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Meta Wins in Antitrust & Texas Loses in Redistricting · Bloomberg Law

• 0:02
  Speaker 1: This is Bloomberg Law with June Grossel from Bloomberg Radio.
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  Speaker 2: It's a massive blow to the federal government that's been
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  Speaker 2: trying to break up Meta for the last five years.
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  Speaker 2: The tech giant has won a key ruling that its
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  Speaker 2: acquisitions of Instagram and WhatsApp didn't violate US anti trust law.
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  Speaker 2: DC Federal Judge James Bosberg said the Federal Trade Commission
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  Speaker 2: had to show that Meta continues to hold monopoly power
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  Speaker 2: in social networking now, and that it had failed to
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  Speaker 2: do so. My guest is anti trust expert Harry First,
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  Speaker 2: a professor at NYU Law School. Harry, how big a
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  Speaker 2: blow is this to the FTC.
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  Speaker 3: Well, it's a blow, all right. So this is the
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  Speaker 3: first big loss in these high tech platform cases. So
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  Speaker 3: two of them have now come to a conclusion of
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  Speaker 3: the trial, you know, both against Google, both successful for
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  Speaker 3: the Justice Department remedy another story maybe. So this is
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  Speaker 3: the third. They're five total, and it's the first loss.
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  Speaker 3: It's sort of not a surprising loss because this judge
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  Speaker 3: has been skeptical of this case clearly from the very beginning.
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  Speaker 3: He had dismissed it originally, so he's been very skeptical
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  Speaker 3: and he said it in his opinions. So this case
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  Speaker 3: has not been well received by the judiciary, shall we say,
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  Speaker 3: so it's not surprising. The opinion itself is a little surprising,
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  Speaker 3: but the result is not so surprising.
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  Speaker 4: What do you say? The opinion is surprising.
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  Speaker 3: So in two ways. First of all, he's taken a
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  Speaker 3: very novel approach to time in the opinion. So he
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  Speaker 3: says that the proof has to be as of the
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  Speaker 3: time I make my decision almost I mean, this is
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  Speaker 3: an impossible standard. He said, maybe maybe they were monopoly,
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  Speaker 3: Maybe this was a properly defined product market in twenty
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  Speaker 3: twenty when the suit was filed, you know, but as
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  Speaker 3: time has gone by, it's not that much time by
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  Speaker 3: now it's not. And the question is not whether it
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  Speaker 3: was then, but whether it is now. I mean, if
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  Speaker 3: you take that literally, that's a completely moving standard. You
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  Speaker 3: could never try a case because your evidence is always outdated.
• 2:25
  Speaker 3: I mean, it's always about the past. You can't try
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  Speaker 3: a case about the future. So that's a departure. He's
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  Speaker 3: got some legal reasoning for why he does that, but
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  Speaker 3: that's a serious problem, and I think it's a serious
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  Speaker 3: anti trust problem. So there is that part of it.
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  Speaker 3: The second part is this judge is very confident of
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  Speaker 3: his opinion. So normally a district court judge, he's got
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  Speaker 3: seven things to decide in front of him, and they
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  Speaker 3: proceed logically, well, if if you go for this, you know,
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  Speaker 3: then you're done. But if you go for this and
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  Speaker 3: it's okay, you go to this number two, three, four,
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  Speaker 3: five had a long trial, but he only decides the
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  Speaker 3: first issue. Now, normally a judge would say, Okay, here's
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  Speaker 3: what I decide. This isn't a market. Market has to
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  Speaker 3: include such and such. They don't really have monopoly power. Okay,
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  Speaker 3: but if I'm wrong, here are the facts that I
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  Speaker 3: found about the conduct. And the conduct wasn't any competitive.
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  Speaker 3: So even if you had monopoly power, this was not
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  Speaker 3: exclusionary conduct, less than any competitive and so you go
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  Speaker 3: through all the things because if a court of appeals
• 3:29
  Speaker 3: disagrees with you, now what you've got to retry the
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  Speaker 3: whole case. So this is a judge who thinks no
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  Speaker 3: one's going to disagree with me man, And maybe maybe
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  Speaker 3: part of it is because the narrative of the case
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  Speaker 3: is at least potentially stronger than the market definition. So
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  Speaker 3: that's when you know all the emails about how Mark
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  Speaker 3: Zuckerberg's theory was to buy them or you know, bury them,
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  Speaker 3: and you know what he tried to do with with competitors,
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  Speaker 3: and why he paid so much for Instagram and for WhatsApp.
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  Speaker 3: WhatsApp drops out of this case like right away. I
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  Speaker 3: don't know third word or something he says, at some point,
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  Speaker 3: we're done with them. We don't have to talk about
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  Speaker 3: them anymore because we don't get to them. That's not
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  Speaker 3: involved in the market definition. So that's pretty unusual, I think.
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  Speaker 3: And it's either hubris or confidence, I don't know which,
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  Speaker 3: but he does not do what I think most district
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  Speaker 3: court judges would do, which is decide the full case.
