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

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Speaker 2: You know, I think things needed to change. So it's

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Speaker 2: a big day for.

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Speaker 1: Tennis, and not because of a big tournament, but because

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Speaker 1: of a big lawsuit. Nick Carrios is one of the

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Speaker 1: Name plaintiffs suing tennis's governing bodies, alleging they run a

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Speaker 1: cartel that CAP's earnings, restricts competition from rival tournaments, and

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Speaker 1: forces players to endure grueling schedules. He spoke to Sky News.

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Speaker 2: I felt like people knew that something was going on

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Speaker 2: behind the scenes for a long time, and I think that,

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Speaker 2: you know, myself, Paspasil Djokovic, we all wanted to do

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Speaker 2: something like this, you know, for the future of tennis.

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Speaker 2: You know. I know the players and myself and many

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Speaker 2: other players aren't happy with the structures and everything that's

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Speaker 2: going on in tennis at.

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Speaker 1: The moments, and their dissatisfaction is apparent from the one

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Speaker 1: hundred and fifty nine page class action antitrust lawsuit filed

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Speaker 1: by the Name Players and the Professional Tennis Players Association.

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Speaker 1: My guest is anti trust law professor Harry First, a

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Speaker 1: professor at NYU Law School. Harry can you give us

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Speaker 1: the basics of this very long complaint.

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Speaker 3: Well, the basic idea is sort of similar to other

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Speaker 3: suits that have been brought. Basically players complaining that those

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Speaker 3: owners who are running the sport are getting a lot

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Speaker 3: of the benefits and they're not getting their due, and

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Speaker 3: mainly because the owners are suppressing the market for the

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Speaker 3: player's services in various ways, and one of the ways

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Speaker 3: being trying to exclude competitors that might be willing to

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Speaker 3: hire the talent these players in competing leagues, competing races,

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Speaker 3: competing tournaments, things like that. So there's exclusion, there's price fixing,

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Speaker 3: and the talent, the players, the laborers, if you will,

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Speaker 3: not getting their due.

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Speaker 1: They accuse the sports governing bodies of running a cartel

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Speaker 1: and say professional tennis players are stuck in a rig game,

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Speaker 1: not on the court, but off it, where players are

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Speaker 1: forced to endure grueling schedules, capped earnings, abusive and invasive

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Speaker 1: investigations and discipline, and have limited control over their own

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Speaker 1: careers and brands. Of course, money is one of the

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Speaker 1: top issues, and you have to make a distinction between

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Speaker 1: the top players who are making millions and millions of

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Speaker 1: dollars and the lower ranked players. The gap with low

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Speaker 1: ranked players is the widest of any major professional sport.

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Speaker 1: In other professional sports, about half the gross revenue goes

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Speaker 1: to players, but tennis shares less than twenty percent. But

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Speaker 1: is this an antitrust issue?

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Speaker 3: Well, that's a really great question. It's sort of a no, yes.

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Speaker 1: No, Let me think about that.

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Speaker 3: Okay, how's that for good wishy washiness. So, really low

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Speaker 3: prices for the things you are buying, or what economists

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Speaker 3: would call the inputs, that in itself I don't think

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Speaker 3: is an any trust violation, just like charging really high

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Speaker 3: prices for what you sell is not really an anti

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Speaker 3: trust violation. You have to have exclusion of competition for

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Speaker 3: there to be an anti trust violation, and an agreement

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Speaker 3: among competitors. So sometimes an agreement among competitors to buy

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Speaker 3: things for a low price that could be an anti

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Speaker 3: trust violation, or an agreement among competitors to sell things

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Speaker 3: at a higher price that could be an anti trust

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Speaker 3: violation technically, because you have competitors who might otherwise either

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Speaker 3: compete the price down if they're sellers, or compete the

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Speaker 3: price up if they're buyers, like buyers of labor, if

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Speaker 3: they were acting independently, you might have different prices, different outcomes,

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Speaker 3: better for the party that's selling their goods or services

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Speaker 3: or better for us consumers who are buying them. So

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Speaker 3: that's in a technical sense no, as an individual seller

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Speaker 3: setting your price, that's okay, it's bad if you do

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Speaker 3: it in collusion, or a more graphic way is to

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Speaker 3: call them a cartel, that's bad. And then there's a

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Speaker 3: slight sort of twist on it. Although it is not

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Speaker 3: bad in itself. If you're a single seller, to pay

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Speaker 3: too much or pay too little, that's often a sign

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Speaker 3: that you do have monopoly power. And so in a

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Speaker 3: lot of cases that we're seeing, the parties are litigating

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Speaker 3: the idea that prices are either too high or in

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Speaker 3: the case of labor, too low, and it will form

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Speaker 3: the basis for a damage's claim.

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Speaker 1: So Harry, there's a price fixing claim. And according to

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Speaker 1: the lawsuit, a key method used by the tennis governing

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Speaker 1: bodies to keep player pay low is locking them into

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Speaker 1: this clothes system of tournaments. And Larry Ellison, the billionaire,

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Speaker 1: wanted to increase the total prize money at his tournament

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Speaker 1: by one point six million dollars, but the ATP and

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Speaker 1: the WTA wouldn't allow that because they didn't want one

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Speaker 1: event to be paying more prize money than the sports

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Speaker 1: for Marquee Grand Slam events. That does sound like price fixing.

