0:00

The Hartford understands protecting your business with

0:02

the proper insurance can be a challenge.

0:05

The Hartford team can provide coverage to

0:07

suit your industry. The Hartford

0:09

empowers mid to large size companies like

0:11

yours to help manage risk, from

0:13

liability and property insurance, to workers

0:16

comp and more. Let

0:18

the Hartford help protect what's unique

0:20

about your business. Learn how at

0:22

the hartford.com. Meet Gary. Gary's

0:24

about to become an Einstein in an

0:26

instant. Whoa, Einstein hair.

0:28

I like it. That's right Gary,

0:31

because you're using Salesforce powered by

0:33

Einstein AI to connect data, predict

0:35

business trends, generate personalized content and

0:37

wow customers. I do feel a

0:39

lot smarter. Because you're not just Gary anymore.

0:42

You are Gary, empowered by

0:44

Einstein AI. Did you hear that

0:46

team? I'm an Einstein. Oh, can

0:48

I get a selfie? The number one

0:50

AI CRM. Now everyone's in Einstein with

0:53

Salesforce. This

0:57

is Bloomberg Law with June

0:59

Grasso from Bloomberg Radio. The

1:04

Supreme Court stripped the Securities and

1:07

Exchange Commission of a major tool

1:09

in fighting securities fraud in a

1:11

decision that could also have far

1:14

reaching effects on other regulatory agencies.

1:17

In a six to three

1:19

vote down ideological lines, the

1:21

justices ruled today that people

1:23

accused of fraud by the

1:25

SEC have the constitutional right

1:27

to a jury trial in

1:29

federal court and that the

1:31

agency's use of in-house proceedings violates

1:33

the constitution. During the

1:35

oral arguments, Justice Brett Kavanaugh

1:38

expressed concerns about the agency's

1:40

use of in-house tribunals. That

1:43

seems problematic to say the government

1:45

can deprive

1:47

you of your property, your money,

1:50

substantial sums in

1:52

a tribunal that

1:54

is at least perceived as not

1:56

being impartial. The

1:59

ruling could rip across the government

2:01

potentially affecting other agencies like the

2:04

FTC, the EPA, and the Agriculture

2:06

Department. Joining me is Anthony Sabino,

2:08

a professor in the Department of

2:10

Law at the Peter J. Tobin

2:13

College of Business at St. John's

2:15

University. This was one of

2:17

the cases we've been waiting for Anthony. Tell

2:19

us why it's important. Well the

2:21

most important thing about this case June, and

2:24

where it will resonate is this. It's a

2:26

very important preservation of the right

2:28

to jury trial for all

2:30

Americans, and that's why this

2:32

case will have repercussions beyond

2:34

the esoteric field of securities

2:37

litigation, securities enforcement. Congress

2:39

back in the aftermath of the

2:41

Great Recession gave the Securities and

2:43

Exchange Commission expanded powers to

2:46

bring enforcement actions and to seek

2:48

civil penalties against malefactors on Wall

2:51

Street, okay? And again a laudable goal to

2:53

be sure and necessary then as it is now.

2:56

However, what Congress forgot was the fact

2:58

that when you accuse someone of fraud,

3:00

they're entitled to a jury trial under

3:02

the Seventh Amendment. The Congress had in

3:04

its wisdom directed that such actions be

3:06

brought or could be brought by the

3:08

SEC before they're in-house,

3:10

and I emphasize in-house administrative law

3:13

judges, and obviously the

3:15

SEC favors that forum because these

3:17

are the ALJs who work for

3:19

the Commission, and I'm not casting

3:21

aspersions upon their neutrality or their abilities,

3:23

but the bottom line is they are

3:25

an in-house adjudicative body. What the court

3:27

said today, and again a very eloquent,

3:29

very erudite opinion by Chief Justice Roberts,

3:31

is that no, hold on a second,

3:34

okay? These folks were entitled to a

3:36

jury trial. Why? Because

3:38

securities fraud is a subspecies of

3:40

fraud, generally speaking, generic fraud, and

3:43

most especially in the fact that

3:45

it is a subspecies of common

3:48

law fraud, and common

3:50

law fraud is something where you have always

3:52

had, since before there was in America, an

3:54

entitlement to a trial by a jury of

3:56

your peers, and in Congress in trying to

3:59

redirect this away... from a jury

4:01

trial violated the Constitution. And then

4:03

you see what's really a wonderful

4:05

discussion and hence its historical value

4:07

and its presidential value in

4:09

the Chief Justice talking about how the

4:11

right to a jury trial was taken

4:13

away from us, stripped away from us

4:15

by King George III. It was one

4:17

of the precipitating factors in the American

4:19

Revolution. That's why Jefferson discussed it in

4:21

the Declaration of Independence. That's why it's

4:23

the Seventh Amendment to the Bill of

4:26

Rights. So it's very much embedded in

4:28

the fabric of American liberty. Now taking

4:30

that and looking at securities fraud, again as

4:32

a subspecies of fraud, securities fraud in this

4:34

country since the 33 and 34 acts

4:36

were promulgated in those years under FDR's New

4:39

Deal, those laws have always

4:41

borrowed liberally from common law traditions. So

4:43

once again securities fraud is simply

4:46

a branch of common law fraud.

