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

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Speaker 1: My heart is broken for the Department of Justice, but

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Speaker 1: I have great confidence in the federal judicial system. I'm innocent,

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Speaker 1: so let's have a trial.

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Speaker 2: But will the criminal case against former FBI Director James

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Speaker 2: Comy even get to trial. Comy's defense has filed several

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Speaker 2: motions to get the case dismissed before trial, including emotion

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Speaker 2: to dismiss because the government engaged in a vindictive and

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Speaker 2: selective prosecution against him, and emotion to dismiss because the

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Speaker 2: US Attorney Lindsay Halligan was illegally appointed. And yesterday, a

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Speaker 2: frustrated judge scolded the prosecution for its indict first, investigate

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Speaker 2: second approach to Comy's case. He ordered prosecutors to turn

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Speaker 2: over the grand jury transcript, phips and a trove of

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Speaker 2: materials from the investigation. Comy has pleaded not guilty to

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Speaker 2: the charges of lying to Congress in twenty twenty, charges

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Speaker 2: filed days after President Donald Trump appeared to urge his

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Speaker 2: attorney general to prosecute the former FBI director and other

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Speaker 2: perceived political enemies. Joining me is former federal prosecutor Robert

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Speaker 2: Mintz a partner mat Carter in English. A federal judge

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Speaker 2: yesterday scolded the prosecutors for what he described as their

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Speaker 2: indict first and investigate second approach to the case, saying,

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Speaker 2: this is not a typical case. Isn't that what Comy

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Speaker 2: has been saying?

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Speaker 3: The magistrate judge, who handles the discovery phase of the

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Speaker 3: potential trial, was clearly frustrated with prosecutors and ultimately instructed

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Speaker 3: them by the end of the day today to turn

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Speaker 3: over grand jury materials and other evidence that investigators had

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Speaker 3: seized or the investigation. The judge was frustrated with a

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Speaker 3: lack of information that federal prosecutors had regarding evidence that

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Speaker 3: was seized back in twenty nineteen and twenty twenty when

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Speaker 3: prosecutors executed a search warrant on Columbia law professor Daniel

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Speaker 3: Richman's office in connection with an investigation that was conducted

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Speaker 3: during Trump's first administration. That's part of an increy into

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Speaker 3: whether or not here Comy had illegally shared classified information.

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Speaker 3: The Justice Department back then during Trump's first term, closed

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Speaker 3: the investigation without charges, but now prosecutors are seeking to

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Speaker 3: use that evidence in this criminal prosecution of James Comy,

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Speaker 3: and that's what the magistrate judge was frustrated about because

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Speaker 3: Comy's lawyers argued that they had yet to see that

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Speaker 3: information and some of it may be privileged since at

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Speaker 3: one point mister Richmond was acting as an attorney to

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Speaker 3: James Comy.

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Speaker 4: Prosecutors were or to turn over all of.

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Speaker 3: That information, including what went on in front of the

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Speaker 3: grand jury when the indictment was obtained against Comy.

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Speaker 2: Besides attorney client privileged questions, the defense is also claiming

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Speaker 2: that prosecutors shouldn't be allowed to use that because it

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Speaker 2: was obtained through search warrants, as you said, that were

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Speaker 2: approved in a different investigation involving a different set of

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Speaker 2: alleged crimes than Comy faces.

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Speaker 3: Now, well, as you say, what happened was that prosecutors

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Speaker 3: executed four search warrants on Richmond's devices between twenty nineteen

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Speaker 3: and twenty twenty, allowing investigators to review his computer hard drive,

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Speaker 3: for example, his email account, iCloud devices. And that's because

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Speaker 3: Richmond had briefly represented Comy as an attorney after Trump

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Speaker 3: fired him as FBI director in twenty seventeen, some of

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Speaker 3: that information might be protected by the attorney client privilege,

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Speaker 3: But the Comy lawyers are arguing beyond the privilege issue,

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Speaker 3: it's simply unfair for that information to be admitted in

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Speaker 3: this case because, as you say, this is a different case.

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Speaker 3: The search warrant was obtained based upon information that was

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Speaker 3: searching for different evidence and potential different criminal violations. So

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Speaker 3: they're saying, different investigation, different set of alleged crimes, and

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Speaker 3: therefore the information that was obtained from those four search

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Speaker 3: warrants should not be admitted in this criminal case.

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Speaker 2: I take it that that doesn't happen often.

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Speaker 4: No, it doesn't happen often. And I think you also have.

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Speaker 3: To bear in mind that the twenty nineteen and twenty

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Speaker 3: twenty search warrants authorized agents to review Richmond's devices only

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Speaker 3: for potential evidence of specific crimes, and so in that case,

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Speaker 3: while search warrants are generally fairly broad, they list a

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Speaker 3: slew of crimes for which evidence may be sees, and

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Speaker 3: they're fairly broad, and they give a great deal of

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Speaker 3: latitude to agents in terms of seizing evidence. In this case,

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Speaker 3: it appears that those search warrants were very limited, or

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Speaker 3: certainly more limited than they typically are, and it only

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Speaker 3: allowed the government to review material that was relevant to

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Speaker 3: the specific crimes that were laced in the search warrants.