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Speaker 3: Well, it's sort of a colorful example because it shows

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Speaker 3: what price fixers who agree on what they will pay

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Speaker 3: for labor can affect the price of labor. You know,

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Speaker 3: here's even Larry Ellison can't pay what he thinks is

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Speaker 3: a market price to attract talent to his tournament and

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Speaker 3: compete in other tournaments. So that sounds really bad. The

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Speaker 3: little problem with that is that actually was what year

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Speaker 3: was that?

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Speaker 1: Does that occur twenty twelve? A while ago?

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Speaker 3: Oh a while ago? Outside the statute of limitations technically,

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Speaker 3: So it's nice to put in a complaint. Whether this

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Speaker 3: is going to be even admissible a trial as another story,

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Speaker 3: but it is an example. I sort of wish they

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Speaker 3: had more recent examples. But presumably their argument is the

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Speaker 3: tournament operators are actually sort of happy with this. You know,

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Speaker 3: they're not Larry Ellison, They're not. Well, actually, some of

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Speaker 3: the tournaments operators are the equivalent. But you know, they

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Speaker 3: would just as soon pay the players less and rake

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Speaker 3: in the money more. And not find themselves in the

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Speaker 3: position of other wealthy owners of teams or in this case,

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Speaker 3: tournaments that actually have to compete to put together the best.

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Speaker 3: So the fact that we don't see more recent examples

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Speaker 3: doesn't show that there isn't price fixing. But on the

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Speaker 3: other hand, you don't have a nice example like you

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Speaker 3: have in that case of a tournament operator that was

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Speaker 3: trying to compete this way but couldn't.

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Speaker 1: The players also claim that the governing bodies limit sponsorship

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Speaker 1: and endorsement deals in part by making players give up

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Speaker 1: some name, image and likeness rights and also controlling the

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Speaker 1: number of sponsors allowed to be displayed on a player's shirt, hat, towel,

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Speaker 1: and bag, and it has to be brands that are

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Speaker 1: ATP or WTA approved.

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Speaker 3: Well, I think that probably needs a little more elaborations

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Speaker 3: to why they do it and what they get out

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Speaker 3: of it. So, you know, it may be that their

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Speaker 3: argument is that sponsorship is more valuable if you can

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Speaker 3: actually see it on the player's uniform rather than it's

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Speaker 3: one of a thousand things that players sport, so to speak,

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Speaker 3: And so they might have a justification that overall it's better,

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Speaker 3: it's a better way to compete. I don't know, so

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Speaker 3: you know, on the face of it, that's a pause

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Speaker 3: will claim the you know how it will fare in

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Speaker 3: litigations and other story The ban on selling nil rights, name, image,

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Speaker 3: and likeness struck me as an unusual, well not unusual,

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Speaker 3: but you know, something that may be problematic from the

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Speaker 3: point of view of the defendants. This is featured in

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Speaker 3: other litigations. Really start out with the NCAA limiting the

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Speaker 3: ability of so called amateur players to sell their nil rights.

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Speaker 3: So I would look for that to play some part

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Speaker 3: in this litigation. But you know, as I hear about

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Speaker 3: the sponsorship, I think if do you remember the movie

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Speaker 3: Talladega Knights, Yes, where they put a sponsor's logo over

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Speaker 3: the windshield Will Ferrell couldn't see as he was driving.

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Speaker 3: You know, that's sort of the outrageous idea of sponsors

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Speaker 3: plastering everything. And they may have a legitimate argument that

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Speaker 3: they do better and get better fan recognition and draw

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Speaker 3: more fans to these if they don't look at this

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Speaker 3: as just a plastered sponsor event. Remember all of this

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Speaker 3: the tennis players come out of actually an amateur tradition.

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Speaker 3: It's only fairly recently that the sports has been monetized

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Speaker 3: this way, so this may play in it as well.

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Speaker 3: But these sorts of justifications have yet to be seen,

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Speaker 3: but they might play a role in the litigation as it.

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Speaker 1: Develops, coming up a jury trial or a settlement. This

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Speaker 1: is Bloomberg. Some top tennis players are suing the sports

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Speaker 1: governing bodies for allegedly running a cartel that caps prize money,

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Speaker 1: limits off court earnings, and restricts competition from rival tournaments.

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Speaker 1: I've been talking to anti trust law professor Harry First

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Speaker 1: of NYU Law School. They also complained about the eleven

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Speaker 1: month schedule, which is long, and that it damages players'

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Speaker 1: bodies and also prevents them from competing in other events.

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Speaker 3: Well, I'm not sure this is any trust violation. Sounded

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Speaker 3: more like a labor law complaint to me in a way.

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Speaker 3: You know. I think it goes in there to show

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Speaker 3: that what the public may see as sort of privileged,

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Speaker 3: high class athletes turns out to be a rather grueling job.

