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Comey Defense & Michael Jordan NASCAR Court Win · Bloomberg Law

0:02
Speaker 1: This is Bloomberg Law with June Grossel from Bloomberg Radio.
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Speaker 1: My heart is broken for the Department of Justice, but
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Speaker 1: I have great confidence in the federal judicial system. I'm innocent,
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Speaker 1: so let's have a trial.
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Speaker 2: But will the criminal case against former FBI Director James
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Speaker 2: Comy even get to trial. Comy's defense has filed several
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Speaker 2: motions to get the case dismissed before trial, including emotion
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Speaker 2: to dismiss because the government engaged in a vindictive and
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Speaker 2: selective prosecution against him, and emotion to dismiss because the
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Speaker 2: US Attorney Lindsay Halligan was illegally appointed. And yesterday, a
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Speaker 2: frustrated judge scolded the prosecution for its indict first, investigate
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Speaker 2: second approach to Comy's case. He ordered prosecutors to turn
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Speaker 2: over the grand jury transcript, phips and a trove of
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Speaker 2: materials from the investigation. Comy has pleaded not guilty to
1:06
Speaker 2: the charges of lying to Congress in twenty twenty, charges
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Speaker 2: filed days after President Donald Trump appeared to urge his
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Speaker 2: attorney general to prosecute the former FBI director and other
1:19
Speaker 2: perceived political enemies. Joining me is former federal prosecutor Robert
1:25
Speaker 2: Mintz a partner mat Carter in English. A federal judge
1:29
Speaker 2: yesterday scolded the prosecutors for what he described as their
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Speaker 2: indict first and investigate second approach to the case, saying,
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Speaker 2: this is not a typical case. Isn't that what Comy
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Speaker 2: has been saying?
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Speaker 3: The magistrate judge, who handles the discovery phase of the
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Speaker 3: potential trial, was clearly frustrated with prosecutors and ultimately instructed
1:52
Speaker 3: them by the end of the day today to turn
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Speaker 3: over grand jury materials and other evidence that investigators had
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Speaker 3: seized or the investigation. The judge was frustrated with a
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Speaker 3: lack of information that federal prosecutors had regarding evidence that
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Speaker 3: was seized back in twenty nineteen and twenty twenty when
2:13
Speaker 3: prosecutors executed a search warrant on Columbia law professor Daniel
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Speaker 3: Richman's office in connection with an investigation that was conducted
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Speaker 3: during Trump's first administration. That's part of an increy into
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Speaker 3: whether or not here Comy had illegally shared classified information.
2:31
Speaker 3: The Justice Department back then during Trump's first term, closed
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Speaker 3: the investigation without charges, but now prosecutors are seeking to
2:39
Speaker 3: use that evidence in this criminal prosecution of James Comy,
2:43
Speaker 3: and that's what the magistrate judge was frustrated about because
2:47
Speaker 3: Comy's lawyers argued that they had yet to see that
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Speaker 3: information and some of it may be privileged since at
2:53
Speaker 3: one point mister Richmond was acting as an attorney to
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Speaker 3: James Comy.
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Speaker 4: Prosecutors were or to turn over all of.
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Speaker 3: That information, including what went on in front of the
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Speaker 3: grand jury when the indictment was obtained against Comy.
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Speaker 2: Besides attorney client privileged questions, the defense is also claiming
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Speaker 2: that prosecutors shouldn't be allowed to use that because it
3:18
Speaker 2: was obtained through search warrants, as you said, that were
3:20
Speaker 2: approved in a different investigation involving a different set of
3:24
Speaker 2: alleged crimes than Comy faces.
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Speaker 3: Now, well, as you say, what happened was that prosecutors
3:31
Speaker 3: executed four search warrants on Richmond's devices between twenty nineteen
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Speaker 3: and twenty twenty, allowing investigators to review his computer hard drive,
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Speaker 3: for example, his email account, iCloud devices. And that's because
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Speaker 3: Richmond had briefly represented Comy as an attorney after Trump
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Speaker 3: fired him as FBI director in twenty seventeen, some of
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Speaker 3: that information might be protected by the attorney client privilege,
3:56
Speaker 3: But the Comy lawyers are arguing beyond the privilege issue,
4:00
Speaker 3: it's simply unfair for that information to be admitted in
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Speaker 3: this case because, as you say, this is a different case.
4:08
Speaker 3: The search warrant was obtained based upon information that was
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Speaker 3: searching for different evidence and potential different criminal violations. So
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Speaker 3: they're saying, different investigation, different set of alleged crimes, and
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Speaker 3: therefore the information that was obtained from those four search
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Speaker 3: warrants should not be admitted in this criminal case.
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Speaker 2: I take it that that doesn't happen often.
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Speaker 4: No, it doesn't happen often. And I think you also have.