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Speaker 3: So it raises the question about number one, whether the

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Speaker 3: government has reviewed information that went beyond the scope of

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Speaker 3: those initial search warrants. And secondly, whether the information that

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Speaker 3: was derived from search warrants that were permitted only to

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Speaker 3: investigate certain crimes could be used now to investigate a

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Speaker 3: crime that was not contemplated at the time that the

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Speaker 3: search warrants were issued.

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Speaker 2: And apparently the prosecutors have been using information obtained from

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Speaker 2: those search warrants in court papers when it hasn't gone

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Speaker 2: through the judge yet.

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Speaker 3: Homie's lawyers raised two interesting points before the Magistrate Judge

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Speaker 3: Number one.

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Speaker 4: They argued that at the time that.

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Speaker 3: Those records were seized from mister Richmond, mister Richmond's lawyers

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Speaker 3: were permitted to review the evidence and to remove anything

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Speaker 3: they thought was covered by the attorney client privilege. But

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Speaker 3: mister Comy's lawyers never saw this evidence and never had

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Speaker 3: an opportunity to review it prior to it being used.

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Speaker 4: By prosecutors here.

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Speaker 3: So they're arguing in the first instance, that privilege belongs

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Speaker 3: to James Comy doesn't belong to mister Richmond, and mister

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Speaker 3: Richmond's interests may have been different at that time than

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Speaker 3: James Comy's interests are now. So the judge apparently agreed

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Speaker 3: with them and said, everything seized back in twenty nineteen

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Speaker 3: and twenty twenty, you've got to turn over to Comy's

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Speaker 3: lawyers so they can go through it and they can

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Speaker 3: make a separate argument as to whether or not any

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Speaker 3: of that information is privileged or not. And the second

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Speaker 3: point is that they are arguing that prosecutors have already

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Speaker 3: used this material in some of their filings with the court,

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Speaker 3: and the judge seemed to take an interest in that,

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Speaker 3: and he warrant prosecutors that if they quote in court

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Speaker 3: filings from that information that was seized from those search

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Speaker 3: warrants before mister Comy's lawyers have an opportunity to complete

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Speaker 3: their review, that they do so quote at their own risk. Interestingly,

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Speaker 3: if the judge's later rules that prosecutors should not have

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Speaker 3: had access to those these communications, it would arguably taint

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Speaker 3: the entire case and would provide a basis for Comey's

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Speaker 3: lawyers to move to dismiss the indictment.

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Speaker 2: Comey's defense lawyers had already asked for a transcript of

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Speaker 2: the grand jury proceedings. And this relates to Lindsey Halligan,

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Speaker 2: who was installed as US attorney hastily. She has no

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Speaker 2: experience as a prosecutor, and she personally presented the case

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Speaker 2: against Komy and New York Attorney General Letitia James to

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Speaker 2: the grand jury with no help from experienced prosecutors who

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Speaker 2: were not willing to take part in the grand jury proceedings.

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Speaker 2: So Comy's defenses claiming that there were irregularities during the

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Speaker 2: presentation to the grand jury. Let's say you've never presented

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Speaker 2: a case to a grand jury. You don't have anyone

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Speaker 2: experienced in the grand jury room with you to help

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Speaker 2: you out. How difficult is it to present a case

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Speaker 2: to a grand jury properly?

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Speaker 3: Well, if you're an experienced prosecutor, appearing before the grand

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Speaker 3: jury is fairly routine and not that difficult. It's not

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Speaker 3: like in your presentation before the grand jury, complicated legal

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Speaker 3: issues typically arise. But in this case, the prosecutor, Lindsay Halligan,

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Speaker 3: had just been appointed as an interim US attorney in

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Speaker 3: the Eastern District of Virginia and had never presented a

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Speaker 3: case before a grand jury before Comy's lawyers are arguing

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Speaker 3: that they're entitled to pull back the curtain on that

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Speaker 3: grand jury proceding, something that very rarely happens. Generally, once

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Speaker 3: an indictment is returned, prosecutors and the defense move on

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Speaker 3: to the trial itself, and there's generally not a basis

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Speaker 3: to go back and review the presentation before the grand

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Speaker 3: jury unless there is some evidence of some type of

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Speaker 3: serious irregularity, and that's exactly what Comy's lawyers are arguing here.

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Speaker 3: They have asked the judge to provide them with all

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Speaker 3: the grand jury materials, and the judge has ordered that

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Speaker 3: the government turned that over, and the basis of their

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Speaker 3: argument is that there were a series of irregularities. They

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Speaker 3: point to the fact that Miss Halligan kept the grand

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Speaker 3: jurors beyond normal business hours after the grand jury voted

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Speaker 3: to indict on two charges but refused to indict on

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Speaker 3: a third. They also argue that she may have used

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Speaker 3: attorney client privileged information in her presentation, and then there

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Speaker 3: was a further irregularity because she apparently signed two indictments,

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Speaker 3: one of them was the one that was actually returned

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Speaker 3: by the grand jury, and the other indictment was the

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Speaker 3: one that was rejected by the grand jury, at least

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Speaker 3: as to one count.

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Speaker 4: And given all of.

