perhaps based upon the 35 00:02:01,800 --> 00:02:05,800 Speaker 3: eye contact that they're making with witnesses, eye contact they 36 00:02:05,840 --> 00:02:08,440 Speaker 3: may be making with a defendant, just the way they 37 00:02:08,480 --> 00:02:12,240 Speaker 3: conduct themselves in the jury box. During the trial, it's 38 00:02:12,240 --> 00:02:15,680 Speaker 3: inevitable that both the prostitution and the defense formed some 39 00:02:15,880 --> 00:02:19,079 Speaker 3: belief as to which jurors may be favoring them as 40 00:02:19,120 --> 00:02:23,240 Speaker 3: a trial unfold. In this case, when the judge decided 41 00:02:23,320 --> 00:02:26,280 Speaker 3: that Jurors number six had to be removed. There was 42 00:02:26,320 --> 00:02:30,680 Speaker 3: an objection by the Combs defense team, saying that it 43 00:02:30,720 --> 00:02:33,720 Speaker 3: would create a mistrial. This was only one of two 44 00:02:33,800 --> 00:02:36,720 Speaker 3: black men that was on the panel, and in this case, 45 00:02:36,880 --> 00:02:39,680 Speaker 3: what you had was the removal of a black, middle 46 00:02:39,720 --> 00:02:42,560 Speaker 3: aged man who was now replaced by the ultramate who 47 00:02:42,639 --> 00:02:45,840 Speaker 3: happened to be an older white man. The defense argued 48 00:02:46,120 --> 00:02:49,799 Speaker 3: that that was unfair, that it created a racial imbalance 49 00:02:49,880 --> 00:02:53,240 Speaker 3: in the jury, but the judge ruled that race is 50 00:02:53,280 --> 00:02:56,840 Speaker 3: not something that he can consider in terms of removal 51 00:02:56,840 --> 00:03:00,040 Speaker 3: of a juror. Is something that is beyond the scope 52 00:03:00,120 --> 00:03:03,920 Speaker 3: of what is relevant for consideration as to whether this 53 00:03:04,080 --> 00:03:07,120 Speaker 3: juror can continue to sit on the jury panel, And 54 00:03:07,200 --> 00:03:11,400 Speaker 3: they therefore remove Juris number six over the objections of 55 00:03:11,480 --> 00:03:12,560 Speaker 3: the defense, the. 56 00:03:12,560 --> 00:03:16,880 Speaker 2: Judge saying that he can't consider race. Do judges when 57 00:03:16,880 --> 00:03:21,840 Speaker 2: they're seeding a jury consider the racial diversity of the panel. 58 00:03:22,639 --> 00:03:25,600 Speaker 3: Well, what the case laws says is that you cannot 59 00:03:25,720 --> 00:03:30,519 Speaker 3: discriminate against jurors based upon their race. So, for example, 60 00:03:30,800 --> 00:03:34,160 Speaker 3: throughout what's called bladder which is a process by which 61 00:03:34,200 --> 00:03:39,600 Speaker 3: both the defense and the prosecution select jurors, attorneys are 62 00:03:39,640 --> 00:03:44,040 Speaker 3: allowed to ask various questions about potential jurors in order 63 00:03:44,080 --> 00:03:46,480 Speaker 3: to determine whether or not they would like them to 64 00:03:46,520 --> 00:03:49,440 Speaker 3: sit on the jury panel. They ask questions to try 65 00:03:49,440 --> 00:03:52,720 Speaker 3: to learn about their background, whether they're being truthful, whether 66 00:03:52,760 --> 00:03:56,560 Speaker 3: they think that they might be biased, and more importantly, 67 00:03:56,600 --> 00:03:59,280 Speaker 3: from the defense side, they look at their life experience 68 00:03:59,360 --> 00:04:02,520 Speaker 3: to decide whether or not it's somebody who they think 69 00:04:02,840 --> 00:04:06,400 Speaker 3: could connect with a defendant who would be sympathetic to 70 00:04:06,480 --> 00:04:09,560 Speaker 3: the situation that the defendants found themselves in and ultimately 71 00:04:09,600 --> 00:04:12,560 Speaker 3: find the defense credible. When you're the prosecution, on the 72 00:04:12,600 --> 00:04:15,360 Speaker 3: other hand, you're looking for jurors who are more law 73 00:04:15,400 --> 00:04:18,880 Speaker 3: and order, people who follow the rules, people who believe 74 00:04:19,279 --> 00:04:21,800 Speaker 3: in the rule of law, and people who are going 75 00:04:21,880 --> 00:04:25,880 Speaker 3: to go into the trial with a mindset that favors 76 00:04:25,920 --> 00:04:28,560 Speaker 3: the prosecution in the sense that they tend to believe 77 00:04:28,800 --> 00:04:32,920 Speaker 3: law enforcement testimony unless there's a reason not to. The 78 00:04:32,960 --> 00:04:35,960 Speaker 3: only time that race comes up during the blas Deer 79 00:04:36,040 --> 00:04:40,039 Speaker 3: process is if there's an allegation by the defense that 80 00:04:40,200 --> 00:04:44,039 Speaker 3: in some way the prosecution is trying to stack the 81 00:04:44,120 --> 00:04:48,719 Speaker 3: deck by removing minorities or by removing people through the 82 00:04:48,760 --> 00:04:52,320 Speaker 3: prosecution fields should not be on the jury for reasons 83 00:04:52,400 --> 00:04:56,400 Speaker 3: that are discriminatory. In that case, the judge can actually 84 00:04:56,560 --> 00:05:00,520 Speaker 3: question the witness and question the prosecutors or the defense 85 00:05:00,880 --> 00:05:04,000 Speaker 3: about their reasons for trying to remove ajuror. Then, if 86 00:05:04,000 --> 00:05:07,200 Speaker 3: a judge finds those reasons to be impermissible, the judge 87 00:05:07,240 --> 00:05:10,799 Speaker 3: can force the prosecution to accept ajuror that they would 88 00:05:10,800 --> 00:05:12,080 Speaker 3: otherwise try to reject. 89 00:05:12,520 --> 00:05:16,520 Speaker 2: Obviously, there are alternates in case something like this does happen, 90 00:05:17,040 --> 00:05:20,400 Speaker 2: but dismissing a juror is not something a judge does lightly. 91 00:05:21,160 --> 00:05:23,760 Speaker 3: It's not an ideal situation from the standpoint of the 92 00:05:23,839 --> 00:05:27,760 Speaker 3: judge to have to replace a juror mid trial, because 93 00:05:27,839 --> 00:05:31,560 Speaker 3: it does raise questions about not only the conduct of 94 00:05:31,600 --> 00:05:35,040 Speaker 3: the individual juror, but sometimes it also raises a question 95 00:05:35,320 --> 00:05:39,560 Speaker 3: about whether other jurors may have been infected by improper 96 00:05:39,640 --> 00:05:42,719 Speaker 3: conduct by the juror who's replaced. For example, if the 97 00:05:42,760 --> 00:05:47,440 Speaker 3: allegation is that a juror was communicating with somebody outside 98 00:05:47,680 --> 00:05:52,000 Speaker 3: of the jury about the case, or was receiving information 99 00:05:52,560 --> 00:05:56,000 Speaker 3: about the trial other than what's being presented in the courtroom, 100 00:05:56,360 --> 00:05:59,159 Speaker 3: that raises a serious concern that results in the removal 101 00:05:59,160 --> 00:06:02,039 Speaker 3: of not only that or, but sometimes Judges then have 102 00:06:02,120 --> 00:06:05,000 Speaker 3: to question the entire jury panel to make sure that 103 00:06:05,160 --> 00:06:08,480 Speaker 3: any evidence that was not presented the trial that may 104 00:06:08,520 --> 00:06:11,719 Speaker 3: have come from the outside did not infect other jurors 105 00:06:11,720 --> 00:06:14,120 Speaker 3: that has not tanked the entire jury. 106 00:06:13,960 --> 00:06:16,719 Speaker 2: All of a sudden, seeing that a juror has been 107 00:06:16,720 --> 00:06:20,320 Speaker 2: dismissed after sitting there for weeks and weeks, does that 108 00:06:20,400 --> 00:06:22,520 Speaker 2: have an effect or could it have an effect on 109 00:06:22,560 --> 00:06:23,359 Speaker 2: the other jurors? 