Latest / Bloomberg Law / Weekend Law: Comey's Motions, Meta Wins & Texas Maps
Transcript
- 0:02Speaker 1: This is Bloomberg Law with June Grossel from Bloomberg Radio.
- 0:08Speaker 2: The Justice Department's indictment of James Comy was riddled with
- 0:13Speaker 2: problems that may give the former FBI director legal grounds
- 0:17Speaker 2: to have it dismissed. And that's according to a federal judge.
- 0:22Speaker 2: Comy's been charged with making false statements and obstructing Congress
- 0:27Speaker 2: and Magistrate Judge William Fitzpatrick cited eleven potential missteps by
- 0:32Speaker 2: the Justice Department in the lead up to filing those charges,
- 0:37Speaker 2: including fundamental misstatements of the launch to the grand jury
- 0:41Speaker 2: by the prosecutor, Lindsay Halligan, and the use of potentially
- 0:45Speaker 2: privileged communications. And he's ordered an extraordinary remedy the release
- 0:51Speaker 2: of all grand jury materials to the defense. That's been
- 0:55Speaker 2: put on hold pending a review by the District Court
- 0:58Speaker 2: Judge Jimy his former federal prosecutor, Robert Mintz, a partner
- 1:03Speaker 2: maccarter in English, Bob In some ways, the judge's opinion
- 1:08Speaker 2: seems like a guideline for the defense to ask for
- 1:11Speaker 2: a dismissal of the indictment. He outlined the procedural and
- 1:15Speaker 2: substance of irregularities that occurred before the grand jury and
- 1:19Speaker 2: said they may give Comby legal grounds to have one
- 1:22Speaker 2: or more of the counts dismissed. Pretty harsh condemnation of
- 1:26Speaker 2: the government's actions.
- 1:28Speaker 3: It was extremely unusual, because it's extremely rare in the
- 1:32Speaker 3: first place for a judge to be reviewing conduct in
- 1:36Speaker 3: front of a grand jury. So what the magistrate judge
- 1:39Speaker 3: was pasked with in this circumstance was to decide whether
- 1:43Speaker 3: mister Comy had met the very high bar for a
- 1:46Speaker 3: defendant to be given full access to the transcripts and
- 1:50Speaker 3: recordings of a grand jury proceeding. What ended up happening
- 1:53Speaker 3: here was that, in addition to the reasons that Combe's
- 1:56Speaker 3: lawyers had argued for access to the grand jury matif,
- 2:00Speaker 3: the judge found from his own review of the materials
- 2:03Speaker 3: a host of new problems, new issues that could ultimately
- 2:07Speaker 3: lead to the dismissal of the case. The judge went
- 2:10Speaker 3: through a series of potential issues that he decided the
- 2:15Speaker 3: defense was entitled to probe and to raise before the
- 2:19Speaker 3: court as a basis to possibly dismiss the indictment. One
- 2:22Speaker 3: of the original issues that Comy's lawyers raised as a
- 2:26Speaker 3: basis for accessing the grand jury material had to do
- 2:30Speaker 3: with search warrants that were executed by the Department of
- 2:33Speaker 3: Justice in twenty nineteen and twenty twenty in connection with
- 2:37Speaker 3: an entirely separate, earlier investigation which took place during President
- 2:41Speaker 3: Trump's first presidency and had to do with the potential
- 2:45Speaker 3: leaking of information to the media about ongoing investigations by
- 2:50Speaker 3: the FBI, and the search warrants were focused on a
- 2:53Speaker 3: Columbia University law professor, Daniel Richman, who was a friend
- 2:57Speaker 3: of mister Comy's, but who would also end up repris
- 3:00Speaker 3: presenting him as his lawyer, and that created the question
- 3:04Speaker 3: of whether or not the information might have been covered
- 3:06Speaker 3: by the attorney client privilege. The judge here raised a
- 3:11Speaker 3: number of issues as to whether or not there could
- 3:13Speaker 3: have been a violation of mister Comy's rights, and whether
- 3:16Speaker 3: or not privileged information might have seeped into the grand
- 3:20Speaker 3: jury presentation and that would have been entirely improper and
- 3:24Speaker 3: would have tainted the presentation and could potentially be a
- 3:27Speaker 3: basist to dismiss the indictment.
- 3:29Speaker 2: So Bob the prosecutor here. The interim US Attorney Lindsay Halligan,
- 3:34Speaker 2: was Trump's former personal lawyer had never been a prosecutor before,
- 3:38Speaker 2: and she presented the case to the grand jury by herself.
- 3:42Speaker 2: It appears that she suggested to the grand jury that
- 3:45Speaker 2: the fact that Comy didn't testify in his defense should
- 3:50Speaker 2: be interpreted as a sign of guilt. Even a first
- 3:54Speaker 2: year law student should know that a defendant doesn't have
- 3:58Speaker 2: to testify.
- 3:59Speaker 3: Well, that's exactly, and the magistrate judge described these as
- 4:03Speaker 3: quote fundamental misstatements of law by the prosecutor in front
- 4:08Speaker 3: of the grand jury, and one of the issues that
- 4:11Speaker 3: he identified was this Fifth Amendment right issue. Apparently, during
- 4:15Speaker 3: the course of the grand jury at presentation, a grandeuror
- 4:19Speaker 3: raised questions, as grandeurs often do to the prosecutor, and
- 4:23Speaker 3: the prosecutor has to respond with the proper law in
- 4:26Speaker 3: order to give the grand jurors the framework by which
- 4:29Speaker 3: to consider whether or not to return an indictment. Here,
- 4:32Speaker 3: apparently a grandeuror asked a question, and as you say,
- 4:36Speaker 3: the exact response has been redacted. But according to the
- 4:39Speaker 3: magistrate judge, it suggested that mister Comy may have had
- 4:44Speaker 3: a burden to explain away the government's evidence. In other words,
- 4:48Speaker 3: the inference was that the burden shifted to mister Comy
- 4:52Speaker 3: to have to explain why he did what he did, when,
- 4:56Speaker 3: in fact, under the Fifth Amendment, a defendant has no
- 4:59Speaker 3: obligation whatsoever to testify, and the fact that they choose
- 5:03Speaker 3: not to testify cannot be used against him. And more fundamentally,
- 5:08Speaker 3: in a criminal prosecution, the burden never shifts to the defense.