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Speaker 3: These irregularities, the magistrate judge has taken the unusual step

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Speaker 3: of saying to Comy's lawyers, you're entitled to review this

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Speaker 3: entire proceeding, and there's little doubt that once they do that,

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Speaker 3: there will be some other issues that they will be

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Speaker 3: able to raise as to why the presentation was not valid.

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Speaker 3: And if they can ultimately convince the judge that the

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Speaker 3: irregularities are serious enough so that it taints the entire

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Speaker 3: grand jury process and that indictment is thrown out, they

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Speaker 3: may well have won their case because the station of

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Speaker 3: limitations I'm sure they will argue, has now expired.

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Speaker 2: Coming up next on the Bloomberg Law Show, I'll continue

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Speaker 2: this conversation with former federal prosecutor Robert Mintz. Attorney General

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Speaker 2: Pam Bondi basically wants a do over, and Comy's defense

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Speaker 2: team wants to know what's the lie Comy supposedly told.

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Speaker 2: And later in the show, Michael Jordan's racing team wins

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Speaker 2: a key legal fight in his anti trust feud with NASCAR.

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Speaker 2: I'm June Grosso and you're listening to Bloomberg. The indictment

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Speaker 2: of former FBI director James Comy came just five days

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Speaker 2: after sident Donald Trump, in a post on truth Social

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Speaker 2: demanded that Attorney General Pam Bondi bring charges against his

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Speaker 2: perceived enemies, naming Komy, New York Attorney General Letitia James,

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Speaker 2: and California Senator Adam Schiff. The charges center on testimony

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Speaker 2: Comy gave in response to questions from Republican Senator Ted

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Speaker 2: Cruz during a twenty twenty hearing over the FBI's investigation

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Speaker 2: into Russian interference in the twenty sixteen election.

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Speaker 1: What mister McKay is saying and what you testify to

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Speaker 1: this committee cannot both be true.

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Speaker 4: One or the other is false. Who's telling the truth?

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Speaker 1: I can only speak to my testimony.

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Speaker 5: I stand by what the testimony you summarized that I

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Speaker 5: gave in May of twenty seventeen.

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Speaker 2: Comy's defense team is trying to get the charges drop

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Speaker 2: before trial. They've filed several motions, including a motion to

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Speaker 2: dismiss because the government engaged in a vindictive and selective

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Speaker 2: prosecution and a motion to dismiss because the US Attorney

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Speaker 2: was illegally appointed. I've been talking to former federal prosecutor

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Speaker 2: Robert Mintz of Maccarter and English, so Bob. One of

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Speaker 2: the big arguments that Komy is making, as well as

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Speaker 2: New York Attorney General Letitia James, is that Lindsay Halligan

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Speaker 2: was illegally appointed to the position of US Attorney for

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Speaker 2: the Eastern District of Virginia. So Attorney General Pambondi has

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Speaker 2: retro actively given Halligan an extra title of special Attorney

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Speaker 2: to try to withstand the claims that she was illegally

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Speaker 2: serving when she brought the charges. I mean, will the

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Speaker 2: court let her sort of erase her mistake and say, oh,

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Speaker 2: by the way, would a court actually let her do

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Speaker 2: a retroactive appointment.

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Speaker 4: Well, that remains to be seen.

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Speaker 3: We don't usually see this kind of litigation, the appointment

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Speaker 3: of a US attorney. I won't say that it never happens,

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Speaker 3: but it certainly does not typically happen. And here we

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Speaker 3: had a situation where the argument was that Halligan was

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Speaker 3: not lawfully appointed as interim US attorney and she shouldn't

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Speaker 3: have been in front of that grand jury in the

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Speaker 3: first place. And the argument is that the Attorney General

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Speaker 3: had appoint at Halligan's predecessor, an experienced prosecutor from the

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Speaker 3: Eastern District of Virginia to lead that office, and that

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Speaker 3: appointment was made on January twenty first. That starts this

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Speaker 3: one hundred and twenty day clock ticking under the statute,

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Speaker 3: which allows time in most circumstances for that prosecutor to

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Speaker 3: get confirmed by the Senate. In this case, mister Siebert

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Speaker 3: was not confirmed, and after one hundred and twenty days

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Speaker 3: expires under the statute. The defense will argue the District Court,

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Speaker 3: not the Justice Department, has exclusive power to appoint the

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Speaker 3: interim US Attorney. That clock ran out on May twenty

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Speaker 3: first of twenty twenty five, at which.

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Speaker 4: Point the Court reappointed Seber.

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Speaker 3: As United States Attorney to serve until the vacancy is filled.

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Speaker 4: Then Sebert was fired, and.

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Speaker 3: The defense has argued that the District Court at that

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Speaker 3: point was the only legitimate appointing authority and that the

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Speaker 3: Attorney General and the President did not have the power

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Speaker 3: to appoint Miss Halligan to another one hundred and twenty

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Speaker 3: day term.

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Speaker 2: Do you think that this retro active title giving will

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Speaker 2: fly with a judge.

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Speaker 3: I think the argument by the Attorney General that she

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Speaker 3: can retroactively give Eastern Virginia's top prosecutors an extra title

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Speaker 3: in order to try to defend against the claims that

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Speaker 3: Halligan was improperly appointed. Is probably not going to gain

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Speaker 3: a lot of traction with the courts.