110 00:06:23,800 --> 00:06:27,440 Speaker 3: Well, yeah, that's a great question, because the jurors obviously 111 00:06:27,560 --> 00:06:30,239 Speaker 3: will be aware that there's a person who's been sitting 112 00:06:30,320 --> 00:06:32,880 Speaker 3: there next to them for six weeks now, who's been 113 00:06:32,880 --> 00:06:35,520 Speaker 3: sitting in the jury box, who's been spending time with 114 00:06:35,600 --> 00:06:38,760 Speaker 3: them outside of the courtroom, and suddenly that person is 115 00:06:38,839 --> 00:06:41,520 Speaker 3: not there, and the judge is not going to explain 116 00:06:41,800 --> 00:06:46,479 Speaker 3: the actual reason for that juror's dismissal. Judges will typically 117 00:06:46,520 --> 00:06:50,080 Speaker 3: tell other jurors that there are various reasons during the 118 00:06:50,080 --> 00:06:52,839 Speaker 3: course of a trial that a juror might be replaced 119 00:06:52,880 --> 00:06:55,440 Speaker 3: by an alternate, and that juror number six in this 120 00:06:55,520 --> 00:06:58,960 Speaker 3: case is being replaced by an alternate without giving them 121 00:06:59,040 --> 00:07:02,479 Speaker 3: reasons as to why that curor has been removed. But 122 00:07:03,040 --> 00:07:05,919 Speaker 3: human nature being what it is there's no question that 123 00:07:06,040 --> 00:07:09,640 Speaker 3: jurors will talk among themselves as to why that juror 124 00:07:09,680 --> 00:07:13,120 Speaker 3: has been removed, and it's just a distraction and an 125 00:07:13,160 --> 00:07:17,640 Speaker 3: injection of information into the jury room that judges would 126 00:07:17,720 --> 00:07:20,760 Speaker 3: like to avoid. So they really try not to remove 127 00:07:20,880 --> 00:07:23,240 Speaker 3: jurors during the course of a trial, but in some 128 00:07:23,320 --> 00:07:27,120 Speaker 3: cases it's inevitable, and in this case, there was this 129 00:07:27,280 --> 00:07:30,280 Speaker 3: lack of candor that the judge found that this juror 130 00:07:30,360 --> 00:07:33,160 Speaker 3: may not really be a resident of the Southern District 131 00:07:33,200 --> 00:07:35,720 Speaker 3: of New York. And if the juror was not removed, 132 00:07:35,760 --> 00:07:38,720 Speaker 3: if the juror was allowed to remain on the panel, 133 00:07:39,120 --> 00:07:42,200 Speaker 3: that's something that I'm sure the judge was concerned would 134 00:07:42,240 --> 00:07:44,679 Speaker 3: be an issue on appeal. And so the judge really 135 00:07:44,720 --> 00:07:48,080 Speaker 3: has to protect the record, he has to protect the 136 00:07:48,320 --> 00:07:51,720 Speaker 3: trial so that ultimately, however it turns out, it will 137 00:07:51,720 --> 00:07:52,880 Speaker 3: stand up on appeal. 138 00:07:53,320 --> 00:07:56,320 Speaker 2: So now you have a forty one year old black 139 00:07:56,320 --> 00:07:59,560 Speaker 2: man being replaced by a fifty seven year old white man, 140 00:08:00,080 --> 00:08:03,480 Speaker 2: leaving just one black man on the jury. Is the 141 00:08:03,640 --> 00:08:06,160 Speaker 2: chain here an issue for appeal? 142 00:08:06,960 --> 00:08:10,000 Speaker 3: Well, I think we could expect the defense, if they 143 00:08:10,200 --> 00:08:13,880 Speaker 3: get a conviction here, to raise it on appeal. Certainly, 144 00:08:14,320 --> 00:08:17,040 Speaker 3: but it's difficult for the defense to argue when a 145 00:08:17,120 --> 00:08:20,760 Speaker 3: black cur is replaced by a whiteer only on the 146 00:08:20,800 --> 00:08:24,240 Speaker 3: basis of race, because what that does is it presupposes 147 00:08:24,480 --> 00:08:28,920 Speaker 3: that a black cur would necessarily favor the defense simply 148 00:08:29,000 --> 00:08:32,520 Speaker 3: because the defendant also happens to be black. That's not 149 00:08:32,720 --> 00:08:35,720 Speaker 3: going to be enough to get a trial overturned. There 150 00:08:35,760 --> 00:08:38,360 Speaker 3: has to be something more to it in order for 151 00:08:38,400 --> 00:08:41,680 Speaker 3: them to really argue that they were unfairly prejudiced by 152 00:08:41,679 --> 00:08:42,800 Speaker 3: the removal of that cur. 153 00:08:43,480 --> 00:08:47,480 Speaker 2: It's unusual enough to have one juror dismissed mid trial, 154 00:08:47,640 --> 00:08:51,000 Speaker 2: but now there's a possibility that a second juror might 155 00:08:51,080 --> 00:08:54,160 Speaker 2: be dismissed. The facts are a little sketchy, but it 156 00:08:54,200 --> 00:08:58,400 Speaker 2: appears that there are concerns that Jury number seven might 157 00:08:58,480 --> 00:09:01,680 Speaker 2: have spoken improperly about the case. 158 00:09:02,720 --> 00:09:05,880 Speaker 3: When a juror is torn in, they are given very 159 00:09:05,920 --> 00:09:09,360 Speaker 3: strict rules that they are not to discuss the case 160 00:09:09,679 --> 00:09:12,839 Speaker 3: outside of the courtroom. They're not to look at social media, 161 00:09:12,920 --> 00:09:15,280 Speaker 3: they're not to read the news. They're not to talk 162 00:09:15,320 --> 00:09:18,680 Speaker 3: about the case during their commute into the trial or 163 00:09:18,720 --> 00:09:20,920 Speaker 3: on their way home. They're not to talk about the 164 00:09:20,920 --> 00:09:24,520 Speaker 3: case with their spouse and the judge will instruct yours 165 00:09:24,920 --> 00:09:27,360 Speaker 3: not to talk about the case with their fellow jurors 166 00:09:27,440 --> 00:09:32,720 Speaker 3: until deliberations begin. They basically live inside a bubble and 167 00:09:32,880 --> 00:09:35,240 Speaker 3: do not talk about what's going on in the courtroom, 168 00:09:35,400 --> 00:09:38,240 Speaker 3: so they are under very strict rules, and sometimes in 169 00:09:38,240 --> 00:09:41,280 Speaker 3: a high profile case this as this, judges will even 170 00:09:41,320 --> 00:09:45,040 Speaker 3: go so far as the sequestered jurors, which means jurors 171 00:09:45,080 --> 00:09:47,120 Speaker 3: do not get to live at home, they live in 172 00:09:47,120 --> 00:09:49,960 Speaker 3: a hotel. They have no contact with the outside world. 173 00:09:50,000 --> 00:09:53,000 Speaker 3: They can't watch TV, they can't read the newspaper. They 174 00:09:53,000 --> 00:09:55,920 Speaker 3: are really cut off from all outside sources, so that 175 00:09:55,960 --> 00:09:59,000 Speaker 3: their entire focus is only what is going on in 176 00:09:59,040 --> 00:09:59,679 Speaker 3: the courtroom. 