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Weekend Law: Trial of Disgraced Lawyer, Student Loans & RFK Jr. · Bloomberg Law

0:03
Speaker 1: This is Bloomberg Law with June Brusso from Bloomberg Radio.
0:10
Speaker 2: In the interest of putting this whole thing to rest,
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Speaker 2: PG and he is willing to offer the Jensens two
0:15
Speaker 2: hundred and fifty thousand dollars for.
0:16
Speaker 3: Their own two hundred and fifty thousand.
0:20
Speaker 2: In terms of land value out in Hinckley. Mister Masory,
0:24
Speaker 2: we feel that's a more than fair price.
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Speaker 4: How about in terms of medical expenses, two hundred and
0:29
Speaker 4: fifty thousand isn't going to come close to what this
0:31
Speaker 4: family is going to have to spend on doctors.
0:33
Speaker 5: Attorney Tom Girardi was catapulted into the national limelight after
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Speaker 5: the two thousand Oscar winning legal drama Aaron Brockovich highlighted
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Speaker 5: his role in getting a more than three hundred million
0:44
Speaker 5: dollars settlement against PG and E for poisoning a California
0:48
Speaker 5: town's drinking water. He was hailed as a pioneer of
0:52
Speaker 5: toxic tort litigation and known for extracting massive settlements for
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Speaker 5: his clients. This season, on the Real Housewives of Beverly Hills,
1:04
Speaker 5: his fame was only enhanced as the husband bankrolling the
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Speaker 5: extravagant lifestyle of the Real housewives of Beverly Hills Erica Girardi,
1:12
Speaker 5: whose ostentatious displays of wealth were over the top even
1:17
Speaker 5: for a real housewife.
1:18
Speaker 1: I'm an enigma wrapped in a riddle and cash.
1:22
Speaker 5: But the eighty five year old man now sitting at
1:25
Speaker 5: the defendant's table in an LA courtroom is a far
1:29
Speaker 5: cry from that powerful lawyer. Girardi is now bankrupt, disbarred,
1:34
Speaker 5: living in a dementia wing of a nursing home, and
1:37
Speaker 5: on trial for stealing fifteen million dollars from his clients.
1:42
Speaker 5: Joining me his trial attorney, David Ring of Taylor Ring
1:45
Speaker 5: in LA. For people who might not know, tell us
1:48
Speaker 5: about Tom Girardi. You know, the star lawyer and his reputation.
1:53
Speaker 6: Tom Girardi was a legend in Los Angeles legal circles.
1:58
Speaker 6: He's a plaintiff's trial lawyer. He represented victims of horrific
2:03
Speaker 6: accidents like plane crashes and horrible automobile accents and things
2:07
Speaker 6: like that. And he'd been a legendary trio loor in
2:10
Speaker 6: Los Angeles since the nineteen eighties. He was as big
2:14
Speaker 6: as it gets in Los Angeles. He was politically connected.
2:18
Speaker 6: He was well known to be connected with the courts
2:23
Speaker 6: and the judges, and he was a very powerful man,
2:26
Speaker 6: and so you know, he was untouchable. He was untouchable
2:29
Speaker 6: in Los Angeles for many, many, many years until this
2:33
Speaker 6: scandal imploded in twenty twenty.
2:36
Speaker 5: Tell us about the scandal that sort of opened this
2:38
Speaker 5: Pandora's box.
2:40
Speaker 6: What caused the downfall of Tom Girardi in his law firm.
2:43
Speaker 6: It all started with a particular lawsuit, the Lion air
2:48
Speaker 6: plane crash, which happened in Jakarta, and Tom Girardi in
2:51
Speaker 6: his firm, they would represent victims in big airplane crashes
2:55
Speaker 6: like that, even if the crash happened halfway across the world.
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Speaker 6: And that litigation was centered in Chicago in federal court,
3:03
Speaker 6: and ultimately it was settled. You know, Boeing and some
3:05
Speaker 6: other defendants paid a lot of money, and Tom Girardi
3:09
Speaker 6: represented families who had lost loved ones in that plane crash.