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  Speaker 2: I thought the focus would be on the market when
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  Speaker 2: Meta bought Instagram and WhatsApp and whether it was anti
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  Speaker 2: competitive conduct when it's alleged that Meta couldn't compete with
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  Speaker 2: these two apps, and Zuckerberg said it's better to buy
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  Speaker 2: than compete.
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  Speaker 3: Well, what he tried to say was, well, we've got
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  Speaker 3: to do it as of now, in part because of
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  Speaker 3: the FTC's remedy powers asking for an injunction, and they
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  Speaker 3: can only stop conduct that is illegal now. So I've
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  Speaker 3: got to decide what's illegal now. Now, he could have
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  Speaker 3: very well said, that's a remedy question. We'll decide that
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  Speaker 3: when we get to remedy, whether it's a continuing violation
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  Speaker 3: or not. We should look at whether there was a
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  Speaker 3: violation then. So, for example, if this were suit for damages,
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  Speaker 3: you wouldn't say, well, we have to see whether it's
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  Speaker 3: a violation today. You would say, let's see whether there
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  Speaker 3: was a violation at the time that the offense was
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  Speaker 3: committed and what damages were caused. So those two things
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  Speaker 3: are are separate. So it's really quite odd, and you're right.
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  Speaker 3: The argument that the Commission makes is that we look
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  Speaker 3: at what they did and why they did it, that
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  Speaker 3: this was an effort to maintain their monopoly. These two
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  Speaker 3: acquisitions for which they wildly overpaid. Why were they paying
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  Speaker 3: nineteen billion dollars for a company that have any revenue?
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  Speaker 3: That was what's app And the answer was they didn't
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  Speaker 3: want them to develop into a competing social network platforms.
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  Speaker 3: So you know now that that part also had problems
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  Speaker 3: that had issues. You know, the Federal Trade Commission and
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  Speaker 3: its earlier guys let those acquisitions go through, so there
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  Speaker 3: were issues with it. But so in that sense, that's
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  Speaker 3: a really strange aspect.
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  Speaker 2: Did the judge come to this decision because of the
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  Speaker 2: way he defined the market and the fact that he
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  Speaker 2: put YouTube and TikTok in the market.
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  Speaker 3: Yeah, so the first question and you have to show
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  Speaker 3: that that defendant has monopoly power in a relevant market.
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  Speaker 3: So he says, okay, we have to start with market definition.
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  Speaker 3: So that's true, that's the way it's normally done. And
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  Speaker 3: then he says, okay, yes, let's look at the market
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  Speaker 3: and what we have to do. He basically puts in
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  Speaker 3: you know, he says, these these platforms have converged, these
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  Speaker 3: are all sort of similar, and particularly TikTok, you know,
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  Speaker 3: was posing a competitive threat. Says, people don't want to
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  Speaker 3: talk to their friends anymore. They just want unconnected videos.
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  Speaker 3: So you know, here's TikTok comes along and they're posing
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  Speaker 3: some threat, and Facebook responds with reels and short videos.
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  Speaker 3: And so that has now changed how we define the
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  Speaker 3: market because users switch back and forth between the two,
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  Speaker 3: and we have to include TikTok and we have to
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  Speaker 3: include YouTube or users switch to those videos later. The
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  Speaker 3: sort of at the end of the opinion says, well,
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  Speaker 3: the argument for YouTube actually is a little thinner. But
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  Speaker 3: even if it's just TikTok, that's enough. We would include
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  Speaker 3: that in However we define the market, whatever we want
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  Speaker 3: to call it doesn't really give it a name. And
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  Speaker 3: at that point, if we include TikTok, then there's no
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  Speaker 3: monopoly power meta. Facebook does not have monopoly power. That
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  Speaker 3: TikTok takes away too much time. All those kids are
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  Speaker 3: frittering where other time on TikTok instead of frittering where
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  Speaker 3: other time on Facebook. He had various evidence of, you know,
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  Speaker 3: the willingness to switch, and that people switched between those
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  Speaker 3: two normally for looking at substitutes. You say, so, if
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  Speaker 3: the celer rates its price, what would people switch to? Well,
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  Speaker 3: the thing is Facebook doesn't have a price.
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  Speaker 5: In that sense.
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  Speaker 3: What has his ads? I don't know if you've looked
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  Speaker 3: at your Facebook feed recently.
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  Speaker 4: I'm not on Facebook. I will confess I got.
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  Speaker 5: You on that one.