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Speaker 4: Typically, the courts.

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Speaker 3: Will look at the facts at the time and whether

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Speaker 3: or not the appointment was proper under the rules, under

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Speaker 3: the regulations, under the statutes at the time of the appointment.

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Speaker 3: And I think it's an uphill battle to argue that

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Speaker 3: even if there was a deficiency, then that can be

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Speaker 3: remedied retroactively by an appointment.

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Speaker 2: Komy is also claiming that the indictment is hopelessly vague

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Speaker 2: and defective on its face, and this may be a

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Speaker 2: result of Halligan having no prosecutorial experience and no help

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Speaker 2: from prosecutors. And they say that Senator Cruz's questions were

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Speaker 2: fundamentally ambiguous and that Komi's response was literally true. So

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Speaker 2: they want to know from the prosecutors, which statements are

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Speaker 2: you claiming were false? And when you listen to that

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Speaker 2: exchange between Cruz and Komi, it's hard to see where

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Speaker 2: there's even a possibility of a lie, where Comy says,

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Speaker 2: I stand by my prior testimony.

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Speaker 3: Yeah, And that's exactly why false statements. That's exactly why

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Speaker 3: false statement prosecutions are extremely difficult, because you.

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Speaker 4: Have to parse through exactly what was.

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Speaker 3: The question and what was the answer, and demonstrate that

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Speaker 3: at the time the answer was given, it was not

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Speaker 3: only false, but it was intentionally false, and that it

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Speaker 3: was false about something that was material. So in this case,

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Speaker 3: the prosecution is based on hearing before the Senate Judiciary

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Speaker 3: Committee on September thirty, is, twenty twenty, and at that hearing,

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Speaker 3: as you say, Senator Ted Cruz asked mister Comy whether

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Speaker 3: he had authorized someone at the FBI to be an

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Speaker 3: anonymous source in news reports. The indictment says mister Comy

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Speaker 3: misled the committee by saying that he had not done so. Now,

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Speaker 3: Comy's lawyers have attacked that indictment by saying that the

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Speaker 3: questioning by mister Cruz was vague and imprecise, and they

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Speaker 3: point out that at the time that Senator Cruz was

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Speaker 3: questioning mister Comy about whether he had authorized anybody to

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Speaker 3: leak information, that Senator Cruz was referring to Andrew McCabe,

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Speaker 3: who once served as mister Comy's deputy at the FBI,

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Speaker 3: and was not referring to Daniel Richman, who had been

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Speaker 3: a former FBI employee and later became the attorney for

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Speaker 3: James Comy. So they're arguing that the indictment is defective

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Speaker 3: on its face, because in order to prove that mister

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Speaker 3: Comy lied, you have to show that there was a

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Speaker 3: clear question and that he gave a clearly false, a

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Speaker 3: knowingly false answer to it, and that he had an

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Speaker 3: intention to mislead the committee, and that the information he

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Speaker 3: provided that was false was material, and that this somehow

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Speaker 3: obstructed the relevant congressional proceeding. They say that that information

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Speaker 3: is not contained in the indictment, and one of their

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Speaker 3: emotions is the requirement that the government provide that information.

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Speaker 3: So what you have here basically is an argument that

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Speaker 3: the indictment is defective on its face. So, in other words,

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Speaker 3: it's not an argument that the government has its facts wrong,

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Speaker 3: because the factual dispute is something that has to.

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Speaker 4: Be resolved by a jury at trial.

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Speaker 3: They are arguing that this is a decision that really

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Speaker 3: needs to be made by the judge, because on its face,

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Speaker 3: the government is unable to prove the charges. The allegations

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Speaker 3: in the indictment simply are not enough to succestain a

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Speaker 3: valid conviction. And that's why they're filing this whole slew

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Speaker 3: of arguments to try to get this case dismissed before

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Speaker 3: it ever goes to trial.

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Speaker 2: One argument that was being discussed even before the defense

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Speaker 2: filed its papers was, you know, a motion to dismiss

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Speaker 2: because of a vindictive and selective prosecution. And here the

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Speaker 2: comy motion includes a document with a sixty page long

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Speaker 2: list of links that detailed Trump's shall we say not

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Speaker 2: so kind statements about Coomy. I mean, how strong is

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Speaker 2: their vindictive prosecution case? I know it's hard to get

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Speaker 2: something dismissed for vindictive prosecution.

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Speaker 4: No, that's exactly right.

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Speaker 3: I mean motions for vindictive prosecution are exceedingly hard to win.

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Speaker 3: They require defendants to prove that prosecutors have displayed animus

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Speaker 3: towards them while they were seeking to exercise their rights,

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Speaker 3: and that the charges never would have been brought except

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Speaker 3: for that animus. Now, prosecutors have argued in response that

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Speaker 3: the comments made by President Trump to prosecute mister Komy,

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Speaker 3: we're only suggesting that if mister Comy committed a crime,

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Speaker 3: that they ought to prosecute him, and that he was

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Speaker 3: not directing the Department of Justice to prosecute mister Comy

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Speaker 3: regardless of whether or not a crime was committed. We'll

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Speaker 3: have to see how the judge handles that at the

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Speaker 3: end of the day. But the vindictive prosecution standard is

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Speaker 3: fairly high, and that may be a difficult argument for

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Speaker 3: the defense to prevail on.