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Speaker 3: To bear in mind that the twenty nineteen and twenty
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Speaker 3: twenty search warrants authorized agents to review Richmond's devices only
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Speaker 3: for potential evidence of specific crimes, and so in that case,
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Speaker 3: while search warrants are generally fairly broad, they list a
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Speaker 3: slew of crimes for which evidence may be sees, and
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Speaker 3: they're fairly broad, and they give a great deal of
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Speaker 3: latitude to agents in terms of seizing evidence. In this case,
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Speaker 3: it appears that those search warrants were very limited, or
5:02
Speaker 3: certainly more limited than they typically are, and it only
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Speaker 3: allowed the government to review material that was relevant to
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Speaker 3: the specific crimes that were laced in the search warrants.
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Speaker 3: So it raises the question about number one, whether the
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Speaker 3: government has reviewed information that went beyond the scope of
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Speaker 3: those initial search warrants. And secondly, whether the information that
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Speaker 3: was derived from search warrants that were permitted only to
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Speaker 3: investigate certain crimes could be used now to investigate a
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Speaker 3: crime that was not contemplated at the time that the
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Speaker 3: search warrants were issued.
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Speaker 2: And apparently the prosecutors have been using information obtained from
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Speaker 2: those search warrants in court papers when it hasn't gone
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Speaker 2: through the judge yet.
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Speaker 3: Homie's lawyers raised two interesting points before the Magistrate Judge
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Speaker 3: Number one.
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Speaker 4: They argued that at the time that.
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Speaker 3: Those records were seized from mister Richmond, mister Richmond's lawyers
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Speaker 3: were permitted to review the evidence and to remove anything
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Speaker 3: they thought was covered by the attorney client privilege. But
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Speaker 3: mister Comy's lawyers never saw this evidence and never had
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Speaker 3: an opportunity to review it prior to it being used.
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Speaker 4: By prosecutors here.
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Speaker 3: So they're arguing in the first instance, that privilege belongs
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Speaker 3: to James Comy doesn't belong to mister Richmond, and mister
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Speaker 3: Richmond's interests may have been different at that time than
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Speaker 3: James Comy's interests are now. So the judge apparently agreed
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Speaker 3: with them and said, everything seized back in twenty nineteen
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Speaker 3: and twenty twenty, you've got to turn over to Comy's
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Speaker 3: lawyers so they can go through it and they can
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Speaker 3: make a separate argument as to whether or not any
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Speaker 3: of that information is privileged or not. And the second
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Speaker 3: point is that they are arguing that prosecutors have already
6:44
Speaker 3: used this material in some of their filings with the court,
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Speaker 3: and the judge seemed to take an interest in that,
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Speaker 3: and he warrant prosecutors that if they quote in court
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Speaker 3: filings from that information that was seized from those search
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Speaker 3: warrants before mister Comy's lawyers have an opportunity to complete
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Speaker 3: their review, that they do so quote at their own risk. Interestingly,
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Speaker 3: if the judge's later rules that prosecutors should not have
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Speaker 3: had access to those these communications, it would arguably taint
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Speaker 3: the entire case and would provide a basis for Comey's
7:16
Speaker 3: lawyers to move to dismiss the indictment.
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Speaker 2: Comey's defense lawyers had already asked for a transcript of
7:23
Speaker 2: the grand jury proceedings. And this relates to Lindsey Halligan,
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Speaker 2: who was installed as US attorney hastily. She has no
7:33
Speaker 2: experience as a prosecutor, and she personally presented the case
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Speaker 2: against Komy and New York Attorney General Letitia James to
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Speaker 2: the grand jury with no help from experienced prosecutors who
7:47
Speaker 2: were not willing to take part in the grand jury proceedings.
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Speaker 2: So Comy's defenses claiming that there were irregularities during the
7:57
Speaker 2: presentation to the grand jury. Let's say you've never presented
8:02
Speaker 2: a case to a grand jury. You don't have anyone
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Speaker 2: experienced in the grand jury room with you to help
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Speaker 2: you out. How difficult is it to present a case
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Speaker 2: to a grand jury properly?
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Speaker 3: Well, if you're an experienced prosecutor, appearing before the grand
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Speaker 3: jury is fairly routine and not that difficult. It's not
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Speaker 3: like in your presentation before the grand jury, complicated legal
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Speaker 3: issues typically arise. But in this case, the prosecutor, Lindsay Halligan,
8:29
Speaker 3: had just been appointed as an interim US attorney in
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Speaker 3: the Eastern District of Virginia and had never presented a
8:36
Speaker 3: case before a grand jury before Comy's lawyers are arguing
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Speaker 3: that they're entitled to pull back the curtain on that
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Speaker 3: grand jury proceding, something that very rarely happens. Generally, once
8:48
Speaker 3: an indictment is returned, prosecutors and the defense move on
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Speaker 3: to the trial itself, and there's generally not a basis
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Speaker 3: to go back and review the presentation before the grand
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Speaker 3: jury unless there is some evidence of some type of
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Speaker 3: serious irregularity, and that's exactly what Comy's lawyers are arguing here.