- 5:12Speaker 3: It's always the prosecution's burden to prove its case beyond
- 5:15Speaker 3: a reasonable doubt. So any suggestion that mister Comy's decision
- 5:20Speaker 3: not to testify not to explain away his conduct could
- 5:24Speaker 3: somehow be used by grand jurors to infer that he
- 5:28Speaker 3: committed a crime would have been improper. The judge also
- 5:32Speaker 3: noted that Miss Halligan may have suggested to the grand
- 5:35Speaker 3: jury that they did not have to rely only on
- 5:38Speaker 3: the record that was presented to them during the grand
- 5:41Speaker 3: jury presentation in order to reach a finding of whether
- 5:44Speaker 3: or not there was probable cause, but that they could
- 5:47Speaker 3: assume and they could be assured of the fact that
- 5:50Speaker 3: the government had even more evidence, perhaps better evidence than
- 5:54Speaker 3: was presented to them during the presentation that could be
- 5:57Speaker 3: used at trial, and therefore that the case was even
- 6:00Speaker 3: stronger than the evidence presented to them during the grand
- 6:03Speaker 3: jury proceeding. If that was done, that too would be
- 6:06Speaker 3: entirely improper. The grand jury has to make a decision
- 6:10Speaker 3: as to whether or not there is probable cause based
- 6:12Speaker 3: solely on the evidence presented to them during the grand
- 6:16Speaker 3: jury proceeding. It's really no different than a trial in
- 6:19Speaker 3: which jurors have to make a determination as to whether
- 6:22Speaker 3: or not the government has met its burden of proof
- 6:24Speaker 3: beyond a reasonable doubt based solely on the evidence that's
- 6:27Speaker 3: presented to them during the trial. They can't rely on
- 6:31Speaker 3: anything outside of the record during the trial proceeding. The
- 6:35Speaker 3: same holds true for a grand jurors, and for a
- 6:38Speaker 3: prosecutor to just suggest that there is other more powerful
- 6:42Speaker 3: evidence that they should consider but has not been presented
- 6:45Speaker 3: to them would be entirely improper.
- 6:48Speaker 2: I mean her comments basically come down to a defendant
- 6:51Speaker 2: has to testify before a grand jury, and trust me,
- 6:55Speaker 2: grand jurors, we have a lot more evidence that will
- 6:58Speaker 2: prove his guilt, but we're not showing it to you now.
- 7:01Speaker 3: Well, I think that's why you saw the opinion written
- 7:04Speaker 3: by the magistrate judge to be as strongly worded at
- 7:08Speaker 3: as detailed as it was. It was a twenty four
- 7:11Speaker 3: page opinion that went through not only the issues that
- 7:15Speaker 3: mister Comey's lawyers had raised in order to try to
- 7:17Speaker 3: gain access to the grand jury transcripts, but also a
- 7:21Speaker 3: litany of other issues that he discovered when he reviewed
- 7:26Speaker 3: in camera those Grand Jury transcripts, and he raised serious
- 7:29Speaker 3: questions in his mind, I believe as to whether or
- 7:32Speaker 3: not there were serious constitutional errors in the presentation, not
- 7:36Speaker 3: only the Fifth Amendment question, not only the question that
- 7:39Speaker 3: there was evidence outside of the Grand jury's purview that
- 7:41Speaker 3: they should consider, even the way the Grand jury returned
- 7:45Speaker 3: the indictment. In this case, the original indictment presented to
- 7:48Speaker 3: the Grand jurors was a three count indictment. When the
- 7:51Speaker 3: Grand jurors went back to deliberate, they chose not to
- 7:55Speaker 3: return a true bill, which means they voted not in
- 7:58Speaker 3: favor of one of the recounts. And now there's a
- 8:01Speaker 3: question as to whether or not an entirely new indictment
- 8:05Speaker 3: with only the two counts that the Grand jurors voted
- 8:08Speaker 3: in favor of, was ever presented to them. If that
- 8:11Speaker 3: did not happen, if the Grand jurors did not deliberate
- 8:14Speaker 3: on the exact indictment that was ultimately presented to the court.
- 8:18Speaker 3: That is another issue that could be very problematic, and.
- 8:21Speaker 2: There's a lot of confusion about whether the grand jury
- 8:24Speaker 2: actually reviewed the final indictment or not, with Halligan first
- 8:28Speaker 2: saying and a hearing that they didn't and then in
- 8:32Speaker 2: court papers saying that they did.
- 8:35Speaker 3: During the hearing, the District Court judge was very clear
- 8:38Speaker 3: in asking the government whether the second indictment, containing only
- 8:43Speaker 3: the two counts that the Grand Jury voted in favor of,
- 8:46Speaker 3: was actually represented to all of the grand jurors, so
- 8:49Speaker 3: that they voted on the actual indictment that was ultimately.
- 8:53Speaker 4: Presented to the court.
- 8:54Speaker 3: At that time, the government said that the full indictment
- 8:57Speaker 3: was not presented, But now they've come back with evidence
- 9:01Speaker 3: in the transcript that suggests that perhaps it was repackaged
- 9:04Speaker 3: and presented to all of the grand jurors. So the
- 9:07Speaker 3: record on this question of whether the grand jurors actually
- 9:10Speaker 3: voted on the indictment that mister Commee is now facing
- 9:14Speaker 3: is muddled at best. At the end of the day,
- 9:16Speaker 3: the question of whether they voted on the actual indictment
- 9:21Speaker 3: or not is probably not the issue that's going to
- 9:24Speaker 3: drive the decision. The judge will more likely look at
- 9:28Speaker 3: some of the constitutional questions that have been raised by
- 9:31Speaker 3: Comey's defense team with regard to some of the comments
- 9:34Speaker 3: that were made during the grand jury process and make
- 9:37Speaker 3: a determination as to whether or not this indictment will
- 9:40Speaker 3: stand based upon those arguments, rather than this procedural question
- 9:45Speaker 3: about whether the proper indictment was presented to the full
- 9:49Speaker 3: grand jury. This is a prosecutor's nightmare. The case should
- 9:52Speaker 3: not be about the prosecutor's conduct right out of the gate.
