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Mangione's Psychiatric Defense & Judges Misbehaving · Bloomberg Law

0:02
Speaker 1: This is Bloomberg Law with June Grosseol from Bloomberg Radio.
0:08
Speaker 2: It's less than three months until the start of Luigi
0:12
Speaker 2: Mangioni's New York State murder trial, and his defense has
0:16
Speaker 2: finally been revealed. Mangioni plans to assert a psychiatric defense,
0:21
Speaker 2: claiming he was suffering from extreme emotional disturbance when he
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Speaker 2: gunned down United Healthcare CEO Brian Thompson outside a midtown
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Speaker 2: Manhattan hotel in December of twenty twenty four. This defense
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Speaker 2: is not the same as a not guilty by reason
0:37
Speaker 2: of insanity defense. If the jury accepts the emotional disturbance defense,
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Speaker 2: it won't absolve Mangioni of the killing, but it could
0:46
Speaker 2: free him from prison sooner. My guest is criminal defense
0:50
Speaker 2: attorney Jeremy saland a former Manhattan prosecutor. Jeremy is it
0:55
Speaker 2: not surprising that Mangioni is going to assert a psychiatric
1:00
Speaker 2: defense in a case where the evidence seemingly against him
1:05
Speaker 2: is overwhelming.
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Speaker 1: To a certain extent, anyone who has knowledge of the
1:10
Speaker 1: law and criminal defense is not shocked, meaning it's incredibly difficult,
1:16
Speaker 1: especially after the failing at the suppression hearing by the
1:20
Speaker 1: defense and I say that not as a negative to
1:22
Speaker 1: the defense. It's very difficult generally to beat these things.
1:25
Speaker 1: But when that weapon is coming in and you have
1:28
Speaker 1: the manifestor diary and you have a video, you're going
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Speaker 1: to say it wasn't me. It was a one armed man.
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Speaker 1: Just not likely a good defense. So this is the
1:38
Speaker 1: next best thing. But but remember this defense is not
1:43
Speaker 1: a defensive. I didn't do it, therefore I'm exonerated. It's
1:46
Speaker 1: I did it with a butt and an asterisk there
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Speaker 1: to minimize the exposure on the back end to a
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Speaker 1: manslaughter from a murder.
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Speaker 2: So this is different from a traditional insanity defense that
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Speaker 2: people maybe familiar with from TV and the movies. He's
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Speaker 2: claiming extreme emotional disturbance, so explain the claim.
2:08
Speaker 1: So basically, it's an objective analysis, if you will, from
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Speaker 1: the perspective of the accused, that at the time of
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Speaker 1: this particular incident, he was under such extreme emotional disturbance
2:22
Speaker 1: dress anxiety that it was so profound to him and
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Speaker 1: it was so overwhelming that he lost control. And if
2:30
Speaker 1: you believe that, if that's proven by a preponderance of
2:33
Speaker 1: the evidence by the defense, because it's their burden always
2:37
Speaker 1: the prosecution's burden to prove the murder beyond a reasonable doubt.
2:41
Speaker 1: But this affirmative defense is on the shoulders of the defense.
2:44
Speaker 1: If that piece is then proven, then you go to
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Speaker 1: the analysis of was this extreme emotional duress and disturbance
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Speaker 1: reasonable given the circumstances, again from that objective perspective, and
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Speaker 1: that it really caused him to act in the way
3:00
Speaker 1: that he did. So those are really the prongs that
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Speaker 1: you have to review, and a jury would decide to
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Speaker 1: make the determination whether this defense is applicable.
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Speaker 2: I've been reading what various legal experts have been suggesting
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Speaker 2: might be the basis for this emotional disturbance defense. They
3:17
Speaker 2: could argue that his physical pain from a back injury
3:21
Speaker 2: or his frustrations with the healthcare system caused him extreme
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Speaker 2: emotional distress. Do you find either of those convincing?
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Speaker 1: I think that's not to sound a little callous here,
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Speaker 1: it's dead in the water. I just don't see it.
3:34
Speaker 1: So I had a matter, without going to too much details,
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Speaker 1: where a client was accused of shooting a person in
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Speaker 1: response and retaliation allegedly of sleeping with his underage daughters,
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Speaker 1: and the argument was, in that moment he was so
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Speaker 1: upset that he found out this guy was bragging about
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Speaker 1: doing his horrible things to his daughters, that he lost
3:54
Speaker 1: his mind for lack of a legal term, and it
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Speaker 1: was so overwhelming, and he took that person's life as
4:00
Speaker 1: opposed to I don't like the way you're talking about
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Speaker 1: my daughters. I don't like the what you're doing here.
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Speaker 1: You know what, The system is corrupt and it allows
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Speaker 1: people to do these things. So I'm gonna hunt you
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Speaker 1: down over weeks and days and find you. It doesn't
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Speaker 1: add up for me, but I think it also also
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Speaker 1: allows the defense to bring in what they might not
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Speaker 1: have been able to bring in before, to try to
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Speaker 1: get that maybe that juror who says, you know what,
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Speaker 1: I'm not going to go with the rest and we're
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Speaker 1: gonna hang this because now you can bring in the
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Speaker 1: healthcare system. Now you can bring in the wrongs potentially
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Speaker 1: of that system, and why cause this guy to act
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Speaker 1: as he did? Assuming that this defense moves forward, but
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Speaker 1: I still don't see it as a winner. I see
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Speaker 1: it as an attempt to run away from what is
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Speaker 1: the likely reality here with the evidence. But I don't
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Speaker 1: see it as a winner.
