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

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Speaker 1: President Trump was highly critical of a Supreme Court's decision

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Speaker 1: last month striking down the tariffs he imposed under the

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Speaker 1: International Emergency Economic Powers Act or AIPA. Wouldn't you think

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Speaker 1: they would have put one sentence in there saying that.

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Speaker 2: Keep the money or don't keep the money? Right, I

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Speaker 2: guess it has to get litigated for the next two years.

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Speaker 1: The decision was silent on the question of refunds. It's

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Speaker 1: up to the US Court of International Trade to determine

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Speaker 1: what refunds will be available for the almost one hundred

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Speaker 1: and seventy billion dollars in global tariffs collected, how they'll

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Speaker 1: be doled out and to whom. And Even though the

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Speaker 1: administration says its web based portal to handle refund requests

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Speaker 1: is about seventy percent complete, more than two thousand lawsuits

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Speaker 1: have already been filed by companies seeking refunds, and a

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Speaker 1: new wrinkle last week, as a Costco member sued the retailer,

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Speaker 1: saying it should reimburse all customers who paid higher prices

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Speaker 1: on its products because of Trump's tariffs. It's one of

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Speaker 1: at least five proposed class action cases identified by Bloomberg

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Speaker 1: News where a customer is suing a company to get

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Speaker 1: tariff refunds. My guest is Timothy Bright Bell, a partner

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Speaker 1: and co chair of the International Trade practice at Wiley

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Speaker 1: Rhyin Tim the Supreme Court didn't give any specifics at

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Speaker 1: all about refunds, but Judge Eaton of the Court of

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Speaker 1: International Trade has said that every single cent of tariffs

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Speaker 1: collected under AIPA has to be returned. Has the Trump

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Speaker 1: administration agreed with that?

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Speaker 2: So the Justice Department has agreed, and Customs and Border

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Speaker 2: Protection has agreed. It's not entirely clear that the White

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Speaker 2: House has agreed so, but the way this is proceeding

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Speaker 2: now in front of Judge Eaton, when he said all

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Speaker 2: importers of record whose entries were subject to IEPA duties

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Speaker 2: are entitled to the benefit of the learning resources decision,

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Speaker 2: that was very clear in the order that was issued

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Speaker 2: on March fourth. Since then, Customs and Border Protection gave

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Speaker 2: a response asking for forty five days to implement functionality

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Speaker 2: for its automated service called ACE. So Judge Eaton, who

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Speaker 2: originally ordered immediate refunds, rescinded that order. He then asked

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Speaker 2: for weekly status reports, so Customs and Border Protection has

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Speaker 2: been giving him updates. There was one on March twelfth,

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Speaker 2: there will be another one on March nineteenth, So the

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Speaker 2: process is moving along. Customs is building the refund system

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Speaker 2: that will be needed, and hopefully if that is created,

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Speaker 2: it will be less messy than otherwise could be, so.

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Speaker 1: The whole process will be automated.

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Speaker 2: That's the intent. Yes, so Customs, when it collects duties,

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Speaker 2: has an automated system for that that brokers and others

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Speaker 2: can access. Again, this ACE system, and so if you

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Speaker 2: can re engineer that, you could potentially provide refunds in

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Speaker 2: a quick and efficient and organized way, which would be

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Speaker 2: ideal and that would potentially make everyone's lives easier. But again,

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Speaker 2: the system is still being built. We don't know for

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Speaker 2: sure what challenges or delays there might be in that,

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Speaker 2: but so far, at least the system seems to be

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Speaker 2: under control or in progress.

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Speaker 1: So then if the system is in place and things

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Speaker 1: are going forward, why have thousands of companies still filed

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Speaker 1: lawsuits at the Court of International Trade.

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Speaker 2: Well, it's a great point, and even after Judge Eaton's decision,

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Speaker 2: additional companies have filed at the Court of International Trade,

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Speaker 2: including some of our clients. So, as I said, Customs

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Speaker 2: and the Justice Department seem committed to this, but there

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Speaker 2: hasn't been a one hundred percent commitment from the White

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Speaker 2: House and the administration about willingness to facilitate tariff refunds.

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Speaker 2: So there's some uncertainty whether the government will in fact

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Speaker 2: pay everyone that paid IEPA tariffs, or if a lawsuit

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Speaker 2: might be required for some reason. So I think that's

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Speaker 2: why some companies are filing. In addition, and this is

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Speaker 2: very much a company by company decision, but once the

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Speaker 2: Supreme Court decision was made, the potential political risk became

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Speaker 2: much lower, and the costs of filing are not particularly great.

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Speaker 2: So all of those things lead to companies continuing to

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Speaker 2: file lawsuits even while this refund automated process is being built.

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Speaker 1: So the judges said that all importers of record whose

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Speaker 1: entries were subject to IEPA duties are entitled to refunds,

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Speaker 1: regardless of whether or not they'd suit the government, but

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Speaker 1: the government will not pay refunds to the final commercial

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Speaker 1: customer or the individual consumer. But there are already at

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Speaker 1: least five proposed class actions by customers against retailers. So,

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Speaker 1: for example, last Wednesday, a Costco member sued the retailer

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Speaker 1: saying it should reimburse all customers who paid higher prices

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Speaker 1: on its products because of the tariffs. That looks like

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Speaker 1: a very messy lawsuit. I'm not even sure how they

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Speaker 1: would work out the numbers.