- 9:56Speaker 3: It should be about the defendant's conduct and about whether
- 9:59Speaker 3: or not the government can prove that the defendant committed
- 10:02Speaker 3: a crime beyond a reasonable doubt. The probe into the
- 10:05Speaker 3: conduct by the government is exactly where you want to
- 10:08Speaker 3: be if you're on the defense side, but it's the
- 10:10Speaker 3: worst place you can possibly be as a prosecutor.
- 10:13Speaker 2: Yet another judge is involved in this case, and that's
- 10:18Speaker 2: the judge considering whether Lindsay Halligan was lawfully appointed.
- 10:23Speaker 3: The federal judge is actually a judge from South Carolina.
- 10:27Speaker 3: Because the question before the court is whether or not
- 10:30Speaker 3: the US Attorney for the Eastern District of Virginia has
- 10:33Speaker 3: been properly appointed, and the decision was made by the
- 10:37Speaker 3: Circuit Court that would be best to have a judge
- 10:40Speaker 3: not in that judicial district making this decision. So the
- 10:43Speaker 3: judge from South Carolina to Judge Curry is looking at
- 10:47Speaker 3: the convoluted process by which Lindsay Halligan was appointed as
- 10:52Speaker 3: the interim US Attorney for the Eastern District of Virginia.
- 10:55Speaker 3: There had been a career prosecutor who was appointed by
- 10:59Speaker 3: President Tromp to serve on an interim basis. That interim
- 11:03Speaker 3: basis lasts one hundred and twenty days. After that time period,
- 11:08Speaker 3: the judges in the district can then extend that appointment,
- 11:11Speaker 3: and that's exactly what happened here with that career prosecutor,
- 11:14Speaker 3: Eric Sebert. The Attorney General then fired mister Siebert and
- 11:18Speaker 3: appointed a new prosecutor, Lindsay Halligan, for a new one
- 11:22Speaker 3: hundred and twenty day period. And the question is whether
- 11:26Speaker 3: or not the Executive Branch can continue with these one
- 11:29Speaker 3: hundred and twenty day interim appointments sort of add infinitum,
- 11:34Speaker 3: or whether they can do it only one time and
- 11:37Speaker 3: after that time it's up to the district court judges
- 11:40Speaker 3: to appoint the US attorney.
- 11:42Speaker 2: There are so many interesting legal questions in this case.
- 11:45Speaker 2: Thanks Bob. That's Robert Mince of Macarter and English coming
- 11:49Speaker 2: up next. A huge win from Meta. I'm June Grosso
- 11:52Speaker 2: when you're listening to Bloomberg. A landmark antitrust decision on
- 11:58Speaker 2: Tuesday was a massive blow to the Federal Trade Commission
- 12:02Speaker 2: and a huge win for Meta, as it prevailed over
- 12:05Speaker 2: an existential challenge to its business that could have forced
- 12:09Speaker 2: the tech giant to spin off Instagram and WhatsApp. A
- 12:13Speaker 2: federal judge ruled that the FTC failed to prove that
- 12:17Speaker 2: those acquisitions allowed Meta to illegally monopolize the social networking market.
- 12:23Speaker 2: The question now is whether the government will even appeal
- 12:27Speaker 2: this significant loss, especially factoring in one dynamic. Meta CEO
- 12:32Speaker 2: Mark Zuckerberg has been courting President Trump.
- 12:36Speaker 4: We're going to work with President Trump to push back
- 12:39Speaker 4: on governments around the world.
- 12:40Speaker 1: They're going after American companies and pushing to censor more.
- 12:44Speaker 2: And it was Zuckerberg who was seated right next to
- 12:47Speaker 2: the President during a high profile dinner of technology executives
- 12:52Speaker 2: in September. My guest is antitrust expert Harry First, a
- 12:56Speaker 2: professor at NYU Law School, Harry, how big a blow
- 13:00Speaker 2: is this to the.
- 13:01Speaker 4: Ftc Well, it's a blow, all right. So this is
- 13:06Speaker 4: the first big loss in these high tech platform cases.
- 13:11Speaker 4: So two of them have now come to a conclusion
- 13:13Speaker 4: of the trial, you know, both against Google, both successful
- 13:17Speaker 4: for the Justice Department remedy another story maybe, So this
- 13:21Speaker 4: is the third. They're five total, and it's the first loss.
- 13:26Speaker 4: It's sort of not a surprising loss because this judge
- 13:29Speaker 4: has been skeptical of this case, clearly from the very beginning.
- 13:32Speaker 4: He had dismissed it originally, so he's been very skeptical,
- 13:36Speaker 4: and he said it in his opinions. So this case
- 13:40Speaker 4: has not been well received by the judiciary, shall we say,
- 13:44Speaker 4: So it's not surprising. The opinion itself is a little surprising,
- 13:48Speaker 4: but the result is not so surprising.
- 13:51Speaker 2: What do you say? The opinion is surprising.
- 13:53Speaker 4: So in two ways. First of all, he's taken a
- 13:56Speaker 4: very novel approach to time in the opinion. So he
- 14:02Speaker 4: says that the proof has to be as of the
- 14:05Speaker 4: time I make my decision. Almost, I mean, this is
- 14:08Speaker 4: an impossible standard. He said, maybe maybe they were monopoly,
- 14:13Speaker 4: Maybe this was a properly defined product, market in twenty
- 14:16Speaker 4: twenty when the suit was filed. But as time has
- 14:19Speaker 4: gone by, it's not that much time by now it's
- 14:23Speaker 4: not And the question is not whether it was then,
- 14:25Speaker 4: but whether it is now. I mean, if you take
- 14:28Speaker 4: that literally, that's a completely moving standard. You could never
- 14:32Speaker 4: try a case because your evidence is always outdated. I mean,
- 14:36Speaker 4: it's always about the past. You can't try a case
- 14:39Speaker 4: about the future. So that's a departure. He's got some
- 14:42Speaker 4: legal reasoning for why he does that, but that's a
- 14:45Speaker 4: serious problem, and I think it's a serious anti trust problem.