177 00:10:00,000 --> 00:10:00,600 Speaker 2: At the end of the. 178 00:10:00,640 --> 00:10:04,720 Speaker 3: Day, jurors have to make their decision about the guilt 179 00:10:05,000 --> 00:10:07,800 Speaker 3: of the defendant or whether or not the prosecution met 180 00:10:07,840 --> 00:10:10,720 Speaker 3: its burden of proof based solely upon the evidence that's 181 00:10:10,760 --> 00:10:13,880 Speaker 3: presented in the courtroom and not based upon any outside 182 00:10:13,880 --> 00:10:17,720 Speaker 3: the information here. There is some allegation at this point 183 00:10:17,960 --> 00:10:20,240 Speaker 3: that the judge is looking into whether or not a 184 00:10:20,400 --> 00:10:24,119 Speaker 3: juror may have communicated with somebody outside of the courtroom, 185 00:10:24,400 --> 00:10:27,280 Speaker 3: and it's a violation of their oath to provide any 186 00:10:27,280 --> 00:10:30,000 Speaker 3: information about what's going on in the trial to anybody 187 00:10:30,080 --> 00:10:33,360 Speaker 3: outside the trial. It's also a violation for that curor 188 00:10:33,400 --> 00:10:36,240 Speaker 3: to receive any information about what's going on in the 189 00:10:36,280 --> 00:10:39,760 Speaker 3: trial from sources outside of the courtroom. So this is 190 00:10:39,800 --> 00:10:42,560 Speaker 3: a serious allegation that the judge is going to have 191 00:10:42,679 --> 00:10:46,120 Speaker 3: to spend some time getting to the bottom of the case. 192 00:10:46,200 --> 00:10:48,959 Speaker 3: Cannot go on if there's the possibility that there is 193 00:10:49,000 --> 00:10:51,959 Speaker 3: a tainted juror, because that could not only result in 194 00:10:52,040 --> 00:10:55,000 Speaker 3: the removal of that juror, but the judge may well 195 00:10:55,120 --> 00:10:58,079 Speaker 3: have to question other jurors to determine whether or not 196 00:10:58,400 --> 00:11:02,360 Speaker 3: any information outside of the jury room and from outside 197 00:11:02,360 --> 00:11:06,240 Speaker 3: the courtroom may have painted that jury, whether information that 198 00:11:06,360 --> 00:11:09,000 Speaker 3: was not presented in the courtroom may have been discussed 199 00:11:09,000 --> 00:11:11,840 Speaker 3: by jurors. This is going to be a bit of 200 00:11:11,840 --> 00:11:15,040 Speaker 3: a side show. It's something that judges do not like 201 00:11:15,120 --> 00:11:18,040 Speaker 3: to have to engage in because it's a distraction that 202 00:11:18,080 --> 00:11:21,080 Speaker 3: will slow the case down and it may ultimately, in 203 00:11:21,120 --> 00:11:24,240 Speaker 3: the worst case scenario, result in a mistrial, which means 204 00:11:24,240 --> 00:11:26,720 Speaker 3: they would have to try the case all over again. 205 00:11:27,000 --> 00:11:29,480 Speaker 3: So we'll have to see how this plays out. But 206 00:11:29,559 --> 00:11:32,040 Speaker 3: the mere fact that there's a suggestion that a juror 207 00:11:32,200 --> 00:11:34,920 Speaker 3: may have been communicating with somebody outside of the courtroom 208 00:11:35,200 --> 00:11:38,480 Speaker 3: is a very troubling development for the prosecution. 209 00:11:39,160 --> 00:11:43,720 Speaker 2: Bob, do you believe that jurors really don't talk to 210 00:11:43,880 --> 00:11:48,800 Speaker 2: anyone about the case, even when the case takes months, 211 00:11:48,920 --> 00:11:51,880 Speaker 2: They don't go home and say something to their husband 212 00:11:51,960 --> 00:11:52,559 Speaker 2: or wife. 213 00:11:53,040 --> 00:11:56,440 Speaker 3: Well, that is clearly what they are instructed to do, 214 00:11:56,800 --> 00:11:59,720 Speaker 3: now whether they do it in actual practice, Most of 215 00:11:59,760 --> 00:12:03,760 Speaker 3: the time, the prosecution, the defense, and the judge don't 216 00:12:03,840 --> 00:12:07,720 Speaker 3: really know. There's a reason why the judge is always 217 00:12:07,760 --> 00:12:11,480 Speaker 3: reluctant to peer behind the curtain and find out exactly 218 00:12:11,520 --> 00:12:13,839 Speaker 3: what's going on in the jury room, because once you 219 00:12:13,960 --> 00:12:17,240 Speaker 3: start asking juror's questions about what's going on, you don't 220 00:12:17,280 --> 00:12:20,679 Speaker 3: exactly know what you are going to find. So unless 221 00:12:20,679 --> 00:12:23,960 Speaker 3: there is some real clear cut evidence that a jury 222 00:12:24,040 --> 00:12:27,040 Speaker 3: is doing something improper, that a juror is communicating with 223 00:12:27,120 --> 00:12:30,000 Speaker 3: somebody outside of the courtroom, or that a juror has 224 00:12:30,040 --> 00:12:33,880 Speaker 3: received information from outside of the trial that they shouldn't 225 00:12:33,880 --> 00:12:37,720 Speaker 3: be receiving, judges are reluctant to go down the road 226 00:12:37,760 --> 00:12:40,960 Speaker 3: to start questioning jurors during the course of a trial. 227 00:12:41,040 --> 00:12:44,560 Speaker 3: But sometimes, like in this case, the judge simply has 228 00:12:44,640 --> 00:12:48,640 Speaker 3: no choice. The judge can't ignore an allegation that this 229 00:12:48,840 --> 00:12:52,760 Speaker 3: jury is possibly tainted, that one juror may have improperly 230 00:12:52,800 --> 00:12:56,920 Speaker 3: communicated with somebody outside of the courtroom, and so he 231 00:12:57,040 --> 00:13:00,480 Speaker 3: has no choice but to begin this process. Thing that 232 00:13:00,520 --> 00:13:04,319 Speaker 3: troubles judges and troubles prosecutors is once you go down 233 00:13:04,360 --> 00:13:07,240 Speaker 3: this road, you really don't know what you're gonna find 234 00:13:07,400 --> 00:13:10,640 Speaker 3: when the judge starts to question yours. So that's why 235 00:13:10,840 --> 00:13:13,600 Speaker 3: something judges are reluctant to do, and they only do 236 00:13:13,720 --> 00:13:16,800 Speaker 3: it as in this circumstance where the judge really has 237 00:13:16,840 --> 00:13:18,000 Speaker 3: no other choice. 238 00:13:18,360 --> 00:13:20,920 Speaker 2: So the judge here is dealing with a very high 239 00:13:21,000 --> 00:13:26,120 Speaker 2: profile case. Obviously there are news reports about every witness, 240 00:13:26,120 --> 00:13:31,760 Speaker 2: et cetera. And this morning the judge was livid and 241 00:13:31,840 --> 00:13:35,679 Speaker 2: he asked both the prosecution and the defense about an 242 00:13:35,800 --> 00:13:40,520 Speaker 2: online article that appeared to include details from a sealed proceeding. 243 00:13:41,080 --> 00:13:43,679 Speaker 2: He said, the court imposed a gag order on the government, 244 00:13:43,720 --> 00:13:46,480 Speaker 2: the defend, and all attorneys for the defense, and anyone 245 00:13:46,600 --> 00:13:50,400 Speaker 2: involved was made accountable. What happened here may result in 246 00:13:50,480 --> 00:13:54,559 Speaker 2: civil or criminal contempt chargers for all involved. 247 00:13:54,840 --> 00:13:58,920 Speaker 3: Well, you don't usually find defense lawyers or prosecutors talking 248 00:13:58,960 --> 00:14:03,120 Speaker 3: about steal procede with somebody outside of the courtroom. Lawyers 249 00:14:03,240 --> 00:14:06,400 Speaker 3: generally know that that would be a serious violation that 250 00:14:06,440 --> 00:14:09,760 Speaker 3: the judge would take serious action against them, perhaps holding 251 00:14:09,800 --> 00:14:14,000 Speaker 3: them in contempt or even a criminal violation for violating 252 00:14:14,320 --> 00:14:16,959 Speaker 3: the stealing order and talking about a proceeding that was 253 00:14:17,040 --> 00:14:20,160 Speaker 3: under steal with the media or somebody outside of the courtroom. 