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Speaker 2: Yes, as predicted by Justice Barat, it could be very messy.

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Speaker 2: The importer of record, of course, is the entity that

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Speaker 2: pays the tariffs, and therefore it is the importer of

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Speaker 2: record who is entitled to the refunds. But that does

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Speaker 2: not address the question of customers who paid higher prices.

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Speaker 2: They are not necessarily entitled to those refunds directly. Now,

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Speaker 2: over the weekend, the US Trade Representative Jamison Greer said

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Speaker 2: that retailers should seek to pay customers refunds. But this

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Speaker 2: is why you've seen this new wrinkle of class action

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Speaker 2: suits being filed against Costco and FedEx and the maker

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Speaker 2: of raybands. These were some of the first companies to

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Speaker 2: file suit at the Court of International Trade for the

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Speaker 2: refunds in the first place. Now they are the first

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Speaker 2: targets for these consumer class actions.

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Speaker 1: How strong are those consumer class actions? It seems to

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Speaker 1: open up the courthouse doors to just about everybody in

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Speaker 1: the country who paid more because of the tariffs.

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Speaker 2: Yes, this could be a very messy process, and it

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Speaker 2: doesn't involve just consumers. Think about businesses that arrange with

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Speaker 2: another entity to have bought certain goods for manufacturing, paid

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Speaker 2: a higher price through the importer of record. Well, now

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Speaker 2: the importer of record gets the money back, and yet

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Speaker 2: it's the manufacturer who paid the importer of record who

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Speaker 2: should ultimately get the benefit of that. So it does

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Speaker 2: seem like this will be a messy process, and it

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Speaker 2: is very difficult to demonstrate what percent of AIPA tariffs

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Speaker 2: were passed on to customers were passed on to consumers

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Speaker 2: in a way that would allow for orderly refunds. So again,

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Speaker 2: it may be each company trying to sort this out

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Speaker 2: in some way or trying to make consumers whole to

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Speaker 2: the best extent possible.

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Speaker 1: Is there any precedent for a lawsuit like that, you know,

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Speaker 1: the customers against Costco, etc.

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Speaker 2: This is very unusual in the trade space. I am

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Speaker 2: not aware of similar sort of consumer class action suits

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Speaker 2: comparable to this. But then again, when you have more

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Speaker 2: than one hundred seven billion dollars at stake. You're going

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Speaker 2: to find lawyers and law firms that might have clients

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Speaker 2: who feel they are entitled to some share of that money.

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Speaker 1: Once this website is up, this portal, is it going

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Speaker 1: to go like one, two three, here's my documentation, put

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Speaker 1: it through or is it going to be more steps

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Speaker 1: after that?

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Speaker 2: It could be a relatively straightforward process. Again, since the

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Speaker 2: importer of record is the one who paid the duties

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Speaker 2: in the first place, and they have automated records through

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Speaker 2: customs of all of those entries, the dates that the

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Speaker 2: entries were made, and the amounts of money, including tariffs,

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Speaker 2: that were paid. That piece of it could be relatively

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Speaker 2: straightforward when it is just reversed back to refund the

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Speaker 2: tariffs to those importers of record. Anything beyond that it

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Speaker 2: gets much more complicated very quickly.

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Speaker 1: Now President Trump has moved to replace those IIPA tariffs,

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Speaker 1: and there are lawsuits already challenging those ten percent tariffs,

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Speaker 1: including by two dozen US states. Tell us about those lawsuits.

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Speaker 2: Yes, sure. So. This is section one twenty two of

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Speaker 2: the Trade Laws, which is a law intended to address

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Speaker 2: a balance of payments deficit, and it does allow the

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Speaker 2: President to impose tariffs of up to fifteen percent for

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Speaker 2: up to one hundred and fifty days, which would be

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Speaker 2: July twenty fourth. President Trump imposed ten percent tariffs. He

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Speaker 2: did threaten to go to fifteen percent, but so far

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Speaker 2: that has not happened yet in response quickly, You're correct.

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Speaker 2: There were lawsuits filed by twenty four states on March fifth,

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Speaker 2: and those have also were filed at the Court of

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Speaker 2: International Trade and will be heard by a three judge

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Speaker 2: panel that includes the Chief Justice, Mark Barnett, and the

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Speaker 2: process will move quickly. There is a motion for summary

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Speaker 2: judgment that was filed last Friday. There will be a

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Speaker 2: hearing on April tenth. So the lower courts appear to

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Speaker 2: want to move quickly, just as they did on the

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Speaker 2: Ayapa tariffs. Now that being said, the tariffs are only

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Speaker 2: in place until July twenty fourth, and it's certainly not

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Speaker 2: clear that you could get through all of the stages

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Speaker 2: of courts and appeals before that July twenty fourth, when

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Speaker 2: those tariffs would have to come on.

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Speaker 1: And what is the theory of the states and others

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Speaker 1: suing well.

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Speaker 2: The basic theory is that the United States does not

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Speaker 2: have a balance of payments deficit, that it has a

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Speaker 2: trade deficit, but balance of payments takes into account many

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Speaker 2: other factors, and when you look at those other factors,

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Speaker 2: in their view, the United States does not have a

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Speaker 2: balance of payments deficit or emergency that would justify these

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Speaker 2: types of teriffs.