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Speaker 3: I mean, they're not coal miners. But there's an aspect

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Speaker 3: to this that the public doesn't see, and I can

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Speaker 3: understand the plaintiffs wanting to get that in front of

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Speaker 3: the judge and eventually in front of a jury if

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Speaker 3: they can. But whether this is actually an anti trust violation.

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Speaker 1: So what do you think is the strongest antitrust claim

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Speaker 1: in the lawsuit?

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Speaker 3: Well, I think the strongest claim is the collusion or

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Speaker 3: cartel claim that these are you know, competing parties, various

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Speaker 3: tournaments that have gotten together to divide up markets geographically,

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Speaker 3: to control the sport, to control the mobility of other tournaments,

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Speaker 3: to enter and compete for talents, to control what they

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Speaker 3: have to pay the talent, and you know, to run

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Speaker 3: the sport in their favor. And these are there are

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Speaker 3: a lot of competing tournaments amongst the defendants. You know,

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Speaker 3: usually competitors have a problem when they get together and agree.

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Speaker 3: Now there's a little different maybe for sports where there's

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Speaker 3: an idea of a circuit or a league or you know,

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Speaker 3: that's how you get fan interest. It's not everything's not

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Speaker 3: a one off. So but the basic idea that this

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Speaker 3: is a cartel and a cartel with power in the

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Speaker 3: market because they've excluded other tournaments, very hard to become

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Speaker 3: a sanctioned tournament. So you know, that core of the

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Speaker 3: case I think certainly will survive any effort to dismiss

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Speaker 3: the case outright, I think, but then we'll see what

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Speaker 3: the justifications might be. And of course what the defendants

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Speaker 3: response is, because they you hat to file anything in

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Speaker 3: this litigation, right, so.

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Speaker 1: They've disputed the claims, say they work to expand compensation

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Speaker 1: for players. I mean, do you see what the defense

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Speaker 1: might be.

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Speaker 3: I think that you know, their basic defense is the

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Speaker 3: defense of you know, all of these organized sports. You know,

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Speaker 3: we can't play tennis individually. You know, you need competitors,

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Speaker 3: and that means you have to deal with others. So

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Speaker 3: to put together a league of circuit tournaments, you know,

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Speaker 3: to appeal to fans requires some joint effort. And remember,

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Speaker 3: you know, a lot of this money is broadcasting money.

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Speaker 3: People don't have to watch tennis, they watch golf. They

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Speaker 3: always argue that there are lots of substitutes. Not sure

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Speaker 3: that's a great argument, but they'll argue that. But basically

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Speaker 3: they'll argue they are good justifications for what they do,

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Speaker 3: for how they come together, and that gives them certain

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Speaker 3: ability to manage the sport in a way that attracts capital,

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Speaker 3: that serves the fans consumers after all, consumer interests, and

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Speaker 3: also is in the interest of the players except for

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Speaker 3: the two hundred and fifty has claimed players who don't

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Speaker 3: seem to like what's going on or just simply want

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Speaker 3: more money.

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Speaker 1: Does it make a difference that the top players in

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Speaker 1: the sport are not among the plaintiffs.

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Speaker 3: Yeah, that's very interesting. I mean, legally it doesn't make

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Speaker 3: a difference. This is a suit. It's styles as a

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Speaker 3: class action, meaning they're bringing on behalf of all tennis players,

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Speaker 3: which they claim are sort of similarly situated, all have

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Speaker 3: similar interests, So in that sense, it really doesn't matter.

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Speaker 3: On the optics of it, it's sort of good and bad.

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Speaker 3: I mean, it does serve to highlight the disparities in

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Speaker 3: this industry, in this sport between the you know, the

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Speaker 3: very top people who are relatively pretty well paid and

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Speaker 3: the majority of people you know who they claim are

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Speaker 3: living out of their cars, So that's good. On the

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Speaker 3: other hand, the public loves to see the names they

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Speaker 3: know behind this, so Michael Jordan's name features prominently, and

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Speaker 3: you know all the stories about the NASCAR litigation, But

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Speaker 3: I don't see that similar sort of marquee name among

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Speaker 3: the plaintiffs in the class. Of course, I don't know tennis,

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Speaker 3: so maybe I'm missing something.

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Speaker 1: They're seeking a jury trial. Do you think that this

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Speaker 1: will get to trial or you know they'll negotiate, there'll

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Speaker 1: be a settlement.

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Speaker 3: Well, the most cases settle, Most lawsuits, and certainly most

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Speaker 3: lawsuits in federal courts settle. So if you want to

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Speaker 3: predict in an actuarial sense, you would predict settlement whether

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Speaker 3: this case will settle. I have no real idea, but

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Speaker 3: certainly it might be in the sense that I'm not

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Speaker 3: sure the players want to blow up the system because

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Speaker 3: I'm not sure what would really be in its place.

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Speaker 3: They do benefit from not having every tournament be a

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Speaker 3: one off. I think, you know, if there's some ATP tournament,

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Speaker 3: some sort of circuit that you build up points that

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Speaker 3: you know, everything's not individual. So I'm not sure that

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Speaker 3: they would want to blow this up, but I don't

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Speaker 3: really know. So that might indicate that some sort of

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Speaker 3: settlement would be what the plaintiffs might like. But you know, now,

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Speaker 3: as a class action, well we're a long way from

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Speaker 3: That's how we say, if it is certified by the

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Speaker 3: judge as a class then they have to have a

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Speaker 3: settlement that the judge approves as being in the interest

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Speaker 3: of the class, so it becomes a little more complicated.