254 00:14:20,360 --> 00:14:23,120 Speaker 3: But it can happen, and in a case like this 255 00:14:23,440 --> 00:14:27,000 Speaker 3: where the media scrutiny has been so intense, where there's 256 00:14:27,040 --> 00:14:31,080 Speaker 3: really been a complete saturation of coverage of every day 257 00:14:31,080 --> 00:14:34,440 Speaker 3: of this trial, of every witness, of people talking about 258 00:14:34,480 --> 00:14:37,920 Speaker 3: them on cable news, in the print, on the radio, 259 00:14:38,400 --> 00:14:42,400 Speaker 3: the news of this trial has really become almost a 260 00:14:42,440 --> 00:14:45,200 Speaker 3: circus in the sense of the level of coverage here. 261 00:14:45,480 --> 00:14:47,720 Speaker 3: And so there's a lot of information out there, and 262 00:14:47,760 --> 00:14:51,240 Speaker 3: the judge needs to make sure that he maintains control 263 00:14:51,360 --> 00:14:54,320 Speaker 3: of that courtroom, and that means not only controlling what 264 00:14:54,480 --> 00:14:57,240 Speaker 3: information may get in front of the jury, but also 265 00:14:57,320 --> 00:15:01,080 Speaker 3: controlling the lawyers and making sure that the attorneys are 266 00:15:01,120 --> 00:15:04,440 Speaker 3: playing their proper role arguing their case in the courtroom 267 00:15:04,440 --> 00:15:08,600 Speaker 3: and not communicating with any outside sources improperly. I'm certainly 268 00:15:08,640 --> 00:15:12,000 Speaker 3: not communicating about proceedings that were held under seal. 269 00:15:12,160 --> 00:15:15,240 Speaker 2: Thanks so much, Bob. That's Robert Mints of Macarter and 270 00:15:15,280 --> 00:15:20,760 Speaker 2: English coming up next, Harvard versus Trump again. I'm June Grosso. 271 00:15:20,760 --> 00:15:24,800 Speaker 2: When you're listening to Bloomberg. Harvard is the main target 272 00:15:24,840 --> 00:15:28,880 Speaker 2: of President Donald Trump's efforts to force universities to crack 273 00:15:28,960 --> 00:15:34,200 Speaker 2: down on anti semitism, remove perceived political bias, and eliminate diversity, 274 00:15:34,320 --> 00:15:38,680 Speaker 2: equity and inclusion programs. The university is already suing over 275 00:15:38,720 --> 00:15:42,120 Speaker 2: the Trump administration's freezing of more than two point six 276 00:15:42,200 --> 00:15:46,280 Speaker 2: billion dollars in federal research funding. The latest legal fight 277 00:15:46,400 --> 00:15:51,000 Speaker 2: concerns the administration's refusal to give foreign students visas to 278 00:15:51,120 --> 00:15:55,720 Speaker 2: attend Harvard. Boston federal Judge Allison Burrows has already issued 279 00:15:55,720 --> 00:16:00,200 Speaker 2: a temporary order on Trump's proclamation, and at a hearing yesterday, 280 00:16:00,280 --> 00:16:03,560 Speaker 2: she extended that order until June twenty third, while she 281 00:16:03,680 --> 00:16:08,040 Speaker 2: weighs Harvard's request for a preliminary injunction. Joining me is 282 00:16:08,040 --> 00:16:11,520 Speaker 2: Bloomberg legal reporter David Voriakis, who was at that hearing 283 00:16:11,600 --> 00:16:15,479 Speaker 2: in Boston. David tell us about Trump's June fourth proclamation. 284 00:16:16,160 --> 00:16:20,280 Speaker 4: The Trump administration said that the United States was going 285 00:16:20,320 --> 00:16:25,080 Speaker 4: to bar visas for foreign nationals seeking to enter the 286 00:16:25,160 --> 00:16:29,920 Speaker 4: United States to study or do research at Harvard, and 287 00:16:29,960 --> 00:16:35,080 Speaker 4: that the administration also had the ability to review current 288 00:16:35,200 --> 00:16:39,560 Speaker 4: students and researchers already in the United States to see 289 00:16:39,600 --> 00:16:45,760 Speaker 4: if they should be removed as well. And Harvard sued immediately, 290 00:16:46,200 --> 00:16:51,080 Speaker 4: and Judge Allison Burrows in Boston quickly entered a temporary 291 00:16:51,160 --> 00:16:57,240 Speaker 4: restraining order, essentially maintaining the status quo and making sure 292 00:16:57,400 --> 00:17:00,600 Speaker 4: that the Trump administration could not enforce the order. 293 00:17:00,960 --> 00:17:05,560 Speaker 2: So is the administration doing anything like this to any 294 00:17:05,560 --> 00:17:06,480 Speaker 2: other university. 295 00:17:06,800 --> 00:17:11,240 Speaker 4: The administration is investigating a number of other universities and 296 00:17:11,600 --> 00:17:16,520 Speaker 4: has indicated that it will suspend funding to other universities. 297 00:17:16,560 --> 00:17:22,120 Speaker 4: But the extent of the broad based assault on Harvard 298 00:17:22,240 --> 00:17:25,600 Speaker 4: has no match at any other university in the United States. 299 00:17:26,080 --> 00:17:29,359 Speaker 2: So you were at the hearing yesterday. What was the 300 00:17:29,400 --> 00:17:30,399 Speaker 2: main issue at the hearing? 301 00:17:31,440 --> 00:17:37,640 Speaker 4: The issue is whether Judge Burrows should issue a preliminary 302 00:17:37,680 --> 00:17:42,959 Speaker 4: injunction which would extend her temporary restraining order and cutting 303 00:17:42,960 --> 00:17:47,240 Speaker 4: through the legal language. Should she continue to block the 304 00:17:47,280 --> 00:17:52,800 Speaker 4: Trump administration from enforcing this proclamation while the litigation plays 305 00:17:52,840 --> 00:17:55,679 Speaker 4: out It would not be a final order, but it 306 00:17:55,720 --> 00:17:59,560 Speaker 4: would give Harvard some breathing room so that it could plan. 307 00:18:00,280 --> 00:18:04,000 Speaker 4: If the proclamation went into effect, it could not accept 308 00:18:04,200 --> 00:18:10,920 Speaker 4: foreign students or researchers for the upcoming semester, and that 309 00:18:10,960 --> 00:18:15,720 Speaker 4: could have a potentially devastating effect on its student population, 310 00:18:16,440 --> 00:18:19,399 Speaker 4: its finances, and its research program. 311 00:18:19,880 --> 00:18:22,920 Speaker 2: I was surprised at how many students at Harvard are 312 00:18:23,000 --> 00:18:24,640 Speaker 2: from other countries. 313 00:18:25,240 --> 00:18:28,679 Speaker 4: It's twenty seven percent of the population, which is at 314 00:18:28,920 --> 00:18:32,200 Speaker 4: a high proportion, but not as high as some other universities. 315 00:18:32,280 --> 00:18:37,600 Speaker 4: But it also would have a significant financial impact on 316 00:18:37,680 --> 00:18:38,439 Speaker 4: the university. 