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Speaker 1: Do you think that's a good argument.

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Speaker 2: By the way, personally, not speaking for my law firm

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Speaker 2: or my clients, I do think it is a credible argument.

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Speaker 2: And there is nearly a difference between trade deficits and

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Speaker 2: balance of payments deficits, and so I expect the court

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Speaker 2: is going to give the government a very hard time

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Speaker 2: at this quring on April.

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Speaker 1: Tenth, Coming up next on the Bloomberg Lawn Show, I'll

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Speaker 1: continue this conversation with trade attorney Tim Brightbell. President Trump

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Speaker 1: has tried to replace the AIPA tariffs. We'll talk about

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Speaker 1: some of the obstacles. I'm June Grosso and you're listening

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Speaker 1: to Bloomberg. President Donald Trump took to truth Social on

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Speaker 1: Sunday night, contending that he has an absolute right to

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Speaker 1: impose tariffs and criticizing the Supreme Court's decision striking down

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Speaker 1: the tariffs he imposed under the International Emergency Economic Powers

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Speaker 1: Act or AIPA quote. The decision that mattered most to

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Speaker 1: me was tariffs. The court knew where I stood, how

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Speaker 1: badly I wanted this victory for our country, and instead

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Speaker 1: decided to potentially give away trillions of dollars to countries

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Speaker 1: and companies who have been taking advantage of the United

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Speaker 1: States for decades. I've been talking to trade expert Timothy

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Speaker 1: Brightbill of Willie Rhyan Jim tell us about the other

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Speaker 1: ways that Trump administration is trying to impose tariffs.

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Speaker 2: Well, and again, the goal is to have something in

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Speaker 2: place by the time that these Section one twenty two

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Speaker 2: tariffs would expire in late July. So last week, the

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Speaker 2: US Trade Representative announced two new sets of investigations under

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Speaker 2: section three oh one of the Trade Laws. Section three

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Speaker 2: oh one is the same law that the first Trump

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Speaker 2: administration used to impose tariffs on hundreds of billions of

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Speaker 2: dollars of goods coming in from China, and those tariffs

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Speaker 2: are still in place. So the two investigations that were

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Speaker 2: announced related first of all to structural overcapacity and overproduction,

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Speaker 2: and these are country specifics. So the US Trade Representative

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Speaker 2: is going to investigate structural excess capacity or production in

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Speaker 2: twenty seven countries, and then followed a day or two

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Speaker 2: later by another investigation into forced labor practices and in

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Speaker 2: particular what other countries are doing to prevent goods that

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Speaker 2: are made with forced labor from being imported or sent

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Speaker 2: onto the United States. That investigation is going to cover

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Speaker 2: sixty countries. There will be a very accelerated time frame

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Speaker 2: for these, so there will be comments that are due

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Speaker 2: starting almost now and due by April fifteenth, and then

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Speaker 2: the US Trade Representative will have hearings on the forced

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Speaker 2: labor issue beginning April twenty eighth, and on the structural

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Speaker 2: overcapacity beginning May fifth, So again we have an accelerated

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Speaker 2: time frame to try and have some of these investigations

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Speaker 2: included by the late July timeframe.

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Speaker 1: Are there other national security investigations underway?

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Speaker 2: Those are still underway as well a number of Section

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Speaker 2: two thirty two investigations. This was the tool in the

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Speaker 2: toolbox that has been used to impose tariffs on steel

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Speaker 2: and aluminum imports from a number of countries. Those tariffs

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Speaker 2: are still in place, but there are a variety of

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Speaker 2: ongoing Section two thirty two investigations covering everything from critical

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Speaker 2: minerals to pharmaceuticals, to solar polysilicon and related products like

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Speaker 2: solar cells and modules. So here the Commerce Department has

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Speaker 2: to do a report on whether imports are a threat

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Speaker 2: to national security. Then the president has ultimate discretion as

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Speaker 2: to what remedy to put in place.

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Speaker 1: When we were talking about the tariffs under AIBA, it

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Speaker 1: seemed as if most experts were saying, well, you know,

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Speaker 1: the president could use this, the president could use that,

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Speaker 1: but it seems like everything that the president is using

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Speaker 1: is under either investigation or some long term process.

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Speaker 2: Well, I would say that the courts have upheld generally

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Speaker 2: the president's ability to use these national security tariffs under

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Speaker 2: Section two thirty two, as well as the Section three

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Speaker 2: oh one tariffs depending on the situation. So there is

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Speaker 2: more discretion for the president in these circumstances, as opposed

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Speaker 2: to the IEPA tariffs, where Chief Justice Roberts concluded that

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Speaker 2: AIPA does not give the president this unbounded power to

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Speaker 2: unilaterally impose tariffs. In fact, he found that that view

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Speaker 2: would represent a transformative expansion of the president's authority over

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Speaker 2: tariff policy. So I think there are tools in the

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Speaker 2: toolbox that the courts have upheld doesn't mean they will

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Speaker 2: necessarily uphold the use of them in these situations.

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Speaker 1: Was there anything in that Supreme Court decision that you

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Speaker 1: found very surprising?

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Speaker 2: Well, I think the decision was in line with our

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Speaker 2: expectations as far as winning. We thought it would come out.