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  Speaker 3: Yeah, well, there are a lot of ads on Facebook,
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  Speaker 3: and so you know, that's sort of the price. But
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  Speaker 3: the judge didn't seem to think that people minded those
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  Speaker 3: ads so much. They're nice, ads didn't really interfere so much,
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  Speaker 3: so not so bad, and people were switching particularly, I
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  Speaker 3: think younger people were switching over to TikTok to you know,
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  Speaker 3: for whatever you get in TikTok, now, what you don't
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  Speaker 3: get in TikTok particularly are friends groups of friends, and
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  Speaker 3: that's what the government sort of honed in on. It's
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  Speaker 3: a social network. It's put together by who your friends are,
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  Speaker 3: and what Bosberg observes is that at least some users
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  Speaker 3: don't really care so much about their friends. They want
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  Speaker 3: to be put together more by interests. You know, I like,
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  Speaker 3: I don't know Japanese cooking, so I get lots of
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  Speaker 3: videos about Japanese cooking. You know, I don't know the
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  Speaker 3: Japanese cooks, and I are not my friends, but that's
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  Speaker 3: what I like to look at. Or I like recipes
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  Speaker 3: you know that are easy to make or crazy to
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  Speaker 3: look at, whatever TikTok has. So people have switched to
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  Speaker 3: that and away from Facebook. Now, the odd thing in
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  Speaker 3: some ways is if so many people are switching, how
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  Speaker 3: come so many people are still on Facebook. He gives
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  Speaker 3: two hundred and thirty million US users, I think is
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  Speaker 3: the number and ad revenues of one hundred and sixty
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  Speaker 3: one billion dollars. So when you read his description, it
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  Speaker 3: sounds like this is a company that is just in
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  Speaker 3: the throes of death from TikTok, and then he says,
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  Speaker 3: this is an amazingly successful product. Give people a compelling
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  Speaker 3: product for free, then sell ads that can be seen
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  Speaker 3: by millions. Yes, he thinks those are good. Two hundred
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  Speaker 3: and forty million active users in the United States. That's
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  Speaker 3: a lot of people. So apparently they haven't been dissuaded
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  Speaker 3: by TikTok, which is also free, and you know they
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  Speaker 3: don't give all their time there. They're still on Facebook.
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  Speaker 3: So the argument, presumably from the government, is that by
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  Speaker 3: incorporating Reels, they've managed to defend their core business, and
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  Speaker 3: their core business is social network putting people together, and
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  Speaker 3: they still get a lot of people who like that product,
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  Speaker 3: even though some people also use different products.
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  Speaker 2: Coming up next, I'll continue this conversation with Professor Harry
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  Speaker 2: First of NYU Law School. Will the government appeal the decision?
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  Speaker 2: I'm Jim Grosso and you're listening to Bloomberg. Meta prevailed
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  Speaker 2: over an existential challenge to its business that could have
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  Speaker 2: forced the tech giant to spin off Instagram and WhatsApp
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  Speaker 2: in a loss for the FTC A judge rule that
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  Speaker 2: the company doesn't hold a monopoly in social networking. I've
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  Speaker 2: been talking to NYU Law School professor Harry First. Harry,
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  Speaker 2: here's what an FTC spokesperson said about the loss to Meta.
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  Speaker 2: We're deeply disappointed in this decision, but the deck was
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  Speaker 2: always stacked against us because of the judge has ruled
• 12:00
  Speaker 2: against the Trump administration in some high profile cases this year,
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  Speaker 2: and he's also been frequently criticized by the President and
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  Speaker 2: the Attorney General. This just continues the Justice departments attacks
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  Speaker 2: on judges.
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  Speaker 3: I hadn't read that, and you sort of wish that
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  Speaker 3: they hadn't done that. Yes, Judge Bosberg did stand up
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  Speaker 3: to the Trump administration, and Trump singled him out as
• 12:25
  Speaker 3: I forget what description crazy something lunatic judge. So now
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  Speaker 3: I don't know which way it even goes, particularly given
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  Speaker 3: the fact that there was a report of Mark Zuckerberg
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  Speaker 3: meeting with Trump in the Oval Office to settle this case,
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  Speaker 3: and Trump was dissuaded apparently from settlement by the efforts
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  Speaker 3: not so much of the chair of the Federal Trade Commission,
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  Speaker 3: but by the head of the Justice Department any Trust Division,
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  Speaker 3: Gail Slater. So maybe the FTC should have settled it,
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  Speaker 3: then maybe it would have done better. But it's just,
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  Speaker 3: first of all, it's in some ways so wrong because
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  Speaker 3: Boseburg took this position way before the immigration cases came up,
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  Speaker 3: from the beginning when he dismissed the complaint, the original
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  Speaker 3: complaint and let them refile it. He's been critical of
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  Speaker 3: this case. So to see this as a connection of
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  Speaker 3: you know, some craze judge who what is just against
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  Speaker 3: the government, I mean, it's just wrong. I wish they'd
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  Speaker 3: stick to the problem that they've got, which is that
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  Speaker 3: this is bad law for the FTC and for any
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  Speaker 3: trust enforcement. And you know, now we're going to see
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  Speaker 3: what they're going to do about it. Are they going
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  Speaker 3: to appeal this decision or not?
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  Speaker 4: Yeah, so that was my next question.
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  Speaker 2: I mean, it sounds like they should appeal because of
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  Speaker 2: the timeline that he's defining markets on. But might they not.
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  Speaker 2: I mean, Zuckerberg has been courting Trump for quite some time.
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  Speaker 3: It's hard to assess the political wins because conservatives had
• 14:03
  Speaker 3: been upset with Facebook, thinking that their algorithm has you know,
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  Speaker 3: discriminated against them. I sent an email to my niece
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  Speaker 3: last night, who uses Facebook all the time, and she
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  Speaker 3: says she thinks they don't post any of her left
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  Speaker 3: leaning posts. They don't seem to get moved up into
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  Speaker 3: the feed.