4:48

And as in fact the Chief

4:50

Justice points out and he uses

4:52

that pithy observation to the court

4:54

said before, when Congress transplants something

4:56

from the common law to modern

4:58

statutes, it takes the old

5:00

soil with it. And that's

5:02

exactly what happened here in creating

5:04

the securities fraud provision. Basically Congress said,

5:06

okay, let's take common law fraud and

5:08

all of its elements and now let's

5:10

simply couch that in terms of when

5:12

you commit fraud in a securities transaction.

5:14

But once again it's a transplant and

5:16

the old soil as the Chief Justice

5:18

pointed out today goes with it. And

5:20

for that reason if you're going to

5:22

try someone in any other kind of

5:24

fraud, June, if you're going to accuse

5:26

someone in any state or federal court

5:28

of fraud, you have to prove the

5:30

traditional elements to the satisfaction of

5:33

a jury of that defendant's peers. So

5:35

too is the exact same here, not to

5:37

forgive me a bureaucrat who was an ALJ

5:39

for the SEC. Well

5:42

what was the SEC's position here for

5:44

its use of in-house tribunals? The

5:47

SEC in defense of its

5:49

right to bring folks before one of

5:51

their in-house ALJs and not

5:53

before a jury basically said, well, no, no,

5:55

no, wait, wait, this is something different here.

5:57

This is a penalty created...

6:00

newly ad hoc law by congress and

6:02

it really is in the realm of

6:04

public right what the

6:06

heck public rights public rights or

6:08

rights or remedies that have been

6:10

created statutorily by congress and

6:13

the court is long recognize that well

6:15

if congress gives you something in that

6:17

realm then it's not from the

6:19

common law at something new so you know

6:21

what we can allow this

6:24

to be adjudicated by in-house

6:26

a lj ok someone or somebody

6:28

other than a jury well

6:30

the supreme court said no that doesn't wash and

6:33

it referred to one of my more favorite

6:36

cases from the bankruptcy realm called grand financier

6:38

that said okay hold on a second you

6:40

have to examine the right to remedy

6:42

that's involved and if it truly is a

6:44

public right and yeah you probably don't have

6:47

a jury trial right but if it's not

6:49

if it's based upon the common law

6:51

they're entitled to a jury trial and grand

6:53

fin the question was if you accuse someone

6:56

in a bankruptcy case of fraudulently emphasis on

6:58

fraudulently convey property away from a debtor in

7:00

order to deprive creditors of payments the

7:03

bankruptcy code is well known adjusting

7:06

the relationship between debtors and creditors and

7:09

a lot of it is statutory and

7:11

rights given to you public rights given by

7:13

congress ok but however some

7:16

point of bankruptcy law like we saw

7:18

in grand fencing and i this is

7:20

just transplanting the old soil of fraudulent

7:22

conveyance under the common law so guess

7:24

what jury trial again same thing here

7:26

relying upon grand fin for its analysis

7:28

the chief said nope fraud is fraud

7:30

and you get a jury and that's

7:33

the way it is so

7:35

you wholly agree with the reasoning

7:37

in the chief's majority opinion absolutely

7:40

and i also agree with justice gorsett's

7:42

concurrence which is quite good because he

7:45

also talks about historical background here the

7:47

right to a jury trial etcetera and

7:49

he thinks a number of points here

7:51

in that regard and

7:54

it has a beautiful turn of phrase

7:56

here we talked about how the constitution

7:58

bills high walls and click distinctions to

8:00

safeguard individual liberty. And again, the jury

8:02

trial is one of those. But also

8:04

what Justice Gorsuch points out, and thank

8:06

you, June, because this was going to

8:08

be our next point. Again, there's going

8:10

to be a lot of hand-wringing and

8:12

no doubt storm-wound wrong about, oh, this

8:14

is going to cripple the SEC's enforcement

8:16

efforts. Well, you know, I'm sorry, that's

8:18

a lot of nonsense. And basically, just

8:20

don't believe me on it. Look at

8:23

the very end of Justice Gorsuch's concurrence

8:25

where he says, the SEC has lots

8:27

of enforcement tools. All right, all

8:29

we're saying here is when you sue for civil

8:31

penalties, then you have to go to a jury. For

8:34

other remedies, the SEC will probably still

8:36

be able to go before an ALJ.

8:38

And in fact, in that realm, for

8:40

example, there are remedies that don't require

8:43

a jury trial. One of them is

8:45

restitution, where you return money to afforded

8:47

investors, stockholders, what have you. Another

8:50

one is disgorgement of legal profits.

8:53

And in recent years, there was the

8:55

legal opinion by Justice Sotomayor that recognized

8:57

that these are equitable remedies. And

9:00

June, as we well know, legal remedies, legal

9:02

causes of action, you have to have a jury.

9:05

That's the Seventh Amendment. Equitable remedies,

9:07

such as we see in the bankruptcy

9:09

code sometimes, as we see sometimes under

9:11

securities laws, you don't need

9:13

a jury. It's equitable. So the SEC

9:15

can today, and they shall in the

9:17

future, bring that before an administrative law

9:19

judge in-house and continue the same way

9:22

they have in the past. So bottom

9:24

line on that particular point, for those

9:26

who say this is going to put

9:28

a dent in SEC enforcement, and this

9:30

is going to be giving license to

9:32

big guys, my simple answer is no,

9:34

you're wrong. Okay, the SEC is going

9:36

to continue to chug along. The

9:38

major difference is, and again, it burdens them slightly,

9:41

but rightly so and for good cause, they're going

9:43

to have to now plead their case before a

9:45

judge and a jury in a federal district court.