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Speaker 2: We thought it would be a five to four or

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Speaker 2: a six to three decision. I do think the Chief

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Speaker 2: Justice writing the main opinion and finding that all tariffs

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Speaker 2: under AEPA were illegal, not just some tariffs like maybe

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Speaker 2: the fent and all tariffs were legal, but the worldwide

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Speaker 2: reciprocal tariffs were not. And then I also thought it

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Speaker 2: was very interesting to see the debate on the Major

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Speaker 2: Questions doctrine, where Justice Gorsich made a full defense of

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Speaker 2: that doctrine and credited that for why he voted the

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Speaker 2: way he did, whereas Justice emy Cony Barrett basically said,

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Speaker 2: this is a textual issue. If you read the text

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Speaker 2: of AEPA, it does not allow tariffs, so you don't

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Speaker 2: have to get into the Major Questions doctrine.

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Speaker 1: President Trump recently said it's going to take five years

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Speaker 1: before all this refund stuff gets settled out. I mean,

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Speaker 1: what's your prediction or assessment of how long this is

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Speaker 1: going to take this process.

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Speaker 2: I think it will be a relatively orderly process for

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Speaker 2: getting money back to importers of record. But I agree

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Speaker 2: that if the goal is to get money back to consumers,

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Speaker 2: that will be longer and messier and could take quite

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Speaker 2: some time. But the building blocks of this custom system

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Speaker 2: seem to be moving along. We're keeping an eye on it,

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Speaker 2: the judge is keeping an eye on it. That part

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Speaker 2: seems manageable. It's really how to get the refunds back

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Speaker 2: to those who may have paid higher prices. That will

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Speaker 2: be a real challenge.

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Speaker 1: And Jim, what's your take on the big picture for trade?

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Speaker 2: The only thing I would say is that trade as

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Speaker 2: a whole remains chaotic. It remains among the top interests

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Speaker 2: of this president and this administration, and it is balanced

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Speaker 2: against the clear importance of affordability as a midterm election

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Speaker 2: year issue and a presidential election issue. So the balance

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Speaker 2: between tariffs and affordable will continue to define this debate

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Speaker 2: this year and running through to the presidential elections.

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Speaker 1: Always a pleasure to have you on, Tim, Thanks so much.

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Speaker 1: That's Timothy bright Bill, co chair of the International Trade

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Speaker 1: Practice at Willie Rhine.

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Speaker 3: Please welcome the very first winner of the FIFA Peace Prize,

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Speaker 3: theifth and forty seven President of the United States of America,

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Speaker 3: Mister Donald J. Trump.

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Speaker 4: Please thank you very much.

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Speaker 3: This is truly one of the great honors of my life.

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Speaker 1: You may remember back in December when FIFA President Gianni

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Speaker 1: Infantino awarded President Donald Trump the newly created FIFA Peace Prize.

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Speaker 1: Days later, the US Solicitor General ordered Brooklyn prosecutors to

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Speaker 1: drop two FIFA bribery convictions. In twenty twenty three, a

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Speaker 1: jury had handed down guilty verdicts against Erman Lopez and

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Speaker 1: the sports marketing group Full play By for money laundering

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Speaker 1: and wirefraud in connection with a scheme to bribe international

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Speaker 1: soccer officials for World Cup broadcasting rights. The highly unusual

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Speaker 1: move of prosecutors asking a judge to overturn guilty verdicts

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Speaker 1: could lead to the reversal of convictions in dozens of

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Speaker 1: other international soccer corruption cases, as well as the return

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Speaker 1: of hundreds of millions of dollars in recovered penalties. So

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Speaker 1: a Brooklyn federal judge is requiring the Justice Department to

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Speaker 1: provide a legal basis for dropping the long running international

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Speaker 1: soccer corruption case and explain the impact on related convictions

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Speaker 1: and penalties. Joining me is Bloomberg Legal reporter Patricia Hurtano,

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Speaker 1: who's been following this legal saga for years. Patty tell

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Speaker 1: us how we got to this point in this long

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Speaker 1: running investigation and prosecution.

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Speaker 5: Two federal juries convicted three sports marketing executives and soccer bosses.

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Speaker 5: They had different titles in a massive bribery scheme for

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Speaker 5: paying bribes or accepting bribes for sports marketing tied to

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Speaker 5: soccer and FIFA International Soccer. It was part of a

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Speaker 5: huge case unveiled by then Attorney General Loretta Lynch in

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Speaker 5: twenty fifteen too much fanfare and people may remember that

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Speaker 5: all the soccer barons were collected in a Barlac five

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Speaker 5: star hotel in Switzerland and the FBI and law enforcement

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Speaker 5: raided it and took them away in handcuffs. There was

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Speaker 5: a huge trial in twenty seventeen and resulted in the

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Speaker 5: conviction of two of those soccer officials, and then they appealed,

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Speaker 5: and then there was a trial in twenty twenty three

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Speaker 5: of former twenty first Century Fox executive and alleged bride

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Speaker 5: paying and receiving and a company called Full Play was

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Speaker 5: also convicted. So then goes the story the appeal of

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Speaker 5: the first two executives.

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Speaker 4: They appealed it and the convictions were upheld.