3:13
Speaker 6: Now he had a co council in Chicago, Chicago firm,
3:17
Speaker 6: and when the settlement was reached and the money was
3:20
Speaker 6: paid by the defendants, Tom Girardi's firm didn't pay his clients,
3:25
Speaker 6: one excuse after another. The firm in Chicago started to
3:29
Speaker 6: get very, very upset because clients are supposed to be
3:32
Speaker 6: paid out right away. And so this firm in Chicago
3:35
Speaker 6: went to federal court and said, there is some suspicious
3:37
Speaker 6: going on here. Tom Girardi's firm is not paying out
3:40
Speaker 6: money that they have received to the clients. And the
3:44
Speaker 6: federal court judge got very involved, went ballistic, and basically
3:49
Speaker 6: some ined Tom Girardi and others to court and it
3:52
Speaker 6: all unfolded there because it was a house of cards
3:55
Speaker 6: and it all fell apart at that point, and it
3:57
Speaker 6: became clear that Tom Girardi had been stealing money from
4:01
Speaker 6: clients and from his firm.
4:03
Speaker 5: Will you explain the basics of the prosecution's case against
4:07
Speaker 5: him in the LA trial.
4:08
Speaker 6: Tom Girardi is being prosecuted for wire fraud, and the
4:12
Speaker 6: wire fraud involves, you know, four or five clients. Look,
4:16
Speaker 6: he defraud a whole lot more than four or five
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Speaker 6: clients over at the years, but the US Attorney's Office
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Speaker 6: in Los Angeles has narrowed it down to about four
4:25
Speaker 6: or five families who basically had their funds, their settlements
4:29
Speaker 6: stolen by Tom Girardi.
4:30
Speaker 7: You know.
4:30
Speaker 6: So he's accused of misappropriation of client funds and wire fraud,
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Speaker 6: and the amounting question this trial is about fifteen million dollars. Again,
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Speaker 6: you look at the long term wrongdoings by mister Girardi
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Speaker 6: and he absconded with a whole lot more than fifteen million.
4:47
Speaker 6: And prosecution is close to resting their case. And they've
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Speaker 6: put on these victims who have explained how they weren't
4:56
Speaker 6: given their settlement funds and all the excuses they were
4:59
Speaker 6: given over time. And they've also had witnesses who are
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Speaker 6: the lawyers for these victims after the fact, who tried
5:05
Speaker 6: to help them get the money from Girardi, you know,
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Speaker 6: when they weren't being paid, and these lawyers come in say,
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Speaker 6: the excuses we got were absurd.
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Speaker 5: Is it basically like a Ponzi scheme that he allegedly operated.
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Speaker 6: I equate Tom Girardi to Bernie Madoff, the same type
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Speaker 6: of personality, the same type of long running fraud, just
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Speaker 6: the absolute despicable conduct of stealing from your own clients
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Speaker 6: who you have a duty of loyalty to. And so yeah,
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Speaker 6: it basically was a Ponzi scheme. What Tom Girardi apparently
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Speaker 6: was doing was he spent extravagantly. We all know he
5:40
Speaker 6: is married to Erica Jane from the Real Housewives and
5:43
Speaker 6: the amount of money that was flowing from Tom for
5:47
Speaker 6: his lifestyle and for Erica Jane's lifestyle, and so settlement
5:51
Speaker 6: would come in, it would go into the Girardi and
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Speaker 6: Keys client trust fund, and Tom Girardi would take some
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Speaker 6: or all of it for his own personal, improper purposes
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Speaker 6: and then would lie to the client the money didn't
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Speaker 6: come in yet. Oh there's a hold up. Oh it's
6:08
Speaker 6: being taxed, all sorts of stories not to pay them out.
6:11
Speaker 6: Then when another big settlement came in, Okay, he might
6:14
Speaker 6: pay out the person who'd been complaining for a year
6:16
Speaker 6: or two, But now he'd stiff that client from their
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Speaker 6: settlement funds, and so yeah, basically a Ponzi scheme.
6:22
Speaker 5: The prosecution is painting him as a celebrity attorney turned villain.
6:28
Speaker 5: But the defendant sitting there in the courtroom is this
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Speaker 5: eighty five year old in mental decline. He's been diagnosed
6:36
Speaker 5: with dementia, lives in a nursing home. So might the
6:39
Speaker 5: jury feel sympathy for him or say why are they
6:42
Speaker 5: going after him at this point?
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Speaker 6: Here's how that plays out in this particular Los Angeles trial.