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Speaker 1: And Harry, why do you think they filed in New

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Speaker 1: York City, London and Brussels.

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Speaker 3: It's sort of smart actually, So generally it's harder to

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Speaker 3: bring private litigation in Europe or the UK. The rules

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Speaker 3: are different, discoveries, different class action status. Bringing on behalf

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Speaker 3: collectively is harder. On the other hand, the law may

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Speaker 3: be a little more favorable to them because competition law

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Speaker 3: in the UK and in Europe tends to recognize more

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Speaker 3: of abuse of dominance, which is sort of a little

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Speaker 3: more in tune with exploitation that they're talking about exploiting

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Speaker 3: the workers, and may be a little more willing to

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Speaker 3: entertain collective dominance, which is a group of competitors exercising

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Speaker 3: dominance together. So it's interesting they filed there as well.

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Speaker 3: Or some of the tournaments in Europe are really quite

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Speaker 3: important and in England it is really an international sport.

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Speaker 1: Always a pleasure to talk to you, Harry, thanks so much.

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Speaker 1: That's Professor Harry First of NYU Law School. President Donald

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Speaker 1: Trump I hired the two Democratic members of the Federal

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Speaker 1: Trade Commission, risking dismantling the image the one hundred and

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Speaker 1: ten year old agency has cultivated as an independent regulator,

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Speaker 1: and also setting up a likely showdown at the Supreme

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Speaker 1: Court over his ability to fire agency leaders at will.

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Speaker 1: The emails firing Rebecca Kelly Slaughter and Alvaro Bedoya said quote,

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Speaker 1: your continued service on the FTC is inconsistent with my

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Speaker 1: administration's priorities. Accordingly, I am removing you from office. Both

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Speaker 1: have vowed to fight their dismissals in court. Slaughter told

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Speaker 1: Bloomberg that the firings are illegal.

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Speaker 4: There is no claim of cause, and the statute actually

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Speaker 4: specifically says cause means neglect, malfeasan's or inefficiency, and there

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Speaker 4: was no claim of any of those on the part

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Speaker 4: of miss Commissioner Badoya or myself, just that the President

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Speaker 4: had the right to fire us and was doing it.

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Speaker 4: And to be clear, that statute is over one hundred

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Speaker 4: years old, and only one time in history has a

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Speaker 4: president attempted to remove an FTC commissioner over a policy disagreement.

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Speaker 4: It was ninety years ago.

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Speaker 1: This is part of Trump's moves to assert control over

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Speaker 1: US regulatory agencies. Since taking office, he's fired other members

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Speaker 1: of independent agencies, including a Democratic commissioner from the National

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Speaker 1: Labor Relations Board, two Democrats on the Equal Employment Opportunity Commission,

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Speaker 1: and a Democratic member of the Privacy and Civil Liberties

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Speaker 1: Oversight Board. Joining me is constitutional law expert Harold Krent,

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Speaker 1: a professor at the Chicago Kent College of Law. The

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Speaker 1: statute says that FTC commissioners can only be removed for cause,

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Speaker 1: meaning neglect, malfeasance, or inefficiency. But the email sent to

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Speaker 1: these two Democratic commissioners just said, your continued service on

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Speaker 1: the FTC is inconsistent with my administration's priorities. So the

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Speaker 1: administration isn't even making an attempt to comply with the statute.

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Speaker 5: Well, the administration has already been on record that it

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Speaker 5: doesn't believe in the existence of independent agencies and that

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Speaker 5: thinks the president needs to closely control all departments, agencies,

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Speaker 5: and burrows within the executive branch. So it's really no

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Speaker 5: surprise that the president's administration reached out between move the

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Speaker 5: two Democratic commissioners. So the consistent with the world view

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Speaker 5: of the administration that he needs to have his fingers

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Speaker 5: in every pot in terms of the administration of the

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Speaker 5: executive branch.

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Speaker 1: Ignoring the law for one minute, these commissioners. The Democratic

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Speaker 1: commissioners are in a minority, so they're not going to

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Speaker 1: influence the policy of the FTC. Why bother firing them.

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Speaker 5: This is not for control of the FTC per se.

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Speaker 5: This is for making a statement as to control of

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Speaker 5: the entire executive branch. Usually commissi are because it's a

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Speaker 5: three to two split for the president's party, are pretty

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Speaker 5: receptive to the President's views. But nonetheless there are sometimes

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Speaker 5: when there's an internal dissension within the commission and therefore

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Speaker 5: the minority members can play a more significant role. But

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Speaker 5: I think here this is not so much reflection the

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Speaker 5: fact that President Trump doesn't trust the FTC. This is

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Speaker 5: reflection of the fact that the administration wants to make statement,

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Speaker 5: wants to make a statement as to the expanse of

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Speaker 5: articles to authority which they believe is devoloved into a

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Speaker 5: single individual on top of the administration, namely the president.