9:48

This case was six to three

9:51

down ideological lines. Why was this

9:53

liberals versus conservatives? I really don't

9:55

think of it that way. As

9:57

you rightly said, I cannot disagree

10:00

that you see the so-called liberal

10:02

wing of the court, Sotomayor, Jackson,

10:04

and Kagan dissenting here. That

10:07

is their view about public rights

10:09

and congressional power, and it's a

10:11

little bit over expansive indeed. And

10:13

what I've seen from Justice Sotomayor's dissent

10:15

here is she's talking about

10:18

basically the court is

10:20

depriving the Article II branch, the

10:22

executive branch, in the form of the SEC,

10:26

their rightful power to enforce the

10:28

law and to adjudicate it internally.

10:30

And I appreciate that argument, but I think

10:33

it's ill-considered and I disagree respectfully as

10:35

follows. The majority is right,

10:37

and with all respect, the minority is

10:39

wrong, because what the majority is saying

10:41

is, look, what we're doing is this.

10:44

We're making sure that the executive

10:46

branch embodied in this administrative

10:48

agency, the SEC does not transgress

10:50

the Constitution, does not overstep its

10:53

bounds, and deprive Americans of a

10:55

jury trial. It's not the self-aggrandizement

10:57

of the Article III courts by

10:59

saying, oh, now you have to

11:01

come here to give you a

11:03

jury trial. No, it's a recognition

11:06

of the liberty of the American people and

11:08

anyone so accused of one of these heinous

11:10

crimes that, hey, you're accusing me? Well, guess

11:13

what? I have a jury trial

11:15

right and the right not to

11:17

be tried by some administrative person within

11:19

the executive branch, the Article II branch.

11:21

So I really think that's the point of contention. There is

11:24

a different point of view, but again, I say

11:26

with respect, it's the other way around. It's not

11:28

depriving the SEC of power. It

11:31

is making sure that the Article III

11:33

branch, the federal courts do what they

11:35

constitutionally are bound to do, supposed to

11:37

do, which is oversee jury trial rights.

11:39

But most of all, it's not just about separation

11:42

of powers and checks and balances. It's

11:44

about the power of the American

11:46

people against the government. And

11:48

it is if you or I or anybody else is

11:51

accused of, hey, you squintled somebody in a stock

11:53

deal. Oh, you think I'm a crook.

11:56

Oh, you think I squintled somebody. That's

11:58

called fraud. Is it part of the law?

12:00

that sub branch of securities fraud? Yeah, guess

12:02

what? Okay, if you accuse me

12:04

of swindling you in a land transaction, selling

12:07

you my car, okay, I

12:09

get a jury trial. It's the same

12:11

thing here. All right.

12:13

It's not about just the tension between

12:15

the branches of government. It's about the

12:18

tension between the people and governments and

12:20

preserving people's rights to a jury trial.

12:22

And that's why, to me, this case is,

12:25

of course, it's a securities law case, no denying that. But

12:27

you're going to see this discussion

12:29

resonate and be repeated again

12:32

when we talk about preserving the sanctity,

12:34

if you will, of the jury trial

12:36

and all sorts of other proceedings. And

12:38

that's why this will have ramifications for

12:40

administrative proceedings, enforcement actions in other branches

12:42

in the federal system as well, be

12:44

it antitrust with the FTC, be it

12:46

consumer products with some of the other agencies. So

12:49

this thing has traction, that's for sure.

12:51

Coming up next, does this decision indicate how

12:54

the court will rule in one of the

12:56

most high-stakes cases of the term? I'm June

12:58

Grasso, and you're listening to Bloomberg. Success

13:01

is more than the final destination. It's

13:03

a path you take one step at

13:05

a time. It's discipline. It's teamwork. And

13:07

it's the drive and passion inside of

13:09

us that comes before all recognition. It's

13:11

what Stiefel's been doing for over 130

13:13

years. Quietly,

13:16

yet strategically, Stiefel's become one of

13:18

the fastest-growing wealth management and investment

13:20

banking firms in the country. Our

13:23

financial advisors go beyond traditional wealth

13:25

management to provide clients with direct

13:27

access to one of the industry's

13:30

largest equity research franchises and a

13:32

leading middle market investment bank. Because success

13:34

is the drive it takes to keep

13:36

climbing, the passion to keep investing, the

13:39

best of each of us made better

13:41

by the best in all of us.

13:44

And that is where success meets

13:46

success. Start your journey at

13:48

stiefel.com. That's

13:50

s-t-i-f-e-l.com. Stiefel, Nicholas &

13:52

Co. Inc. Member S-I-P-C & NYSE.

13:56

You know success when you see it. Or

13:58

you think you do. the people

14:00

in the spotlight, athletes, actors,

14:03

artists. But what about

14:05

the people behind the scenes? You know,

14:07

the ones who make it all happen.

14:09

The lighting engineers, the sideline photographers, the

14:11

caterers, they're small business

14:14

masterminds. And if there's one thing

14:16

they have in common, it's making their money work

14:18

harder. That's why they have a business

14:20

bank account with QuickBooks Money, where they are now

14:22

earning a generous 5% annual percentage

14:25

yield. Yes, 5% APY. Making

14:28

your money work as hard as you do?