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Speaker 4: Bob.

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Speaker 2: It seems like we're seeing case after case where judges

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Speaker 2: are questioning, rejecting, or not relying on what federal prosecutors

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Speaker 2: are telling them. We have that happening in this case

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Speaker 2: to a certain extent, and in the criminal case against

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Speaker 2: the mistakenly deported Abrego Garcia, the judge has ordered the

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Speaker 2: prosecutors to send their internal communications to him and there's

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Speaker 2: a hearing schedule for December where the number two leader

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Speaker 2: or of the Justice Department may have to testify. Today,

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Speaker 2: a judge in Chicago found that the evidence from the

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Speaker 2: government about the Border Patrol's use of force was not credible.

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Speaker 2: We've had other judges questioning whether the Justice Department is

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Speaker 2: following orders. It seems to be a crisis of confidence

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Speaker 2: where judges are not accepting at face value.

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Speaker 3: Well, there's no question that historically federal judges give great

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Speaker 3: deference to the government and specifically the US Attorney's office

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Speaker 3: when they appear in court on federal cases. How was

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Speaker 3: a federal prosecutor for almost ten years, and I can

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Speaker 3: say from experience that judges take prosecutors at their word.

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Speaker 3: They sometimes request additional information, They may request additional briefing

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Speaker 3: in order to make sure that the government has the

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Speaker 3: law right. But if a federal prosecutor makes a representation

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Speaker 3: to a federal judge in open cques court, generally that

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Speaker 3: is something historically that judges will accept. I think we

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Speaker 3: are seeing a greater degree of skepticism by judges because

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Speaker 3: we're seeing a series of unusual issues that judges have

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Speaker 3: never really faced before. For example, the issues regarding whether

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Speaker 3: or not the appointment of the US Attorney was properly

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Speaker 3: done is not something that judges typically deal with. Some

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Speaker 3: of the issues that went on in the grand jury

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Speaker 3: in the Komi indictment that we talked about earlier are

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Speaker 3: not issues that typically arise. Again, it is very unusual

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Speaker 3: for the defense to get access to the grand jury

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Speaker 3: proceeding it's a motion that defense lawyers routinely make. It

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Speaker 3: happens all the time, so it's not as if judges

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Speaker 3: are not faced with that question, but it's rarely granted.

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Speaker 3: It's we rarely have a situation where defense lawyers are

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Speaker 3: privy to that entire proceeding, because once they look at

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Speaker 3: everything that's said before that grand jury that are certainly

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Speaker 3: going to come up with some other arguments. That's to

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Speaker 3: why some of the presentation may have been improper. I

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Speaker 3: think it's fair to say that there have been examples

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Speaker 3: of where federal judges are not nearly as deferential to

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Speaker 3: federal prosecutors as they have been in the past.

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Speaker 2: That deprives them of one advantage they have over defense attorneys.

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Speaker 2: Thanks so much, Bob. That's Robert Mince of McCarter and English.

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Speaker 2: Coming up next on the Bloomberg Law Show, Michael Jordan's

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Speaker 2: racing team wins a key legal fight in his anti

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Speaker 2: trust feud with NASCAR. Will the case be settled or

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Speaker 2: go to trial? On December first, I'm June Grosso and

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Speaker 2: you're listening to Bloomberg.

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Speaker 5: Look, I've been a fan of the game for a

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Speaker 5: long period of time, you know, and you know, when

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Speaker 5: we first started this goal process, I've always said that

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Speaker 5: y'all want to fight for the betterment of the sport.

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Speaker 5: You know, even though they try to point out that,

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Speaker 5: you know, we made you know, some money, or we

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Speaker 5: had successful business, that's not the point. The point is

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Speaker 5: is that the sport itself needs to continually change for

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Speaker 5: the for the fans as well as for the teams,

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Speaker 5: as well as the NASCAR too, if you understand that.

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Speaker 2: And Michael Jordan's racing team secured a crucial win in

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Speaker 2: its anti trust case against NASCAR this week. On Tuesday,

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Speaker 2: a federal judge rule that Premier stock Car Racing is

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Speaker 2: its own, separate and distinct market. That strengthens Jordan's anti

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Speaker 2: trust claims as his team twenty three to eleven Racing

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Speaker 2: and co plaintiff front Row Motorsports head towards December first

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Speaker 2: trial against the racing organization.

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Speaker 5: Look, I look forward to going down the fire. If

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Speaker 5: I have to fight this to the end for the

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Speaker 5: betterment of the sport, how we'll do that?

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Speaker 2: So will there be a trial on December first or

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Speaker 2: a settlement joining me?

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Speaker 3: Is?

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Speaker 2: Anti trust law expert Harry First, a professor at NYU

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Speaker 2: law school. Harry explained Michael Jordan's anti trust case against NASCAR.

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Speaker 1: This is a tussle between the family that has controlled

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Speaker 1: NASCAR and I guess stock car racing for many years.