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Speaker 2: So if he uses this defense, he's admitting that he
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Speaker 2: killed Thompson.
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Speaker 1: Correct, So you're now taking away that ability to say
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Speaker 1: it wasn't me or some other defense. But again, that
4:56
Speaker 1: wasn't going to be the defense anyway. So yes, he's
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Speaker 1: acknowledging saying I murdered him with an asterisk, because if
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Speaker 1: this affirmative defense applies, then it gets knocked down to
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Speaker 1: a man one a manslaughter charge. The reason why that's
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Speaker 1: relevant is instead of having up to life on the
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Speaker 1: back end and say, for example, twenty five years on
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Speaker 1: the bottom en on the man one and the manslaughter,
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Speaker 1: it's a be violent felony. It's a mandatory minimum of
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Speaker 1: five years and a maximum of twenty five years. So realistically,
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Speaker 1: is a judge going to give him if he's convicted
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Speaker 1: five years. Absolutely not. But it gives him a life
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Speaker 1: outside of incarceration as a young man potentially down the road,
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Speaker 1: as opposed to the risk of never seeing the outside
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Speaker 1: of a cell.
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Speaker 2: Since he's admitting to the killing, would it change anything
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Speaker 2: in the prosecution's presentation of the case.
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Speaker 1: Regardless, I think they're going to be methodical of the
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Speaker 1: preparation and the planning and the scope and magnitude of
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Speaker 1: all the steps that Manngoni allegedly took that ultimately culminated
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Speaker 1: in this homicide and this death. So I think the
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Speaker 1: defense was likely going to go through this anyway. So
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Speaker 1: does it change it. You're arguing a little bit different
6:08
Speaker 1: because you want to deprive him of the ability to
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Speaker 1: use this defense. But I am guessing guess may not
6:13
Speaker 1: be the right word. I believe, based on my training
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Speaker 1: and experience that the prosecution this was going to challenge
6:19
Speaker 1: this anyway. But what I think with the prosecution has
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Speaker 1: to be prepared for now is there may be, by
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Speaker 1: default with this defense, some more evidence that's going to
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Speaker 1: come in to mitigate and they have to be that
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Speaker 1: much more diligent to make sure they don't get that
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Speaker 1: one or two jurors on there who might be swayed
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Speaker 1: by this outside noise about the healthcare system.
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Speaker 2: Was there any other defense available to them besides he
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Speaker 2: didn't do it or you know, suffering under emotional distress.
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Speaker 1: I mean, I think people were waiting and this was
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Speaker 1: under seal for this or something similar. It's not again,
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Speaker 1: that traditional insanity defense. Not to sound glob here, it's
6:56
Speaker 1: not one flow over the cuckoo's nest, you know, it's
6:58
Speaker 1: not nurse Ratchet, you know, putting him in institution. I
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Speaker 1: was so overwhelmed in that moment objectively from my own
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Speaker 1: perspective that I did this. That really has to be
7:09
Speaker 1: the angle in the avenue, because there really is northern
7:11
Speaker 1: defense once they lost the suppression, if they beat the suppression,
7:15
Speaker 1: a different animal. But now they are really locked in.
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Speaker 1: And keep in mind, whatever he says or does here
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Speaker 1: is going to be memorialized in a transcript for what
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Speaker 1: is done and used later on at the federal trial.
7:27
Speaker 1: Granted the charges are a little different, but nonetheless he's
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Speaker 1: going to be locked in, and the question will be
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Speaker 1: how is that coming in? Is it coming in? Is
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Speaker 1: he going to testify? Is it going to be coming
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Speaker 1: in through an expert only, you know, a medical health professional.
7:38
Speaker 1: So there's gonna be a lot of questions. But got
7:40
Speaker 1: to keep an eye on that federal case which is
7:42
Speaker 1: hanging in the balance.
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Speaker 2: And do you think this kind of defense requires a
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Speaker 2: medical experts testimony?
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Speaker 1: Well, how else are you going to establish that he
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Speaker 1: had these mental health issues that were so overwhelming, and
7:55
Speaker 1: he had such great dress and distress and disturbance. You're
7:59
Speaker 1: going to need professionals and experts to help elaborate on this, absolutely,
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Speaker 1: and someone that have to explain what this means, because
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Speaker 1: to a lay person, they don't know what the eed
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Speaker 1: defense is. They're not familiar with this. Yes, there's jury instructions,
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Speaker 1: but you're going to hear from someone beyond potentially Mangioni.
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Speaker 3: I don't know if we want to call it ironic.
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Speaker 2: But days after his arrest and before Mangoni retained her
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Speaker 2: as his lead attorney, Karen Friedman, Agnifilo told CNN that
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Speaker 2: a psychiatric defense could be the right move for him. Quote,
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Speaker 2: you have someone who was a valc diictorian of his class.
8:32
Speaker 2: He was brilliant his whole life. He comes from this
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Speaker 2: great family. I mean something changed, right, significantly, something changed.
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Speaker 1: But people can be ill, for lack of a better term,
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Speaker 1: and I'm not using that as a legal term. People
8:45
Speaker 1: can be ill and disturbed emotionally or mentally, but not
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Speaker 1: necessarily have this extreme emotional distress. You can be a
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Speaker 1: brilliant person. I mean, think about historically some serial killers.