14:31

That's how you business differently. Learn

14:33

more about QuickBooks Money at

14:35

quickbooks.com/five APY. Banking

14:37

services provided by Green Dot Bank,

14:39

member FDIC, only funds and envelopes

14:41

earn APY. APY can change at

14:43

any time. In

14:46

a six to three vote down

14:48

ideological lines, the Supreme Court rule

14:50

that people accused of fraud by

14:52

the SEC have the constitutional right

14:54

to a jury trial in federal

14:56

court. The case is among

14:58

several this term, likely to have

15:00

broad implications for federal regulators as

15:03

conservatives and business interests are urging

15:05

the court to constrict the power

15:08

of the so-called administrative state. And

15:11

during oral arguments in this

15:13

case, Chief Justice John Roberts

15:15

expressed his concerns about the

15:17

growing power of federal regulators.

15:20

The extent of impact

15:23

of government agencies on daily

15:26

life today is

15:28

enormously more significant than

15:30

it was 50 years ago. The

15:33

court's six conservatives have already

15:35

reigned in federal agency power,

15:37

including in a decision last

15:39

year that sharply limited the

15:41

EPA's ability to police water

15:43

pollution in wetlands. I've

15:45

been talking to Anthony Sabino, a professor

15:47

in the Department of Law at the

15:50

Peter J. Tobin College of Business at

15:52

St. John's University. During the

15:54

oral arguments, the Justice Department said

15:56

more than two dozen agencies now

15:58

impose penalties through. administrative

16:01

proceedings. And then only

16:03

some of those have the option of going

16:05

to federal court instead? Right. And you see,

16:07

that's one of the keys, okay? And I

16:09

understand the government's position as much as I

16:12

disagree with it. And the court has said,

16:14

well, sorry, but you're wrong. Here's part of

16:16

the evolution of turcasi. Now the

16:18

battle is going to shift. We're going

16:20

to see increased emphasis and therefore

16:22

increased litigation over the precise contours

16:24

of what are remedies. The chief

16:26

justice made a point, a very

16:28

powerful point, that the expanded enforcement

16:30

powers of the Securities and Exchange

16:32

Commission, which now must be subjected

16:34

to a jury trial, not to

16:37

an SEC in-house ALJ. Those

16:39

are civil penalties that are designed to

16:41

be, and I quote, punitive in nature

16:43

to punish and to deter. And the

16:45

court pointed out that the SEC, if

16:48

it wins, it doesn't have to give

16:50

the money back to investors. So that's

16:52

a purely punitive measure. You have to

16:54

give someone a jury trial right when

16:57

you seek that kind of civil penalty.

16:59

Once again, as I mentioned earlier, the

17:01

SEC has the power to seek other

17:03

compensation, if you will. This is what

17:06

Justice Gorsuch mentions at the very end

17:08

of his concurrence in the form of

17:10

disgorgement, or you made some money, give

17:12

it back. Okay? Restitution. You defrauded John

17:15

Smith, give the money back, et cetera.

17:17

So there's another branch of remedies that

17:20

are not penal in nature, are not

17:22

punitive. They are equitable. And the

17:24

Supreme Court, when they're faced with that, I

17:26

have no doubt, and again, the

17:28

groundwork was already laid by Sotomayor a couple of

17:30

years ago in the Leo case, is

17:33

that, yeah, that can be brought

17:35

before an administrative law judge. That can be

17:37

in-house at the SEC, and you do not

17:39

have a right to a jury trial. So

17:41

once again, this is going to evolve. The

17:44

case is going to evolve. It's going to

17:46

branch off. And I fully expect three years

17:48

from now, okay, you and I

17:50

are going to be having a conversation about another

17:52

Supreme Court landmark in 2027 that

17:55

defines the contours between civil

17:57

penalties, where there is a mandatory... jury

18:00

trial, right? And an

18:02

equitable remedy such as disfortunate or

18:04

restitution where nope, okay, equitable, so

18:06

therefore there's no jury. I

18:09

mean I have to get a calendar that goes

18:11

farther than my current one. You and I both.

18:14

So one of the big cases

18:16

we're waiting for involves the Chevron

18:18

doctrine and whether that

18:21

40-year-old doctrine will survive

18:23

or not. It basically

18:25

means a deference to

18:27

agencies when regulations are

18:29

ambiguous. Do you think

18:31

the decision in this SEC case

18:34

indicates how the court will rule

18:36

in that case? To

18:38

me it does. To me it does. Once

18:40

again, and I hate

18:43

to, you know, paint with a broad

18:45

brush with respect to ideologies, the nine

18:47

justice, they're all equal up there. But

18:49

once again if I engage in a

18:51

little political punditry here, we see the

18:53

division of the justices the six to

18:55

three here today, will the court move

18:57

along those same lines in Loperbright which

18:59

we hope to get tomorrow? Possibly. And

19:01

again I perceive your point and I

19:03

agree completely. One of the

19:06

aspects of jarcaisis is this. It's

19:08

a demonstration that the Constitution must

19:10

be honored and sometimes

19:12

that means the necessity of curtailing

19:14

the power of administrative agencies, whichever

19:17

agency that may be, whether it's

19:19

the SEC here or the Federal

19:21

Fish and Wildlife Fishery Service in

19:24

Loperbright. Okay. So to me

19:26

this is in many respects a precursor, a

19:28

flare going up if you will, and

19:31

I think there are hints of what might happen

19:33

tomorrow the next couple of days with respect to

19:35

Loperbright then comes down. And again the whole point

19:37

is this, and this is why I

19:40

see the linkage if you will, the connection. Jarcaisis

19:42

is about honoring the Constitution,

19:44

its text and the constitutional

19:46

plan, and saying Americans have

19:48

a right to a jury

19:50

trial when they were

19:52

accused of certain wrongdoing. Loperbright in terms

19:54

of whatever it does with Chevron and

19:56

whatever way it goes should

19:59

be about honoring the Constitution. saying, what

20:01

are the boundaries upon administrative agencies, unelected

20:03

officials of administrative agencies, with regards to

20:05

the American people? It's almost the 4th

20:08

of July. I'm not trying to wrap

20:10

myself in the flag, but I must

20:12

say this, all right? This

20:15

is about American liberty. This is

20:17

about preserving liberty. This is about freedom.