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  Speaker 5: But you know the calm ones do. I don't know.
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  Speaker 4: I like what they're doing. Research at night.
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  Speaker 3: That's research. That's my that's my empirical research.
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  Speaker 2: Fair enough, although Zuckerberg seems to have tried to turn
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  Speaker 2: that around by weakening hate speech policies and eliminating fact checking.
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  Speaker 3: My view of Mark Zuckerberg he hasn't turned at all,
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  Speaker 3: is that he just turns whichever way the politics are
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  Speaker 3: so so now it's this way, and that's fine with
• 14:53
  Speaker 3: him too, as long as he keeps You know, they're
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  Speaker 3: apparently the third largest digital advertiser after Google and Amazon,
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  Speaker 3: so they're doing really, really well. Despite Bozberg's feeling that
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  Speaker 3: nobody wants to talk to their friends, apparently a lot
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  Speaker 3: of people still do and they read those ads and
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  Speaker 3: click on them.
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  Speaker 2: If this were an administration that just based its decisions
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  Speaker 2: on the law, would they appeal to try to get
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  Speaker 2: this ruling that the government has to show monopoly power
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  Speaker 2: now reversed or because of Zuckerberg's attempts to court Trump,
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  Speaker 2: do you think they might not appeal.
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  Speaker 3: Who knows exactly which wins, and the wins may go
• 15:37
  Speaker 3: the other way because a populist wing of the party
• 15:43
  Speaker 3: feels that these platforms have too much power and need
• 15:48
  Speaker 3: to be cut down. So who knows exactly. But if
• 15:51
  Speaker 3: you look straight at the legal issues, usually appeals from
• 15:55
  Speaker 3: adverse decisions of trial courts are hard to win an
• 16:00
  Speaker 3: appeal because they're mostly fact based, So you have to
• 16:03
  Speaker 3: look for legal issues. And there's a you know, an
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  Speaker 3: important legal issue of you know, whether he applied the
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  Speaker 3: correct standard for defining the market and for assessing when
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  Speaker 3: a violation occurred. And that one's sort of a very
• 16:17
  Speaker 3: pointed legal issue. How it will fare in the court
• 16:21
  Speaker 3: of appeals if they do take it, I don't know.
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  Speaker 2: And does this decision have any implications for the other
• 16:28
  Speaker 2: antitrust cases against tech platforms.
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  Speaker 3: Yeah, that's a good question. Perhaps I'm thinking of Amazon
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  Speaker 3: for example. So these are platform cases, and platform strategy
• 16:42
  Speaker 3: is you have a core product, and what you want
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  Speaker 3: to do is to keep people on the platform and
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  Speaker 3: engaged because of the strength of the core product, and
• 16:52
  Speaker 3: you defend the core product by acquiring things around the
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  Speaker 3: periphery that might challenge it or by doing things. You know,
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  Speaker 3: these companies are always subject to some competitive forces, even
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  Speaker 3: if they're monopolis. So certainly Facebook was TikTok did pose
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  Speaker 3: a competitive threat, and Amazon similarly has competitive threats to
• 17:14
  Speaker 3: which they respond. But the basic strategy is pretty similar,
• 17:20
  Speaker 3: and the market definition in some ways is similar because
• 17:24
  Speaker 3: they offer a bunch of different products in the same place,
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  Speaker 3: much as supermarkets do, like whole foods for example. So
• 17:34
  Speaker 3: you have a you know, sort of core product and
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  Speaker 3: then other things that they offer that other firms may
• 17:40
  Speaker 3: compete on. I mean, look at your smartphone, so thirty
• 17:44
  Speaker 3: five millimeters cameras compete on cameras, but you know, are
• 17:47
  Speaker 3: they in the same market. No, so you could say
• 17:50
  Speaker 3: this is this is quite similar. You know, Yes, TikTok competes.
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  Speaker 3: I'm surprised Twitter's not mentioned. Twitter competes, you know, to
• 17:59
  Speaker 3: some extent. But these are all to some extent, and
• 18:05
  Speaker 3: it's still a meta defending its core product in which
• 18:09
  Speaker 3: it has a lot of power, as all advertisers know.
• 18:14
  Speaker 4: Always a pleasure.
• 18:15
  Speaker 2: Thanks so much, Harry, that's Professor Harry First of NYU
• 18:19
  Speaker 2: Law School. Texas kicked off the nationwide redistricting battle, but now,
• 18:24
  Speaker 2: a federal court has blocked the state from using a
• 18:27
  Speaker 2: redrawn congressional map that was engineered to give Republicans five
• 18:32
  Speaker 2: additional House seats. The ruling is a blow to President
• 18:36
  Speaker 2: Trump's efforts to preserve a slim Republican majority ahead of
• 18:40
  Speaker 2: the twenty twenty six elections. Joining me is elections law
• 18:44
  Speaker 2: expert Richard Befalt, a professor at Columbia Law School.
• 18:49
  Speaker 4: Rich So this was a.
• 18:49
  Speaker 2: Two to one decision. Will you explain why the judges
• 18:53
  Speaker 2: decided that Texas couldn't use its new congressional plan.