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Speaker 6: The crimes that Tom Grady's being accused of committing date
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Speaker 6: back to twenty ten, and there's no evidence that he
6:54
Speaker 6: had any real mental decline until about twenty twenty. So
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Speaker 6: he was perfectly fity ten through twenty twenty. He was
7:02
Speaker 6: in courts, he was given speeches, he was politicians, fundraisers,
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Speaker 6: He was in perfect mental health between twenty ten and
7:10
Speaker 6: twenty twenty when some of these crimes were committed, And
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Speaker 6: it really was only in twenty twenty when, yeah, he
7:17
Speaker 6: absolutely did have some sort of mental decline, And now
7:21
Speaker 6: they say he has early on Alzheimer's or dementia, and
7:24
Speaker 6: he does not look well at all in court. But
7:27
Speaker 6: what the prosecution will do and has done, is say,
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Speaker 6: can't look at this man for what he is right
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Speaker 6: now here today, look at what he's done over the
7:35
Speaker 6: past fifteen years, back to twenty ten, when he was
7:39
Speaker 6: absolutely positively competent.
7:41
Speaker 5: The defense is blaming the XCFO Christopher Cayman, who's charge
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Speaker 5: with fraud for allegedly stealing from both client accounts and
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Speaker 5: the firm's operating fund. A judge has split Girardi's trial
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Speaker 5: from Cayman's, so that's quite advantageous to Girardi's defense is
8:00
Speaker 5: his lyric and point at Cayman as the real villain here.
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Speaker 6: Yes, so Tom Girardi really has two main points in
8:08
Speaker 6: his defense. One is that, oh, you know, he was unfit,
8:12
Speaker 6: he was mentally declining, he had dementia, He didn't know
8:15
Speaker 6: what he was doing. He couldn't have controlled these accounts
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Speaker 6: or this money because he really couldn't even handle his
8:21
Speaker 6: own data day activities. That's a big part of their defense.
8:24
Speaker 6: And the other part is what you mentioned that the
8:27
Speaker 6: law firm Girardi and Keith had a chief financial officer
8:30
Speaker 6: named Chris Cayman, and mister Caymen is separately charged from
8:34
Speaker 6: mister Girardi for crimes that mister Cayman committed, and so
8:38
Speaker 6: absolutely in this case, Tom Girardi's defense is to point
8:42
Speaker 6: the finger at Chris Cayman, the CFO, and say, you
8:44
Speaker 6: know what, he's the guy who is stealing the money.
8:48
Speaker 6: He's the guy who you know, wreaked havoc on the
8:51
Speaker 6: law firm's financial resources and the client trust accounts. The
8:55
Speaker 6: problem with that is that it's going to become pretty
8:59
Speaker 6: clear at the CFO Chris came in, he was conducting
9:03
Speaker 6: what they've called is a side fraud. He knew that
9:06
Speaker 6: Girardi was playing Shenanigans with all the money. I mean,
9:10
Speaker 6: he was a CFO. He knew what was going on,
9:12
Speaker 6: and he knew he could get away with from pzzling money.
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Speaker 6: And so what he did He saw this firm in disarray,
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Speaker 6: knew what Girardi was doing, so he started to steal
9:21
Speaker 6: money on his own. And that's going to be a
9:24
Speaker 6: separate trial down the road against mister Cayman, who had
9:28
Speaker 6: fled the country and they brought him back here. But
9:30
Speaker 6: it certainly gives Tom Girardi's lawyers some arguments in this
9:34
Speaker 6: particular trial. My personal opinion, I don't think it's going
9:37
Speaker 6: to carry the day for Tom Girardi.
9:39
Speaker 5: Apparently there is some evidence coming in. On the fifth
9:42
Speaker 5: day of the trial, there was testimony about a secret
9:46
Speaker 5: bank account that was hidden from Girardi. So the defense
9:49
Speaker 5: is looking at that as evidence showing that Girardi wasn't
9:54
Speaker 5: aware of all that was going on at the firm.
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Speaker 6: Tell you what, this very very very interesting development in
10:00
Speaker 6: the case, this secret bank account, and we don't know
10:03
Speaker 6: a lot about it yet. It really just surfaced for
10:06
Speaker 6: the first time in the media at least in this lawsuit.
10:09
Speaker 6: No one had really heard about this secret bank account before.
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Speaker 6: But what it appears to have been is part of
10:16
Speaker 6: perhaps Chris came in side fraud where someone set up
10:21
Speaker 6: another bank account and a different bank than the law
10:25
Speaker 6: firm routinely used, and was siphoning money over to this
10:30
Speaker 6: other bank account, and we don't really know why. We
10:32
Speaker 6: do know that checks were written out of it, we
10:34
Speaker 6: know clients were paid money out of it, but we
10:36
Speaker 6: also know that didn't really start until close to twenty
10:40
Speaker 6: nineteen or twenty twenty. And so again you got to
10:43
Speaker 6: go back and look at the crimes that are ledged
10:46
Speaker 6: against Girardi and those days all the way back to
10:49
Speaker 6: twenty ten in this case. So again, this secret bank
10:52
Speaker 6: account very interesting, raises eyebrows for sure, but I don't
10:56
Speaker 6: think it's enough to get Tom Girardi off.