20:19

So those are the more transcendental issues

20:21

that I see here. And

20:24

bottom line is, again, yeah, Jarkezy, all right,

20:26

I think this is a pretty good sign

20:28

as to what might very well transpire with

20:31

Loper Bright in the next day or two.

20:34

A lot of legal experts are warning

20:36

that getting rid of the Chevron doctrine

20:39

could throw longstanding regulations

20:41

into doubt. It

20:43

could crimp agency power over

20:46

things like workplace conditions, drug

20:48

safety, climate change, et

20:50

cetera. And there

20:52

would be a deluge of

20:54

lawsuits challenging agencies and regulations.

20:58

I firmly do not believe that. And if

21:00

I may, I'm going to use a word

21:02

that I've heard Mr. Biden use quite a

21:04

lot in recent times, and that's this malarkey.

21:07

I think that's a lot of malarkey, okay?

21:09

Jarkezy is not going to

21:11

curtail the SEC's enforcement efforts.

21:13

The basic change is one

21:15

of tactics whereby you

21:18

don't go in front of an in-house,

21:20

ostensibly friendly if I may say so,

21:22

ALJ, who works in the same building

21:24

with you, is paid by the SEC

21:26

the same way, et cetera. You're

21:28

going to go to an Article III

21:30

judge appointed for life, but more importantly

21:32

is you're going to see 12 ordinary

21:34

American people in that jury box. So

21:36

the vector, the direction of these cases

21:38

will change somewhat in terms of tactically,

21:40

but still the burden is going to

21:42

be the same, June. When you accuse

21:44

someone of securities fraud, you have to

21:46

prove those six elements, which again differ

21:48

only from the five traditional elements of

21:50

common law fraud. So you still have

21:52

to make your case the evidence, burden

21:54

of persuasion, et cetera, with respect to

21:56

the issues that are being addressed and

21:58

low proprietors. Agencies aren't going

22:00

to be curtailed if the Chevron deference

22:03

standard is modified or in fact eradicated

22:05

and whole apart. All it's saying

22:07

is it restores a balance.

22:09

The problem that not just I,

22:12

but Justice Scalia had during his

22:14

lifetime, that Justice Thomas has now

22:17

with Chevron is that it

22:19

basically created an imbalance. It

22:21

gave an unfair advantage to the

22:23

agencies to say, okay, we're an

22:26

agency, we're the experts, and

22:28

look where experts have gotten us in recent years

22:30

if I may say so, we're the experts so

22:32

you have to listen to us and it diminished

22:34

the power of judges to do their job which

22:36

is to judge. So now

22:38

if Chevron is curtailed, modified, what

22:40

have you, it restores

22:42

balance. At this point in time in

22:45

an administrative case and a case with an agency,

22:47

the agency has a clear advantage and it's

22:49

a zero-sum game. Advantage

22:52

to the agency means disadvantage to

22:54

the public. If you modify Chevron

22:56

deference, now you restore balance. It's

22:58

even, as we'd like to say in sports, it's

23:00

a level playing field. Agency comes

23:03

in, argues the case, citizen comes in, she

23:05

argues her case case, it's all even, there's

23:07

a balance. Let's talk about

23:10

the practical implications of the Jarkissee

23:12

case because it's expensive to go

23:14

to trial in federal court. So

23:17

would a defendant have a choice of federal

23:20

court or an in-house proceeding?

23:23

You are correct and I'll give you the perfect analog for

23:25

that. Antitrust trials,

23:27

okay, as we know are incredibly complex.

23:30

They involve literally days

23:33

if not weeks of

23:35

what's incredibly, forgive me,

23:37

boring testimony from economists and

23:39

other experts. And again case in

23:41

point, United States versus IBM, that

23:44

boondoggle which ended in no resolution

23:46

whatsoever but basically the parties decided

23:48

to, the defendant IBM said, okay,

23:50

no jury trial because no jury's

23:52

gonna sit there for years to

23:55

listen to all this boring evidence.

23:57

So parties can make a decision and say,

23:59

look, all right. This case would not be

24:01

understood by the average layperson. This case

24:03

is far too arcane and complex. And

24:06

also, you know what, let's just go see

24:08

the ALJ and let her decide. And again,

24:10

let me be clear. I've spoken about the

24:12

need to limit the power of ALJs. That's

24:15

one of the issues which Tracasi bypassed, unfortunately,

24:17

because that's the one I addressed in my

24:19

amicus briefs, I'm a little sad they left

24:21

that one out. But I understand the reason,

24:23

as you and I know, it's axiomatic that

24:25

the court need only decide as much of

24:27

a case as it needs to. So you

24:29

say that Tracasi has a right to a

24:31

jury trial. He has to be in front

24:33

of an Article III judge. We don't need

24:35

to decide whether there's a power of removal

24:37

of an ALJ, but again, that'll be the

24:40

next case. I'm looking forward to writing that

24:42

amicus already. We'll see that in a couple

24:44

of years. But the bottom line is the

24:46

key differential, June, is this, it's a choice.