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Speaker 3: They have asked the judge to provide them with all
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Speaker 3: the grand jury materials, and the judge has ordered that
9:12
Speaker 3: the government turned that over, and the basis of their
9:15
Speaker 3: argument is that there were a series of irregularities. They
9:17
Speaker 3: point to the fact that Miss Halligan kept the grand
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Speaker 3: jurors beyond normal business hours after the grand jury voted
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Speaker 3: to indict on two charges but refused to indict on
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Speaker 3: a third. They also argue that she may have used
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Speaker 3: attorney client privileged information in her presentation, and then there
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Speaker 3: was a further irregularity because she apparently signed two indictments,
9:41
Speaker 3: one of them was the one that was actually returned
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Speaker 3: by the grand jury, and the other indictment was the
9:45
Speaker 3: one that was rejected by the grand jury, at least
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Speaker 3: as to one count.
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Speaker 4: And given all of.
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Speaker 3: These irregularities, the magistrate judge has taken the unusual step
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Speaker 3: of saying to Comy's lawyers, you're entitled to review this
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Speaker 3: entire proceeding, and there's little doubt that once they do that,
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Speaker 3: there will be some other issues that they will be
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Speaker 3: able to raise as to why the presentation was not valid.
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Speaker 3: And if they can ultimately convince the judge that the
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Speaker 3: irregularities are serious enough so that it taints the entire
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Speaker 3: grand jury process and that indictment is thrown out, they
10:17
Speaker 3: may well have won their case because the station of
10:19
Speaker 3: limitations I'm sure they will argue, has now expired.
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Speaker 2: Coming up next on the Bloomberg Law Show, I'll continue
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Speaker 2: this conversation with former federal prosecutor Robert Mintz. Attorney General
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Speaker 2: Pam Bondi basically wants a do over, and Comy's defense
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Speaker 2: team wants to know what's the lie Comy supposedly told.
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Speaker 2: And later in the show, Michael Jordan's racing team wins
10:44
Speaker 2: a key legal fight in his anti trust feud with NASCAR.
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Speaker 2: I'm June Grosso and you're listening to Bloomberg. The indictment
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Speaker 2: of former FBI director James Comy came just five days
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Speaker 2: after sident Donald Trump, in a post on truth Social
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Speaker 2: demanded that Attorney General Pam Bondi bring charges against his
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Speaker 2: perceived enemies, naming Komy, New York Attorney General Letitia James,
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Speaker 2: and California Senator Adam Schiff. The charges center on testimony
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Speaker 2: Comy gave in response to questions from Republican Senator Ted
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Speaker 2: Cruz during a twenty twenty hearing over the FBI's investigation
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Speaker 2: into Russian interference in the twenty sixteen election.
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Speaker 1: What mister McKay is saying and what you testify to
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Speaker 1: this committee cannot both be true.
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Speaker 4: One or the other is false. Who's telling the truth?
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Speaker 1: I can only speak to my testimony.
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Speaker 5: I stand by what the testimony you summarized that I
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Speaker 5: gave in May of twenty seventeen.
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Speaker 2: Comy's defense team is trying to get the charges drop
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Speaker 2: before trial. They've filed several motions, including a motion to
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Speaker 2: dismiss because the government engaged in a vindictive and selective
12:00
Speaker 2: prosecution and a motion to dismiss because the US Attorney
12:05
Speaker 2: was illegally appointed. I've been talking to former federal prosecutor
12:10
Speaker 2: Robert Mintz of Maccarter and English, so Bob. One of
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Speaker 2: the big arguments that Komy is making, as well as
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Speaker 2: New York Attorney General Letitia James, is that Lindsay Halligan
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Speaker 2: was illegally appointed to the position of US Attorney for
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Speaker 2: the Eastern District of Virginia. So Attorney General Pambondi has
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Speaker 2: retro actively given Halligan an extra title of special Attorney
12:38
Speaker 2: to try to withstand the claims that she was illegally
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Speaker 2: serving when she brought the charges. I mean, will the
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Speaker 2: court let her sort of erase her mistake and say, oh,
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Speaker 2: by the way, would a court actually let her do
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Speaker 2: a retroactive appointment.
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Speaker 4: Well, that remains to be seen.