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Speaker 5: And then we get to the story where the twenty

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Speaker 5: first century Fox executive is named at A. Non Lopez,

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Speaker 5: and he had hired a squad of good lawyers and

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Speaker 5: they challenged and challenged the case, and then out of

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Speaker 5: the blue, the judge dismisses his conviction, anticipating how the

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Speaker 5: Supreme Court would rule. And it took everyone by surprise

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Speaker 5: and the government by surprise, and they challenged it, and

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Speaker 5: they went to the second Circuit and they won. The

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Speaker 5: circuit reinstated the conviction. He continued to challenge it, and

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Speaker 5: he was taken it to the Supreme Court, and then

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Speaker 5: suddenly everyone was very shocked. Literally days before Christmas of

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Speaker 5: last year, the government and the Solicitor General said they

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Speaker 5: weren't going to appeal this case. So basically it put

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Speaker 5: the case back into the posture of a conviction for

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Speaker 5: ernand Lopez and full play will no longer be challenged.

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Speaker 5: Nothing to see here, Supreme Court judges, the government is

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Speaker 5: pulling away from this prosecution. So reporting from my colleague

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Speaker 5: and I in be law determined that the Trump administration

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Speaker 5: ordered the Eastern District to pull the plug on their prosecution.

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Speaker 1: The order you reported from the Solicitor General to pull

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Speaker 1: the prosecution was that after Donald Trump was awarded a

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Speaker 1: so called peace prize by FIFA.

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Speaker 5: Yes, surprisingly you remember that, so, yes, this is true.

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Speaker 5: It happened days later. So my sources told me that

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Speaker 5: the Eastern District did not want to pull the plug.

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Speaker 5: It was one of their And the other thing that

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Speaker 5: affects this whole thing and this equation is that more

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Speaker 5: than two dozen defendants either pleaded guilty or were convicted.

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Speaker 5: So imagine you have at least twenty four people or

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Speaker 5: entities that got convicted in this crackdown of international soccer,

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Speaker 5: and what happens to them too? Because they all are

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Speaker 5: running back to court saying, Hey, if the judge voided

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Speaker 5: that guy's conviction, what about us?

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Speaker 4: What about me? It was an uproar in the court.

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Speaker 1: In January, the Supreme Court vacated and remanded the Second

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Speaker 1: Circuit's decision reinstating the bribery and money laundering convictions of

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Speaker 1: Lopez and the full play group. So where do we

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Speaker 1: stand now?

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Speaker 5: Where we stand now is the case has been abandoned.

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Speaker 5: So what does it mean for not only against a

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Speaker 5: non lope as in Full Play the company that were convicted,

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Speaker 5: the government's abandoning that. But then it threw into question

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Speaker 5: what was the government going to tell the district court

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Speaker 5: judge about the remaining defendants? And so what's happened now

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Speaker 5: is the judge ordered the government to explain what the

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Speaker 5: heck was going on. So the same judge that overturned

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Speaker 5: the conviction of these two defendants, and she had previously

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Speaker 5: upheld the convictions of the other twenty four entities and people,

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Speaker 5: she basically asked the government to explain themselves. So what

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Speaker 5: we saw on filed late Thursday that showed up on

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Speaker 5: the docket on Friday morning is the government's explanation.

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Speaker 1: And what is the government's explanation.

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Speaker 5: The government's explanation is we've decided it's not worth pursuing

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Speaker 5: these two cases. So is it kind of a solemnonic

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Speaker 5: decision if you want to call it because they want

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Speaker 5: to save the bathwater rather than the baby, I guess

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Speaker 5: if you want to call it that way, I mean

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Speaker 5: they're basically agreeing to dismiss these two cases. The Full

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Speaker 5: Play Company conviction as well as Air non Lope. But

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Speaker 5: they say there are different elements involved in the earlier convictions,

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Speaker 5: so they should stay. They said that the Department of

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Speaker 5: Justice has determined it will not commit further resources to

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Speaker 5: these two defendants conviction. They said, in the interests of justice,

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Speaker 5: just get rid of these two cases, but let the

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Speaker 5: other twenty four stand.

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Speaker 4: It's quite remarkable.

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Speaker 1: Absolutely, the federal rules of criminal procedure do allow the

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Speaker 1: government to seek dismissal of an indictment even after there's

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Speaker 1: a conviction by a jury and a court has entered judgment.

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Speaker 1: But how unusual is it for the US attorney to

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Speaker 1: come in and say, well, we got these convictions, your honor,

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Speaker 1: but forget it, we don't really want them.

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Speaker 5: It's unusual too that the government, when they were winning,

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Speaker 5: would pull out. I mean, that was what was so

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Speaker 5: extraordinary about what I saw on the docket in December.

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Speaker 5: I mean, first docket entry was from the US Attorney

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Speaker 5: in Brooklyn telling the court, hey, we're pulling out of

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Speaker 5: this case, and then leave seconds later, minutes later, the

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Speaker 5: Solicitor General of the United States pulls out of the case. Now,

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Speaker 5: my colleague and Bee Law had his sources saying that basically,

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Speaker 5: DOJ felt and the Solicitor General felt the case was

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Speaker 5: not winnable, but they had already won at the circuit,

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Speaker 5: which is kind of incredible.

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Speaker 4: I mean, if you're winning, do you give up?

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Speaker 1: Not usually. I mean, there seems to be a lot

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Speaker 1: more here than we're being told. So the papers are

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Speaker 1: in then or are there more papers to come?

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Speaker 4: Well?