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Speaker 1: Apparently almost uniquely in sports. You know, most sports are

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Speaker 1: controlled by groups of team owners, but this is one

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Speaker 1: that's only controlled by one family, this France family. You know,

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Speaker 1: I guess, It's had its ups and downs, but it's

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Speaker 1: pretty up now. You know. They're sort of the only

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Speaker 1: real game in town for the Top Line Cup racing.

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Speaker 1: There basically been arguments between the owners of these racing

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Speaker 1: teams and the Frances over who's gonna, you know, sort

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Speaker 1: of split the money, particularly broadcast revenue. I think they

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Speaker 1: both need each other. Race car owners need tracks to

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Speaker 1: race on, and NASCAR, you know, has made itself through

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Speaker 1: a series of moves, acquisitions and so forth, is basically

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Speaker 1: the only place where you can have these high level races.

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Speaker 1: And of course you've got to have the race cars

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Speaker 1: or else you've got nothing to show. So they both

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Speaker 1: need each other. But apparently the racing teams have not

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Speaker 1: been hugely profitable. Unlike other sports. It's very expensive to

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Speaker 1: maintain these According to the litigation anyway, and the France's

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Speaker 1: So the plaintiffs say, the plaintiff's being two of these

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Speaker 1: teams anyway, one being this twenty three to eleven racing,

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Speaker 1: which is Michael Jordan's. Now, the plaintiffs say that they

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Speaker 1: take most of the revenue, particularly the broadcast revenue, and

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Speaker 1: we're not getting enough, you know. The Francis say, well,

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Speaker 1: you don't like it, take it or leave it, and

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Speaker 1: that's when the litigation particularly broke out.

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Speaker 2: It sounds like anti trust to me, but sounds like

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Speaker 2: path sounds like it is it? So this partial summary

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Speaker 2: judgment motion was about the relevant market, which we've talked

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Speaker 2: about before is key to anti trust.

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Speaker 1: Right. So the litigation has had a little back and forth.

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Speaker 1: The district court judge seems pretty well disposed to the

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Speaker 1: plaintiff's claims, at one point issuing this injunction requiring NASCAR

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Speaker 1: to admit the two teams into the I guess it

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Speaker 1: was the twenty twenty four circuit and the Court of

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Speaker 1: Appeals knocked that down for various reasons. So just within

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Speaker 1: I guess it's the last few days, right, the district

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Speaker 1: court judge granted the plaintiff's motion for partial summary judgement.

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Speaker 1: I mean, some of the important issues are now out

440
00:26:34,840 --> 00:26:38,760
Speaker 1: of the case, and particularly as you mentioned, this contentious

441
00:26:38,800 --> 00:26:42,600
Speaker 1: issue over what's the relevant market. Is it just this

442
00:26:42,880 --> 00:26:47,560
Speaker 1: NASCAR premier racing market? Does it include, you know, other

443
00:26:47,880 --> 00:26:51,920
Speaker 1: kinds of stock car racing? There are other tiers? Does

444
00:26:51,960 --> 00:26:55,639
Speaker 1: it include other motor sports? The game and anty trust

445
00:26:55,680 --> 00:26:58,760
Speaker 1: If you're a defendant as to constantly include different kinds

446
00:26:58,800 --> 00:27:03,199
Speaker 1: of substitutes, people would watch. But here the market is

447
00:27:03,240 --> 00:27:07,080
Speaker 1: a labor market that they're arguing about, and the question is,

448
00:27:07,720 --> 00:27:11,879
Speaker 1: you know, what are the choices available for these race

449
00:27:11,920 --> 00:27:15,879
Speaker 1: car drivers who are selling their services? And this is

450
00:27:15,920 --> 00:27:19,359
Speaker 1: basically it. So it looked like a pretty strong claim

451
00:27:19,400 --> 00:27:24,159
Speaker 1: on market definition. But proving market definition is expensive, you know,

452
00:27:24,280 --> 00:27:27,880
Speaker 1: requires lots of experts, and they went through to the stage.

453
00:27:28,359 --> 00:27:31,440
Speaker 1: Now this is before you get to the jury, this

454
00:27:31,800 --> 00:27:35,800
Speaker 1: summary judgment stage, but a lot of the record's been developed,

455
00:27:36,359 --> 00:27:40,280
Speaker 1: and the district court judge sort of took an interesting

456
00:27:40,400 --> 00:27:44,080
Speaker 1: turn on this. He said, well, if there's a dispute

457
00:27:44,080 --> 00:27:47,639
Speaker 1: of fact, which there always is, in market definition, I

458
00:27:47,640 --> 00:27:51,480
Speaker 1: think it's really broad. You know, well, you could have

459
00:27:51,640 --> 00:27:54,760
Speaker 1: lots of race car drivers, there are lots of choices

460
00:27:54,960 --> 00:27:58,919
Speaker 1: that the race car drivers have. I think it's really narrow,

461
00:27:59,040 --> 00:28:02,200
Speaker 1: say the plaintiffs. So lots of things to argue in

462
00:28:02,960 --> 00:28:07,840
Speaker 1: front of a jury. But the judge says, ah, guess what, NASCAR.