317 00:18:38,760 --> 00:18:41,480 Speaker 2: So is the government's claim that Harvard is a national 318 00:18:41,520 --> 00:18:44,000 Speaker 2: security risk? What is the government's claim here? 319 00:18:44,480 --> 00:18:48,320 Speaker 4: The government's made several different claims over the last couple 320 00:18:48,400 --> 00:18:53,000 Speaker 4: of months. One is that Harvard has inadequately addressed the 321 00:18:53,080 --> 00:18:58,440 Speaker 4: problem of anti semitism on campus. Harvard acknowledges that there 322 00:18:58,520 --> 00:19:01,800 Speaker 4: have been problems on camp and that it's taken steps 323 00:19:01,840 --> 00:19:05,119 Speaker 4: to address them in the area of anti semitism. The 324 00:19:05,160 --> 00:19:11,560 Speaker 4: Trump administration has also said that there's not sufficient viewpoint diversity, 325 00:19:11,600 --> 00:19:15,720 Speaker 4: that it's too much of a woke university to liberal leaning, 326 00:19:15,920 --> 00:19:20,280 Speaker 4: and that it needs to increase its ideological viewpoint. Across 327 00:19:20,320 --> 00:19:24,960 Speaker 4: the spectrum, the Trump administration has also said that Harvard 328 00:19:25,400 --> 00:19:29,080 Speaker 4: has done too much research and taken too much money 329 00:19:29,200 --> 00:19:33,400 Speaker 4: from the Chinese government in the hundreds of millions of dollars. 330 00:19:34,000 --> 00:19:38,680 Speaker 4: And then the final area is that the Trump administration 331 00:19:38,880 --> 00:19:44,719 Speaker 4: has demanded records from Harvard about how it's disciplined students 332 00:19:45,040 --> 00:19:50,760 Speaker 4: who've gotten into criminal or other administrative problems at the school. 333 00:19:51,240 --> 00:19:55,879 Speaker 4: The administration says that Harvard's only turned over records on 334 00:19:56,080 --> 00:20:00,480 Speaker 4: three students, which is clearly inadequate, and that the failure 335 00:20:01,200 --> 00:20:08,120 Speaker 4: to adequately disclose records on student discipline poses a national 336 00:20:08,160 --> 00:20:09,080 Speaker 4: security threat. 337 00:20:09,480 --> 00:20:11,639 Speaker 2: Just say there is a lack of diversity. How does 338 00:20:11,720 --> 00:20:14,840 Speaker 2: lack of diversity affect national security? How does you know 339 00:20:14,920 --> 00:20:18,480 Speaker 2: anti semitism affect national security? I just don't understand the 340 00:20:18,480 --> 00:20:23,120 Speaker 2: connection between what they're arguing is wrong with Harvard. 341 00:20:23,040 --> 00:20:26,840 Speaker 4: As I understand it. What the Trump administration is arguing 342 00:20:27,000 --> 00:20:32,080 Speaker 4: is not that all failings a Harvard pose national security risks. 343 00:20:32,119 --> 00:20:35,280 Speaker 4: The national security risk that they are citing is that 344 00:20:35,320 --> 00:20:39,159 Speaker 4: they're not turning over information on foreign students, which means 345 00:20:39,640 --> 00:20:43,560 Speaker 4: that the United States cannot vet those students who are 346 00:20:43,800 --> 00:20:47,480 Speaker 4: coming into the country or who are already in the country. 347 00:20:48,080 --> 00:20:50,760 Speaker 2: And what is Harvard's response. 348 00:20:51,440 --> 00:20:58,240 Speaker 4: Harvard's response is that this is all impermissible retaliation for 349 00:20:58,520 --> 00:21:03,680 Speaker 4: Harvard exercising its First Amendment rights to hire the teachers 350 00:21:03,720 --> 00:21:06,560 Speaker 4: that it wants, admit the students that it wants, and 351 00:21:06,880 --> 00:21:11,640 Speaker 4: teach the curriculum that it wants, and that it refused 352 00:21:11,960 --> 00:21:15,120 Speaker 4: the administration's demands in mid April to make a number 353 00:21:15,200 --> 00:21:19,920 Speaker 4: of changes. And because of that refusal, the administration has 354 00:21:20,000 --> 00:21:24,680 Speaker 4: engaged in an unceasing campaign of retaliation with a number 355 00:21:24,760 --> 00:21:28,679 Speaker 4: of punitive steps. And it says that the law is 356 00:21:28,720 --> 00:21:31,080 Speaker 4: on its side when it comes to the First Amendment, 357 00:21:31,119 --> 00:21:35,640 Speaker 4: that it protects academic freedom, and it says that its 358 00:21:35,760 --> 00:21:42,120 Speaker 4: First Amendment privileges Trump if you will the United States 359 00:21:42,280 --> 00:21:48,840 Speaker 4: claim that the administration has unfettered ability to control visas 360 00:21:49,000 --> 00:21:50,160 Speaker 4: and national security. 361 00:21:50,760 --> 00:21:53,040 Speaker 2: Was the judge tougher on one side than the other? 362 00:21:53,200 --> 00:21:56,399 Speaker 2: Were her questions leaning in one direction or another? I 363 00:21:56,440 --> 00:21:58,680 Speaker 2: know she did say I can't imagine that anything you've 364 00:21:58,720 --> 00:22:01,840 Speaker 2: described a place only to Harvard, right. 365 00:22:01,960 --> 00:22:04,439 Speaker 4: It was a little hard to reach Judge Burrow's but 366 00:22:04,520 --> 00:22:07,520 Speaker 4: given her track record in which she's sort of consistently 367 00:22:07,640 --> 00:22:11,960 Speaker 4: ruled in Harvard's favor. I would bet that she's likely 368 00:22:12,080 --> 00:22:16,199 Speaker 4: to grant a preliminary injunction here, But she clearly is 369 00:22:16,280 --> 00:22:20,800 Speaker 4: troubled by this question of whether the Trump administration is 370 00:22:20,880 --> 00:22:26,679 Speaker 4: in fact following the law in exercising its discretion to 371 00:22:27,560 --> 00:22:31,160 Speaker 4: exclude a class of people who are entering the United 372 00:22:31,200 --> 00:22:34,399 Speaker 4: States to study at Harvard. She asked a number of 373 00:22:34,440 --> 00:22:39,960 Speaker 4: probing questions of the Harvard lawyer, suggesting that maybe it's 374 00:22:40,000 --> 00:22:42,159 Speaker 4: a bit of a close call in her mind, but 375 00:22:42,560 --> 00:22:44,200 Speaker 4: it was hard to tell for sure. 376 00:22:44,400 --> 00:22:48,080 Speaker 2: Tell us about what the requirements are for getting a 377 00:22:48,119 --> 00:22:49,080 Speaker 2: preliminary injunction. 378 00:22:49,840 --> 00:22:53,160 Speaker 4: There are four legal factors, but the ones that really 379 00:22:53,200 --> 00:22:57,000 Speaker 4: matter are the likelihood of success in the litigation as 380 00:22:57,040 --> 00:23:03,159 Speaker 4: it progresses, and whether the action causes irreparable harm to 381 00:23:04,320 --> 00:23:08,240 Speaker 4: the party that's suing. And Harvard says that the harm 382 00:23:08,359 --> 00:23:13,080 Speaker 4: here is overwhelming and devastating, and that they are likely 383 00:23:13,240 --> 00:23:19,320 Speaker 4: to succeed in showing that the Trump administration is retaliating 384 00:23:19,840 --> 00:23:23,240 Speaker 4: in violation of its First Amendment free speech rights. 385 00:23:23,480 --> 00:23:27,200 Speaker 2: What else has the Trump administration done to Harvard? 386 00:23:27,920 --> 00:23:31,480 Speaker 4: Primarily, it's frozen about two point six billion dollars in 387 00:23:31,600 --> 00:23:35,359 Speaker 4: research grants, which is the subject of a separate lawsuit 388 00:23:35,800 --> 00:23:39,880 Speaker 4: that Harvard filed and that is also before Judge Burrows. 389 00:23:40,280 --> 00:23:46,760 Speaker 4: It's also been subject to different government investigations, and Trump 390 00:23:46,840 --> 00:23:50,920 Speaker 4: has said that he's considering pulling the tax exempt status 391 00:23:50,920 --> 00:23:55,760 Speaker 4: of Harvard, which means the school would have to essentially 392 00:23:55,800 --> 00:23:57,600 Speaker 4: pay a lot more money to operate. 