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Speaker 1: I'm not saying Manngoi is a serial killer, people who
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Speaker 1: had incredible You've had people come from broken families, You've
9:02
Speaker 1: had people come from solid healthy families that would not
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Speaker 1: preclude him from having this extreme emotional distress. I think
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Speaker 1: what precludes the success of this defense as I know it,
9:13
Speaker 1: and we'll learn more right because we don't know it.
9:15
Speaker 1: It's under seal still is. You have the writings, you
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Speaker 1: have the preparation, you have, the planning, you have the following.
9:22
Speaker 1: You have so many steps that he took and did
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Speaker 1: it well. As scary as that sounds, and it's not
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Speaker 1: the situation where I'm coming home and finding my spouse
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Speaker 1: sleeping with my next door neighbor and I just lose
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Speaker 1: it right then and there. This is just not what
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Speaker 1: you think of when you think of this defense, but
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Speaker 1: it is what it is. What else you're going to argue?
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Speaker 2: Do you think there's going to be a subtle jury
9:42
Speaker 2: nullification argument? I mean, no one expected that, with what
9:47
Speaker 2: appears to be a cold blooded murder, that he would
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Speaker 2: be made into this kind of folk hero by so
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Speaker 2: many people.
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Speaker 1: To my point than before, this defense allows you, within
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Speaker 1: not fully, to put the healthcare system on trial. It
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Speaker 1: allows you to bring out the agony and the pain
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Speaker 1: and the emotional responses that people have been dealing with
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Speaker 1: with the healthcare system in a small scope, because that
10:14
Speaker 1: is what they're going to argue. I believe, again I
10:16
Speaker 1: haven't seen it is part of the illness that he
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Speaker 1: was so emotional, distraught, and whatever other factors in his
10:23
Speaker 1: life came into play, that all this collectively, So it
10:26
Speaker 1: gives the ability of the defense to bring some of
10:28
Speaker 1: this out, not the whole storyline, but enough that maybe
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Speaker 1: you mitigate or maybe you get that sympathetic juror who says,
10:35
Speaker 1: you know what, you know, he did justice, as sick
10:38
Speaker 1: as that might sound, but all you need is one.
10:40
Speaker 1: You need one?
10:41
Speaker 2: Is there any way the federal case goes away after
10:44
Speaker 2: a verdict tier.
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Speaker 1: I think not. I've said this before and I'm not
10:48
Speaker 1: afraid to say it again. I think the federal case
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Speaker 1: is driven by ego and arrogance, meaning this has no
10:54
Speaker 1: place in a federal courtroom period. This is a state case.
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Speaker 1: This is the Southern District big footing, as we call it,
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Speaker 1: the Matt and DA's office to try to, you know,
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Speaker 1: use their strong arm and I won't go beyond politics,
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Speaker 1: and that it happens. You know, under Morgantaw's days, he
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Speaker 1: would have said go take a hike. But it happens.
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Speaker 1: It is what it is, and I don't mean that
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Speaker 1: as a shot at Bragg. I meant that more of
11:16
Speaker 1: there's been battles in the past, But I think that
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Speaker 1: case proceeds likely regardless because they want the notoriety of it.
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Speaker 1: We all saw that moment, you know, on top of
11:26
Speaker 1: the aircraft carrier, when we're declaring the war is over.
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Speaker 1: A little tongue in cheek here, when Mangioni came into
11:32
Speaker 1: New York with the mayor behind them, all these armed
11:35
Speaker 1: officers and these escorts, you would think, you know, the
11:37
Speaker 1: un was in session and they were protecting these folks.
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Speaker 1: It was just over the top. It was a spectacle,
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Speaker 1: total spectacle. All of it's been unnecessary because what you're
11:45
Speaker 1: forgetting about, and I think this is so important, is yes,
11:49
Speaker 1: we have proof beyond a reasonable doubt, and we have
11:51
Speaker 1: to get there, and he's innocent until proven guilty. But
11:54
Speaker 1: no matter what the result is, there is a man
11:56
Speaker 1: whose life was taken unnecessarily. There was a family that
11:59
Speaker 1: lost the father, a husband, a son, a brother, whatever
12:02
Speaker 1: it may be, a friend, a colleague, it's lost. It's
12:05
Speaker 1: all lost on all these suide stories. Let's just try
12:08
Speaker 1: to let justice be done. Let's let him put the
12:10
Speaker 1: right defense forward, give him every right we all expect
12:13
Speaker 1: and deserve, and that's what the jury decide.
12:15
Speaker 2: And Manngioni's trial is expected to begin on September eighth.
12:20
Speaker 2: Thanks so much, Jeremy. That's criminal defense attorney Jeremy Salande.
12:24
Speaker 2: This is Bloomberg. We're used to judges sitting at the
12:29
Speaker 2: bench and holding others accountable for their bad behavior, but
12:34
Speaker 2: recently there have been several high profile incidents of alleged
12:38
Speaker 2: bad behavior by judges off the bench. In fact, in
12:42
Speaker 2: two cases the judges were charged, one with misdemeanor drunken
12:47
Speaker 2: driving and another with misdemeanor battery and malicious injury to property.
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Speaker 2: Joining me is Jacqueline Thompson, Bloomberg law reporter who's been
12:57
Speaker 2: following these cases. So, Jacqueline. In past, we rarely heard
13:01
Speaker 2: about cases of judges misbehaving off the bench, but recently
13:07
Speaker 2: there have been three cases of alleged misconduct by judges.
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Speaker 3: Tell us about them.