463
00:28:08,040 --> 00:28:13,200
Speaker 1: You filed a counterclaim against these driver teams which had

464
00:28:13,200 --> 00:28:19,720
Speaker 1: gotten together to jointly negotiate with NASCAR over these agreements

465
00:28:19,760 --> 00:28:24,520
Speaker 1: to their charges that they've got. So we're alleging that

466
00:28:24,720 --> 00:28:28,359
Speaker 1: you sort of engage in a price fixing conspiracy. So

467
00:28:28,400 --> 00:28:32,719
Speaker 1: they filed a counterclaim. Now, unfortunately for them, when you

468
00:28:32,800 --> 00:28:36,679
Speaker 1: file a complaint in anti trust, normally you have to

469
00:28:37,240 --> 00:28:40,719
Speaker 1: put in your complaint what the relevant market is. So

470
00:28:40,760 --> 00:28:43,760
Speaker 1: they defined a market which was pretty much the same

471
00:28:43,920 --> 00:28:48,840
Speaker 1: as the market that Michael Jordan defined, all different wording,

472
00:28:49,040 --> 00:28:52,520
Speaker 1: but basically the same labor market. It's these racing teams

473
00:28:53,000 --> 00:28:57,840
Speaker 1: or you know, the premier stock car racing group, you

474
00:28:57,840 --> 00:29:00,400
Speaker 1: know at the very top. So they basically to find

475
00:29:00,440 --> 00:29:04,120
Speaker 1: the same market. So the judge says, sorry, you've already

476
00:29:04,160 --> 00:29:06,880
Speaker 1: admitted it, and you know we hold that you've made

477
00:29:06,920 --> 00:29:11,680
Speaker 1: this admission. That's your admission. So we're done, and you're done,

478
00:29:12,000 --> 00:29:15,200
Speaker 1: and we don't have to try this issue. I'm sure

479
00:29:15,240 --> 00:29:18,720
Speaker 1: that defendants and their lawyers were not all that happy

480
00:29:18,960 --> 00:29:21,800
Speaker 1: with that, and I mean, I think it's pretty supportable

481
00:29:21,840 --> 00:29:25,440
Speaker 1: on appeal, and there would have been ways to handle

482
00:29:25,480 --> 00:29:29,680
Speaker 1: the complaint that didn't fall into this trap, but they

483
00:29:29,720 --> 00:29:32,440
Speaker 1: didn't do it this way, and they were sort of

484
00:29:32,520 --> 00:29:35,520
Speaker 1: too clever by half. It was a very clever counterclaim,

485
00:29:35,960 --> 00:29:38,400
Speaker 1: but there was no requirement that they even needed to

486
00:29:38,520 --> 00:29:43,120
Speaker 1: file it. Then well, it's not quite the ballgame. So

487
00:29:43,400 --> 00:29:46,320
Speaker 1: the judge also did something else, not just the market definition,

488
00:29:46,400 --> 00:29:48,400
Speaker 1: but you have to have monopoly power or in this

489
00:29:48,520 --> 00:29:52,720
Speaker 1: case monops AEE power as the sole buyer, and there

490
00:29:52,760 --> 00:29:55,720
Speaker 1: have to be high barriers to entry, hard to get

491
00:29:55,760 --> 00:29:59,000
Speaker 1: into this market. And the judge found on all of

492
00:29:59,040 --> 00:30:02,440
Speaker 1: those things they've had this position for years and years

493
00:30:02,880 --> 00:30:06,200
Speaker 1: as the sole buyer. It's very hard to have a

494
00:30:06,240 --> 00:30:11,760
Speaker 1: competing league. It's hard to even start your own racing team.

495
00:30:11,880 --> 00:30:15,000
Speaker 1: They had estimates on that in the record. So the

496
00:30:15,120 --> 00:30:18,240
Speaker 1: judge said, no, you've got this high entry barrier. It's

497
00:30:18,320 --> 00:30:21,960
Speaker 1: very hard to enter. There are really no substitutes. There

498
00:30:22,040 --> 00:30:25,880
Speaker 1: aren't other teams out there, you know, to race. So

499
00:30:26,080 --> 00:30:31,440
Speaker 1: on the having monopoly or monopsony power interrelevant market is

500
00:30:31,520 --> 00:30:35,200
Speaker 1: now out of the case. But that still leaves the

501
00:30:35,320 --> 00:30:39,720
Speaker 1: question really two questions. One is they have to engage

502
00:30:39,760 --> 00:30:45,160
Speaker 1: in some anti competitive conduct that maintains their monopoly position,

503
00:30:45,560 --> 00:30:49,480
Speaker 1: and that's still going to go to trial, and that involves,

504
00:30:49,840 --> 00:30:52,680
Speaker 1: you know, maybe their acquisitions of these other tracks, which

505
00:30:52,720 --> 00:30:57,200
Speaker 1: they did. There were some exclusive agreements. There's this agreement

506
00:30:57,280 --> 00:31:00,400
Speaker 1: that if you sign an agreement, you wave your an

507
00:31:00,480 --> 00:31:03,920
Speaker 1: he trust claims. All of those will go together into

508
00:31:03,960 --> 00:31:07,800
Speaker 1: a trial. And then there's the question of damages, and

509
00:31:07,840 --> 00:31:11,080
Speaker 1: that's going to be interesting because you know, the plaintiffs

510
00:31:11,080 --> 00:31:15,120
Speaker 1: want more money. As the plaintiffs always won, I say

511
00:31:15,200 --> 00:31:17,760
Speaker 1: you took too much, I didn't get enough. But they

512
00:31:17,800 --> 00:31:21,840
Speaker 1: have to show what the competitive rate would be for

513
00:31:22,000 --> 00:31:25,280
Speaker 1: these teams, and you know that's going to be a

514
00:31:25,320 --> 00:31:29,080
Speaker 1: battle of their economists. So there's still a distance to go.