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Speaker 1: So this involves one hundred year old statue. And the

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Speaker 1: one time the president has attempted to remove a commissioner

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Speaker 1: led to the Supreme Court case Humphrey's Executor in nineteen

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Speaker 1: thirty five. So that's the precedent.

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Speaker 5: So President Roosevelt Franklin Roosevelt had a dispute with a

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Speaker 5: right wing member of the Federal Trade Commission. He removed

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Speaker 5: him from office. Unfortunately, the individual dies shortly thereafter, but

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Speaker 5: his state brought a suit in order to claim that

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Speaker 5: President Roosevelt lacked the ability to fire the individual without cause,

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Speaker 5: and President Roosevelt did not delineate any specific cause for

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Speaker 5: the ouster of the commissioner. Supreme Court ultimately took up

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Speaker 5: the case and decided, in a surprise at the time,

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Speaker 5: that Congress can, with respect to agencies that they said

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Speaker 5: acted in a kind of quasi judicial or quasi legislative manner,

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Speaker 5: that Congress could preserve those commissioners from the president's at

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Speaker 5: well removal if it's so Desira. It doesn't have to.

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Speaker 5: If Congress thinks that quasi independence is important for those

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Speaker 5: officers performing what they suggested were quasi legislative the quasiti

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Speaker 5: judicial functions, then that would be consistent with the separation

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Speaker 5: of powers in the Constitution now. But those are kind

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Speaker 5: of weird words, quasi legislative and quasi judicial. By that

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Speaker 5: the Court really meant sort of from quasi legislative will

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Speaker 5: make function, which FTC does, as does other agencies and

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Speaker 5: by quasi judicial and meant some kind of sitting enforcement action,

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Speaker 5: and of course the FTC does that, as does many

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Speaker 5: other agencies as well.

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Speaker 1: The Justice Department said recently that it is going to

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Speaker 1: push the Supreme Court to reverse that precedent. Now, the

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Speaker 1: Supreme Court's conservative majority, as we've discussed before, has with

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Speaker 1: a series of rulings, reigned in regulators independence, and in

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Speaker 1: twenty twenty, Justices Clarence Thomas and Neil Gorsuch said they

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Speaker 1: would have overturned Humphrey's Executor. Do you think Humphrey's Executor

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Speaker 1: would survive at the Supreme Court? At this Supreme Court, it's.

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Speaker 5: Going to be a close call. And I think that

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Speaker 5: if you look at the t leaves, the TVs are

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Speaker 5: all suggesting that the Court is a firm believer in

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Speaker 5: the unitary executive. And indeed, the distinction between a single

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Speaker 5: member commission, which the Court previously is held cannot be

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Speaker 5: shielded from that will removal, and a multi member commission

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Speaker 5: is very thin. On the other hand, what these tip

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Speaker 5: administration is a private court of is its ability to

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Speaker 5: sort of go very slow and make these odd sort

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Speaker 5: of distinctions and therefore not rush to judgment as to

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Speaker 5: the makeup of the entire administrative state. And so President

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Speaker 5: Trumpson will force the Court in the near future to

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Speaker 5: make this call as to what does it mean to

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Speaker 5: have the independent agencies. And there's a couple other factors involved.

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Speaker 5: Theres not just all independents. It may mean how extensive

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Speaker 5: is the authority issue. They may have to make the judgment.

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Speaker 5: They may have to make a judgment about what kind

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Speaker 5: of functions a agency is undertaking before Congress can decide

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Speaker 5: to shield them from some kind of that will removal.

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Speaker 5: And so you know, for instance, there are some agencies

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Speaker 5: that principally adjudicate, and even recently the Supreme Court has

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Speaker 5: said that Congress has the right to share yield those

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Speaker 5: adjudicating agencies from that will removal. In the Colns case

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Speaker 5: just a couple of years ago, the Court reaffirmed the

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Speaker 5: validity of that decision. Will that go unclear, you know,

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Speaker 5: And again even in the Special Council case where the

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Speaker 5: Court remove the head of the whistle blowers within the government,

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Speaker 5: you know, that doesn't seem like a traditional executive function either.

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Speaker 5: And it's unclear though we're not going to see that

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Speaker 5: case because the case died off. It's unclear whether Congress

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Speaker 5: can shield whistleblowers from the will removal authority of the president. Logically,

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Speaker 5: you would think that they could, because you wouldn't want

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Speaker 5: to have a whistleblower against the president be able to

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Speaker 5: be removed that will. But that's the kind of issues

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Speaker 5: the Court will have to face. Whether anybody in the

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Speaker 5: executive branch must be subject to at will removal or

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Speaker 5: doesn't mean they have to have a certain amount authority,

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Speaker 5: doesn't mean they have to have a certain type of authority.

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Speaker 5: These are issues that the Court has died so far,

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Speaker 5: and so wolves have to see what they come up with.

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Speaker 1: So then there could be different rules for different agencies, and.

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Speaker 5: Here has been right. There's been rules for some agencies

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Speaker 5: which are deemed independent because they have these quasi judicial

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Speaker 5: quasi legislative functions, as opposed to others like prosecutors, who

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Speaker 5: must be subject to the atword mu authority. So that's

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Speaker 5: a distinction that the Court has relied upon in the past,

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Speaker 5: and so they may form other distinctions in the upcoming cases.