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Speaker 5: And there were more two hundred misconduct complaints filed against
11:03
Speaker 5: Girardi before the State Bar of California over four decades,
11:07
Speaker 5: yet he managed to avoid any disciplinary action until I
11:10
Speaker 5: think about twenty twenty two. And the parents of a
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Speaker 5: boy who died of cancer who was represented by Girardi
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Speaker 5: have filed a class action lawsuit against the California State
11:22
Speaker 5: Bar alleging gross negligence and reckless misconduct. What's your take
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Speaker 5: on that case.
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Speaker 6: I think it's definitely got legs. There has been a
11:31
Speaker 6: lot that has come out against the California State Bar
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Speaker 6: since this Girardi scandal erupted four years ago, and it's
11:39
Speaker 6: absolutely mind numbing and despicable what has been shown. This
11:43
Speaker 6: shows you how powerful Tom Girardi was. Tom Girardi had
11:46
Speaker 6: the state bar wrapped around his finger. Tom Girardi had
11:50
Speaker 6: so many complaints made against him over the course of
11:54
Speaker 6: twenty or thirty years, and how did he get away
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Speaker 6: with that? He was the ultimate mastermind. This guy had
12:00
Speaker 6: so many connections. He actually placed an investigator in the
12:06
Speaker 6: state Bar office who was there handling complaints against Gerbarti.
12:11
Speaker 6: Tom Girardi was very close with some of these state
12:13
Speaker 6: bar judges. And so the system, now that we've seen
12:17
Speaker 6: it exposed for what it was. It was a sham
12:21
Speaker 6: and Tom Girardi manipulated the state bar system and he
12:24
Speaker 6: got away with it for thirty plus years despite having
12:28
Speaker 6: hundreds of complaints made against him, and not one thing
12:31
Speaker 6: was ever done to him. Shameful.
12:33
Speaker 5: We'll see what the jury decides in this case. Thanks
12:36
Speaker 5: so much, David. That's LA trial attorney David Ring. I'm
12:40
Speaker 5: June Grosso and you're listening to Bloomberg.
12:42
Speaker 4: Starting today, we're Cansiley student Debtford borrowers who are enrolled
12:46
Speaker 4: in the Save Plan and have been paying student loans
12:49
Speaker 4: for as little as ten years.
12:51
Speaker 5: Back in February, President Biden unveiled the Save Plan, a
12:55
Speaker 5: student loan repayment program that ties how much someone pays
12:59
Speaker 5: he month to their income. Education Secretary Miguel Cardona said
13:04
Speaker 5: the program is targeted to certain borrowers.
13:07
Speaker 8: These are people that took out loans of twelve thousand
13:10
Speaker 8: dollars or less, smaller loans. We know that these folks
13:13
Speaker 8: are more likely to go into default, so that's the
13:16
Speaker 8: group we targeted with this debt relief announcement.
13:19
Speaker 5: But eight million borrowers enrolled in Save have endured the
13:23
Speaker 5: chaos of conflicting up and down legal rulings on the
13:27
Speaker 5: viability of the program. That's because more than a dozen
13:30
Speaker 5: Republican led states filed lawsuits challenging the plan in two jurisdictions,
13:36
Speaker 5: Kansas and Missouri, and now the Eighth Circuit Court of
13:39
Speaker 5: Appeals in Missouri has issued an extraordinary sweeping order blocking
13:44
Speaker 5: the program everywhere while litigation proceeds. This conflicts with a
13:49
Speaker 5: decision from the Tenth Circuit in Colorado. On Tuesday, the
13:53
Speaker 5: Biden administration filed an emergency petition at the Supreme Court
13:57
Speaker 5: asking the justices to reinstead the Save Plan joining me
14:02
Speaker 5: is constitutional law Professor Michael Dorf of Cornell Law School, Mike,
14:06
Speaker 5: is the Safe Plan different from the Biden student loan
14:10
Speaker 5: relief plan the Supreme Court throughout in July of last year?
14:14
Speaker 7: Yes, I mean it had some different details in terms
14:17
Speaker 7: of who is eligible and what you had do to file.