- 14:48Speaker 4: So there is that part of it. The second part
- 14:50Speaker 4: is this judge is very confident of his opinion. So
- 14:54Speaker 4: normally a district court judge, he's got seven things to
- 14:57Speaker 4: decide in front of him, and they proceed logically, well,
- 15:01Speaker 4: if if you go for this, you know, then you're done.
- 15:04Speaker 4: But if you go for this and it's okay, you
- 15:06Speaker 4: go to number two, three, four, five. So he has
- 15:09Speaker 4: a long trial, but he only decides the first issue. Now,
- 15:12Speaker 4: normally a judge would say, okay, here's what I decide.
- 15:16Speaker 4: This isn't a market. Market has to include such and such.
- 15:18Speaker 4: They don't really have monopoly power. Okay, but if I'm wrong,
- 15:22Speaker 4: here are the facts that I found about the conduct.
- 15:25Speaker 4: And the conduct wasn't any competitive. So even if you
- 15:28Speaker 4: had monopoly power, this was not exclusionary conduct, less than
- 15:31Speaker 4: any competitive And so you go through all the things
- 15:34Speaker 4: because if a court of appeals disagrees with you, now
- 15:38Speaker 4: what you've got to retry the whole case. So this
- 15:42Speaker 4: is a judge who thinks no one's going to disagree
- 15:45Speaker 4: with me man, And maybe maybe part of it is
- 15:49Speaker 4: because the narrative of the case is at least potentially
- 15:53Speaker 4: stronger than the market definition. So you know all the
- 15:57Speaker 4: emails about how Mark zuckerberg theory was to buy them
- 16:01Speaker 4: or bury them, and you know what he tried to
- 16:04Speaker 4: do with competitors and why he paid so much for
- 16:07Speaker 4: Instagram and for WhatsApp. WhatsApp drops out of this case
- 16:12Speaker 4: like right away, I don't know, third word or something.
- 16:14Speaker 4: He says, at some point, we're done with them, we
- 16:16Speaker 4: don't have to talk about them anymore. So that's pretty unusual,
- 16:20Speaker 4: I think, And it's either hubris or confidence, I don't
- 16:24Speaker 4: know which. But he does not do what I think
- 16:27Speaker 4: most district court judges would do, which is decide the
- 16:30Speaker 4: full case.
- 16:31Speaker 3: I thought the.
- 16:32Speaker 2: Focus would be on the market when Meta bought Instagram
- 16:36Speaker 2: and WhatsApp, and whether it was anti competitive conduct when
- 16:41Speaker 2: it's alleged that Meta couldn't compete with these two apps,
- 16:45Speaker 2: and Zuckerberg said it's better to buy than compete.
- 16:49Speaker 4: What he tried to say was, well, we've got to
- 16:52Speaker 4: do it as of now, in part because of the
- 16:55Speaker 4: FTC's remedy powers. They're asking for an injunction and they
- 16:59Speaker 4: can only stop conduct that is illegal now. So I've
- 17:03Speaker 4: got to decide what's illegal now. Now, he could have
- 17:06Speaker 4: very well said that's a remedy question. We'll decide that
- 17:09Speaker 4: when we get to remedy whether it's a continuing violation
- 17:13Speaker 4: or not. We should look at whether there was a
- 17:15Speaker 4: violation then. So, for example, if this were suit for damages,
- 17:19Speaker 4: you wouldn't say, well, we have to see whether it's
- 17:22Speaker 4: a violation today. You would say, let's see whether there
- 17:26Speaker 4: was a violation at the time that the offense was
- 17:29Speaker 4: committed and what damages were caused. So those two things
- 17:34Speaker 4: are are separate. So it's really quite odd, and you're right.
- 17:38Speaker 4: The argument that the Commission makes is that we look
- 17:42Speaker 4: at what they did and why they did it that
- 17:44Speaker 4: this was an effort to maintain their monopoly. These two
- 17:47Speaker 4: acquisitions for which they wildly overpaid. Why were they paying
- 17:51Speaker 4: nineteen billion dollars for a company that didn't have any
- 17:54Speaker 4: revenue that was What's app And the answer was they
- 17:57Speaker 4: didn't want them to develop into a compete social network platforms.
- 18:01Speaker 4: So you know, now that part also had problems that
- 18:04Speaker 4: had issues. You know, the Federal Trade Commission and its
- 18:08Speaker 4: earlier guys let those acquisitions go through, so there were
- 18:12Speaker 4: issues with it. So in that sense, that's a really
- 18:15Speaker 4: strange aspect.
- 18:16Speaker 2: As far as the definition of the market, the FDC
- 18:20Speaker 2: had argued that menas apps, Facebook and Instagram are primarily
- 18:25Speaker 2: used for personal social networking, while TikTok and YouTube are
- 18:31Speaker 2: video entertainment apps. But the judge rejected that and put
- 18:35Speaker 2: them all in one market.
- 18:37Speaker 4: Yeah, so the first question you have to show that
- 18:40Speaker 4: defendant has monopoly power in a relevant market. So he says, okay,
- 18:44Speaker 4: we have to start with market definition. So that's true,
- 18:47Speaker 4: that's the way it's normally done. And then he says, okay, yes,
- 18:51Speaker 4: let's look at the market. You know, he says, these
- 18:53Speaker 4: platforms have converged, these are all sort of similar and
- 18:59Speaker 4: particularly TikTok, you know, was posing a competitive threat. Says,
- 19:04Speaker 4: people don't want to talk to their friends anymore. They
- 19:06Speaker 4: just want unconnected videos. So, you know, TikTok comes along
- 19:11Speaker 4: and they're posing some threat, and Facebook responds with reels
- 19:16Speaker 4: short videos. And so that has now changed how we
- 19:20Speaker 4: define the market because users switch back and forth between
- 19:24Speaker 4: the two, and we have to include TikTok, and we
- 19:26Speaker 4: have to include YouTube or users switch to those videos later.