393 00:23:58,160 --> 00:24:01,560 Speaker 2: It's not legal for him to direct the IRS to 394 00:24:01,600 --> 00:24:04,480 Speaker 2: pull the tax exempt status of a university of anybody. 395 00:24:04,840 --> 00:24:07,480 Speaker 4: Well, they're trying to change the law that would make 396 00:24:07,560 --> 00:24:10,159 Speaker 4: it legal. I'm not sure that it's legislation, but I 397 00:24:10,200 --> 00:24:13,960 Speaker 4: think that they are posing new regulations through the Treasury 398 00:24:14,000 --> 00:24:17,240 Speaker 4: Department right now. The procedure is that it has to 399 00:24:17,280 --> 00:24:21,600 Speaker 4: go through IRS, and there's a whole long due process 400 00:24:22,359 --> 00:24:27,000 Speaker 4: procedure that any organization that is threatened with losing its 401 00:24:27,040 --> 00:24:30,639 Speaker 4: tax exempt status has an opportunity to have a hearing, 402 00:24:31,359 --> 00:24:34,840 Speaker 4: they can appeal, and it goes on for some time. 403 00:24:35,400 --> 00:24:40,760 Speaker 4: As I understand it, Treasury Secretary Besson would have that 404 00:24:41,359 --> 00:24:46,040 Speaker 4: exclusive authority to determine whether an institution can maintain its 405 00:24:46,080 --> 00:24:49,399 Speaker 4: tax exempt status. I don't know how that's going to 406 00:24:49,440 --> 00:24:53,440 Speaker 4: play out, but that's my understanding of where it's headed. 407 00:24:53,840 --> 00:24:56,840 Speaker 2: These all in front of Judge Burrows because one is 408 00:24:56,880 --> 00:24:58,800 Speaker 2: in front of her, so they're signing the other ones 409 00:24:58,800 --> 00:24:59,239 Speaker 2: to her too. 410 00:24:59,560 --> 00:25:02,320 Speaker 4: I assume that the Clerk's office consider these to be 411 00:25:02,400 --> 00:25:08,640 Speaker 4: related cases, and so typically civil litigation will move as 412 00:25:08,680 --> 00:25:12,320 Speaker 4: a group if cases are related before a single judge. 413 00:25:12,400 --> 00:25:14,680 Speaker 2: Do you have any idea when she'll have an opinion 414 00:25:14,680 --> 00:25:15,880 Speaker 2: on the preliminary injunction. 415 00:25:16,280 --> 00:25:19,520 Speaker 4: She indicated that she would rule by June twenty third, 416 00:25:19,720 --> 00:25:23,640 Speaker 4: which is next Monday. There was a temporary restraining order 417 00:25:23,680 --> 00:25:26,920 Speaker 4: that was in place until the end of the week. 418 00:25:27,000 --> 00:25:31,000 Speaker 4: The government agreed to allow her to extend that until Monday, 419 00:25:31,720 --> 00:25:35,720 Speaker 4: June twenty third, and then she said that she's likely 420 00:25:35,800 --> 00:25:36,680 Speaker 4: to rule by then. 421 00:25:37,160 --> 00:25:40,280 Speaker 2: Do you know anything about the attorneys that are representing Harvard. 422 00:25:40,880 --> 00:25:44,520 Speaker 4: There are a number of attorneys in the litigation, and 423 00:25:44,920 --> 00:25:48,520 Speaker 4: the one that argued on Monday was from Generin Block, 424 00:25:48,600 --> 00:25:50,879 Speaker 4: so there were a number of Generan Block lawyers there. 425 00:25:51,280 --> 00:25:56,040 Speaker 4: They're also represented by Quinn Emmanuel lawyers, and people from 426 00:25:56,280 --> 00:26:00,840 Speaker 4: the Harvard Council's office were there, but the Justice Department 427 00:26:01,359 --> 00:26:02,720 Speaker 4: had a single lawyer. 428 00:26:03,480 --> 00:26:06,600 Speaker 2: Well. As you know, the government team is often dwarfed 429 00:26:06,880 --> 00:26:10,680 Speaker 2: by the defense teams in high profile cases like this, 430 00:26:11,240 --> 00:26:16,000 Speaker 2: and interestingly, Harvard is being represented by jennerin Block, which 431 00:26:16,200 --> 00:26:20,640 Speaker 2: was one of the law firms targeted by Trump, one 432 00:26:20,680 --> 00:26:23,320 Speaker 2: of the law firms that fought back and a federal 433 00:26:23,400 --> 00:26:27,040 Speaker 2: judge struck down that executive order at the end of 434 00:26:27,119 --> 00:26:31,320 Speaker 2: last month. Thanks so much, David. That's David voriankis Bloomberg 435 00:26:31,400 --> 00:26:37,360 Speaker 2: Legal reporter. During the June first episode of The Totally 436 00:26:37,480 --> 00:26:41,639 Speaker 2: Football Show with James Richardson, a podcast produced by The 437 00:26:41,680 --> 00:26:45,960 Speaker 2: New York Times, listeners in the Washington, DC area heard 438 00:26:46,080 --> 00:26:47,479 Speaker 2: a mysterious ad. 439 00:26:48,320 --> 00:26:51,919 Speaker 1: Did you know that foreign investors are quietly funding lawsuits 440 00:26:51,920 --> 00:26:56,320 Speaker 1: and American courts through a practice called third party litigation funding? 441 00:26:56,600 --> 00:27:00,480 Speaker 1: Shadowy Overseas funders are paying to sue American companies in 442 00:27:00,520 --> 00:27:03,359 Speaker 1: our courts, and they don't pay a time in US 443 00:27:03,400 --> 00:27:06,679 Speaker 1: taxes if there is an award or settlement. They profit 444 00:27:06,840 --> 00:27:09,919 Speaker 1: tax free from our legal system, while US companies are 445 00:27:09,960 --> 00:27:13,240 Speaker 1: tied up in court and American families pay the price 446 00:27:13,600 --> 00:27:16,560 Speaker 1: to the tune of five thousand dollars a year. 447 00:27:17,280 --> 00:27:21,760 Speaker 2: The sixty second spot highlights an emerging strategy trying to 448 00:27:21,840 --> 00:27:27,800 Speaker 2: turn consumers against the plaintiff's bar and litigation finance. Joining 449 00:27:27,800 --> 00:27:31,359 Speaker 2: me is Bloomberg Law senior reporter Emily Siegel, who's written 450 00:27:31,400 --> 00:27:34,840 Speaker 2: about this. Emily tell us about this ad and where 451 00:27:34,880 --> 00:27:36,119 Speaker 2: it came from. 452 00:27:36,160 --> 00:27:39,240 Speaker 5: A colleague was listening to that podcast and sent me 453 00:27:39,280 --> 00:27:42,040 Speaker 5: a recording of the ad, and it was an advertisement 454 00:27:42,160 --> 00:27:46,480 Speaker 5: that was basically anti litigation funding. They called them shadowy 455 00:27:46,600 --> 00:27:51,160 Speaker 5: overseas funders and indicated that they don't pay any US 456 00:27:51,240 --> 00:27:54,040 Speaker 5: taxes if there's an award or settlement, And there is 457 00:27:54,080 --> 00:27:58,560 Speaker 5: no disclosure on the ad, which is required by the 458 00:27:58,600 --> 00:28:01,919 Speaker 5: Federal Election Commission, and so we don't actually know who 459 00:28:02,080 --> 00:28:02,720 Speaker 5: was behind it. 460 00:28:03,280 --> 00:28:10,000 Speaker 2: I mean, how much do foreign investors invest in litigation financing? 