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Speaker 4: Right, So in these three instances, some of them are
13:16
Speaker 4: getting a little more attention than others. There was recently
13:19
Speaker 4: a lot of news about Judge Eleanor Ross in Atlanta,
13:22
Speaker 4: who was subject to a private reprimand by the Eleventh
13:26
Speaker 4: Circuit for various acts of misconduct, including having an extramarital
13:31
Speaker 4: affair in her chambers in earshot of her law clerks.
13:35
Speaker 4: And she also was found to attend a partisan political event,
13:39
Speaker 4: which was Fulton County District Attorney Fannie Willis's election night
13:43
Speaker 4: party in twenty twenty four, twenty twenty three. And that
13:48
Speaker 4: you got a lot of attention for a number of reasons.
13:50
Speaker 4: I mean, it's pretty salacious to say judge having sex
13:54
Speaker 4: in the workplace, as well as the political element of it.
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Speaker 4: The other couple of examples we were looking at is
14:00
Speaker 4: Judge Ryan Nelson on the Ninth Circuit. He is facing
14:04
Speaker 4: some misdemeanor charges stemming from a parking lot altercation that
14:09
Speaker 4: he had. Evidently another person made some comments about the
14:12
Speaker 4: judges parking skills, and he did not take kindly to it,
14:15
Speaker 4: according to a video obtained and published by the Idaho
14:18
Speaker 4: State Journal. And he is due actually back in court tomorrow,
14:22
Speaker 4: June eighteenth for a pre trial conference in that case.
14:25
Speaker 5: And we will have a Bloomberglob reporter there.
14:27
Speaker 4: To keep everyone updated on exactly what's going on there.
14:31
Speaker 4: And you know, it sounds like there is a misconduct
14:34
Speaker 4: inquiry started into him by the Ninth Circuit. The Chief
14:37
Speaker 4: Judge Mary mcgheeah said that she has identified a complaint
14:41
Speaker 4: against Judge Nelson. We may not know exactly what happens
14:45
Speaker 4: next there, but you know, we at least know it.
14:47
Speaker 4: It has gotten the attention of the Ninth Circuit. And
14:50
Speaker 4: the last example is Judge Thomas Ludington. He is a
14:53
Speaker 4: federal district judge for the Eastern District of Michigan. He
14:57
Speaker 4: was charged with a drunken driving misdemeanor, pleaded no contests
15:01
Speaker 4: to that, but is due to end up back in
15:03
Speaker 4: court later this month after a probation officer alleged that
15:08
Speaker 4: he did not comply with the terms of his probation,
15:10
Speaker 4: which was his sentence for the underlying misdemeanor.
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Speaker 5: You know, Judge.
15:13
Speaker 4: Lennington is facing a misconduct complaint, but we do not
15:17
Speaker 4: know if the circuit that oversees him, which is the
15:20
Speaker 4: US Court of Appeals for the Sixth Circuit, has started
15:23
Speaker 4: any misconduct proceedings or an investigation into his behavior.
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Speaker 2: So just explain what happens how these misconduct allegations complaints
15:33
Speaker 2: are handled in the judiciary.
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Speaker 4: Yeah, so typically these are proceedings that are handled by
15:41
Speaker 4: the chief judge of a circuit. Someone can make a complaint,
15:45
Speaker 4: or the chief judge can become independently aware of something
15:48
Speaker 4: that took place involving a judge within that circuit and
15:52
Speaker 4: then start an investigation or an inquiry based off of that.
15:56
Speaker 4: The chief judge can either take initial steps on their own.
15:59
Speaker 4: They can pull the subject judge to the side and say, hey,
16:02
Speaker 4: did this happen? What's going on here? And sometimes that's
16:05
Speaker 4: just enough and they can conclude a proceeding on that
16:07
Speaker 4: basis alone if they feel like, hey, we've come to
16:10
Speaker 4: a good solution here or I found no wrongdoing based
16:14
Speaker 4: off of my limited inquiry is the term they use.
16:17
Speaker 4: Other times they say, okay, it looks like there's a
16:20
Speaker 4: little bit more that we need to dig into here.
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Speaker 5: And that's what happened with Judge Ross.
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Speaker 4: Chief Judge William Pryor of the Eleventh Circuit ordered the
16:28
Speaker 4: creation of a special committee that then started investigating her behavior.
16:33
Speaker 4: They retained counsel to dig into what exactly was happening there,
16:37
Speaker 4: to conduct an investigation and interview her law clerks. So
16:41
Speaker 4: there can be much more of a proceeding there but
16:44
Speaker 4: we didn't find out about it until a more national
16:48
Speaker 4: committee within the Federal Judiciary released its opinion affirming that
16:52
Speaker 4: Judge Ross should be subject to a private reprimand for
16:56
Speaker 4: her actions, and then we only knew it was Ross
17:00
Speaker 4: after reporting identified her as the subject.
17:03
Speaker 5: Judge.
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Speaker 2: So there has been criticism let's talk about Judge Ross
17:07
Speaker 2: because a private reprimand which her name wouldn't even have
17:12
Speaker 2: been disclosed Bloomberg Law hadn't found it or another reporter
17:16
Speaker 2: hadn't found that out. And also she was supposed to
17:19
Speaker 2: write apology letters to her clerks, but the first apology
17:23
Speaker 2: letter wasn't even strong enough, and then she had to
17:25
Speaker 2: write a second apology letter. I mean, that doesn't seem
17:29
Speaker 2: like a penalty at all, a private reprimand.