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Speaker 5: I mean, and one of the things, you know, how

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Speaker 5: broad is the authority? What type of authority? So in

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Speaker 5: my mind. For instance, you can have scientific authority technological

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Speaker 5: authority in the executive branch, but that doesn't really mean

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Speaker 5: that you're a type of officer that the present needs

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Speaker 5: to be at his or her Beck and Call.

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Speaker 1: Slaughter said on Bloomberg. If they can remove me, they

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Speaker 1: can remove Jerome Powell, the head of the Federal Reserve.

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Speaker 5: And the Republicans for a long time have used power

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Speaker 5: as an example of an officer who, at least at

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Speaker 5: the time, many did not want to be removed at will.

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Speaker 5: And the theory is that you don't want the money

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Speaker 5: supply and inflation rates to be pegged upon a presence

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Speaker 5: need to win an election. But you know, it's hard

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Speaker 5: to separate monetary policy from foreign policy, or from health policy,

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Speaker 5: or from the FTC itself. So I think that if

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Speaker 5: the court decides that the FTC commissioners can be removed

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Speaker 5: at will, then the next step would be logically that

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Speaker 5: so could the head of the ped The.

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Speaker 1: FDC is an active litigation against corporate giants such as Amazon,

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Speaker 1: Meta Platforms and three major pharmacy benefit managers. And here's

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Speaker 1: what Padoya has said.

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Speaker 3: I'm worried that the only thing that's going to matter

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Speaker 3: are which billionaire has the president's ear on this deal

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Speaker 3: and what strings can he pull about it.

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Speaker 5: It is always possible for the administration to pressure agencies

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Speaker 5: to side with friends. Doesn't happen very often, probably not,

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Speaker 5: but I'm sure it's happened historically. And this will just

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Speaker 5: be a more self evident case where the commissioners know

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Speaker 5: and the Republican commissioners will know that if they go

435
00:27:18,840 --> 00:27:23,040
Speaker 5: against a Tesla they're going to be in immediate trouble.

436
00:27:23,160 --> 00:27:25,800
Speaker 5: They probably knew it anyway, but this will make it

437
00:27:25,840 --> 00:27:28,879
Speaker 5: even more clear. And so that's the dangerous not just

438
00:27:28,920 --> 00:27:32,920
Speaker 5: that it's the Democratic members of the Commission who might

439
00:27:32,960 --> 00:27:35,800
Speaker 5: have gone against the business. It's also the Republican members

440
00:27:35,800 --> 00:27:38,080
Speaker 5: of the Commission, and this will take away some of

441
00:27:38,119 --> 00:27:41,560
Speaker 5: their security in going about their business without looking over

442
00:27:41,600 --> 00:27:44,800
Speaker 5: their shoulder at what the political aid of the land

443
00:27:44,880 --> 00:27:45,280
Speaker 5: might be.

444
00:27:45,760 --> 00:27:49,000
Speaker 1: The DC Circuit Court of Appeals appear a split over

445
00:27:49,080 --> 00:27:53,439
Speaker 1: whether to sideline two independent agency officials as the Trump

446
00:27:53,440 --> 00:27:57,840
Speaker 1: administration continues to fight for the legal right to fire them.

447
00:27:58,200 --> 00:28:02,639
Speaker 1: Trump fired Gwyn Wilcox National Labor Relations Board and Kathy

448
00:28:02,720 --> 00:28:06,880
Speaker 1: Harris at the Merit Systems Protection Board, but federal judges

449
00:28:07,040 --> 00:28:10,439
Speaker 1: reinstated them. I've been talking to Professor Harold Krant of

450
00:28:10,480 --> 00:28:14,040
Speaker 1: the Chicago Kent College of Law. It appeared like the

451
00:28:14,080 --> 00:28:19,440
Speaker 1: court was split, with the Democratic appointee favoring the reinstatement

452
00:28:19,760 --> 00:28:24,399
Speaker 1: and the Republican appointee favoring the administration's position, and then

453
00:28:24,440 --> 00:28:27,760
Speaker 1: the third We're not sure where, because she didn't ask

454
00:28:27,920 --> 00:28:28,879
Speaker 1: very many questions.

455
00:28:29,320 --> 00:28:31,679
Speaker 5: At the PC Circuit, there there was a fearing on

456
00:28:32,320 --> 00:28:35,160
Speaker 5: basically the same issue we've been discussing about whether the

457
00:28:35,200 --> 00:28:38,760
Speaker 5: president of Humphrey's Executor is still valid. I mean, the

458
00:28:38,760 --> 00:28:43,040
Speaker 5: court recognized that under Humphrey's Executor that the President acted

459
00:28:43,080 --> 00:28:46,360
Speaker 5: illegally in firing the members of the Merit System Protection

460
00:28:46,440 --> 00:28:50,080
Speaker 5: Board and the National Labor Relations Board, because those two

461
00:28:50,320 --> 00:28:54,680
Speaker 5: are engaged in both a kind of rulemaking power as