461 00:28:10,119 --> 00:28:10,560 Speaker 4: Do we know? 462 00:28:11,760 --> 00:28:15,119 Speaker 5: We don't really know. I think that there are some 463 00:28:15,560 --> 00:28:19,840 Speaker 5: funders that have sovereign wealth funds involved in as their investors, 464 00:28:19,960 --> 00:28:23,760 Speaker 5: but we don't really know the extent of how much 465 00:28:23,800 --> 00:28:27,919 Speaker 5: that's actually happening. So kind of unclear how often there 466 00:28:27,920 --> 00:28:30,600 Speaker 5: are foreign investors involved. And also if you speak to 467 00:28:30,640 --> 00:28:33,879 Speaker 5: any funders, the investors don't really play any role in 468 00:28:33,960 --> 00:28:38,800 Speaker 5: case selection or how the case proceeds, or looking at documents. 469 00:28:38,880 --> 00:28:41,760 Speaker 5: So even if there are foreign investors, at least from 470 00:28:41,800 --> 00:28:43,840 Speaker 5: the funders I've spoken to, they'd say that there's no 471 00:28:44,040 --> 00:28:46,240 Speaker 5: real involvement from any of the investors. 472 00:28:46,680 --> 00:28:50,440 Speaker 2: So what is the purpose of this ad on a podcast? 473 00:28:50,760 --> 00:28:54,400 Speaker 5: It seems to be pushing for a particular piece of 474 00:28:54,520 --> 00:28:58,680 Speaker 5: legislation by Senator Tom Tillis which would add a forty 475 00:28:58,760 --> 00:29:02,840 Speaker 5: one percent tax on litigation finance profits. It doesn't name 476 00:29:02,920 --> 00:29:06,240 Speaker 5: that bill, but it does say that there is a 477 00:29:06,280 --> 00:29:09,680 Speaker 5: solution and it would be taxing the industry, and it 478 00:29:09,760 --> 00:29:15,120 Speaker 5: also urged the listeners to contact lawmakers and Republicans on 479 00:29:15,160 --> 00:29:18,280 Speaker 5: Capitol Hill who could make the measure go forward. 480 00:29:18,520 --> 00:29:20,280 Speaker 2: Tell us a little about that bill. 481 00:29:20,800 --> 00:29:24,440 Speaker 5: Sure, So basically it would add at least a forty 482 00:29:24,480 --> 00:29:27,280 Speaker 5: one percent tax. There are other provisions in the bill 483 00:29:27,360 --> 00:29:30,440 Speaker 5: that indicate it could even be higher than that, and 484 00:29:30,600 --> 00:29:32,040 Speaker 5: you know, a lot of the funders in the States 485 00:29:32,040 --> 00:29:35,000 Speaker 5: are really unhappy with it. It was recently, as of 486 00:29:35,120 --> 00:29:40,320 Speaker 5: last night, included in the text of the tax package, 487 00:29:40,400 --> 00:29:43,640 Speaker 5: the Big Beautiful Bill, and it was just updated a 488 00:29:43,720 --> 00:29:46,239 Speaker 5: new version of the tax and healthcare provisions and it 489 00:29:46,280 --> 00:29:48,680 Speaker 5: was added in there. So I think there's a lot 490 00:29:48,760 --> 00:29:51,479 Speaker 5: of people in the industry, the litigation finance industry, who 491 00:29:51,520 --> 00:29:53,320 Speaker 5: are concerned that this can end up going through. 492 00:29:54,240 --> 00:29:58,440 Speaker 2: So this would force foreign investors to pay taxes. 493 00:29:59,280 --> 00:30:03,840 Speaker 5: It would force all investors, all litigation funders, whether they're 494 00:30:03,920 --> 00:30:07,560 Speaker 5: foreign or not, to pay this tax, and that includes 495 00:30:07,600 --> 00:30:10,160 Speaker 5: hedge funds and includes private equity firms that are also 496 00:30:10,200 --> 00:30:13,160 Speaker 5: doing litigation finance. They would be taxed at this separate rate. 497 00:30:13,920 --> 00:30:18,360 Speaker 2: There have been efforts at reform for decades. How is 498 00:30:18,400 --> 00:30:21,160 Speaker 2: this different from what we've seen before. 499 00:30:21,880 --> 00:30:25,520 Speaker 5: This version of the attack to litigation finance is new, 500 00:30:25,640 --> 00:30:28,120 Speaker 5: but there have been I think at least three or 501 00:30:28,200 --> 00:30:31,440 Speaker 5: four other congressional bills that have been introduced over the 502 00:30:31,440 --> 00:30:34,360 Speaker 5: past couple of years. None of them have been successful, 503 00:30:34,440 --> 00:30:38,400 Speaker 5: and they mostly focus on disclosure, which would mean that 504 00:30:38,480 --> 00:30:40,920 Speaker 5: parties would have to file with the court whether they 505 00:30:40,920 --> 00:30:44,920 Speaker 5: are receiving litigation funding. And so this is a totally 506 00:30:45,000 --> 00:30:47,920 Speaker 5: different type of attack on the industry, and I think 507 00:30:48,400 --> 00:30:52,880 Speaker 5: this one has funders more concerned because it has more 508 00:30:52,920 --> 00:30:55,080 Speaker 5: of a chance going somewhere if it's part of the 509 00:30:55,120 --> 00:30:56,160 Speaker 5: tax package. 510 00:30:56,600 --> 00:31:00,920 Speaker 2: So with these ads, they're trying to turn consumer against 511 00:31:00,960 --> 00:31:05,920 Speaker 2: the plaintiff's bar and litigation finance. I mean, is this 512 00:31:06,000 --> 00:31:10,840 Speaker 2: an effort to turn the public against these large class 513 00:31:10,880 --> 00:31:12,200 Speaker 2: action towards suits. 514 00:31:12,880 --> 00:31:15,080 Speaker 5: A lot of these funders are doing mass towards in 515 00:31:15,120 --> 00:31:17,240 Speaker 5: class action lawsuits, but a lot of them are just 516 00:31:17,360 --> 00:31:21,880 Speaker 5: doing you know, corporate business to business sort of litigation. 517 00:31:22,120 --> 00:31:25,560 Speaker 5: You know, one large business tough is another. So I 518 00:31:25,640 --> 00:31:29,719 Speaker 5: don't know if the public has enough knowledge about this 519 00:31:29,960 --> 00:31:33,800 Speaker 5: entire industry. It's it's new compared to other industries, and 520 00:31:34,440 --> 00:31:37,400 Speaker 5: I think there's not a great sense of what it 521 00:31:37,480 --> 00:31:40,040 Speaker 5: is they actually do. And there's a lot of coinflation 522 00:31:40,240 --> 00:31:45,080 Speaker 5: between litigation finance and plaintiffs who receive some sort of 523 00:31:45,160 --> 00:31:48,800 Speaker 5: loan against their settlement for paying rent for their medical bills, 524 00:31:49,000 --> 00:31:53,120 Speaker 5: which are completely different types of industries. So I don't 525 00:31:53,400 --> 00:31:55,240 Speaker 5: know that there's a lot of information out there, and 526 00:31:55,280 --> 00:31:58,520 Speaker 5: a lot of these like the podcast ad, and there 527 00:31:58,520 --> 00:32:01,000 Speaker 5: are other ads that are I've about in the story 528 00:32:01,040 --> 00:32:03,880 Speaker 5: that are sort of an attempt to educate the public 529 00:32:04,000 --> 00:32:07,400 Speaker 5: on what litigation finances, but it comes from a certain perspective. 530 00:32:08,160 --> 00:32:10,240 Speaker 2: What are the costs. I know that the Chamber of 531 00:32:10,240 --> 00:32:13,240 Speaker 2: Commerce has done an analysis of how much the toward 532 00:32:13,360 --> 00:32:14,960 Speaker 2: system actually costs. 