14:20
Speaker 7: But the more important piece in terms of the legal
14:24
Speaker 7: aspect is that it relied on a different set of
14:27
Speaker 7: statutory authorities.
14:29
Speaker 5: So a three judge panel of the Eighth Circuit with
14:32
Speaker 5: three Republican appointees called the plan a vast assertion of
14:37
Speaker 5: newfound power. Tell us about their decision.
14:40
Speaker 7: So the court had two issues to decide. It first
14:44
Speaker 7: needed to decide whether there was standing for the plaintiffs,
14:48
Speaker 7: which were a bunch of states that were basically led
14:51
Speaker 7: by Republicans, And there it essentially relied on the Supreme
14:55
Speaker 7: Court case because Missouri is one of the plaintiffs in
14:58
Speaker 7: the earlier case. The Supreme courts had that Missouri had
15:00
Speaker 7: standing because this corporation that Missouri had chartered to process loans,
15:06
Speaker 7: known as Mohila, could suffer legal injury, and that injury
15:09
Speaker 7: would be translated to the state. The censer on that
15:12
Speaker 7: point in the Supreme Court. But that's sort of what
15:14
Speaker 7: are under the bridge, So there was really no issue
15:16
Speaker 7: about standing for the Eighth Circuit to decide. The heart
15:19
Speaker 7: of the matter was whether this was something authorized by
15:24
Speaker 7: an Act of Congress, and the Biden administration had a
15:27
Speaker 7: decent argument that if you read the literal text of
15:31
Speaker 7: the statute, it does seem to give the Secretary of
15:33
Speaker 7: Education broad discretion to modify loans to delay payments, including
15:40
Speaker 7: on principle.
15:41
Speaker 3: But the Court said two things.
15:43
Speaker 7: First, they said, well, there are other parts of the
15:45
Speaker 7: same statutory's team that expressly grant to the Department of
15:51
Speaker 7: Education the authority to forgive loans, and given that Congress
15:56
Speaker 7: did those expressly, it's unlikely that Congress would have intended
16:00
Speaker 7: for the Secretary of Education in this more general language
16:04
Speaker 7: to be able to forgive loans. The second thing they
16:08
Speaker 7: said was the language you quoted, which is that in
16:11
Speaker 7: the last few years, the Supreme Court, and especially to
16:15
Speaker 7: Justice Roberts, have relied on something that has come to
16:19
Speaker 7: be known as the major questions doctrine, and the basic
16:21
Speaker 7: idea there is that if an agency is going to
16:24
Speaker 7: be exercising power over a very large part of the
16:28
Speaker 7: economy or our social life, then you need to find
16:33
Speaker 7: authorization for the agency to do so in the express
16:37
Speaker 7: language of Congress. So it's kind of what someone is
16:40
Speaker 7: called a clear statement rule. Although there's some debate among
16:42
Speaker 7: administrative law scholars and even by Justice Barrett questioning whether
16:46
Speaker 7: that's exactly how to understand it. But in any event,
16:49
Speaker 7: that's what the Eighth Circuit said. They said, Look, this
16:51
Speaker 7: is just not the kind of thing that Congress has
16:54
Speaker 7: given you power to do. Maybe Congress could do that,
16:57
Speaker 7: maybe Congress could do it itself, but they haven't done it.
17:00
Speaker 5: Where do issue the injunction? Did the Eighth Circuit find
17:02
Speaker 5: that there was irreparable injury to the Republican States here?
17:07
Speaker 4: Yeah?
17:07
Speaker 7: Well, so that's the interesting thing. Yes, although the core
17:11
Speaker 7: of the decision in the Court says this is likelihood
17:15
Speaker 7: of success on the merit, of course, it's really kind
17:17
Speaker 7: of hard to see how there's an irreparable injury to
17:20
Speaker 7: Missouri because they're going to be collecting a little bit
17:22
Speaker 7: less in interest through this entity that they've created to
17:26
Speaker 7: process loans, but that there is not a reparable injury
17:30
Speaker 7: to the millions of borrowers who now have to pay
17:34
Speaker 7: off these student loans when they thought they were going
17:36
Speaker 7: to be eligible for some forgiveness. Court doesn't say that
17:39
Speaker 7: the borrowers don't have an injury or even an irreparable injury.
17:43
Speaker 7: But the Court doesn't really get to the question of
17:45
Speaker 7: balancing of.
17:46
Speaker 3: The equities, which is typically the last.