24:48

If a defendant says, you know what, I'll

24:50

go with the ALJ. And once again, I've

24:52

talked about the need to check and balance

24:54

the power of administrative agencies, but I still

24:56

respect ALJs. I still respect their expertise and

24:58

the job they have to do. It's a

25:00

tough job, it's a demanding job, but in

25:02

the right situation, if a Mr. Tracasi or

25:04

someone like him in the days to come

25:06

says, you know what, I don't want a

25:08

jury trial, okay? The jury's not gonna understand

25:10

this. It's too arcane, it's too complex. I'll

25:13

go with the ALJ, that's fine. The important

25:15

thing is there's a choice. There's a choice.

25:18

And once again, when you look at the mosaic, if

25:20

you will, all right, and I know

25:22

there's gonna be the hand wringing and the gnashing of teeth,

25:25

oh, it's gonna impact the

25:28

agencies, it's gonna handicap the agencies, it's gonna make it

25:30

too more expensive. Again, the answer for

25:32

me is my opinion is no. They're

25:35

still gonna have to bring their case.

25:37

The difference is now persuade a jury

25:39

of defendant's peers as opposed

25:42

to persuading the single person, the ALJ.

25:44

So there will not be a C

25:46

change. There will not be a fundamental

25:48

change here. SEC enforcement will go on.

25:50

Enforcement, these other agencies will go on.

25:52

Again, you're simply changing your shifting direction

25:54

to persuading the jury as opposed

25:57

to persuading an in-house ALJ. Well,

25:59

we'll find out. perhaps as early as

26:01

tomorrow, whether the Chevron doctrine will survive.

26:03

Thanks for being on the show, Anthony.

26:06

That's Anthony Sabino, a professor in the

26:08

Department of Law at the Peter J.

26:10

Tobin College of Business at St. John's

26:12

University. The Supreme Court

26:15

has six more cases left

26:17

before it adjourns for summer

26:19

vacation. Those cases involve questions

26:21

of presidential immunity, a

26:23

criminal charge used against January

26:25

6th defendants, the constitutionality of

26:27

Texas and Florida's social media

26:30

laws, homelessness, and of course,

26:32

the Chevron doctrine. Coming up

26:34

next on the Bloomberg Law

26:36

Show, the Supreme Court allows

26:38

emergency abortions in Idaho for

26:41

now. This is Bloomberg. Success

26:44

is more than the final destination. It's

26:46

a path you take one step at

26:48

a time. It's discipline. It's teamwork. And

26:50

it's the drive and passion inside of

26:52

us that comes before all recognition. It's

26:54

what Stiefel's been doing for over 130

26:56

years. Quietly

26:58

yet strategically, Stiefel's become one of

27:01

the fastest growing wealth management and

27:03

investment banking firms in the country.

27:05

Our financial advisors go beyond traditional

27:07

wealth management to provide clients with

27:09

direct access to one of the

27:11

industry's largest equity research franchises and

27:13

a leading middle market investment bank

27:15

because success is the drive it

27:18

takes to keep climbing, the passion

27:20

to keep investing, the best of

27:22

each of us made better by

27:24

the best in all of us.

27:27

And that is where success

27:29

meets success. Start your journey

27:31

at stiefel.com. That's stiefel.com. Stiefel,

27:34

Nicholas and Company Incorporated, member

27:36

SIPC and NYSE. You

27:38

know success when you see it. Or

27:41

you think you do. The

27:43

people in the spotlight, athletes,

27:45

actors, artists. But what

27:47

about the people behind the scenes? You

27:49

know, the ones who make it all

27:52

happen. The lighting engineers, the sideline photographers,

27:54

the caterers, their small

27:56

business masterminds. And if

27:58

there's one thing they have in common. It's

28:00

making their money work harder. That's why they

28:02

have a business bank account with QuickBooks Money,

28:04

where they are now earning a generous 5%

28:07

annual percentage yield. Yes, 5% APY.

28:11

Making your money work as hard as you

28:13

do. That's how you business differently. Learn

28:16

more about QuickBooks Money at

28:18

quickbooks.com/5APY. Banking

28:20

services provided by Green Dot Bank,

28:22

Member FDIC. Only funds and envelopes

28:24

earn APY. APY can change at

28:26

any time. The

28:30

Supreme Court confirmed today that it

28:32

will allow abortions to take place

28:34

in medical emergencies in Idaho for

28:36

the time being, making

28:39

official a decision that was

28:41

inadvertently posted online yesterday. Over

28:44

three dissents, the justices reinstated a

28:46

federal trial court order that ensures

28:48

hospitals in the state can perform

28:51

emergency abortions to protect the health

28:53

of the mother. The court had

28:55

blocked that order in January and

28:57

allowed Idaho to fully enforce its

28:59

near total ban for five months.

29:02

The court dismissed the case

29:05

as improvidently granted. The

29:07

about face is at least a

29:09

temporary victory for abortion rights advocates.

29:12

Doctors and hospital administrators say the

29:14

state's law was keeping them from

29:16

treating women with serious health risks,

29:18

even if they had no chance

29:20

to deliver a healthy baby. Joining

29:23

me is an expert in reproductive health

29:25

care rights, Mary Ziegler, a professor at

29:28

UC Davis Law School. So,

29:30

Mary, this was three to three to three

29:33

and the court as a whole

29:35

didn't explain its decision. So what

29:38

does this stand for? Well,

29:40

I mean, I think that we have

29:42

the best clues from the opinion offered

29:44

by Justice Barrett that the three kind

29:47

of swing conservative justices believe

29:49

that the terms of the litigation had changed.