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Speaker 4: You know, that's the feedback that we've gotten from some
17:35
Speaker 4: experts in the space. And then also we're hearing from
17:38
Speaker 4: some members of Congress their sort of displeasure with this
17:42
Speaker 4: being the penalty for Judge Ross, saying they're going to
17:45
Speaker 4: start taking matters.
17:46
Speaker 5: Into their own hands.
17:47
Speaker 4: Whether or not they have the political will power or
17:49
Speaker 4: interests to do so is another question. But yeah, you know,
17:52
Speaker 4: a private reprimand that would have meant that no one
17:55
Speaker 4: knew who the judge was. No one would have known
17:58
Speaker 4: if there were any potential conflicts of interests in their cases,
18:02
Speaker 4: as the affair that she had was with a commander
18:05
Speaker 4: in the Atlanta Police Department, which could lead to issues
18:10
Speaker 4: in various cases. So we have a situation where Judge
18:15
Speaker 4: Ross could have gone without being identified this entire time.
18:20
Speaker 4: It was only until what you reference with the apology
18:23
Speaker 4: letters took place that there was any acknowledgment that Judge
18:26
Speaker 4: Ross was the subject judge as chief Judge prior made
18:30
Speaker 4: his letters public, and then there was an acknowledgement also
18:33
Speaker 4: in a recusal order that she issued the other day
18:36
Speaker 4: where she said, I will not hear this case by
18:39
Speaker 4: the Justice Department seeking Georgia voter rules as the undersigned
18:43
Speaker 4: is what she referred to herself as was the subject
18:45
Speaker 4: of this misconda complaint and I was found to do
18:49
Speaker 4: X Y Z.
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Speaker 2: And with these kinds of incidents, the public may question
18:56
Speaker 2: the judge's ability to make good judgment calls, and beyond
19:01
Speaker 2: the individual judge, it tangs the judiciary as well.
19:06
Speaker 5: Right.
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Speaker 4: Yeah, When I was speaking to former judges, a lot
19:08
Speaker 4: of them said, look, when I'm and they've said this
19:11
Speaker 4: to me over the years. They've said, you know, when
19:12
Speaker 4: I'm not in court, I really feel like I have
19:15
Speaker 4: to hold myself to a pretty high standard in terms
19:18
Speaker 4: of my public behavior, who I'm associating with, what I'm
19:22
Speaker 4: doing when I'm out in public. I just don't want
19:25
Speaker 4: anything to come back that could undermine my reputation as
19:28
Speaker 4: well as the integrity of the courts. And that's something
19:31
Speaker 4: that I think a lot of judges think about on
19:34
Speaker 4: a daily basis, and it's in the Canons and the
19:37
Speaker 4: Code of Ethics for federal judges, that's something that they
19:41
Speaker 4: have to do. They cannot participate in conduct that undermines
19:44
Speaker 4: the integrity of the courts. So, you know, when you
19:48
Speaker 4: have instances like this, it does start to raise questions
19:52
Speaker 4: about these judges and whether this is an isolated incident
19:56
Speaker 4: from them, whether it's part of a trend of conduct,
19:59
Speaker 4: if they act like this behind closed doors with court staff,
20:02
Speaker 4: things along those lines. So it starts to raise bigger
20:06
Speaker 4: questions about the courts, And especially in this period of
20:09
Speaker 4: time where we have judges truly under attack. We've seen
20:13
Speaker 4: a spike in threats against them. We've seen the president
20:16
Speaker 4: and his allies go after judges for rulings that they
20:19
Speaker 4: don't agree with. We see articles of impeachment filed over
20:23
Speaker 4: rulings and not overconduct. It's a period of time where
20:27
Speaker 4: I think the courts would say, hey, please, it'd be
20:30
Speaker 4: nice to not get negative attention right now, and yet
20:34
Speaker 4: we're having these high profile instances that are casting sort
20:38
Speaker 4: of a negative shadow over the courts.
20:40
Speaker 2: It's hard to say what the judge's reactions are, but
20:45
Speaker 2: it does seem like you had the instance where Judge
20:48
Speaker 2: Ross didn't even write an apology letter that was strong enough,
20:51
Speaker 2: and then you have and then you have Judge Ludington
20:54
Speaker 2: who played no contest to a misdemeanor drunken driving charge,
21:00
Speaker 2: and then a probation officer reports that he failed to
21:04
Speaker 2: do a drug screen that was required during his first
21:07
Speaker 2: week of probation. Now, if someone came before him and
21:11
Speaker 2: had failed to comply with the terms of probation, they
21:14
Speaker 2: might have their probation revoked and be thrown into jail.
21:18
Speaker 2: It just seems like they're not taking this seriously, maybe
21:22
Speaker 2: because they're confident that at most they'll get a slap
21:25
Speaker 2: on the wrist.
21:26
Speaker 4: And that's something that some people have brought up to
21:28
Speaker 4: me as well is the fact that these judges have
21:30
Speaker 4: so much power and they really can determine, you know,
21:34
Speaker 4: the liberty of so many human beings.
21:37
Speaker 5: And we think of criminal revocation hearings.
21:39
Speaker 4: For example, if someone is and on probation violates the
21:42
Speaker 4: terms of their probation, they end up back before a judge,
21:46
Speaker 4: and sometimes a penalty for that is, hey, you're going
21:49
Speaker 4: to prison at the end of this hearing. You're being
21:51
Speaker 4: taken into custody by the marshals or you are given
21:54
Speaker 4: a surrenderdy, and that's how this is going to go. So,
21:58
Speaker 4: you know, there are questions about our judges being held
22:01
Speaker 4: to the same standards at the litigants before them are
22:04
Speaker 4: being held to buy those own judges.