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Speaker 5: I anticipate that what's going to happen is these defendants,

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Speaker 5: some of them led guilty expecting you know, some of

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Speaker 5: them have gone to prison and are out.

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Speaker 4: So we have two defendants.

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Speaker 5: The soccer bosses, Latin American soccer bosses. They got convicted

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Speaker 5: in twenty seventeen and did their time and are out.

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Speaker 5: They're wealthy enough to sort of try to go to

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Speaker 5: see if they can get a clean slate, to wipe

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Speaker 5: away their conviction and ask for something. I mean, I

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Speaker 5: don't think this is the end of it. Obviously, if

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Speaker 5: you have a smart lawyer and you're mad about Hey,

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Speaker 5: I did a deal, but that's not fair to let

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Speaker 5: that other guy get away with it. Why do I

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Speaker 5: have to have that black mark on my record? You know,

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Speaker 5: certainly worth hiring a lawyer and to pursue that, and.

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Speaker 1: So they're like about thirty individuals and corporate defendants who've

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Speaker 1: entered guilty please who may now want to withdraw them.

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Speaker 5: Here's this data I have. Or corporate defendants pled guilty,

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Speaker 5: Two corporate defendants got deferred prosecution agreements, one corporation got

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Speaker 5: a non prosecution agreement, twenty six peopled defendants got convicted,

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Speaker 5: and one basically they dropped the cooperation agreement. I mean,

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Speaker 5: one key former banker. He was a city bank banker,

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Speaker 5: and he became the government's star witness. I mean, the

441
00:27:51,840 --> 00:27:55,199
Speaker 5: guy cooperated for like eight years in this investigation, and

442
00:27:55,320 --> 00:27:58,040
Speaker 5: his whole life got eaten up by this case and

443
00:27:58,119 --> 00:28:01,080
Speaker 5: he pled guilty and he got no JA time, you know.

444
00:28:01,160 --> 00:28:03,600
Speaker 5: I mean, imagine being that person and you've given up

445
00:28:03,640 --> 00:28:06,879
Speaker 5: your life and there were death threats allegedly against him,

446
00:28:07,160 --> 00:28:09,640
Speaker 5: and imagine you were living under this cloud and then

447
00:28:09,760 --> 00:28:13,080
Speaker 5: the US government says, hey, it's okay, nothing to see.

448
00:28:13,119 --> 00:28:16,880
Speaker 1: Here are the prosecutions over basically, or there are other

449
00:28:16,960 --> 00:28:17,800
Speaker 1: cases pending.

450
00:28:17,960 --> 00:28:21,199
Speaker 5: I mean, there's two defendants who it's a father and

451
00:28:21,359 --> 00:28:26,400
Speaker 5: son sports marketing company executives that are basically in South

452
00:28:26,440 --> 00:28:29,879
Speaker 5: America and they're never going to be showing up in

453
00:28:29,880 --> 00:28:32,920
Speaker 5: the US so they could get arrested. So I mean

454
00:28:32,920 --> 00:28:35,199
Speaker 5: that case is pending against them, and the government has

455
00:28:35,280 --> 00:28:37,119
Speaker 5: vowed that they would pursue them, And I mean the

456
00:28:37,119 --> 00:28:39,520
Speaker 5: way the government has written their letter that they filed

457
00:28:39,520 --> 00:28:43,320
Speaker 5: on Friday is it's sort of very discrete carving out

458
00:28:43,480 --> 00:28:47,280
Speaker 5: of the defendants. These two defendants are non Lopez and

459
00:28:47,320 --> 00:28:51,479
Speaker 5: full Play and not the other twenty six in that hopper.

460
00:28:52,080 --> 00:28:54,760
Speaker 5: So if you can think about it, those earlier people

461
00:28:54,920 --> 00:28:58,240
Speaker 5: may be according the way the government's perspective, they're still

462
00:28:58,240 --> 00:29:02,000
Speaker 5: in their target site. We'll see if some executives got

463
00:29:02,000 --> 00:29:03,960
Speaker 5: a lot of money and wants to get their lawyer

464
00:29:04,000 --> 00:29:06,440
Speaker 5: in and make a big deal about this that hey,

465
00:29:06,480 --> 00:29:07,800
Speaker 5: this ain't fair, you know.

466
00:29:08,360 --> 00:29:12,560
Speaker 1: And hundreds of millions of dollars in penalties were paid, right.

467
00:29:12,440 --> 00:29:15,480
Speaker 5: I mean, the government's carving out and say basically, leave

468
00:29:15,520 --> 00:29:19,080
Speaker 5: those alone. Those are fine, We're still happy with those

469
00:29:19,160 --> 00:29:21,760
Speaker 5: and we're not going to give up. It's just Ernon

470
00:29:21,840 --> 00:29:24,560
Speaker 5: Lopez in this full Play group that we're giving up on,

471
00:29:25,000 --> 00:29:27,960
Speaker 5: which is kind of a wild theory. And it'll be

472
00:29:28,080 --> 00:29:31,680
Speaker 5: up to the judge who's basically started this to have

473
00:29:31,720 --> 00:29:32,640
Speaker 5: to parse out.