• 18:58
  Speaker 1: In a nutshell of a court concluded that this was
• 19:01
  Speaker 1: a racial gerry mander and not a partisan gerrymander. And
• 19:05
  Speaker 1: as you know, the Supreme Court has said parts in
• 19:07
  Speaker 1: jerrymanders are not unconstitutional, there's no basis for challenging them
• 19:11
  Speaker 1: in federal court. But racial gerry manders can be unconstitutional
• 19:15
  Speaker 1: and can be challenged in federal court. So the heart
• 19:17
  Speaker 1: of the court's decision was that this was a racial
• 19:19
  Speaker 1: gerry mander. And what have they based that on? The
• 19:23
  Speaker 1: court said what triggered this? Although we think of this
• 19:26
  Speaker 1: as Trump demanding more Republican seats from the Texas congressional delegation.
• 19:31
  Speaker 1: In the court's view, the Texas governor was initially reluctant
• 19:35
  Speaker 1: to call the special Section to create the map until
• 19:39
  Speaker 1: he got a letter from the Department of Justice in
• 19:42
  Speaker 1: Washington that said several of the Texas districts were unconstantually
• 19:48
  Speaker 1: created on racial grounds. In particular, the Department of Justice
• 19:52
  Speaker 1: focused on so called coalition districts, which are districts which
• 19:57
  Speaker 1: are majority minority but not one particular minority group. And
• 20:02
  Speaker 1: for a period of time in the Fifth Circuit, courts
• 20:05
  Speaker 1: there had said that the Voting Rights Act could be
• 20:07
  Speaker 1: interpreted to require the so called coalition district district which,
• 20:11
  Speaker 1: let's say is is forty percent Black and thirty percent Hispanic.
• 20:15
  Speaker 1: Neither one is a majority, but together they add.
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  Speaker 5: Up to seventy percent. And so the Apartment.
• 20:20
  Speaker 1: Of Justice says, well, we see four districts in your
• 20:23
  Speaker 1: current in your twenty twenty one map that looked like
• 20:26
  Speaker 1: their coalition districts to us, and based on a recent
• 20:30
  Speaker 1: decision in the Fifth Circuit, we think that makes them unconstitutional.
• 20:33
  Speaker 1: So you got to fix it. You've got to redo
• 20:35
  Speaker 1: those districts. So what the three judge panel in this
• 20:38
  Speaker 1: case concluded is that that was what was driving the redistricting.
• 20:42
  Speaker 1: They looked at the statements of the governor, the governor Abbott,
• 20:45
  Speaker 1: and of the leading members of the state legislature, and
• 20:48
  Speaker 1: they also looked at the resulting map, and they pointed
• 20:51
  Speaker 1: out that most of the changes in the redrawn districts
• 20:55
  Speaker 1: went from being so called coalition districts, the districts which
• 21:00
  Speaker 1: one race or another had a majority, and often an
• 21:04
  Speaker 1: extremely narrow majority. They said there were three districts they
• 21:07
  Speaker 1: were either Black or Hispanic, where the majority group had
• 21:10
  Speaker 1: like fifteen.
• 21:11
  Speaker 5: Point two percent.
• 21:12
  Speaker 1: So they said the combination of the Department of Justice letter,
• 21:16
  Speaker 1: the governor's statement calling the legislature decision, in statements by
• 21:21
  Speaker 1: many of the leading members of legislature, and then the
• 21:24
  Speaker 1: districts that were created. In their minds, this meant that
• 21:27
  Speaker 1: race predominated the desire to create racial majority districts is
• 21:32
  Speaker 1: what was driving this. It's through, the court said, and
• 21:35
  Speaker 1: also clearly had partisan consequences in the nave and some
• 21:38
  Speaker 1: partisan motivation as well. But they said that the dominant
• 21:41
  Speaker 1: motive that they found was race, and thatfore this made
• 21:45
  Speaker 1: it a nonconstitutional racial gerry matter.
• 21:47
  Speaker 2: Even though we know that the reason that Greg Abbott
• 21:51
  Speaker 2: called the special session was because President Donald Trump told
• 21:55
  Speaker 2: him that he wanted to get, you know, extra seats
• 21:58
  Speaker 2: in Texas.
• 21:59
  Speaker 1: I think what you would you could say is that
• 22:02
  Speaker 1: to Barbary Shakespeare, their partner of Justice was hoist by
• 22:05
  Speaker 1: its own petard. I think when this all began, it's
• 22:08
  Speaker 1: now like four months later, it's amazing how much has
• 22:10
  Speaker 1: gone in four or five months. When this all began,
• 22:13
  Speaker 1: maybe people thought it was too blatant to say this
• 22:16
  Speaker 1: was all from partisan reasons. I mean, we've now been
• 22:18
  Speaker 1: totally partisan and since June of this year in the redistricting,
• 22:21
  Speaker 1: but maybe they thought it was just too blatant to
• 22:23
  Speaker 1: say we're doing different partisan purposes.
• 22:26
  Speaker 5: So the Department of Justice trumped up this racial argument.
• 22:29
  Speaker 1: There was no argument actually that those coalition districts were unconstitutional.