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Speaker 3: We don't usually see this kind of litigation, the appointment
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Speaker 3: of a US attorney. I won't say that it never happens,
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Speaker 3: but it certainly does not typically happen. And here we
13:07
Speaker 3: had a situation where the argument was that Halligan was
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Speaker 3: not lawfully appointed as interim US attorney and she shouldn't
13:13
Speaker 3: have been in front of that grand jury in the
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Speaker 3: first place. And the argument is that the Attorney General
13:18
Speaker 3: had appoint at Halligan's predecessor, an experienced prosecutor from the
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Speaker 3: Eastern District of Virginia to lead that office, and that
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Speaker 3: appointment was made on January twenty first. That starts this
13:30
Speaker 3: one hundred and twenty day clock ticking under the statute,
13:33
Speaker 3: which allows time in most circumstances for that prosecutor to
13:39
Speaker 3: get confirmed by the Senate. In this case, mister Siebert
13:42
Speaker 3: was not confirmed, and after one hundred and twenty days
13:45
Speaker 3: expires under the statute. The defense will argue the District Court,
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Speaker 3: not the Justice Department, has exclusive power to appoint the
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Speaker 3: interim US Attorney. That clock ran out on May twenty
13:57
Speaker 3: first of twenty twenty five, at which.
14:00
Speaker 4: Point the Court reappointed Seber.
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Speaker 3: As United States Attorney to serve until the vacancy is filled.
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Speaker 4: Then Sebert was fired, and.
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Speaker 3: The defense has argued that the District Court at that
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Speaker 3: point was the only legitimate appointing authority and that the
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Speaker 3: Attorney General and the President did not have the power
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Speaker 3: to appoint Miss Halligan to another one hundred and twenty
14:22
Speaker 3: day term.
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Speaker 2: Do you think that this retro active title giving will
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Speaker 2: fly with a judge.
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Speaker 3: I think the argument by the Attorney General that she
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Speaker 3: can retroactively give Eastern Virginia's top prosecutors an extra title
14:37
Speaker 3: in order to try to defend against the claims that
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Speaker 3: Halligan was improperly appointed. Is probably not going to gain
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Speaker 3: a lot of traction with the courts.
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Speaker 4: Typically, the courts.
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Speaker 3: Will look at the facts at the time and whether
14:50
Speaker 3: or not the appointment was proper under the rules, under
14:53
Speaker 3: the regulations, under the statutes at the time of the appointment.
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Speaker 3: And I think it's an uphill battle to argue that
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Speaker 3: even if there was a deficiency, then that can be
15:02
Speaker 3: remedied retroactively by an appointment.
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Speaker 2: Komy is also claiming that the indictment is hopelessly vague
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Speaker 2: and defective on its face, and this may be a
15:12
Speaker 2: result of Halligan having no prosecutorial experience and no help
15:17
Speaker 2: from prosecutors. And they say that Senator Cruz's questions were
15:22
Speaker 2: fundamentally ambiguous and that Komi's response was literally true. So
15:28
Speaker 2: they want to know from the prosecutors, which statements are
15:31
Speaker 2: you claiming were false? And when you listen to that
15:36
Speaker 2: exchange between Cruz and Komi, it's hard to see where
15:41
Speaker 2: there's even a possibility of a lie, where Comy says,
15:44
Speaker 2: I stand by my prior testimony.
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Speaker 3: Yeah, And that's exactly why false statements. That's exactly why
15:51
Speaker 3: false statement prosecutions are extremely difficult, because you.
15:55
Speaker 4: Have to parse through exactly what was.
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Speaker 3: The question and what was the answer, and demonstrate that
16:02
Speaker 3: at the time the answer was given, it was not
16:04
Speaker 3: only false, but it was intentionally false, and that it
16:07
Speaker 3: was false about something that was material. So in this case,
16:12
Speaker 3: the prosecution is based on hearing before the Senate Judiciary
16:15
Speaker 3: Committee on September thirty, is, twenty twenty, and at that hearing,
16:18
Speaker 3: as you say, Senator Ted Cruz asked mister Comy whether
16:22
Speaker 3: he had authorized someone at the FBI to be an
16:25
Speaker 3: anonymous source in news reports. The indictment says mister Comy
16:29
Speaker 3: misled the committee by saying that he had not done so. Now,
16:32
Speaker 3: Comy's lawyers have attacked that indictment by saying that the
16:34
Speaker 3: questioning by mister Cruz was vague and imprecise, and they
16:39
Speaker 3: point out that at the time that Senator Cruz was
16:42
Speaker 3: questioning mister Comy about whether he had authorized anybody to
16:45
Speaker 3: leak information, that Senator Cruz was referring to Andrew McCabe,
16:50
Speaker 3: who once served as mister Comy's deputy at the FBI,
16:53
Speaker 3: and was not referring to Daniel Richman, who had been
16:56
Speaker 3: a former FBI employee and later became the attorney for
17:00
Speaker 3: James Comy. So they're arguing that the indictment is defective
17:03
Speaker 3: on its face, because in order to prove that mister
17:06
Speaker 3: Comy lied, you have to show that there was a
17:09
Speaker 3: clear question and that he gave a clearly false, a
17:12
Speaker 3: knowingly false answer to it, and that he had an
17:15
Speaker 3: intention to mislead the committee, and that the information he
17:18
Speaker 3: provided that was false was material, and that this somehow
17:22
Speaker 3: obstructed the relevant congressional proceeding. They say that that information
17:26
Speaker 3: is not contained in the indictment, and one of their
17:28
Speaker 3: emotions is the requirement that the government provide that information.