474
00:29:33,360 --> 00:29:38,200
Speaker 1: And also the Second Circuit decision was important as far

475
00:29:38,320 --> 00:29:42,880
Speaker 1: as you know, the government's ability to prosecute these corruption

476
00:29:43,080 --> 00:29:45,640
Speaker 1: cases right sort of gave the government a leg up.

477
00:29:46,120 --> 00:29:48,760
Speaker 5: Yeah, and that's one of the arguments that the government

478
00:29:48,800 --> 00:29:51,200
Speaker 5: did say that when the member, when I said that,

479
00:29:51,240 --> 00:29:55,760
Speaker 5: the judge ex partey, without any invitation, decided on her

480
00:29:55,800 --> 00:29:58,120
Speaker 5: own to say, you know what, I just sat through

481
00:29:58,160 --> 00:30:01,320
Speaker 5: this trial, they got a conviction, and here I am

482
00:30:01,360 --> 00:30:04,719
Speaker 5: about five six months later, on second thought, I'm going

483
00:30:04,800 --> 00:30:07,480
Speaker 5: to dismiss it because this is what I think the Supreme.

484
00:30:07,120 --> 00:30:07,760
Speaker 4: Court would roll.

485
00:30:07,840 --> 00:30:11,080
Speaker 5: The Circuit was very affirm and said she shouldn't be

486
00:30:11,120 --> 00:30:13,880
Speaker 5: taking the job of having to determine how the Supreme

487
00:30:13,880 --> 00:30:16,200
Speaker 5: Court is going to roll on something. She should just

488
00:30:16,280 --> 00:30:19,080
Speaker 5: have looked at what she was asked for. So the

489
00:30:19,120 --> 00:30:23,960
Speaker 5: government fought very strenuously in their appeal, saying to the

490
00:30:24,000 --> 00:30:27,680
Speaker 5: Second Circuit, Hey, this is important for us. We have

491
00:30:28,080 --> 00:30:32,560
Speaker 5: a new way of attacking international corruption. The judge had

492
00:30:32,640 --> 00:30:35,920
Speaker 5: ruled that this was international corruption that didn't fit into

493
00:30:35,960 --> 00:30:37,320
Speaker 5: the actual statutes.

494
00:30:38,240 --> 00:30:42,000
Speaker 1: The Solicitor General, according to your sources, didn't want to

495
00:30:42,040 --> 00:30:45,200
Speaker 1: go forward with this because he was afraid that the

496
00:30:45,200 --> 00:30:48,720
Speaker 1: Supreme Court would reverse because the Supreme Court has been

497
00:30:49,600 --> 00:30:53,680
Speaker 1: on a sort of a mission to limit corruption cases.

498
00:30:54,320 --> 00:30:59,880
Speaker 5: Yes, Solicitor General was saying this, but my sources also

499
00:31:00,120 --> 00:31:04,480
Speaker 5: told me that they were pretty convinced that they were

500
00:31:04,520 --> 00:31:07,360
Speaker 5: going to win at the Supreme Court and that they

501
00:31:07,400 --> 00:31:10,400
Speaker 5: were ordered to give up on the case by DOJ

502
00:31:10,600 --> 00:31:14,840
Speaker 5: and the Trump DOJ just days after mister Trump got

503
00:31:14,880 --> 00:31:17,000
Speaker 5: the FIFA Peace Prize.

504
00:31:17,320 --> 00:31:19,840
Speaker 1: And if every time this listener general thought they were

505
00:31:19,840 --> 00:31:21,560
Speaker 1: going to lose it, the Supreme Court just threw in

506
00:31:21,600 --> 00:31:26,080
Speaker 1: the towel, that would write pretty unusual, right, And.

507
00:31:26,080 --> 00:31:29,440
Speaker 5: Also you know, I mean the Second Circuit is hardly

508
00:31:30,040 --> 00:31:33,959
Speaker 5: they are one of the venues for this grist of

509
00:31:34,160 --> 00:31:37,280
Speaker 5: white collar corruption, right. I mean they are a very

510
00:31:37,320 --> 00:31:41,480
Speaker 5: tough circuit and they've made a lot of rulings that

511
00:31:41,560 --> 00:31:44,360
Speaker 5: have gotten and have been upheld in the Supreme Court

512
00:31:44,440 --> 00:31:46,120
Speaker 5: so anticipating.

513
00:31:46,160 --> 00:31:48,200
Speaker 4: I mean, this case so extraordinary.

514
00:31:48,280 --> 00:31:50,920
Speaker 5: You have a judge who decided on her own without

515
00:31:50,960 --> 00:31:54,160
Speaker 5: being asked. She was repeatedly asked by the way during

516
00:31:54,200 --> 00:31:58,080
Speaker 5: the trial by the defense lawyers, hey this is not right,

517
00:31:58,280 --> 00:32:01,000
Speaker 5: and she rejected it. And then she gets she had

518
00:32:01,000 --> 00:32:02,840
Speaker 5: the summer to think about it and to decide it

519
00:32:02,840 --> 00:32:04,800
Speaker 5: on her own you know what, I think this is

520
00:32:04,840 --> 00:32:07,000
Speaker 5: what the Supreme Court's going to rule. And she was

521
00:32:07,040 --> 00:32:09,479
Speaker 5: actually like chided by the Second Circuit about this.

522
00:32:10,040 --> 00:32:13,160
Speaker 1: So what does the timeline look like in the case now?