22:08
Speaker 2: And there is video of Judge Nilsen in that parking
22:12
Speaker 2: lot confrontation.
22:13
Speaker 4: Yes you can find it again for our journalism colleagues
22:18
Speaker 4: over at the Idaho State Journal, and it shows the
22:22
Speaker 4: judge parking in a way that does take up a
22:24
Speaker 4: bit of three different spots, and you know, a guy
22:29
Speaker 4: says something to the effect of learn how to park,
22:32
Speaker 4: and it seems to have just set the judge off
22:35
Speaker 4: in some sort of way or another.
22:38
Speaker 5: You know, and it does raise interesting questions.
22:40
Speaker 4: It's not like he yelled, hey, I'm a federal judge,
22:43
Speaker 4: don't talk to me that way. He just yelled other
22:46
Speaker 4: things and took the guy's glasses off, threw them on
22:50
Speaker 4: the ground, stomped on them. And now he's facing a
22:54
Speaker 4: misdemeanor charge of destroying property.
22:58
Speaker 2: And have the courts taken any action against Judge Luddington,
23:02
Speaker 2: I mean, he did plead no contest to drunken driving
23:06
Speaker 2: and then allegedly violated the terms of his probation.
23:10
Speaker 4: We have no indication of what's going on with the
23:12
Speaker 4: Michigan judge Thomas Luddington. For Judge Ross, everything is fully
23:17
Speaker 4: wrapped up on the Eleventh Circuit unless there is another
23:21
Speaker 4: complaint over an unrelated instance of misconduct or a different
23:26
Speaker 4: allegation of misconduct that wasn't previously considered. You know, the
23:30
Speaker 4: court's role is sort of done there in terms of
23:34
Speaker 4: any finding or penalty that could be issued against her.
23:38
Speaker 4: But you know, there have been two members of Congress
23:42
Speaker 4: to House Republicans from Georgia, which is where Judge Ross
23:46
Speaker 4: is located, who have announced, you know, articles of impeachment
23:50
Speaker 4: against her. So there's a possibility that the Republican controlled
23:53
Speaker 4: House could take up those and you know, start considering
23:57
Speaker 4: whether or not this meets to the bar of impeachment,
23:59
Speaker 4: which is high crimes and misdemeanors, and then you know,
24:03
Speaker 4: move to impeachure. And then if the Senate also has
24:06
Speaker 4: the appetite for taking up a trials another question.
24:09
Speaker 2: The rules are the rules made by the judiciary, right,
24:12
Speaker 2: So it would take the judiciary to decide to strengthen
24:16
Speaker 2: their rules.
24:18
Speaker 4: It could take the judiciary, and it also could take Congress.
24:21
Speaker 4: The judiciary operates under the Judicial Conduct and Disability Act,
24:25
Speaker 4: which is a federal law, so Congress could go ahead
24:28
Speaker 4: and amend that law requiring certain steps to be taken.
24:32
Speaker 4: But you know, as long as the judiciary operates within
24:35
Speaker 4: the confines of that law, I think there are opportunities
24:39
Speaker 4: for the courts to implement and adopt reforms on its
24:42
Speaker 4: own without Congress getting involved.
24:44
Speaker 2: We'll talk again if there are any other developments in
24:47
Speaker 2: these cases. Thanks so much, Jacqueline. That's Bloomberg Law reporter
24:50
Speaker 2: Jacqueline Thompson. Activist investors will be looking for other ways
24:58
Speaker 2: to get into court after the Supreme Court closed off
25:02
Speaker 2: a major avenue to sue closed end funds. In a
25:06
Speaker 2: six to three decision last week, the Court ruled that
25:09
Speaker 2: private parties can't sue to enforce most provisions of an
25:13
Speaker 2: eighty six year old federal statute, the nineteen forty Investment
25:18
Speaker 2: Company Act. The justices said that power belongs exclusively to
25:23
Speaker 2: the Securities.
25:23
Speaker 3: And Exchange Commission.
25:25
Speaker 2: The ruling reversed a federal appeals Court decision that had
25:28
Speaker 2: said the law contained a so called private right of
25:32
Speaker 2: action allowing investors to sue to rescind contracts made by
25:36
Speaker 2: a fund. Joining me is securities law expert James Park,
25:40
Speaker 2: a professor at UCLA Law School, Jim, Before we get
25:43
Speaker 2: to the implications of the decision, explain what the Supreme
25:47
Speaker 2: Court decided in this case.
25:49
Speaker 6: The Supreme Court decided that the Investment Company Act does
25:53
Speaker 6: not provide an implied positive action for recision. There are
25:58
Speaker 6: a couple places where it expressly allows individual plaintiffs to
26:04
Speaker 6: sue private plaintiffs. If you think that the mutual fund
26:08
Speaker 6: is charging you excessive fees, you can sue for that.
26:11
Speaker 6: If you think that they are profiting through various short
26:14
Speaker 6: swing profits, you can sue for that. But you cannot
26:17
Speaker 6: sue generally for the remedy of recision or anything else. Basically,
26:22
Speaker 6: the plaintiff's loss to was dismissed because the statute does
26:25
Speaker 6: not authorize the planeiff to bring a cause of action
26:29
Speaker 6: for recision.
26:31
Speaker 2: Why was this of six to three ruling down ideological lines?