533 00:32:16,080 --> 00:32:19,920 Speaker 5: Yeah, they say it could cost in each ceuse fold 534 00:32:20,520 --> 00:32:23,720 Speaker 5: around I think four thy two hundred dollars, And then 535 00:32:23,760 --> 00:32:27,920 Speaker 5: it is basically saying that litigation finance contributes to the 536 00:32:28,040 --> 00:32:32,560 Speaker 5: rise in lawsuits it's hard to discern how they're getting 537 00:32:32,560 --> 00:32:37,400 Speaker 5: that information if we're not really aware of how often 538 00:32:37,440 --> 00:32:42,680 Speaker 5: litigation finance is used. So that's their calculations, and that 539 00:32:42,760 --> 00:32:45,440 Speaker 5: the calculations from the US Chamber of Commerce are often 540 00:32:45,600 --> 00:32:47,200 Speaker 5: used in these advertisements. 541 00:32:47,800 --> 00:32:51,360 Speaker 2: Are there companies that are actively lobbying on this? 542 00:32:52,360 --> 00:32:55,479 Speaker 5: Yeah, I think, you know, there are a bunch of 543 00:32:55,480 --> 00:32:59,080 Speaker 5: different companies. I think Intel has lobbied on this. They're 544 00:32:59,160 --> 00:33:03,320 Speaker 5: the recipient of a lot of patent lawsuits. Uber has 545 00:33:03,360 --> 00:33:06,440 Speaker 5: funded one of the groups that is putting out advertisements, 546 00:33:06,440 --> 00:33:09,080 Speaker 5: and they're also the recipient of a lot of lawsuits. 547 00:33:09,520 --> 00:33:13,640 Speaker 5: So there are some big corporations. The insurance industry also, 548 00:33:14,120 --> 00:33:17,000 Speaker 5: you know, has put out letters and support of bills 549 00:33:17,320 --> 00:33:21,400 Speaker 5: like Fattilla's bill, and because they are usually again on 550 00:33:21,440 --> 00:33:23,600 Speaker 5: the other side of cases that are being funded. 551 00:33:23,960 --> 00:33:28,440 Speaker 2: Now there's a new group called Protecting American Consumers Together 552 00:33:29,040 --> 00:33:32,040 Speaker 2: or PACKED. What's their goal? 553 00:33:33,640 --> 00:33:37,400 Speaker 5: They seem to be sort of generally looking at tort 554 00:33:37,440 --> 00:33:41,040 Speaker 5: reform and pushing for tort reform while also pushing for 555 00:33:41,240 --> 00:33:45,160 Speaker 5: regulation of the litigation finance industry, and they do that 556 00:33:45,240 --> 00:33:49,280 Speaker 5: through advertisements and education materials that they put out there. 557 00:33:49,640 --> 00:33:52,400 Speaker 5: They say they were not behind this podcast ad. They 558 00:33:52,400 --> 00:33:55,160 Speaker 5: do have some funding from Uber and they launched in 559 00:33:55,240 --> 00:33:58,520 Speaker 5: January and they already had some success. Was a bill 560 00:33:58,760 --> 00:34:03,120 Speaker 5: of tort reform package in Georgia that passed earlier this year, 561 00:34:03,160 --> 00:34:06,720 Speaker 5: and it also included a litigation finance regulation provision. 562 00:34:07,080 --> 00:34:11,400 Speaker 2: Does another group make America affordable again? What's its push? 563 00:34:12,040 --> 00:34:15,760 Speaker 5: They have not, at least outwardly put anything out against 564 00:34:15,840 --> 00:34:18,960 Speaker 5: litigation finance, but they're pushing for something called loser pays, 565 00:34:19,360 --> 00:34:22,080 Speaker 5: which would mean that the person or the entity that 566 00:34:22,120 --> 00:34:24,240 Speaker 5: files the lawsuit would have to pay the other side's 567 00:34:24,280 --> 00:34:27,160 Speaker 5: legal bills if they lose. It seems to be the 568 00:34:27,239 --> 00:34:30,480 Speaker 5: majority of their ads or focused on loser pays. 569 00:34:31,239 --> 00:34:34,440 Speaker 2: And is that something that President Trump has commented on. 570 00:34:34,960 --> 00:34:37,560 Speaker 5: I think that he has commented on it a little bit. 571 00:34:37,640 --> 00:34:41,239 Speaker 5: There was a press conference in January during the California 572 00:34:41,280 --> 00:34:44,600 Speaker 5: wildfires where someone asks him about it, and he seemed 573 00:34:44,600 --> 00:34:47,719 Speaker 5: to like the idea. He said it would cut down costs, 574 00:34:48,040 --> 00:34:51,480 Speaker 5: So it is something that he's expressed in interest in. 575 00:34:51,920 --> 00:34:54,799 Speaker 5: He has directed the Justice Department to demand bonds from 576 00:34:54,800 --> 00:34:59,279 Speaker 5: court challengers when judges temporarily halt his policies, but I 577 00:34:59,280 --> 00:35:02,640 Speaker 5: don't think he's actually put out anything explicitly about loser 578 00:35:02,680 --> 00:35:03,640 Speaker 5: pace and. 579 00:35:03,640 --> 00:35:07,240 Speaker 2: Our litigation funders doing anything to fight back. 580 00:35:07,920 --> 00:35:10,680 Speaker 5: Well, they have a group called the International Legal Finance 581 00:35:10,680 --> 00:35:13,480 Speaker 5: Association which does a lot of their lobbying, and they 582 00:35:13,480 --> 00:35:18,640 Speaker 5: have hired a new Republican lobbyist named Pete Kirkham according 583 00:35:18,680 --> 00:35:22,360 Speaker 5: to a recent disclosure, So they are actively lobbying against 584 00:35:22,400 --> 00:35:25,240 Speaker 5: this bill and that's pretty much their goal. I attended 585 00:35:25,920 --> 00:35:29,160 Speaker 5: a conference a couple of weeks ago where other funders 586 00:35:29,160 --> 00:35:32,880 Speaker 5: were urging people to join the group as members so 587 00:35:32,920 --> 00:35:35,480 Speaker 5: that they could pay us to help fight against this 588 00:35:35,880 --> 00:35:36,800 Speaker 5: sort of legislation. 589 00:35:37,360 --> 00:35:41,080 Speaker 2: And as far as the ad itself is, it still playing. 590 00:35:42,040 --> 00:35:45,959 Speaker 5: So I reached out to The Athletic, which was where 591 00:35:45,960 --> 00:35:48,160 Speaker 5: we first discovered the ad. They're owned by The New 592 00:35:48,239 --> 00:35:51,600 Speaker 5: York Times, and they said that they had requested from 593 00:35:51,640 --> 00:35:54,360 Speaker 5: their vendor to have the ad taken down. The vendors 594 00:35:54,480 --> 00:35:56,759 Speaker 5: a company called a Cast and they do a lot 595 00:35:56,760 --> 00:35:59,480 Speaker 5: of podcasts. So I reached out to them and they 596 00:35:59,520 --> 00:36:02,600 Speaker 5: said they've put issue to takedown notice and that the 597 00:36:02,600 --> 00:36:06,440 Speaker 5: ad would not play on any of their platforms anymore. 598 00:36:06,440 --> 00:36:08,600 Speaker 5: It just has something that it was an error. They 599 00:36:08,840 --> 00:36:11,399 Speaker 5: would not say who paid for the ad. 600 00:36:11,719 --> 00:36:16,560 Speaker 2: So the mystery continues. Thanks so much, Emily. That's Emily Siegel, 601 00:36:16,760 --> 00:36:20,160 Speaker 2: Bloomberg Law Senior Reporter. And that's it for this edition 602 00:36:20,160 --> 00:36:22,839 Speaker 2: of The Bloomberg Law Show. Remember you can always get 603 00:36:22,840 --> 00:36:26,000 Speaker 2: the latest legal news on our Bloomberg Law Podcast. You 604 00:36:26,000 --> 00:36:30,080 Speaker 2: can find them on Apple Podcasts, Spotify, and at www 605 00:36:30,239 --> 00:36:34,520 Speaker 2: dot Bloomberg dot com, slash podcast Slash Law, and remember 606 00:36:34,560 --> 00:36:37,520 Speaker 2: to tune into The Bloomberg Law Show every weeknight at 607 00:36:37,520 --> 00:36:41,000 Speaker 2: ten pm Wall Street Time. I'm June Grosso and you're 608 00:36:41,080 --> 00:36:42,320 Speaker 2: listening to Bloomberg