17:48
Speaker 7: Step in one of these decisions, whether the grade in
17:51
Speaker 7: junctior belief.
17:52
Speaker 5: Republican attorneys general filed separate lawsuits over the Safe Plan,
17:57
Speaker 5: this one and one filed in Kansas. The Tenth Circuit
18:01
Speaker 5: said the plan could take effect while the court battle continues.
18:06
Speaker 5: So now you have an Eighth Circuit decision contrary to
18:09
Speaker 5: the Tenth Circuit decision. Does this mean that the Supreme
18:13
Speaker 5: Court is going to take up the case?
18:15
Speaker 7: Presumably?
18:16
Speaker 3: Yes.
18:16
Speaker 7: You know what interesting about this case and so many
18:19
Speaker 7: other Supreme Court hears these days, is there hasn't been
18:22
Speaker 7: a trial. This is on a preliminary in junction, and
18:24
Speaker 7: maybe you don't need a trial because it's really.
18:25
Speaker 3: Just a pure question of law.
18:27
Speaker 7: But it's technically what they were doing was addressing whether
18:31
Speaker 7: to keep a stay pending appeal in place or to
18:35
Speaker 7: modify it. But the bottom line of the Eighth Circuit
18:39
Speaker 7: ruling is that the program is enjoined indefinitely pending Supreme
18:44
Speaker 7: Court reversal or potentially I suppose the case could go
18:49
Speaker 7: back to the district court and somehow the district court
18:51
Speaker 7: could find the case comes out the other way, but
18:54
Speaker 7: you know that would result in reversal almost immediately because
18:57
Speaker 7: here likelihood of success in the merits means we think
19:00
Speaker 7: the merits favor the challengers, meaning the state.
19:03
Speaker 5: The Biden administration has tried all kinds of loan forgiveness
19:07
Speaker 5: plans to get around the Supreme Court's decision, and it
19:12
Speaker 5: appears they're gearing up for another one come fall, because
19:16
Speaker 5: the Education Department has email borrowers to let it know
19:20
Speaker 5: by August thirtieth if they want to opt out of
19:22
Speaker 5: any future programs. I mean, is there any point anymore
19:26
Speaker 5: for the Biden administration to keep trying The plans just
19:29
Speaker 5: get blocked by courts.
19:31
Speaker 7: Well, you know, it depends on what you mean by
19:33
Speaker 7: a point, right, If the point is to actually deliver
19:38
Speaker 7: debt forgiveness to borrowers, probably not. You know, you would
19:42
Speaker 7: think that if you want to deliver that forgiveness through
19:46
Speaker 7: existing statutory authority for one of the federal agencies, you
19:50
Speaker 7: would start with the strongest case for doing so, And
19:55
Speaker 7: you know, the backups tend to have somewhat weaker arguments.
19:58
Speaker 7: Although I will say that the argument for the programmer
20:03
Speaker 7: was just struck down didn't rely on the kind of
20:07
Speaker 7: emergency theory that the previous one did. So it's possible
20:12
Speaker 7: that they will eventually hit upon something that the Supreme
20:15
Speaker 7: Court and the lower federal courts accept. I just think
20:18
Speaker 7: it's not very likely.
20:20
Speaker 5: So you think that practically speaking, there'll be no substantial
20:24
Speaker 5: student debt relief program during the Biden administration, Yeah, I think.
20:29
Speaker 7: That's right, just given the pace of litigation, right, so
20:31
Speaker 7: that you could throw a Hail Mary Kney appeal to
20:33
Speaker 7: the US Supreme Court and hope that they side with
20:38
Speaker 7: the Tenth Circuit rather than the Eighth Circuit. But again,
20:42
Speaker 7: given how closely the Eighth Circuit's logic tracks the logic
20:47
Speaker 7: of the Supreme Court's own opinion in Biden against Nebraska,
20:50
Speaker 7: the earlier case. I don't think that's going to happen.
20:54
Speaker 5: Why are the Republican states so bent, so driven to
20:59
Speaker 5: stop any student loan forgiveness? Is it just because it's
21:02
Speaker 5: a Biden administration initiative or is it some other reason?
21:07
Speaker 3: Well, I think they've got three kinds of reasons.