462
00:28:54,760 --> 00:28:58,440
Speaker 5: well as an adjudication power, both more adjudication than the rulemaking,

463
00:28:58,480 --> 00:29:02,560
Speaker 5: but still some kind of mixture. But at the same time,

464
00:29:02,600 --> 00:29:06,760
Speaker 5: they also realized that the Supreme Court has been showing

465
00:29:06,760 --> 00:29:12,120
Speaker 5: disfavor to Humphrey's Executive and showing more unease with the

466
00:29:12,160 --> 00:29:15,760
Speaker 5: whole concept of independent agencies. So the discussion in the

467
00:29:15,840 --> 00:29:19,000
Speaker 5: case was mixed because of the fact that there was

468
00:29:19,040 --> 00:29:22,720
Speaker 5: a tension between the validity of the precedent at which

469
00:29:22,760 --> 00:29:25,760
Speaker 5: the Court has reaffirmed on numerous occasions, that is Humphrey's Executor,

470
00:29:25,960 --> 00:29:29,240
Speaker 5: but also the kind of again these tea leaves that

471
00:29:29,320 --> 00:29:33,720
Speaker 5: the Court was laying out narrowing the Humphrey's Executor over

472
00:29:33,760 --> 00:29:36,360
Speaker 5: and over again, most recently in the College case, in

473
00:29:36,400 --> 00:29:39,880
Speaker 5: the Cello Law case involving the Consumer Financial Protection Board.

474
00:29:40,480 --> 00:29:44,520
Speaker 1: Yeah, the Trump appoint de judge Justin Walker said, the

475
00:29:44,560 --> 00:29:48,480
Speaker 1: Court is bound by the Humphreys Executor case, but it's

476
00:29:48,520 --> 00:29:51,520
Speaker 1: also bound by Supreme Court decisions that took a more

477
00:29:51,560 --> 00:29:57,280
Speaker 1: skeptical view of restrictions on the president's removal power. But still,

478
00:29:57,400 --> 00:30:02,040
Speaker 1: Humphrey's Executor is good law right now? How can they

479
00:30:02,160 --> 00:30:03,040
Speaker 1: rule against it?

480
00:30:03,560 --> 00:30:05,880
Speaker 5: Well, And that was part of the discussion. I mean,

481
00:30:05,960 --> 00:30:08,560
Speaker 5: it's not for the lower courts to finally take the

482
00:30:08,600 --> 00:30:12,200
Speaker 5: step to overrule a Supreme Court precedent. It's traditionally been

483
00:30:12,280 --> 00:30:14,640
Speaker 5: up to the Supreme Court. And that's certainly some of

484
00:30:14,640 --> 00:30:18,200
Speaker 5: the arguments that were made in the DC case. My

485
00:30:18,280 --> 00:30:21,040
Speaker 5: guess is that at the end of the day, the

486
00:30:21,120 --> 00:30:24,520
Speaker 5: Court is going to stick with a narrow ground of

487
00:30:24,640 --> 00:30:27,280
Speaker 5: Humphrey's Executor and allow the Supreme Court to make the

488
00:30:27,400 --> 00:30:31,240
Speaker 5: change if indeed it's so desirous too, which is more

489
00:30:31,360 --> 00:30:34,240
Speaker 5: likely not the debate, but not a Footgart conclusion.

490
00:30:34,720 --> 00:30:37,560
Speaker 1: The cases of the FTC commissioners will end up at

491
00:30:37,600 --> 00:30:39,200
Speaker 1: the DC Circuit as well.

492
00:30:40,000 --> 00:30:41,520
Speaker 5: Yeah, I mean, we'll see.

493
00:30:41,680 --> 00:30:41,840
Speaker 2: You know.

494
00:30:41,840 --> 00:30:44,320
Speaker 5: Obviously, the Supreme Court's going have to rule on this

495
00:30:44,480 --> 00:30:47,440
Speaker 5: relatively soon. There's no factional issues involved, so it can

496
00:30:47,520 --> 00:30:50,320
Speaker 5: be a kind of easy case to go up to

497
00:30:50,400 --> 00:30:53,200
Speaker 5: the Court of Appeals and then the Supreme Court, because

498
00:30:53,680 --> 00:30:57,040
Speaker 5: you know, President Trump's administrations ask the Supreme Court to

499
00:30:57,080 --> 00:30:59,640
Speaker 5: do this. There's all these cases floating around now, so

500
00:30:59,680 --> 00:31:02,640
Speaker 5: it just makes sense for the Court to perhaps to

501
00:31:02,680 --> 00:31:05,400
Speaker 5: take all of them together and to make a decision.

502
00:31:05,640 --> 00:31:09,960
Speaker 1: And this is all part of the unitary executive concept,

503
00:31:10,000 --> 00:31:11,280
Speaker 1: all power in the president.