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Speaker 3: So what you have here basically is an argument that
17:35
Speaker 3: the indictment is defective on its face. So, in other words,
17:39
Speaker 3: it's not an argument that the government has its facts wrong,
17:42
Speaker 3: because the factual dispute is something that has to.
17:44
Speaker 4: Be resolved by a jury at trial.
17:47
Speaker 3: They are arguing that this is a decision that really
17:49
Speaker 3: needs to be made by the judge, because on its face,
17:53
Speaker 3: the government is unable to prove the charges. The allegations
17:57
Speaker 3: in the indictment simply are not enough to succestain a
18:00
Speaker 3: valid conviction. And that's why they're filing this whole slew
18:04
Speaker 3: of arguments to try to get this case dismissed before
18:07
Speaker 3: it ever goes to trial.
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Speaker 2: One argument that was being discussed even before the defense
18:12
Speaker 2: filed its papers was, you know, a motion to dismiss
18:16
Speaker 2: because of a vindictive and selective prosecution. And here the
18:20
Speaker 2: comy motion includes a document with a sixty page long
18:24
Speaker 2: list of links that detailed Trump's shall we say not
18:28
Speaker 2: so kind statements about Coomy. I mean, how strong is
18:32
Speaker 2: their vindictive prosecution case? I know it's hard to get
18:35
Speaker 2: something dismissed for vindictive prosecution.
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Speaker 4: No, that's exactly right.
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Speaker 3: I mean motions for vindictive prosecution are exceedingly hard to win.
18:43
Speaker 3: They require defendants to prove that prosecutors have displayed animus
18:48
Speaker 3: towards them while they were seeking to exercise their rights,
18:51
Speaker 3: and that the charges never would have been brought except
18:54
Speaker 3: for that animus. Now, prosecutors have argued in response that
18:58
Speaker 3: the comments made by President Trump to prosecute mister Komy,
19:03
Speaker 3: we're only suggesting that if mister Comy committed a crime,
19:06
Speaker 3: that they ought to prosecute him, and that he was
19:08
Speaker 3: not directing the Department of Justice to prosecute mister Comy
19:12
Speaker 3: regardless of whether or not a crime was committed. We'll
19:15
Speaker 3: have to see how the judge handles that at the
19:17
Speaker 3: end of the day. But the vindictive prosecution standard is
19:20
Speaker 3: fairly high, and that may be a difficult argument for
19:23
Speaker 3: the defense to prevail on.
19:26
Speaker 4: Bob.
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Speaker 2: It seems like we're seeing case after case where judges
19:31
Speaker 2: are questioning, rejecting, or not relying on what federal prosecutors
19:38
Speaker 2: are telling them. We have that happening in this case
19:41
Speaker 2: to a certain extent, and in the criminal case against
19:45
Speaker 2: the mistakenly deported Abrego Garcia, the judge has ordered the
19:51
Speaker 2: prosecutors to send their internal communications to him and there's
19:56
Speaker 2: a hearing schedule for December where the number two leader
20:00
Speaker 2: or of the Justice Department may have to testify. Today,
20:04
Speaker 2: a judge in Chicago found that the evidence from the
20:07
Speaker 2: government about the Border Patrol's use of force was not credible.
20:14
Speaker 2: We've had other judges questioning whether the Justice Department is
20:18
Speaker 2: following orders. It seems to be a crisis of confidence
20:22
Speaker 2: where judges are not accepting at face value.
20:26
Speaker 3: Well, there's no question that historically federal judges give great
20:31
Speaker 3: deference to the government and specifically the US Attorney's office
20:35
Speaker 3: when they appear in court on federal cases. How was
20:37
Speaker 3: a federal prosecutor for almost ten years, and I can
20:41
Speaker 3: say from experience that judges take prosecutors at their word.
20:46
Speaker 3: They sometimes request additional information, They may request additional briefing
20:50
Speaker 3: in order to make sure that the government has the
20:53
Speaker 3: law right. But if a federal prosecutor makes a representation
20:58
Speaker 3: to a federal judge in open cques court, generally that
21:01
Speaker 3: is something historically that judges will accept. I think we
21:05
Speaker 3: are seeing a greater degree of skepticism by judges because
21:09
Speaker 3: we're seeing a series of unusual issues that judges have
21:13
Speaker 3: never really faced before. For example, the issues regarding whether
21:17
Speaker 3: or not the appointment of the US Attorney was properly
21:19
Speaker 3: done is not something that judges typically deal with. Some
21:22
Speaker 3: of the issues that went on in the grand jury
21:25
Speaker 3: in the Komi indictment that we talked about earlier are
21:29
Speaker 3: not issues that typically arise. Again, it is very unusual
21:32
Speaker 3: for the defense to get access to the grand jury
21:35
Speaker 3: proceeding it's a motion that defense lawyers routinely make. It
21:39
Speaker 3: happens all the time, so it's not as if judges
21:42
Speaker 3: are not faced with that question, but it's rarely granted.