21:10
Speaker 7: One is, you know, anything your forum against. I think
21:13
Speaker 7: that there is some of that going on here. But
21:16
Speaker 7: I think a second piece is that you know, they're
21:20
Speaker 7: hostile to executive branch agencies doing things that Congress hasn't
21:27
Speaker 7: clearly authorized because they're hostile to the administrative state. And
21:30
Speaker 7: you saw that in the overruling of Chevron, You've seen
21:34
Speaker 7: that in the Major Questions doctrine. You see that in
21:36
Speaker 7: these suggestions by various Conservative justices that they'd like to
21:40
Speaker 7: revitalize the so called non delegation doctrine. I should say
21:44
Speaker 7: that the Republicans in Congress are much more hostile to
21:47
Speaker 7: the executive doing things that aren't very clearly authorized by
21:51
Speaker 7: Congress when it's a democratic presidents, and they are when
21:53
Speaker 7: it's a Republican president. But that you know that door
21:56
Speaker 7: swings both ways. That's just generally true. And then the
21:58
Speaker 7: third thing I'll say is that you know, there are
22:02
Speaker 7: I think legitimate policy reasons to it's not necessarily oppose
22:08
Speaker 7: a student's debt forgiveness to think about the issue in.
22:13
Speaker 3: A broader perspective.
22:14
Speaker 7: So it's true that people who borrowed money to go
22:19
Speaker 7: to college, or even to go to grad school or
22:21
Speaker 7: professional school and now are battled with a lot of
22:24
Speaker 7: debt find that difficult, especially if they didn't have you know,
22:28
Speaker 7: fixed rates, which we typically don't for these things, especially
22:31
Speaker 7: as we've been in a high interest rate environment for
22:33
Speaker 7: the last couple of years. But so do other people, right,
22:37
Speaker 7: you know, if you borrow money to start a business,
22:39
Speaker 7: you could be saddled with a lot of debt. If
22:43
Speaker 7: you went to a less expensive college, then you might
22:48
Speaker 7: have gone to that might have given you a somewhat
22:50
Speaker 7: more prestigious degree because you didn't want to be saddled
22:54
Speaker 7: with debt, and you paid for your education out of pocket,
22:57
Speaker 7: or you got loans that aren't covered by one of
23:00
Speaker 7: these relief programs. Then you might say, well, I'm similarly
23:03
Speaker 7: situated to the people who are getting this relief.
23:05
Speaker 3: I should get the relief as well.
23:06
Speaker 7: And there is of course a revenue hit to the
23:09
Speaker 7: federal government, which means either you're going to run larger
23:12
Speaker 7: deficits or you're going to have to cut somewhere else.
23:14
Speaker 3: So it's not as though student debt.
23:16
Speaker 7: Forgiveness is a slam dunk on the policy side. And
23:21
Speaker 7: so I think it's quite possible that some Republicans, probably
23:24
Speaker 7: even some Democrats, think that while this may or may
23:28
Speaker 7: not have certain political impacts, and it's certainly valuable to
23:32
Speaker 7: the people who get the forgiveness and they certainly, you know,
23:36
Speaker 7: use it, it's not necessarily the best policy, of all
23:38
Speaker 7: things considered.
23:40
Speaker 5: The next thing we'll hear on this will probably be
23:42
Speaker 5: whether the Supreme Court decides to take the case. Thanks
23:46
Speaker 5: so much, Mike Best. Professor Michael Dorf of Cornell Law School. Now,
23:50
Speaker 5: if you're one of the borrowers enrolled in the save plan,
23:53
Speaker 5: you don't have to worry about payments or interest accruing.
23:56
Speaker 5: Yet the Education Department has put all low in forbearance
24:01
Speaker 5: while the litigation continues. I'm June Grosso, and this is Bloomberg.
24:11
Speaker 1: This is Bloomberg Law with June Grosso from Bloomberg Radio.
24:17
Speaker 5: Robert F. Kennedy Junior's independent presidential campaign took a hit
24:21
Speaker 5: this week when a judge kicked him off the ballot
24:24
Speaker 5: in New York after finding that he falsely claimed a
24:27
Speaker 5: New York residence on his nominating petitions, despite the fact
24:31
Speaker 5: that he lives in California. It's a ruling that could
24:34
Speaker 5: create problems for the candidate as he faces challenges elsewhere.
24:38
Speaker 5: Following a short trial, Judge Christina Reba found that Kennedy
24:42
Speaker 5: was using a sham address on the petitions to put
24:45
Speaker 5: his name on the New York ballot. In her decision
24:48
Speaker 5: on Monday, the judge said that quote using a friend's
24:52
Speaker 5: address for political and voting purposes while barely stepping foot
24:56
Speaker 5: on the premises, does not equate to residency under the
25:00
Speaker 5: election law. In an interview with CBS six in Albany,
25:04
Speaker 5: Kennedy compared his situation to that of his late father,
25:08
Speaker 5: Senator Robert F. Kennedy, when he ran in New York
25:11
Speaker 5: in nineteen sixty eight.