- 19:30Speaker 4: It's sort of at the end of the opinion, he says, well,
- 19:33Speaker 4: the argument for YouTube actually is a little thinner. But
- 19:36Speaker 4: even if it's just TikTok, that's enough. We would include
- 19:39Speaker 4: that in. However, we define the market, whatever we want
- 19:43Speaker 4: to call it doesn't really give it a name. And
- 19:45Speaker 4: at that point, if we include TikTok, then Meta does
- 19:50Speaker 4: not have monopoly power. TikTok takes away too much time.
- 19:55Speaker 4: All those kids are frittering where other time on TikTok.
- 20:00Speaker 4: That refrittering we're other time on Facebook. He had various
- 20:03Speaker 4: evidence of, you know, the willingness to switch, and that
- 20:07Speaker 4: people switch between those two. Now, the odd thing in
- 20:12Speaker 4: some ways is if so many people are switching, how
- 20:15Speaker 4: come so many people are still on Facebook. He gives
- 20:19Speaker 4: two hundred and forty million active users in the United
- 20:22Speaker 4: States and ad revenues of one hundred and sixty one
- 20:27Speaker 4: billion dollars. So when you read his description, it sounds
- 20:32Speaker 4: like this is a company that is just in the
- 20:34Speaker 4: throes of death from TikTok, and then he says, this
- 20:40Speaker 4: is an amazingly successful product. Give people a compelling product
- 20:44Speaker 4: for free, then sell ads that can be seen by millions.
- 20:48Speaker 4: I guess he thinks those are good. Two hundred and
- 20:51Speaker 4: forty million active users in the United States, it's a
- 20:55Speaker 4: lot of people. So apparently they haven't been dissuaded by TikTok,
- 20:59Speaker 4: which is also free, and you know they don't give
- 21:02Speaker 4: all their time there. They're still on Facebook. So the
- 21:05Speaker 4: argument from the government is that by incorporating Reels, they've
- 21:09Speaker 4: managed to defend their core business, and their core business
- 21:13Speaker 4: is social network putting people together, and they still get
- 21:18Speaker 4: a lot of people who like that product, even though
- 21:21Speaker 4: some people also use different products.
- 21:23Speaker 2: Harriet sounds like the government should appeal because of the
- 21:26Speaker 2: unusual way the judge defined the market. But this is
- 21:31Speaker 2: not an administration that always follows what's best for the
- 21:34Speaker 2: legal landscape. So might they decide not to appeal because
- 21:38Speaker 2: of political reasons?
- 21:41Speaker 4: Who knows exactly. It's hard to assess the political wins,
- 21:45Speaker 4: and the winds may go the other way because, you know,
- 21:47Speaker 4: a populist wing of the party feels that these platforms
- 21:53Speaker 4: have too much power and need to be cut down.
- 21:56Speaker 4: So who knows exactly. But if you look straight, it's
- 21:59Speaker 4: a legal issue. Is usually appeals from adverse decisions of
- 22:04Speaker 4: trial courts are hard to win on appeal because they're
- 22:09Speaker 4: mostly fact based, so you have to look for legal issues,
- 22:12Speaker 4: and there's a you know, an important legal issue of
- 22:16Speaker 4: you know, whether he applied the correct standard for defining
- 22:19Speaker 4: the market and for assessing when a violation occurred, And
- 22:22Speaker 4: that one's sort of a very pointed legal issue. How
- 22:26Speaker 4: it will fare in the court of appeals if they
- 22:28Speaker 4: do take it, I don't know.
- 22:29Speaker 2: And does this decision have any implications for the other
- 22:33Speaker 2: antitrust cases against tech platforms.
- 22:37Speaker 4: Yeah, that's a good question. Perhaps I'm thinking of Amazon
- 22:41Speaker 4: for example. So these are platform cases, and platform strategy
- 22:46Speaker 4: is you have a core product and what you want
- 22:49Speaker 4: to do is to keep people on the platform and
- 22:52Speaker 4: engaged because of the strength of the core product, and
- 22:55Speaker 4: you defend the core product by acquiring things around the
- 22:59Speaker 4: periphery that might challenge it, or by doing things. You know,
- 23:02Speaker 4: these companies are always subject to some competitive forces, even
- 23:06Speaker 4: if they're monopolis. So certainly Facebook was TikTok did pose
- 23:12Speaker 4: a competitive threat, and Amazon similarly has competitive threats to
- 23:17Speaker 4: which they respond. But the basic strategy is pretty similar,
- 23:22Speaker 4: and the market definition in some ways is similar because
- 23:26Speaker 4: they offer a bunch of different products in the same place,
- 23:30Speaker 4: much as supermarkets do, like whole foods for example. So
- 23:36Speaker 4: you have a you know, sort of core product and
- 23:38Speaker 4: then other things that they offer that other firms may
- 23:41Speaker 4: compete on. I mean, look at your smartphone, so thirty
- 23:45Speaker 4: five millimeters cameras compete on cameras, But you know, are
- 23:47Speaker 4: they in the same market. No, so you could say
- 23:51Speaker 4: this is quite similar. You know, yes, TikTok competes. I'm
- 23:56Speaker 4: surprised Twitter's not mentioned. Twitter competes, you know, to some
- 23:59Speaker 4: ext but these are all to some extent, and it's
- 24:04Speaker 4: still a meta defending its core product in which it
- 24:08Speaker 4: has a lot of power, as all advertisers know.
- 24:12Speaker 2: And there are more trials ahead as the government continues
- 24:16Speaker 2: to try to rein in big tech with antitrust suits.