21:44
Speaker 3: It's we rarely have a situation where defense lawyers are
21:47
Speaker 3: privy to that entire proceeding, because once they look at
21:50
Speaker 3: everything that's said before that grand jury that are certainly
21:54
Speaker 3: going to come up with some other arguments. That's to
21:56
Speaker 3: why some of the presentation may have been improper. I
21:59
Speaker 3: think it's fair to say that there have been examples
22:02
Speaker 3: of where federal judges are not nearly as deferential to
22:05
Speaker 3: federal prosecutors as they have been in the past.
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Speaker 2: That deprives them of one advantage they have over defense attorneys.
22:13
Speaker 2: Thanks so much, Bob. That's Robert Mince of McCarter and English.
22:17
Speaker 2: Coming up next on the Bloomberg Law Show, Michael Jordan's
22:21
Speaker 2: racing team wins a key legal fight in his anti
22:24
Speaker 2: trust feud with NASCAR. Will the case be settled or
22:29
Speaker 2: go to trial? On December first, I'm June Grosso and
22:32
Speaker 2: you're listening to Bloomberg.
22:36
Speaker 5: Look, I've been a fan of the game for a
22:37
Speaker 5: long period of time, you know, and you know, when
22:40
Speaker 5: we first started this goal process, I've always said that
22:43
Speaker 5: y'all want to fight for the betterment of the sport.
22:46
Speaker 5: You know, even though they try to point out that,
22:48
Speaker 5: you know, we made you know, some money, or we
22:50
Speaker 5: had successful business, that's not the point. The point is
22:53
Speaker 5: is that the sport itself needs to continually change for
22:57
Speaker 5: the for the fans as well as for the teams,
22:59
Speaker 5: as well as the NASCAR too, if you understand that.
23:01
Speaker 2: And Michael Jordan's racing team secured a crucial win in
23:05
Speaker 2: its anti trust case against NASCAR this week. On Tuesday,
23:09
Speaker 2: a federal judge rule that Premier stock Car Racing is
23:13
Speaker 2: its own, separate and distinct market. That strengthens Jordan's anti
23:19
Speaker 2: trust claims as his team twenty three to eleven Racing
23:22
Speaker 2: and co plaintiff front Row Motorsports head towards December first
23:27
Speaker 2: trial against the racing organization.
23:30
Speaker 5: Look, I look forward to going down the fire. If
23:33
Speaker 5: I have to fight this to the end for the
23:35
Speaker 5: betterment of the sport, how we'll do that?
23:37
Speaker 2: So will there be a trial on December first or
23:40
Speaker 2: a settlement joining me?
23:42
Speaker 3: Is?
23:42
Speaker 2: Anti trust law expert Harry First, a professor at NYU
23:45
Speaker 2: law school. Harry explained Michael Jordan's anti trust case against NASCAR.
23:51
Speaker 1: This is a tussle between the family that has controlled
23:55
Speaker 1: NASCAR and I guess stock car racing for many years.
24:00
Speaker 1: Apparently almost uniquely in sports. You know, most sports are
24:06
Speaker 1: controlled by groups of team owners, but this is one
24:10
Speaker 1: that's only controlled by one family, this France family. You know,
24:14
Speaker 1: I guess, It's had its ups and downs, but it's
24:17
Speaker 1: pretty up now. You know. They're sort of the only
24:21
Speaker 1: real game in town for the Top Line Cup racing.
24:26
Speaker 1: There basically been arguments between the owners of these racing
24:31
Speaker 1: teams and the Frances over who's gonna, you know, sort
24:37
Speaker 1: of split the money, particularly broadcast revenue. I think they
24:41
Speaker 1: both need each other. Race car owners need tracks to
24:45
Speaker 1: race on, and NASCAR, you know, has made itself through
24:49
Speaker 1: a series of moves, acquisitions and so forth, is basically
24:53
Speaker 1: the only place where you can have these high level races.