515
00:31:29,240 --> 00:31:31,800
Speaker 1: Maybe maybe we'll never get there, and the parties are

516
00:31:31,800 --> 00:31:34,040
Speaker 1: now going to settle. I don't know, but this I

517
00:31:34,040 --> 00:31:36,920
Speaker 1: think was a pretty big win for the plaintiffs.

518
00:31:37,200 --> 00:31:41,120
Speaker 2: People are saying that this will put pressure on both

519
00:31:41,200 --> 00:31:45,360
Speaker 2: sides to settle. After the latest court hearing, Michael Jordan's

520
00:31:45,440 --> 00:31:48,760
Speaker 2: said that settlement has always been on the table, and.

521
00:31:48,640 --> 00:31:51,680
Speaker 1: It seems to me what they're really arguing over is

522
00:31:51,840 --> 00:31:54,800
Speaker 1: how do we split the pot so that the teams

523
00:31:54,840 --> 00:31:58,719
Speaker 1: have enough money to invest in these fast cars and

524
00:31:59,240 --> 00:32:01,400
Speaker 1: you know, all the things we need to do, and

525
00:32:01,720 --> 00:32:04,920
Speaker 1: you know, at the end of the day, perhaps unfortunately

526
00:32:04,960 --> 00:32:08,520
Speaker 1: for consumers, there's not going to be another circuit because

527
00:32:08,520 --> 00:32:11,840
Speaker 1: these are private planeiffs pursuing this. So the goal is

528
00:32:11,920 --> 00:32:15,760
Speaker 1: not to split up NASCAR, so there are competing circuits

529
00:32:16,080 --> 00:32:20,160
Speaker 1: and you'd have real competition in this kind of racing.

530
00:32:20,560 --> 00:32:23,800
Speaker 1: This is not Michael Jordan's goal. It's not the goal

531
00:32:23,840 --> 00:32:27,480
Speaker 1: of private parties. The goal is to basically split the

532
00:32:27,520 --> 00:32:33,120
Speaker 1: monopoly profits differently so they will likely benefit you know, consumers.

533
00:32:33,640 --> 00:32:34,960
Speaker 1: I don't know, maybe not so much.

534
00:32:35,720 --> 00:32:37,880
Speaker 2: If I'm the defendant. I don't want to be in

535
00:32:37,880 --> 00:32:42,280
Speaker 2: a courtroom sitting opposite Michael Jordan with his star power.

536
00:32:42,320 --> 00:32:46,720
Speaker 2: I mean, you know how juries are mesmerized right by stars, and.

537
00:32:47,160 --> 00:32:50,360
Speaker 1: Asking for damages in a jury trial is a good move,

538
00:32:50,480 --> 00:32:53,320
Speaker 1: particularly these days. I mean, juries have come in with

539
00:32:53,360 --> 00:32:57,280
Speaker 1: some pretty big verdicts in these big cases against major defendants.

540
00:32:57,840 --> 00:33:02,880
Speaker 1: You know, Google is one example. So yeah, defendants have

541
00:33:03,000 --> 00:33:06,239
Speaker 1: never liked Church, let's put it that way. You know,

542
00:33:06,560 --> 00:33:09,200
Speaker 1: they don't want the subway sandwich thrown.

543
00:33:09,000 --> 00:33:12,920
Speaker 2: At them, but the jury today did not convict the

544
00:33:12,960 --> 00:33:16,720
Speaker 2: thrower of the subway sandwich. Thanks so much, Harry. That's

545
00:33:16,800 --> 00:33:20,520
Speaker 2: Professor Harry First of NYU Law School, and that's it

546
00:33:20,560 --> 00:33:23,160
Speaker 2: for this edition of The Bloomberg Law Show. Remember you

547
00:33:23,160 --> 00:33:25,640
Speaker 2: can always get the latest legal news on our Bloomberg

548
00:33:25,720 --> 00:33:29,360
Speaker 2: Law Podcast. You can find them on Apple Podcasts, Spotify,

549
00:33:29,520 --> 00:33:34,560
Speaker 2: and at www dot bloomberg dot com, slash podcast Slash Law,

550
00:33:35,000 --> 00:33:37,560
Speaker 2: and remember to tune into The Bloomberg Law Show every

551
00:33:37,600 --> 00:33:41,520
Speaker 2: weeknight at ten pm Wall Street Time. I'm June Grosso

552
00:33:41,640 --> 00:33:43,240
Speaker 2: and you're listening to Bloomberg