- 24:20Speaker 2: Thanks so much, Harry. That's Professor Harry First of NYU
- 24:24Speaker 2: Law School, coming up next on the Bloomberg Law Show.
- 24:28Speaker 2: A loss for Texas in the nationwide redistricting battle that
- 24:32Speaker 2: it started. I'm June Grosso and you're listening to Bloomberg.
- 24:36Speaker 2: You may remember back in July when President Donald Trump
- 24:40Speaker 2: pushed Texas Republicans to redraw congressional maps to give the
- 24:45Speaker 2: party five more seats to maintain its hold on the
- 24:48Speaker 2: House in the midterm elections.
- 24:51Speaker 1: Five. I think we get five, and there could be
- 24:54Speaker 1: some other states we're going to get another three or
- 24:56Speaker 1: four or five.
- 24:57Speaker 3: In addition, Texas would be the biggest one.
- 25:00Speaker 2: And Texas did kick off the nationwide mid decade redistricting
- 25:06Speaker 2: battle that's playing out in other states and in courtrooms
- 25:10Speaker 2: across the country. But could Trump's plan backfire? This week,
- 25:16Speaker 2: a panel of federal judges blocked the new map in
- 25:19Speaker 2: Texas and said the old map will have to be
- 25:22Speaker 2: used for the midterms. But on Friday, the state made
- 25:26Speaker 2: an emergency appeal to the Supreme Court asking it to
- 25:30Speaker 2: reinstate the newly drawn congressional map, and in just a
- 25:34Speaker 2: little over an hour, Justice Samuel Alito, who handles emergency
- 25:39Speaker 2: appeals from Texas, did just that. He temporarily blocked the
- 25:44Speaker 2: three judge panels ruling and restored the map. Alito asked
- 25:49Speaker 2: the opponents of the map to file a response by Monday,
- 25:53Speaker 2: signaling quick action by the court joining me. His elections
- 25:56Speaker 2: law expert Richard Brefalt, a professor at Columbia Law School,
- 26:01Speaker 2: rich this was a two to one decision with a
- 26:03Speaker 2: Trump appointee and an Obama appointee in the majority and
- 26:08Speaker 2: a Reagan appointee dissenting. Will you explain why the judges
- 26:12Speaker 2: decided that Texas couldn't use its new congressional plan.
- 26:17Speaker 1: In a nutshell, the court concluded that this was a
- 26:20Speaker 1: racial jerry mander and not a partisan jerrymander. And as
- 26:24Speaker 1: you know, the Supreme Court has said parts in jerry
- 26:26Speaker 1: manders are not unconstitutional, there's no basis for challenging them
- 26:29Speaker 1: in federal court. But racial jerry manders can be unconstitutional
- 26:33Speaker 1: and can be challenged in federal court. So the heart
- 26:35Speaker 1: of the Court's decision was that this was a racial
- 26:37Speaker 1: jerry mander. And what did they base that on? The
- 26:40Speaker 1: Court said what triggered this, Although we think of this
- 26:43Speaker 1: as Trump demanding more Republican seats from the Texas congressional delegation,
- 26:48Speaker 1: in the court's view, the Texas governor was initially reluctant
- 26:52Speaker 1: to call the special Section to create the map until
- 26:55Speaker 1: he got a letter from the Department of Justice in
- 26:58Speaker 1: Washington that said several of the Texas districts were unconstantly
- 27:04Speaker 1: created on racial grounds. In particular, the Department of Justice
- 27:07Speaker 1: focused on so called coalition districts, which are districts which
- 27:12Speaker 1: are majority minority, but not one particular minority group. And
- 27:17Speaker 1: for a period of time in the Fifth Circuit, courts
- 27:20Speaker 1: there had said that the Voting Rights Act could be
- 27:22Speaker 1: interpreted to require the so called coalition district district which,
- 27:26Speaker 1: let's say is forty percent Black and thirty percent Hispanic.
- 27:30Speaker 1: Neither one is a majority, but together they add up
- 27:32Speaker 1: to seventy percent. And so the Apartment of Justice says, well,
- 27:35Speaker 1: we see four districts in your current in your twenty
- 27:38Speaker 1: twenty one map that look like their coalition districts to us,
- 27:41Speaker 1: and based on a recent decision in the Fifth Circuit,
- 27:44Speaker 1: we think that makes them unconstitutional. So you got to
- 27:47Speaker 1: fix it, you've got to redo those districts. So what
- 27:50Speaker 1: the three judge panel in this case concluded is that
- 27:52Speaker 1: that was what was driving the redistricting. They looked at
- 27:55Speaker 1: the statements of the governor and of the leading members
- 27:58Speaker 1: of the state legislature, and they also looked at the
- 28:00Speaker 1: resulting map, and they pointed out that most of the
- 28:03Speaker 1: changes in the redrawn districts went from being so called
- 28:08Speaker 1: coalition districts, the districts in which one race or another
- 28:12Speaker 1: had a majority, and often an extremely narrow majority. They
- 28:16Speaker 1: said there were three districts they were either black or Hispanic,
- 28:19Speaker 1: where the majority group had like fifteen point two percent.
- 28:22Speaker 1: So they said the combination of the Department of Justice letter,
- 28:26Speaker 1: the governor's statement calling the legislature decision, in statements by
- 28:31Speaker 1: many of the leading members of legislature, and then the
- 28:33Speaker 1: districts that were created. In their minds, this meant that
- 28:37Speaker 1: race predominated the desire to create racial majority districts is
- 28:41Speaker 1: what was driving this. It's tub the court sent and
- 28:43Speaker 1: also clearly had partisan consequences in the nave and some
- 28:46Speaker 1: partisan motivation as well, But they said the dominant motive
- 28:50Speaker 1: that they found was race, and thatfore this made it
- 28:53Speaker 1: an unconstitutional racial jerry.
- 28:54Speaker 2: Matter, even though we know that President Trump really pushed
- 28:58Speaker 2: Texas Republics as he's continuing to push Republicans in other
- 29:03Speaker 2: states like Indiana and Kansas who've been resisting redistricting.