• 22:34
  Speaker 1: You could argue that there's no mandate that a state
• 22:37
  Speaker 1: create them, and that's certainly true now, but there was
• 22:40
  Speaker 1: no evidence that they were unconstitutionally drawn. Nonetheless, part of
• 22:44
  Speaker 1: Justice having, I think, provided this kind of pretext for
• 22:48
  Speaker 1: the state to go ahead and.
• 22:49
  Speaker 5: Do the partisan gerrymander.
• 22:51
  Speaker 1: But given that that was the stated reason, the court
• 22:54
  Speaker 1: was able to say we think it's a racial gerrymander.
• 22:56
  Speaker 1: They also made the point that the Democratic districts which
• 23:00
  Speaker 1: were undone mostly fell into this category of coalition districts,
• 23:04
  Speaker 1: and they pointed out there was one white majority Democratic
• 23:07
  Speaker 1: district which was barely touched. So they do have some
• 23:12
  Speaker 1: evidence suggesting that most of the focus of the legislature
• 23:16
  Speaker 1: was on coalition districts and making them majority one race
• 23:20
  Speaker 1: or the other. But I think what you've got here
• 23:23
  Speaker 1: is this irony that at least in June of this year,
• 23:27
  Speaker 1: the governor and the Department of Justice thought it's too
• 23:29
  Speaker 1: blatant to do it for purely partisan reasons, so we're
• 23:33
  Speaker 1: going to give them an anti race discrimination motivation, and that,
• 23:37
  Speaker 1: as I think, turned around to sort of bite them
• 23:39
  Speaker 1: in the rear, at least for now.
• 23:41
  Speaker 2: And now the question is what will happen when this
• 23:44
  Speaker 2: gets to the Supreme Court. Rich We've talked before about
• 23:48
  Speaker 2: the case currently before the Supreme Court on the Louisiana maps.
• 23:53
  Speaker 4: Does that fit in anywhere here?
• 23:55
  Speaker 2: Well?
• 23:55
  Speaker 1: Here, I think what the court three judge paneled, really
• 23:58
  Speaker 1: two judges.
• 23:59
  Speaker 5: There's a dissenter. The majority opinion is one hundred and
• 24:01
  Speaker 5: sixty pages long. But I think.
• 24:03
  Speaker 1: The Court said, here, yes, the issue was sort of
• 24:05
  Speaker 1: disentangling race from party again to restate racial gerrymandering is
• 24:10
  Speaker 1: on constitutional partisan is not. The Court just kind of
• 24:14
  Speaker 1: went through a lot of evidence and said, we have
• 24:17
  Speaker 1: all this evidence, and we think it shows that on balance,
• 24:20
  Speaker 1: given the governor's statements, given the statement of the chair
• 24:24
  Speaker 1: of the relevant committee, given the statements of some other
• 24:26
  Speaker 1: prominent legislators, and then given the results, we think this
• 24:30
  Speaker 1: is predominantly racial and therefore it violates a pre existing doctrine.
• 24:35
  Speaker 1: The Louisiana case turns on whether or not in fact
• 24:39
  Speaker 1: it was predominantly racial to create a second black majority district.
• 24:43
  Speaker 5: But here this was really about.
• 24:45
  Speaker 1: You had a valid plan and existence before, and this
• 24:50
  Speaker 1: is whether or not were the changes predominantly race based
• 24:54
  Speaker 1: or predominantly partisan.
• 24:55
  Speaker 5: And the Court says, argue, with the evidence.
• 24:58
  Speaker 1: Is that they're so predominantly race we think preliminary injunction
• 25:01
  Speaker 1: should be granted.
• 25:02
  Speaker 4: They're appealing right to the Supreme Court.
• 25:05
  Speaker 2: First of all, I mean, as far as timing is concerned,
• 25:08
  Speaker 2: there's a decemberate state deadline for candidates to file campaign paperwork.
• 25:14
  Speaker 2: Is the Supreme Court likely to make a decision here
• 25:18
  Speaker 2: within that time frame.