523
00:32:13,680 --> 00:32:18,800
Speaker 5: When the Solicitor General and the US Attorney told the

524
00:32:18,880 --> 00:32:21,600
Speaker 5: judge that they were not going to pursue this case,

525
00:32:22,280 --> 00:32:26,320
Speaker 5: a couple of weeks later, the district court judge asked

526
00:32:26,440 --> 00:32:29,440
Speaker 5: for an explanation. So next thing we have to hear

527
00:32:29,720 --> 00:32:32,440
Speaker 5: is from the defense lawyers, who I'm sure are thrilled

528
00:32:32,920 --> 00:32:33,680
Speaker 5: and what they're.

529
00:32:33,480 --> 00:32:34,000
Speaker 4: Going to say.

530
00:32:34,440 --> 00:32:40,320
Speaker 5: And then I expect more defendants maybe flocking to her

531
00:32:40,560 --> 00:32:42,560
Speaker 5: and asking her, Hey.

532
00:32:42,360 --> 00:32:44,920
Speaker 4: What about me? Nobody wants to be left out of

533
00:32:45,360 --> 00:32:46,360
Speaker 4: a good ruling like this.

534
00:32:47,200 --> 00:32:50,720
Speaker 1: The two defendants or non Lopez in the sports marketing

535
00:32:50,720 --> 00:32:53,440
Speaker 1: group full play, I mean, is there anything about them

536
00:32:53,440 --> 00:32:56,960
Speaker 1: that stands out from the rest of the defendants? Do

537
00:32:57,040 --> 00:32:59,760
Speaker 1: they have more ties to the Trump administration? I mean,

538
00:33:00,360 --> 00:33:02,640
Speaker 1: do they stand out for any other reasons?

539
00:33:03,280 --> 00:33:07,560
Speaker 5: Ernn Lopez has gotten very wealthy and doing a podcast company,

540
00:33:07,680 --> 00:33:10,360
Speaker 5: and that's got a lot of clout and ate a

541
00:33:10,400 --> 00:33:14,160
Speaker 5: lot of money after he left twenty first Century Fox.

542
00:33:14,800 --> 00:33:18,000
Speaker 5: You know, he's got some excellent lawyers, including one who

543
00:33:18,080 --> 00:33:21,680
Speaker 5: is a former federal judge in Brooklyn. So, whether one

544
00:33:21,680 --> 00:33:26,440
Speaker 5: has moral suasion or has you know, the creds, the

545
00:33:26,560 --> 00:33:30,680
Speaker 5: legal creds to help you in your pursuit of what

546
00:33:30,720 --> 00:33:33,520
Speaker 5: you think was an injustice. I mean, the one thing

547
00:33:33,600 --> 00:33:36,040
Speaker 5: that all the defendants have assailed is there was no

548
00:33:36,120 --> 00:33:38,520
Speaker 5: nexus for the US to bring this kind of case.

549
00:33:39,000 --> 00:33:42,960
Speaker 5: But the government Eastern District especially is very creative and

550
00:33:43,240 --> 00:33:46,920
Speaker 5: establishing that there were actual impacts on the American legal

551
00:33:46,960 --> 00:33:50,080
Speaker 5: system or also on the financial system, and they showed

552
00:33:50,200 --> 00:33:54,560
Speaker 5: thousands of financial transactions where some of them even had

553
00:33:54,640 --> 00:33:59,080
Speaker 5: bribes that went through US financial institutions who correspondent banks.

554
00:33:59,600 --> 00:34:02,960
Speaker 5: So I mean the government, yeah, I mean the reach

555
00:34:03,160 --> 00:34:06,719
Speaker 5: maybe has been self impost you know, think about it,

556
00:34:06,760 --> 00:34:08,600
Speaker 5: if you put yourself in a straight track of rather

557
00:34:08,640 --> 00:34:11,120
Speaker 5: than having one put on you. So, I mean, this

558
00:34:11,200 --> 00:34:15,920
Speaker 5: kind of decision will maybe limit further transnational criminal cases,

559
00:34:16,239 --> 00:34:18,920
Speaker 5: especially white collar financial fraud cases.

560
00:34:19,520 --> 00:34:22,400
Speaker 1: We've talked about these cases so many times, and I

561
00:34:22,520 --> 00:34:26,680
Speaker 1: anticipate we'll be talking about them again. Thanks so much, Patty.

562
00:34:27,200 --> 00:34:30,920
Speaker 1: That's Bloomberg Legal reporter Patricia Hurtado, And that's it for

563
00:34:30,960 --> 00:34:33,600
Speaker 1: this edition of the Bloomberg Law Show. Remember you can

564
00:34:33,600 --> 00:34:36,800
Speaker 1: always get the latest legal news on our Bloomberg Law Podcast.

565
00:34:37,120 --> 00:34:40,160
Speaker 1: You can find them on Apple Podcasts, Spotify, and at

566
00:34:40,320 --> 00:34:45,360
Speaker 1: www dot bloomberg dot com, slash podcast slash Law, and

567
00:34:45,440 --> 00:34:48,480
Speaker 1: remember to tune into The Bloomberg Law Show every weeknight

568
00:34:48,560 --> 00:34:52,040
Speaker 1: at ten pm Wall Street Time. I'm June Grosso and

569
00:34:52,080 --> 00:34:53,560
Speaker 1: you're listening to Bloomberg