- 29:09Speaker 1: I think what you could say is that, to Barbary Shakespeare,
- 29:12Speaker 1: the Apartment of Justice was hoist by its own petard.
- 29:15Speaker 1: I think when this all began, it's now like four
- 29:17Speaker 1: months later, it's amazing how much has gone in four
- 29:19Speaker 1: or five months. When this all began, maybe people thought
- 29:21Speaker 1: it was too blatant to say this was all for
- 29:24Speaker 1: partisan reasons. I mean, we've now been totally partisan since
- 29:26Speaker 1: June of this year in the redistricting. But maybe they
- 29:29Speaker 1: thought it was just too blatant to say we're doing
- 29:31Speaker 1: different partisan purposes. So the Department of Justice trumped up
- 29:34Speaker 1: this racial argument. There was no argument actually that those
- 29:37Speaker 1: coalition districts were unconstitutional. You could argue that there's no
- 29:41Speaker 1: mandate that a state create them, and that's certainly true now,
- 29:45Speaker 1: but there was no evidence that they were unconstitutionally drawn. Nonetheless,
- 29:49Speaker 1: part of Justice having, i think, provided this kind of
- 29:52Speaker 1: pretext for the state to go ahead and do the
- 29:55Speaker 1: partisan gerrymander. But given that that was the stated reason
- 29:59Speaker 1: the court was able to we think it's a racial
- 30:01Speaker 1: gerry manner. They also made the point that the Democratic
- 30:04Speaker 1: districts which were undone mostly fell into this category of
- 30:09Speaker 1: coalition districts, and they pointed out there was one white
- 30:11Speaker 1: majority Democratic district which was barely touched. So they do
- 30:15Speaker 1: have some evidence suggesting that most of the focus of
- 30:19Speaker 1: the legislature was on coalition districts and making them majority
- 30:24Speaker 1: one race or the other. But I think what you've
- 30:27Speaker 1: got here is this irony that at least in June
- 30:30Speaker 1: of this year, the governor and the Department of Justice
- 30:33Speaker 1: thought it's too blatant to do it for purely partisan reasons,
- 30:36Speaker 1: so we're going to give them an anti race discrimination motivation,
- 30:40Speaker 1: and that, as I think, turned around to sort of
- 30:42Speaker 1: bite them in the rear.
- 30:43Speaker 2: At least for now, Texas is appealing to the Supreme Court.
- 30:47Speaker 2: What do you think will be the main question?
- 30:50Speaker 1: Well, I think the real question is will the Supreme
- 30:52Speaker 1: Court say that the lower court has made this decision
- 30:56Speaker 1: too close to the election. There's this doctrine called the
- 30:59Speaker 1: Percell principle, based on a Supreme Court decision now about
- 31:02Speaker 1: twenty five years old, in which the Court says that
- 31:05Speaker 1: federal courts should not undo state election laws if they're
- 31:10Speaker 1: too close to an election. The Court has never said
- 31:13Speaker 1: what is too close to an election, but there have
- 31:16Speaker 1: been some orders from the Supreme Court in recent years
- 31:19Speaker 1: that treated decisions that were within six months of an
- 31:23Speaker 1: election as too close to an election. And the Texas
- 31:26Speaker 1: primary is in March, so looking at some recent Supreme
- 31:30Speaker 1: Court decisions, there is a plausible argument that this Court's
- 31:34Speaker 1: decision is too close to the election and therefore should
- 31:37Speaker 1: be stayed.
- 31:38Speaker 4: Now.
- 31:38Speaker 1: The Court addresses that for about twenty pages, and they
- 31:41Speaker 1: make the point that the Texas plan was not signed
- 31:44Speaker 1: into law until the end of August, and if you
- 31:47Speaker 1: took the idea that six months is too late, it
- 31:50Speaker 1: was almost too late. As of the moment the Texas
- 31:53Speaker 1: redistricting was signed into law, it would have been impossible
- 31:56Speaker 1: to have a challenge, have the parties do the research
- 32:00Speaker 1: or have a hearing, and have a decision in time
- 32:03Speaker 1: to take something like six months. So the Court makes
- 32:07Speaker 1: kind of a strong pitch for saying that the percel
- 32:09Speaker 1: principle has to be handled flexibly. We've got to look
- 32:12Speaker 1: at how late the Texas legislature did this, and we
- 32:16Speaker 1: do have to say that it is possible to come
- 32:17Speaker 1: into compliance. They make two more points. One is that
- 32:21Speaker 1: the old map is still in existence, because Texas is
- 32:24Speaker 1: about to hold an election on that old map in January,
- 32:28Speaker 1: because there is a vacancy a member of the Texas
- 32:30Speaker 1: Commercial Delegation died early this year. There was just a
- 32:34Speaker 1: primary thing to fill that the general election to actually
- 32:37Speaker 1: fill that seat won't be until January. That's on the
- 32:41Speaker 1: old map, the pre Gerrymander map. And so the court says, well,
- 32:44Speaker 1: the old maps are still the law, so under our
- 32:47Speaker 1: preliminary injunction, we're just going to continue to live by
- 32:50Speaker 1: the old map. So the old map is still on
- 32:51Speaker 1: the books. And so they're saying that in some sense,
- 32:54Speaker 1: the real disruption was the state legislature's acting so late,
- 32:57Speaker 1: and so therefore we should be able to do this.
- 32:59Speaker 1: And yes, it's still time for everyone to come into
- 33:02Speaker 1: compliance to file under the old maps. I think the
- 33:05Speaker 1: first question maybe the stronger argument. What the Spreme Court
- 33:08Speaker 1: will do is unclear, but there is a plausible percel
- 33:13Speaker 1: argument that it's too late. But as I said, the
- 33:16Speaker 1: court is very strong in saying, well, if that's the case,
- 33:20Speaker 1: you can never bring a challenge to a gerrymander. That indeed,
- 33:24Speaker 1: it's an incentive to do the gerrymanders closer and closer
- 33:27Speaker 1: to the election to make it impossible to bring challenges.