• 25:20
  Speaker 1: Well, I think the real question is will the Supreme
• 25:22
  Speaker 1: Court say that the lower court has made this decision
• 25:26
  Speaker 1: too close to the election. There's this doctrine called the
• 25:29
  Speaker 1: Percell principle, based on a Supreme Court decision now about
• 25:32
  Speaker 1: twenty five years old, in which the Court says that
• 25:35
  Speaker 1: federal courts should not undo state election laws if they're
• 25:40
  Speaker 1: too close to an election. The Court has never said
• 25:43
  Speaker 1: what is too close to an election, but there have
• 25:46
  Speaker 1: been some orders from the Supreme Court in recent years
• 25:50
  Speaker 1: that treated decisions that were within six months of an
• 25:53
  Speaker 1: election as too close to an election. And the Texas
• 25:57
  Speaker 1: primary is in March, so looking at some recent Supreme
• 26:01
  Speaker 1: Court decisions, there is a plausible argument that this Court's
• 26:05
  Speaker 1: decision is too close to the election and therefore should
• 26:09
  Speaker 1: be stayed. Now, the Court addresses that for about twenty pages,
• 26:14
  Speaker 1: and they make the point that the Texas plan was
• 26:16
  Speaker 1: not signed into law until the end of August, and
• 26:20
  Speaker 1: if you took the idea that six months is too late,
• 26:23
  Speaker 1: it was almost too late. As of the moment the
• 26:25
  Speaker 1: Texas redistricting was signed into law, it would have been
• 26:28
  Speaker 1: impossible to have a challenge, have the parties, do the research,
• 26:34
  Speaker 1: have a hearing, I have a decision in time to
• 26:37
  Speaker 1: take something like six months. So the court makes you
• 26:40
  Speaker 1: kind of a strong pitch for saying that the per
• 26:43
  Speaker 1: Sel principle has to be handled flexibly. We've got to
• 26:46
  Speaker 1: look at how late the Texas legislature did this, and
• 26:50
  Speaker 1: we do have to say that it is possible to
• 26:51
  Speaker 1: come to compliance. They make two more points. One is
• 26:55
  Speaker 1: that the old map is still in existence because Texas
• 26:58
  Speaker 1: is about to hold an election on that old map
• 27:01
  Speaker 1: in January, because there is a vacancy a member of
• 27:05
  Speaker 1: the Texas Commercial Delegation died early this year. There was
• 27:09
  Speaker 1: just a primary thing to fill that the general election
• 27:13
  Speaker 1: to actually fill that seat won't be until January. That's
• 27:16
  Speaker 1: on the old map, the pre Gerrymander map. And so
• 27:19
  Speaker 1: the court says, well, the old maps are still the law,
• 27:22
  Speaker 1: so under our preliminary injunction, we're just going to continue to.
• 27:25
  Speaker 5: Live by the old map. So the old map is
• 27:27
  Speaker 5: still on the books.
• 27:29
  Speaker 1: And so they're saying that in some sense, the real
• 27:31
  Speaker 1: disruption was the state legislature's acting so late, and so
• 27:35
  Speaker 1: therefore we should be able to do this. And yes,
• 27:37
  Speaker 1: it's still time for everyone to come into compliance to
• 27:40
  Speaker 1: file under the old maps. I think the first question
• 27:44
  Speaker 1: may be the stronger argument. When Texas appeals this to
• 27:48
  Speaker 1: the Supreme Court, I suspect they will lean heavily on
• 27:50
  Speaker 1: this purcell idea that it's too late, that we're about
• 27:54
  Speaker 1: three weeks away from the filing deadlines for the March
• 27:57
  Speaker 1: primary and it's too late. And I think secondarily they'll say, well, yes,
• 28:02
  Speaker 1: there is a lot of race evidence, but there's also
• 28:04
  Speaker 1: partis in evidence, and we should defer to the legislature
• 28:08
  Speaker 1: on that. So I think that's how that's likely to
• 28:10
  Speaker 1: go out. On what the Spreme Court will do is unclear,
• 28:12
  Speaker 1: but there is a plausible Percel argument that it's too late.
• 28:18
  Speaker 1: But as I said, the Court is very strong in saying, well,
• 28:22
  Speaker 1: if that's the case, you can never bring a challenge
• 28:25
  Speaker 1: to a gerrymander. That indeed, it's an incentive to do
• 28:28
  Speaker 1: the jerrymanders closer and closer to the election to make
• 28:31
  Speaker 1: it impossible to bring challenges.
• 28:33
  Speaker 2: If the Supreme Court says, forget the percel principle here,
• 28:37
  Speaker 2: how do you think they would rule on Texas's appeal.
• 28:41
  Speaker 2: You know that this was a part is in not
• 28:42
  Speaker 2: a racial Jerrymander. Do you have any idea on that.
• 28:46
  Speaker 5: It's really hard to say.
• 28:47
  Speaker 1: I mean, I think they're you know, I think the
• 28:49
  Speaker 1: court acknowledges that there's evidence on the other side. But
• 28:52
  Speaker 1: they have, and particularly the testimony of the map drawer,
• 28:56
  Speaker 1: the Republican specialist who hire to draw the map. You said,
• 28:59
  Speaker 1: you know, no, I never looked.
• 29:00
  Speaker 5: At race data.
• 29:01
  Speaker 1: The court said, we essentially don't believe you, partly because
• 29:05
  Speaker 1: the discrepancies between your testimony and the testimony of the
• 29:08
  Speaker 1: state legislator who hired you, but also because we just
• 29:11
  Speaker 1: don't believe that you could produce three districts that are
• 29:14
  Speaker 1: fifty point two, fifty point three to fifty point four
• 29:17
  Speaker 1: percent majority. I think two were Hispanic, one was black.
• 29:20
  Speaker 1: I'm not sure about that. And that's so precise, and
• 29:23
  Speaker 1: you could do it three times, and that you were
• 29:25
  Speaker 1: not paying attention to race. But I mean, there is
• 29:28
  Speaker 1: counter evidence in you know, in theory, the Supreme Court's
• 29:32
  Speaker 1: not supposed to judge the evidence. That's really for the
• 29:35
  Speaker 1: lower court. They're supposed to defer lower courts on evidentiary findings.