29:51

And what they saw as consequential ways since

29:53

the court agreed to hear the case. And

29:56

I think the three were interested in this

29:58

spending clause theory that Idaho had. raised but

30:00

believed that it had never been heard by

30:02

the lower court. So I think it stands

30:05

for the proposition that maybe those justices are

30:07

willing to side with Idaho. Maybe

30:09

they're also interested in some kind of what they

30:11

would view as a compromise ruling, but

30:13

that in either case they weren't ready to

30:15

reach a final conclusion before the election. The

30:18

opinion by the three liberals

30:20

talked about what's happening to

30:22

women in Idaho who need

30:24

abortions and didn't get them,

30:26

sort of echoing what

30:29

Justice Kagan said during the oral

30:31

arguments. How bad has it been in

30:34

Idaho? Yeah, I mean, from what

30:36

I've gathered, there's evidence that there

30:38

have been significant harms in Idaho,

30:40

that patients have been airlifted to

30:42

other states in a handful of

30:44

circumstances. We know that there have

30:46

been knock-on effects in terms of

30:48

people not choosing Idaho for their

30:50

medical residencies, that having further effects

30:52

on access to care for pregnant

30:54

patients across the state. I think

30:56

obviously in terms of scholarly documentation

30:58

of that, we're just at the beginning.

31:01

But there is data, I think, including

31:03

data cited by Justice Jackson, in her

31:05

opinion, to the effect that even

31:07

allowing the law to go into effect when

31:10

it did has had real-world effects. And

31:12

so it was only the

31:14

three liberals who said that

31:16

Mtala requires hospitals to provide

31:18

abortions that Idaho's law

31:21

prohibits, that Idaho's law is preempted

31:23

by the federal law. Yeah,

31:25

I mean, I think Justice Jackson clearly

31:28

wanted to reach that conclusion. The other

31:30

two liberals were willing to go along

31:32

with the idea that it was okay

31:34

to defer a decision, essentially, that the

31:36

petition had been improvidently granted. It's

31:39

probably fair to assume that that was

31:41

compromised on the part of those liberal

31:44

justices. But Justice Kagan did take it

31:46

upon herself to respond to some of

31:48

the conservative justices' points on preemption. And

31:51

we can certainly gather from that that

31:53

she doesn't think that the preemption arguments

31:56

that Idaho had raised were very

31:58

good. Tell us

32:00

about the dissent by Alito. Well,

32:03

there was a lot there. I mean, Justice

32:05

Alito wrote about the spending cause argument. He

32:08

also spent a lot of time

32:10

on the fact that Emtala uses

32:12

the language unborn child, which Alito

32:15

suggested created expressed protection for the

32:17

unborn child, as he put it,

32:19

and would by definition mean no

32:21

emergency access to abortion for patients.

32:23

That's obviously an interesting and significant

32:25

conclusion, because the statute just used

32:27

the word unborn child, didn't say

32:29

anything more about unborn children than

32:31

that. So Alito's conclusion seems

32:34

to be if a statute uses language

32:36

like that, it suggests a belief

32:38

that an unborn child is

32:40

an equal rights holding person or

32:42

patient, at least for statutory purposes.

32:44

So that's a pretty revealing reading

32:47

of the statute. Again, even though

32:49

that isn't going to be the

32:51

legal upshot, at least for now.

32:53

Well, Alito has suggested in oral

32:55

arguments and elsewhere this concept of

32:57

fetal personhood before, hasn't he? Yeah,

33:00

I mean, he's used personhood adjacent language in

33:02

doves. So we know that he's been at

33:05

least open to this kind of question.

33:08

He hasn't, of course, addressed constitutional questions

33:10

of personhood in the sense

33:12

of the conclusion that fetuses have 14th

33:14

Amendment rights clearly in any of these

33:16

cases. But the way he's

33:18

approaching the question certainly suggests that he may

33:21

be open to that argument. He

33:23

also chided the court. He said,

33:26

the court has simply lost the

33:28

will to decide the easy but

33:30

emotional and highly politicized question that

33:33

the case presents. And

33:35

then Katonji Brown Jackson, on the other

33:37

side, the court is not willing to

33:39

make a decision here. It's punting. And

33:41

she pointed out that even though this

33:44

means that there is no clarity in

33:46

the law, no clarity for doctors. Right.

33:49

I mean, you do see that coming

33:51

from both Jackson and the

33:53

conservatives, essentially, that the court

33:55

took this case and should have had

33:57

the courage to definitively resolve it. it.

34:00

Of course, you know, neither

34:02

of those wings of the court have the power to

34:05

make that call, though. It's a reminder of

34:07

kind of where the power in the court

34:09

lies at the moment. The

34:11

justices took two abortion cases this

34:13

term, and neither did they

34:15

reach the merits. In the Mipha

34:17

Pristone abortion pill case, they went

34:19

off on procedural grounds. So, I

34:22

mean, why take the cases, especially this

34:24

case where it was an unusual procedure?

34:27

Well, I think that it's hard to

34:29

know why the court took the case.