- 33:30Speaker 2: If the Supreme Court says, forget the percell principle here,
- 33:34Speaker 2: how do you think they would rule on Texas's appeal.
- 33:37Speaker 2: You know that this was a part is in not
- 33:39Speaker 2: a racial gerrymander. Do you have any idea on that?
- 33:41Speaker 1: It's really hard to say. I mean, I think the
- 33:43Speaker 1: court acknowledges that there's evidence on the other side, but
- 33:46Speaker 1: they have in particularly the testimony of the map drawer,
- 33:50Speaker 1: the Republican specialist whoshire to draw the map. You said,
- 33:53Speaker 1: you know, no, I never looked at race data. The
- 33:54Speaker 1: Court said, we essentially don't believe you, partly because there
- 33:57Speaker 1: are discrepancies between your testimony the testimony of the state
- 34:01Speaker 1: legislator who hired you, but also because we just don't
- 34:03Speaker 1: believe that you could produce three districts that are fifty
- 34:07Speaker 1: point two fifty point three to fifty point four percent majority.
- 34:10Speaker 1: I think two were Hispanic, one was black. I'm not
- 34:13Speaker 1: sure about that and that's so precise, and you could
- 34:16Speaker 1: do it three times, and that you were not paying
- 34:18Speaker 1: attention to race. But I mean there is counter evidence.
- 34:22Speaker 1: You know, in theory, the Supreme Court's not supposed to
- 34:24Speaker 1: judge the evidence that's really for the lower court. They're
- 34:27Speaker 1: supposed to defer lower courts on evidentiary findings. But the
- 34:30Speaker 1: current Supreme Court has not always followed that rule, so
- 34:33Speaker 1: it's hard to tell what they're going to do.
- 34:36Speaker 2: As you know, California has approved a redistricting plan that
- 34:40Speaker 2: would offset the Texas Map, which is now in serious jeopardy.
- 34:45Speaker 2: Tell us about the legal challenge to California's redistricting from
- 34:50Speaker 2: California Republicans and also now the Trump administration.
- 34:54Speaker 1: I mean, they're basically making the same argument that prevailed here,
- 34:58Speaker 1: that this is a racial gerrymander. Mean, they can't bring
- 35:01Speaker 1: a parties in Jerrymenner argument because, as I said, the
- 35:03Speaker 1: Supreme Court in La Rouco case in I think twenty
- 35:06Speaker 1: nineteen said those are simply not just diiciable. He can't challenge.
- 35:09Speaker 1: So I think they're bringing a claim that the states
- 35:11Speaker 1: the legislature's motivation was race. Assumely they've targeted specific districts.
- 35:16Speaker 1: But I think the essence of it is that it's
- 35:17Speaker 1: a racial jerry mender. The basic idea is similar to
- 35:21Speaker 1: the argument that the three judge court in Texas recognized
- 35:24Speaker 1: and striking down the Texas jerrymander, only.
- 35:27Speaker 2: The jerry mander is sort of going in the opposite direction.
- 35:31Speaker 2: The Justice Department argued that California's map illegally bolsters the
- 35:36Speaker 2: voting power of Hispanics in the state.
- 35:38Speaker 1: Which is interesting because, of course, in Texas, one of
- 35:42Speaker 1: the arguments Governor Abbott made is that this is going
- 35:44Speaker 1: to actually strengthen the voting power of Hispanics, although he
- 35:47Speaker 1: combined that basically Hispanics are becoming more Republican and this
- 35:50Speaker 1: is going to allow them to be able to articulate
- 35:53Speaker 1: that in districts to both their preference and districts. He
- 35:55Speaker 1: had the sentence which kind of combined the two in
- 35:57Speaker 1: one sentence. So, I mean, much would turn on whatever
- 36:00Speaker 1: evidence they have for that. There's also an argument, there's
- 36:03Speaker 1: been a lot of debate about this amongst the law
- 36:05Speaker 1: professors as to what's the significance of the fact that
- 36:08Speaker 1: the California redistricting was approved by the voters. But the
- 36:13Speaker 1: challengers have to prove that the voters were racially motivated
- 36:17Speaker 1: as opposed to the legislature, and I think for grabs,
- 36:19Speaker 1: because the public campaigning was largely on party grounds. So
- 36:23Speaker 1: whether or not even if there was a racial motivation
- 36:26Speaker 1: within the legislature, whether that was some kind of washed
- 36:29Speaker 1: away by the voters, or whether if it really is
- 36:32Speaker 1: racially tainted, whether the legislature's motivation was racial pro hispanic,
- 36:37Speaker 1: whether it doesn't matter that the voters voted for it
- 36:39Speaker 1: because they thought that I'm putting on partisan grounds. That
- 36:41Speaker 1: will be an interesting fight.
- 36:43Speaker 2: You law professors have some interesting conversations.
- 36:46Speaker 1: Yeah, obviously it's been all online, but it's been an
- 36:48Speaker 1: interesting back and forth. Whereas the government on the plaintiffs
- 36:51Speaker 1: first have to show that the plan was racially motivated
- 36:53Speaker 1: and not partisanly motivated even within the legislature, and then
- 36:57Speaker 1: they conclude that it was partisan even the legislature, then
- 36:59Speaker 1: the effective of the voter as becomes irrelevant.
- 37:02Speaker 2: Thanks so much, rich and for sharing those professorial insights.
- 37:06Speaker 2: That's Columbia Law School professor Richard Breflt. And that's it
- 37:10Speaker 2: for this edition of the Bloomberg Law Show. Remember you
- 37:12Speaker 2: can always get the latest legal news on our Bloomberg
- 37:15Speaker 2: Law Podcast. You can find them on Apple Podcasts, Spotify,
- 37:19Speaker 2: and at www dot bloomberg dot com, slash podcast slash Law,
- 37:24Speaker 2: and remember to tune into The Bloomberg Law Show every
- 37:27Speaker 2: weeknight at ten pm Wall Street Time. I'm June Grosso
- 37:31Speaker 2: and you're listening to Bloomberg