• 29:38
  Speaker 1: But the current Supreme Court has.
• 29:40
  Speaker 5: Not always followed that rule. So it's hard to tell
• 29:43
  Speaker 5: what they're.
• 29:44
  Speaker 1: Going to do, and we haven't seen the dissenting opinion,
• 29:47
  Speaker 1: which may provide, you know, good arguments for Texas when
• 29:52
  Speaker 1: it takes to the Supreme Court.
• 29:54
  Speaker 2: As you know, this whole redistricting national redistricting battle was
• 30:00
  Speaker 2: yuarded by President Trump, and California has approved a redistricting
• 30:05
  Speaker 2: plan that would offset the Texas map, which is now
• 30:10
  Speaker 2: in serious jeopardy. Tell us about the legal challenge to
• 30:15
  Speaker 2: California's redistricting from California Republicans and also now the Trump administration.
• 30:22
  Speaker 1: I mean, they're basically making the same argument that prevailed
• 30:25
  Speaker 1: here that this is a racial gerrymander. I mean, they
• 30:28
  Speaker 1: can't bring a parties in jerrymander argument because, as I said,
• 30:31
  Speaker 1: the Supreme Court in La Rouco case in I think
• 30:33
  Speaker 1: twenty nineteen said those are simply not just diiciable, it
• 30:36
  Speaker 1: can't challenge. So I think they're bringing a claim that
• 30:39
  Speaker 1: the state's the legislature's motivation was race. Assumely they've targeted
• 30:42
  Speaker 1: specific districts for that, but I don't know what they've
• 30:45
  Speaker 1: argued in that. But I think the essence of it
• 30:48
  Speaker 1: is that it's a racial gerrymander very similar to the argument.
• 30:51
  Speaker 1: I don't know the details, but the basic idea is
• 30:54
  Speaker 1: similar to the argument that the three judge court in
• 30:56
  Speaker 1: Texas recognized in striking down the Texas a jerrymander, and is.
• 31:01
  Speaker 4: Sort of opposite of what happened in Texas.
• 31:03
  Speaker 2: The Justice Department argued that California's map illegally bolsters the
• 31:08
  Speaker 2: voting power of Hispanics in the state.
• 31:11
  Speaker 1: Which is interesting because, of course, in Texas, one of
• 31:14
  Speaker 1: the arguments Governor Abbott made is that this is going
• 31:17
  Speaker 1: to actually strengthen the voting power of his Panics, although
• 31:20
  Speaker 1: he combined that he was basically, Hispanics are becoming more Republican,
• 31:23
  Speaker 1: and this is going to allow them to be able
• 31:25
  Speaker 1: to articulate that in districts to both their preference and districts.
• 31:29
  Speaker 5: He had a kind of a sentence which kind of
• 31:31
  Speaker 5: combined the two in one sentence.
• 31:33
  Speaker 1: But yes, so, I mean much would turn on whatever
• 31:36
  Speaker 1: evidence they have for that. There's also an argument that
• 31:39
  Speaker 1: there's been a lot of debate about this amongst the
• 31:41
  Speaker 1: law professors in the last twenty four hours as to
• 31:44
  Speaker 1: what's the significance of the fact that the California redistricting
• 31:49
  Speaker 1: was approved by the voters, but the challengers have to
• 31:52
  Speaker 1: prove that the voters were racially motivated as opposed to
• 31:56
  Speaker 1: the legislature, and I think for grabs, because the public
• 31:59
  Speaker 1: campaign was largely on party grounds. So whether or not
• 32:03
  Speaker 1: even if there was a racial motivation within the legislature,
• 32:07
  Speaker 1: whether that was some kind of washed away by the voters,
• 32:11
  Speaker 1: or whether if it really is racially tainted, whether the
• 32:13
  Speaker 1: legislature's motivation was racial prospanic, whether it doesn't matter that
• 32:18
  Speaker 1: the voters voted for it because they thought that I'm
• 32:20
  Speaker 1: voting on partisan grounds.
• 32:21
  Speaker 4: That's interesting.
• 32:22
  Speaker 5: That will be an interesting fight.
• 32:24
  Speaker 2: You law professors have some interesting conversations.
• 32:27
  Speaker 1: Yeah, obviously it's been all on live, but it's been
• 32:29
  Speaker 1: an interesting back and forth on that course.
• 32:32
  Speaker 5: The government on the plaintiffs first have.
• 32:34
  Speaker 1: To show that the plan was racially motivated and not
• 32:38
  Speaker 1: partisanly motivated even within the legislature. And then they conclude
• 32:42
  Speaker 1: that it was partisan even in the legislature, than the
• 32:45
  Speaker 1: effect of the voters as becomes irrelevant.
• 32:47
  Speaker 2: And there are other states, both democratic and Republican, that
• 32:52
  Speaker 2: are in play. We'll see what settles out. Thanks so much, Rich,
• 32:57
  Speaker 2: that's professor Richard Rfault of Columbia Law School. And that's
• 33:01
  Speaker 2: it for this edition of The Bloomberg Law Show. Remember
• 33:03
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• 33:06
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• 33:10
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• 33:15
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• 33:18
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• 33:22
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