24:56
Speaker 1: And of course you've got to have the race cars
25:01
Speaker 1: or else you've got nothing to show. So they both
25:04
Speaker 1: need each other. But apparently the racing teams have not
25:08
Speaker 1: been hugely profitable. Unlike other sports. It's very expensive to
25:13
Speaker 1: maintain these According to the litigation anyway, and the France's
25:18
Speaker 1: So the plaintiffs say, the plaintiff's being two of these
25:22
Speaker 1: teams anyway, one being this twenty three to eleven racing,
25:25
Speaker 1: which is Michael Jordan's. Now, the plaintiffs say that they
25:29
Speaker 1: take most of the revenue, particularly the broadcast revenue, and
25:33
Speaker 1: we're not getting enough, you know. The Francis say, well,
25:36
Speaker 1: you don't like it, take it or leave it, and
25:39
Speaker 1: that's when the litigation particularly broke out.
25:42
Speaker 2: It sounds like anti trust to me, but sounds like
25:45
Speaker 2: path sounds like it is it? So this partial summary
25:49
Speaker 2: judgment motion was about the relevant market, which we've talked
25:54
Speaker 2: about before is key to anti trust.
25:58
Speaker 1: Right. So the litigation has had a little back and forth.
26:02
Speaker 1: The district court judge seems pretty well disposed to the
26:05
Speaker 1: plaintiff's claims, at one point issuing this injunction requiring NASCAR
26:11
Speaker 1: to admit the two teams into the I guess it
26:15
Speaker 1: was the twenty twenty four circuit and the Court of
26:19
Speaker 1: Appeals knocked that down for various reasons. So just within
26:24
Speaker 1: I guess it's the last few days, right, the district
26:27
Speaker 1: court judge granted the plaintiff's motion for partial summary judgement.
26:32
Speaker 1: I mean, some of the important issues are now out
26:34
Speaker 1: of the case, and particularly as you mentioned, this contentious
26:38
Speaker 1: issue over what's the relevant market. Is it just this
26:42
Speaker 1: NASCAR premier racing market? Does it include, you know, other
26:47
Speaker 1: kinds of stock car racing? There are other tiers? Does
26:51
Speaker 1: it include other motor sports? The game and anty trust
26:55
Speaker 1: If you're a defendant as to constantly include different kinds
26:58
Speaker 1: of substitutes, people would watch. But here the market is
27:03
Speaker 1: a labor market that they're arguing about, and the question is,
27:07
Speaker 1: you know, what are the choices available for these race
27:11
Speaker 1: car drivers who are selling their services? And this is
27:15
Speaker 1: basically it. So it looked like a pretty strong claim
27:19
Speaker 1: on market definition. But proving market definition is expensive, you know,
27:24
Speaker 1: requires lots of experts, and they went through to the stage.
27:28
Speaker 1: Now this is before you get to the jury, this
27:31
Speaker 1: summary judgment stage, but a lot of the record's been developed,
27:36
Speaker 1: and the district court judge sort of took an interesting
27:40
Speaker 1: turn on this. He said, well, if there's a dispute
27:44
Speaker 1: of fact, which there always is, in market definition, I
27:47
Speaker 1: think it's really broad. You know, well, you could have
27:51
Speaker 1: lots of race car drivers, there are lots of choices
27:54
Speaker 1: that the race car drivers have. I think it's really narrow,
27:59
Speaker 1: say the plaintiffs. So lots of things to argue in
28:02
Speaker 1: front of a jury. But the judge says, ah, guess what, NASCAR.
28:08
Speaker 1: You filed a counterclaim against these driver teams which had
28:13
Speaker 1: gotten together to jointly negotiate with NASCAR over these agreements
28:19
Speaker 1: to their charges that they've got. So we're alleging that
28:24
Speaker 1: you sort of engage in a price fixing conspiracy. So
28:28
Speaker 1: they filed a counterclaim. Now, unfortunately for them, when you
28:32
Speaker 1: file a complaint in anti trust, normally you have to
28:37
Speaker 1: put in your complaint what the relevant market is. So
28:40
Speaker 1: they defined a market which was pretty much the same
28:43
Speaker 1: as the market that Michael Jordan defined, all different wording,
28:49
Speaker 1: but basically the same labor market. It's these racing teams
28:53
Speaker 1: or you know, the premier stock car racing group, you
28:57
Speaker 1: know at the very top. So they basically to find
29:00
Speaker 1: the same market. So the judge says, sorry, you've already
29:04
Speaker 1: admitted it, and you know we hold that you've made
29:06
Speaker 1: this admission. That's your admission. So we're done, and you're done,
29:12
Speaker 1: and we don't have to try this issue. I'm sure
29:15
Speaker 1: that defendants and their lawyers were not all that happy
29:18
Speaker 1: with that, and I mean, I think it's pretty supportable
29:21
Speaker 1: on appeal, and there would have been ways to handle
29:25
Speaker 1: the complaint that didn't fall into this trap, but they
29:29
Speaker 1: didn't do it this way, and they were sort of
29:32
Speaker 1: too clever by half. It was a very clever counterclaim,
29:35
Speaker 1: but there was no requirement that they even needed to
29:38
Speaker 1: file it. Then well, it's not quite the ballgame. So
29:43
Speaker 1: the judge also did something else, not just the market definition,
29:46
Speaker 1: but you have to have monopoly power or in this
29:48
Speaker 1: case monops AEE power as the sole buyer, and there
29:52
Speaker 1: have to be high barriers to entry, hard to get
29:55
Speaker 1: into this market. And the judge found on all of
29:59
Speaker 1: those things they've had this position for years and years
30:02
Speaker 1: as the sole buyer. It's very hard to have a
30:06
Speaker 1: competing league. It's hard to even start your own racing team.