26:36
Speaker 6: You know, the decision is based upon the statute and
26:40
Speaker 6: statutory interpretation, and so the majority, consisting of the more
26:46
Speaker 6: conservative justices, refused to look at the legislative history, which
26:50
Speaker 6: is consistent with their approach more generally. And so if
26:54
Speaker 6: you have looked at the legislative history, there is some
26:57
Speaker 6: evidence that Congress intended to create a private right of.
27:01
Speaker 7: Action, but it's not in the text of the statue.
27:06
Speaker 6: And the three justices in the minority looked at the
27:10
Speaker 6: legislative history. They did not look just at the text.
27:12
Speaker 6: And they are the more liberal justices. And so this
27:16
Speaker 6: in some ways was not just a case about whether
27:19
Speaker 6: or not we think it's a good idea for private
27:22
Speaker 6: platiffs to sue, although it partly was about that. It's
27:25
Speaker 6: about what did Congress intent through the legislative history, you know,
27:30
Speaker 6: through the statute, and whether you look at legislative history
27:32
Speaker 6: or not, and one group says yes, one group says no,
27:35
Speaker 6: and that I think is what determined to some extent
27:38
Speaker 6: the breakup of the of the votes. Now, certainly the
27:42
Speaker 6: justices and the majority are probably also sympathetic to the
27:45
Speaker 6: idea that we should very rarely ever create implied causes
27:50
Speaker 6: of action. We should only look at the text of
27:53
Speaker 6: the statute. So that's why we get a six y
27:55
Speaker 6: three breakdown in this way.
27:57
Speaker 3: Who loses here?
27:58
Speaker 2: Is it activist investors that are are losing here.
28:02
Speaker 6: And merely so because they're the ones who have been
28:05
Speaker 6: bringing these types of lawsuits. It's not really the type
28:09
Speaker 6: of lawsuit that is brought frequently by your ordinary retail investor.
28:14
Speaker 6: These are activist investors who are paying attention to the
28:18
Speaker 6: governance of these closed and funds, and they, you know,
28:22
Speaker 6: are basically challenging the governance and the corporate governance practices
28:26
Speaker 6: of these funds. And that is basically the plaintiffs suit
28:30
Speaker 6: are sort of being barred now for bringing these lawsuits.
28:33
Speaker 6: I don't think that retail investors have typically brought these cases,
28:36
Speaker 6: although they could they could at some point do so.
28:39
Speaker 6: And SABA Capital, which is the clain if in this
28:42
Speaker 6: particular case, is brought a number of these against a
28:44
Speaker 6: number of different mutual funds, so they in particular are
28:47
Speaker 6: affected by this decision.
28:49
Speaker 2: Boas Weinstein, the SABA Hedge Fund was on As you say,
28:53
Speaker 2: the losing end of this ruling said that legal fights
28:56
Speaker 2: against entrenched fund managers will continue pursue every avenue available
29:02
Speaker 2: to defend shareholders' rights, including lawsuits under other provisions of
29:05
Speaker 2: the forty Act and under state law. So what kind
29:09
Speaker 2: of fights are we likely to see in the future
29:12
Speaker 2: now that this avenue has been closed?
29:14
Speaker 6: Pricky, I'm not really sure there is a clear avenue
29:18
Speaker 6: to bring private rights of action under either federal or
29:20
Speaker 6: state law. If you try to repackage the claim. You know,
29:25
Speaker 6: I'm not sure what federal action there is. There could
29:28
Speaker 6: be some theories you could assert. Under state law, you
29:31
Speaker 6: can at leays bring a derivative lawsuit saying that the
29:34
Speaker 6: corporate governance decisions violate the fiduciary duties of the directors,
29:39
Speaker 6: but those often fay significant procedural hurdles, you know, demand
29:43
Speaker 6: requirement and you know, sometimes a business judgment rule. So
29:47
Speaker 6: I'm not really sure how viable those positive action are.
29:51
Speaker 6: And you know, it's telling that they did rely upon
29:54
Speaker 6: this particular provision, right, This is the provision that they
29:56
Speaker 6: were bringing suit under, and that was their best option.
30:00
Speaker 6: I don't know if there's an afia's second or third
30:02
Speaker 6: choice for private planets to utilize in this situation.
30:06
Speaker 2: The balls in the SEC's court. But is the SEC
30:10
Speaker 2: likely to do anything.
30:12
Speaker 7: Not this SEC?
30:13
Speaker 6: I don't think that this SEC is really inclined to
30:17
Speaker 6: spend resources to support activist hedge fund investors. But you
30:21
Speaker 6: never know, right, I never want to prejudge what the
30:24
Speaker 6: SEC is going to do in terms of its enforcement.
30:26
Speaker 6: I'm sure they'll take a look at it, and I'm
30:28
Speaker 6: sure they'll discuss it, but I think it is fairly
30:30
Speaker 6: unlikely that they're going to bring a lawsuit, you know,
30:34
Speaker 6: in a few years, though maybe there's a different SEC.
30:37
Speaker 7: So if that's the case, then certainly they could.
30:39
Speaker 6: Bring various enforcement cases and they they may be the
30:43
Speaker 6: right actor to act in most of these situations. Although
30:47
Speaker 6: it just strikes me as a little bit odd that
30:49
Speaker 6: you have what seemed to be a state provision that
30:54
Speaker 6: is inconsistent with federal law and nobody's challenging it.
30:58
Speaker 7: Right. That just seems sort of odd to me, because,
31:00
Speaker 7: as you.