34:31

I imagine that at least at some

34:33

point the conservative justices thought they had

34:35

the votes to side with Idaho, and

34:38

then realized that they didn't, potentially because

34:41

the oral argument in the case was

34:43

such a disaster for the state of

34:45

Idaho. I think, obviously, Chief Justice Roberts

34:47

has been concerned with the court's reputation

34:49

and the damage to it in the

34:52

years since Dobbs, and may have argued

34:54

that the time was not right, given

34:56

the procedural problems and complexities

34:58

of both cases. And he may

35:00

have found a more receptive audience

35:03

in Justice Sperid and Kavanaugh than

35:05

he had previously, not only because

35:07

this is an election year, but

35:09

also because there were procedural and

35:11

strategic mistakes made by the conservative

35:13

attorneys in both of these cases.

35:16

So, explain what happens now, what

35:18

this decision actually does. Well, in

35:20

the short term, this decision has

35:22

the effect of reinstating an injunction

35:24

that a district judge put in

35:26

place in Idaho permitting emergency access.

35:29

That litigation will continue through the Ninth

35:31

Circuit Court of Appeals. The decision does

35:33

nothing to disturb a ruling by the

35:35

Fifth Circuit of Court of Appeals upholding

35:37

an injunction against the Biden administration and

35:41

allowing Texas's law to be

35:44

enforced as written with its very narrow

35:46

abortion exceptions. And it doesn't do anything

35:48

to change the situation on the ground

35:50

in other states with very narrow exceptions,

35:52

although there is some impala-related litigation potentially

35:54

proceeding in some other states like Oklahoma.

35:56

So, essentially, all All of that will

35:58

continue as if none of this ever

36:00

happened. The Supreme Court may come back

36:02

into the picture. Then again, it may

36:04

not because the polls are correct and

36:06

Donald Trump wins the 2024 presidential election.

36:10

A Trump administration would almost certainly withdraw

36:12

the Centala guidance and not really try

36:14

to intervene on behalf of patients facing

36:17

life-threatening emergencies. And I

36:19

believe Justice Jackson indicated that that Fifth

36:21

Circuit case will likely be coming up

36:23

to the court. Yeah, no, I think

36:25

that will be going up to the

36:27

court. And I think the case from

36:29

the Ninth Circuit may too, again, unless

36:31

Biden loses the 2024 election

36:33

and Trump stops interpreting Intala in this

36:36

way and the case becomes moot. Do

36:39

you surmise that in

36:41

these cases, the justices or some

36:43

of the justices are thinking about

36:45

the fact that there's an election

36:47

coming up and not wanting to

36:49

rock the boat too much as

36:51

Alito says? I think that's a

36:53

possibility. I think that there

36:55

are again, I think this is a scenario

36:57

where there were plenty of off-ramps for a

37:00

court that didn't want to decide these questions

37:02

in an election year, given the

37:05

fact that Idaho did what it did.

37:07

It oral argument didn't raise these questions

37:09

about the spending clause until later, given

37:11

that there were standing problems in Alliance

37:14

for Hippocratic Medicine. But I think that

37:16

there were almost certainly political concerns that

37:18

dovetailed with those legal and political and

37:20

strategic questions. So as far

37:23

as looking back at this term, what

37:25

conclusions can we make about

37:28

abortions? Well I think we

37:30

can conclude, you know, we know that

37:32

there are some divides within the court about

37:34

abortion, but they can discern primarily how much

37:37

further to the right to move the court

37:39

and how much federal intervention to limit voters'

37:42

ability to decide for themselves which abortion rights

37:44

protections they want, how much in that direction

37:46

the court is going to head. So

37:49

that that's on the table, we don't know

37:51

which way the court ultimately is going to

37:53

go, because again, so many of these substantive

37:56

questions were deferred. subjects

38:00

at the debate this evening between

38:02

Biden and Trump. And speaking of

38:05

voting, do you know how many

38:07

states will have

38:09

abortion on the ballot in

38:11

November? So there I think

38:13

are four states that have

38:15

confirmed ballot initiatives. There are

38:17

three states where they have

38:19

submitted signatures to get on

38:22

the ballot where likely there

38:24

would be a potential upshot

38:26

there. And then there

38:28

are three where there are further signatures

38:30

being gathered. So I think a lot

38:33

of those are likely to end up on the

38:35

ballot but the status of several is still

38:38

TBD. So Colorado,

38:40

Florida, Maryland, and

38:43

South Dakota are all guaranteed to

38:45

be on the ballot. And

38:48

there are several others that are possibilities

38:51

including Arizona,

38:54

Arkansas, Missouri, Montana,

38:57

Nebraska, Nevada, and

38:59

Pennsylvania. We'll be following those

39:01

closely. Thanks so much Mary.

39:03

That's Professor Mary Ziegler of

39:05

UC Davis Law School. And

39:08

that's it for this edition of

39:10

the Bloomberg Law Show. Remember you can

39:12

always get the latest legal news on

39:15

our Bloomberg Law podcast. You can find

39:17

them on Apple Podcasts, Spotify, and at

39:19

www.bloomberg.com slash podcast slash law.

39:22

And remember to tune into the

39:24

Bloomberg Law Show every weeknight at

39:26

10 p.m. Wall Street time. I'm

39:29

June Grosso and you're listening to Bloomberg.

39:36

Meet Gary. Gary's about to become

39:39

an Einstein in an instant. Whoa,

39:41

Einstein hair. I like it. That's

39:43

right Gary because you're using Salesforce

39:45

powered by Einstein AI to connect

39:47

data, predict business trends, generate personalized

39:49

content, and wow customers. I do

39:51

feel a lot smarter. Because you're

39:53

not just Gary anymore. You're Gary.

39:55

Empowered by Einstein AI. Did you

39:57

hear that team? I'm an Einstein.

39:59

Okay.