504
00:31:12,000 --> 00:31:14,600
Speaker 5: It absolutely is. I mean, most people think that Congress

505
00:31:14,640 --> 00:31:18,400
Speaker 5: has at least a range of discretion to decide how

506
00:31:18,480 --> 00:31:22,280
Speaker 5: best to construct offices, whether offices should be headed by

507
00:31:22,320 --> 00:31:25,800
Speaker 5: three people, one person, five people, and whether officers need

508
00:31:25,880 --> 00:31:29,200
Speaker 5: independence or quasi independence from the president in order to

509
00:31:29,200 --> 00:31:31,520
Speaker 5: effectuate their job. I would think that the head of

510
00:31:31,560 --> 00:31:35,920
Speaker 5: the whistleblowers would need some kind of independence. I would

511
00:31:36,000 --> 00:31:39,040
Speaker 5: think that. Again, it's up to the Congress to determine

512
00:31:39,040 --> 00:31:43,880
Speaker 5: whether complex organizations or agencies like the National Labor Relations

513
00:31:43,920 --> 00:31:47,800
Speaker 5: Board or the Mayor Assistants Protection Board should deserve a

514
00:31:47,800 --> 00:31:49,840
Speaker 5: little bit of independence as well as well as the

515
00:31:49,840 --> 00:31:52,240
Speaker 5: head of the FAT. As we discussed before, many people

516
00:31:52,280 --> 00:31:55,320
Speaker 5: think you need to isolate and insulate the head of

517
00:31:55,320 --> 00:31:58,920
Speaker 5: the fat from political pressures. So that's really many people

518
00:31:58,960 --> 00:32:01,400
Speaker 5: think up to Congress make that judgment. But under the

519
00:32:01,440 --> 00:32:06,320
Speaker 5: minitary executive belief that all those kinds of measures of

520
00:32:06,920 --> 00:32:11,640
Speaker 5: separating the executional law from the president is a violation

521
00:32:11,800 --> 00:32:15,600
Speaker 5: of the Article too, So that's really the grand dispute,

522
00:32:15,760 --> 00:32:19,080
Speaker 5: And the court has a variety of options of how

523
00:32:19,120 --> 00:32:23,680
Speaker 5: to accommodate Congress's interest with the executive's interest, but right

524
00:32:23,720 --> 00:32:25,920
Speaker 5: now it's been leaning towards the executive, so we'll have

525
00:32:25,920 --> 00:32:28,000
Speaker 5: to see how this plays out. There is one other

526
00:32:28,120 --> 00:32:31,640
Speaker 5: interesting compromise that the courts might take. The courts might

527
00:32:31,720 --> 00:32:38,320
Speaker 5: suggest that the president has acted unconstitutionally, but nonetheless declined

528
00:32:38,360 --> 00:32:41,600
Speaker 5: to order reinstatement, thinking that it would be too much

529
00:32:41,720 --> 00:32:44,200
Speaker 5: of a imposition on the president to have to work

530
00:32:44,200 --> 00:32:47,200
Speaker 5: with someone wholice try to fire so they can offer

531
00:32:47,280 --> 00:32:50,960
Speaker 5: a declaratory judgment and require the government to pay money

532
00:32:51,160 --> 00:32:54,479
Speaker 5: and say that the president acted illegally, but nonetheless not

533
00:32:54,560 --> 00:32:57,960
Speaker 5: require the president to take back the officer. And now

534
00:32:58,000 --> 00:33:00,640
Speaker 5: would be sort of an interesting compromise, but I could

535
00:33:00,640 --> 00:33:03,160
Speaker 5: see some members of the court leaning to in order

536
00:33:03,200 --> 00:33:08,280
Speaker 5: to again affirm a position that the president does not

537
00:33:08,480 --> 00:33:13,080
Speaker 5: have the way to ignore Congress's decision to put restrictions

538
00:33:13,120 --> 00:33:15,880
Speaker 5: on the removal power of a certain type of agency

539
00:33:15,880 --> 00:33:18,760
Speaker 5: had and yet the same time be empathetic to the

540
00:33:18,760 --> 00:33:21,640
Speaker 5: President and show respect by saying, we're not going to

541
00:33:21,680 --> 00:33:23,440
Speaker 5: force you to rehire these individuals.

542
00:33:23,720 --> 00:33:26,760
Speaker 1: We'll see how fast this issue gets to the Supreme Court.

543
00:33:27,280 --> 00:33:29,840
Speaker 1: Thanks so much, Hal. That's Professor Harold Krant of the

544
00:33:29,960 --> 00:33:33,200
Speaker 1: Chicago Kent College of Law. And that's it for this

545
00:33:33,360 --> 00:33:36,080
Speaker 1: edition of The Bloomberg Law Show. Remember you can always

546
00:33:36,120 --> 00:33:39,040
Speaker 1: get the latest legal news on our Bloomberg Law Podcast.

547
00:33:39,320 --> 00:33:42,320
Speaker 1: You can find them on Apple Podcasts, Spotify, and at

548
00:33:42,480 --> 00:33:47,520
Speaker 1: www dot Bloomberg dot com, slash podcast Slash Law, and

549
00:33:47,600 --> 00:33:50,680
Speaker 1: remember to tune into The Bloomberg Law Show every weeknight

550
00:33:50,760 --> 00:33:54,200
Speaker 1: at ten pm Wall Street Time. I'm June Grosso, and

551
00:33:54,280 --> 00:34:00,120
Speaker 1: you're listening to Bloomberg, m