31:00
Speaker 6: Know, the Maryland law allows the board to take away
31:03
Speaker 6: voting rights of certain large shareholders, and you know, that's
31:10
Speaker 6: inconsistent with the Investment Company Act, which says that you
31:12
Speaker 6: have to have equal voting rights for the shriffs. And
31:15
Speaker 6: so I think that's, you know, something somebody should be
31:18
Speaker 6: able to act upon, and it's so odd for the
31:20
Speaker 6: sec to just kind of leave that hanging and not
31:23
Speaker 6: intervene at all.
31:24
Speaker 2: Are you saying that the Supreme Court decision was an
31:26
Speaker 2: incorrect decision in your view?
31:28
Speaker 6: I don't think it was necessarily incorrect because their job
31:31
Speaker 6: was simply to interpret the law and that's what they
31:34
Speaker 6: say the statute means. And so what their decision means
31:38
Speaker 6: is that the private plaintiffs cannot bring a lawsuit or recision,
31:42
Speaker 6: but the secs can bring an action saying that there's
31:45
Speaker 6: a violation of the Investment Company Act, and they can
31:48
Speaker 6: sue for recision or some other remedy.
31:50
Speaker 2: So, will you explain the broader struggle in the closed
31:54
Speaker 2: end fund industry between established boards and activists investors?
32:00
Speaker 6: Always been some concern about the governance of mutual funds,
32:03
Speaker 6: and particularly closed end funds. You know, mutual funds have
32:07
Speaker 6: boards and you know there's always questions of how independent
32:11
Speaker 6: are those boards from the fund managers who are making decisions,
32:17
Speaker 6: And one view is that they're not very independent because
32:20
Speaker 6: they're handpicked by you know, managers and so forth, and
32:24
Speaker 6: so maybe there's a reason to be concerned and that
32:27
Speaker 6: we can increase the value of the closed end fund
32:30
Speaker 6: by allowing for this sort of activism. I think the
32:34
Speaker 6: other view is that, well, you know, mutual funds, you
32:38
Speaker 6: should give a lot of deference to the managers because
32:40
Speaker 6: they are the experts, are the ones choosing the investments,
32:43
Speaker 6: so there's no really good way to evaluate. And I
32:48
Speaker 6: think they would say the activists are second guessing the
32:51
Speaker 6: fund managers and these boards. That's essentially the main argument
32:54
Speaker 6: that they're gonna be making is that, look, there's you know,
32:57
Speaker 6: there's a lot of dispression you have as a manager
32:59
Speaker 6: to choose what's a good investment, and the board is
33:02
Speaker 6: typically going to defer to that in most cases. And
33:05
Speaker 6: you're just coming in and you're making these you know,
33:08
Speaker 6: Monday morning quarterback calls to basically, you know, enrich yourself
33:13
Speaker 6: and say you're doing something and you're really just messing
33:16
Speaker 6: things up. I think that's what the opponents of activism
33:19
Speaker 6: would say, and you know, they're good arguments on both sides.
33:22
Speaker 2: Jim, does the retail investor lose if the activist shareholders,
33:27
Speaker 2: you know, can't sue like this, or are the activist
33:30
Speaker 2: shareholders just you know, suing for the interests of huge
33:35
Speaker 2: hedge funds or whatever.
33:36
Speaker 7: They're definitely mainly in it for their own interests.
33:39
Speaker 6: Of course, they have a financial interest because they have
33:42
Speaker 6: significant states in these funds. But the retail investors can
33:47
Speaker 6: come along for the ride, you know. I think if
33:49
Speaker 6: they are improving the firm's value, that benefits the retail
33:53
Speaker 6: investors who are not putting any work at all into it.
33:56
Speaker 7: And so I think that's the argument.
33:58
Speaker 6: The activist investors, acting through their self interest, are actually
34:01
Speaker 6: helping these retail investors.
34:04
Speaker 2: Any other possible avenues that we haven't discussed.
34:07
Speaker 6: There is another possibility beyond sec action and maybe state
34:12
Speaker 6: law derivative suits, and that's for Congress to amend the
34:16
Speaker 6: statute to make it clear that in some circumstances, private
34:22
Speaker 6: planeffs can bring a certain type of lawsuit and it
34:25
Speaker 6: may not necessarily be for recision.
34:27
Speaker 7: Which is kind of a harsh remedy.
34:29
Speaker 6: Recision means you get your money back, which means the
34:31
Speaker 6: mutual fund would have to liquidate some of its investments
34:34
Speaker 6: perhaps and give the money back.
34:36
Speaker 7: That's not always appealing.
34:37
Speaker 6: But if there could be an action, for say a
34:40
Speaker 6: declaratory relief or an injunction that essentially says you get
34:44
Speaker 6: your voting rights back, then that strikes me as something
34:49
Speaker 6: that could be a more reasonable type of remedy. And
34:52
Speaker 6: to the extent that that's not allowed under the Supreme
34:54
Speaker 6: Court's decision, Congress, when it's so inclined to do something,
34:59
Speaker 6: could eventually amend the statue to make it clear that
35:04
Speaker 6: some sort of private right of action is appropriate.
35:07
Speaker 7: That's the other course that we might see in a
35:09
Speaker 7: few years.
35:10
Speaker 2: Thanks so much for joining me today, Jim Best, Professor
35:13
Speaker 2: James Park of UCLA Law School.
35:16
Speaker 3: And that's it for this edition of the Bloomberg Law Show.
35:18
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