30:11
Speaker 1: They had estimates on that in the record. So the
30:15
Speaker 1: judge said, no, you've got this high entry barrier. It's
30:18
Speaker 1: very hard to enter. There are really no substitutes. There
30:22
Speaker 1: aren't other teams out there, you know, to race. So
30:26
Speaker 1: on the having monopoly or monopsony power interrelevant market is
30:31
Speaker 1: now out of the case. But that still leaves the
30:35
Speaker 1: question really two questions. One is they have to engage
30:39
Speaker 1: in some anti competitive conduct that maintains their monopoly position,
30:45
Speaker 1: and that's still going to go to trial, and that involves,
30:49
Speaker 1: you know, maybe their acquisitions of these other tracks, which
30:52
Speaker 1: they did. There were some exclusive agreements. There's this agreement
30:57
Speaker 1: that if you sign an agreement, you wave your an
31:00
Speaker 1: he trust claims. All of those will go together into
31:03
Speaker 1: a trial. And then there's the question of damages, and
31:07
Speaker 1: that's going to be interesting because you know, the plaintiffs
31:11
Speaker 1: want more money. As the plaintiffs always won, I say
31:15
Speaker 1: you took too much, I didn't get enough. But they
31:17
Speaker 1: have to show what the competitive rate would be for
31:22
Speaker 1: these teams, and you know that's going to be a
31:25
Speaker 1: battle of their economists. So there's still a distance to go.
31:29
Speaker 1: Maybe maybe we'll never get there, and the parties are
31:31
Speaker 1: now going to settle. I don't know, but this I
31:34
Speaker 1: think was a pretty big win for the plaintiffs.
31:37
Speaker 2: People are saying that this will put pressure on both
31:41
Speaker 2: sides to settle. After the latest court hearing, Michael Jordan's
31:45
Speaker 2: said that settlement has always been on the table, and.
31:48
Speaker 1: It seems to me what they're really arguing over is
31:51
Speaker 1: how do we split the pot so that the teams
31:54
Speaker 1: have enough money to invest in these fast cars and
31:59
Speaker 1: you know, all the things we need to do, and
32:01
Speaker 1: you know, at the end of the day, perhaps unfortunately
32:04
Speaker 1: for consumers, there's not going to be another circuit because
32:08
Speaker 1: these are private planeiffs pursuing this. So the goal is
32:11
Speaker 1: not to split up NASCAR, so there are competing circuits
32:16
Speaker 1: and you'd have real competition in this kind of racing.
32:20
Speaker 1: This is not Michael Jordan's goal. It's not the goal
32:23
Speaker 1: of private parties. The goal is to basically split the
32:27
Speaker 1: monopoly profits differently so they will likely benefit you know, consumers.
32:33
Speaker 1: I don't know, maybe not so much.
32:35
Speaker 2: If I'm the defendant. I don't want to be in
32:37
Speaker 2: a courtroom sitting opposite Michael Jordan with his star power.
32:42
Speaker 2: I mean, you know how juries are mesmerized right by stars, and.
32:47
Speaker 1: Asking for damages in a jury trial is a good move,
32:50
Speaker 1: particularly these days. I mean, juries have come in with
32:53
Speaker 1: some pretty big verdicts in these big cases against major defendants.
32:57
Speaker 1: You know, Google is one example. So yeah, defendants have
33:03
Speaker 1: never liked Church, let's put it that way. You know,
33:06
Speaker 1: they don't want the subway sandwich thrown.
33:09
Speaker 2: At them, but the jury today did not convict the
33:12
Speaker 2: thrower of the subway sandwich. Thanks so much, Harry. That's
33:16
Speaker 2: Professor Harry First of NYU Law School, and that's it
33:20
Speaker 2: for this edition of The Bloomberg Law Show. Remember you
33:23
Speaker 2: can always get the latest legal news on our Bloomberg
33:25
Speaker 2: Law Podcast. You can find them on Apple Podcasts, Spotify,
33:29
Speaker 2: and at www dot bloomberg dot com, slash podcast Slash Law,
33:35
Speaker 2: and remember to tune into The Bloomberg Law Show every
33:37
Speaker 2: weeknight at ten pm Wall Street Time. I'm June Grosso
33:41
Speaker 2: and you're listening to Bloomberg