25:13
Speaker 1: He was also, ironically also called a carpetbagger. In other words,
25:18
Speaker 1: you know that he didn't really live in New York State.
25:20
Speaker 1: So sixty years later, now I'm running and I'm being
25:23
Speaker 1: told I don't live in New York State. My driver's
25:26
Speaker 1: license here, I vote in this state, my car is
25:28
Speaker 1: registered here, my law licenses in this state, not California,
25:34
Speaker 1: my law offices in the state. I pay income tagris
25:37
Speaker 1: in this state.
25:38
Speaker 5: Kennedy is facing challenges in more than a half dozen states,
25:42
Speaker 5: some alleging that he falsely listed the same New York address.
25:46
Speaker 5: He's appealing the New York decision joining me is elections
25:49
Speaker 5: law expert Richard Brofalt, a professor at Columbia Law School,
25:54
Speaker 5: rich how is residency defined under New York law.
25:57
Speaker 4: Residency means domicile is the place that you maintain is
26:02
Speaker 4: your home and if you are a way, you intend
26:04
Speaker 4: to return to it. New York law recognizes that people
26:08
Speaker 4: can have multiple residents. You could have a main home
26:10
Speaker 4: and a summer home and another home, but one of
26:12
Speaker 4: them has to be the place that is your primary
26:15
Speaker 4: residence in legal terms, your domicile.
26:17
Speaker 5: Kennedy listed as his residence a friend's house in Katona,
26:22
Speaker 5: New York, where he said he rented a bedroom, but
26:25
Speaker 5: he admitted at trial that he only spent one night
26:29
Speaker 5: there that was about a month ago. In June. There's
26:32
Speaker 5: no written lease. He only made a rent payment. After
26:34
Speaker 5: a New York Post story came out, he moved with
26:37
Speaker 5: his kids and his pets except for the Falcons and
26:40
Speaker 5: the Hawk, to California in twenty fourteen. He bought a
26:43
Speaker 5: house there, and when asked a trilo if he lives
26:45
Speaker 5: in California, he said yes. I mean, what is his
26:48
Speaker 5: reason for claiming New York residency?
26:52
Speaker 4: Oh, his reason, I think is that his running mate
26:55
Speaker 4: is a California resident, and under the constitution he went
26:59
Speaker 4: in the electoral votes, the California electors cannot vote for
27:03
Speaker 4: both of them. In other words, if he somehow carried California,
27:07
Speaker 4: the California electors are prohibited by the constitution for voting
27:10
Speaker 4: for two people from their own state, so he had
27:12
Speaker 4: to have a separate residency from his vice president.
27:14
Speaker 8: Well.
27:15
Speaker 5: The judge said that he demonstrated a long standing pattern
27:18
Speaker 5: of borrowing addresses to keep up the appearances of New
27:22
Speaker 5: York residency. I mean, at one point he claimed residency
27:26
Speaker 5: at a house that his sister had sold and neither
27:29
Speaker 5: of them lived in anymore.
27:30
Speaker 4: Apparently he's still registered to vote in New York. He
27:32
Speaker 4: has a new York driver's license, and has some other
27:35
Speaker 4: New York connections, and in some kind of fairness, he
27:38
Speaker 4: was a New York resident for a long while and
27:40
Speaker 4: had a lot of connections to New York. But yes,
27:43
Speaker 4: as I think the judge found, for quite a long
27:46
Speaker 4: period of time, recently he's been living in California with
27:49
Speaker 4: his wife and children and pets, and California has, I
27:52
Speaker 4: think the court found that it seems reasonable, has been
27:54
Speaker 4: his principal residence for the last several years. As the
27:57
Speaker 4: court said, you need a specific place to be a residence,
28:00
Speaker 4: not some general geographic area like he's had connections to
28:04
Speaker 4: New York, but you actually need to have, as the
28:06
Speaker 4: course as a specific abode in New York in order
28:09
Speaker 4: for New York to be a residence, and he doesn't
28:11
Speaker 4: have one.
28:12
Speaker 5: So some of the reasons he claims residency, or he
28:14
Speaker 5: has New York state fishing and falconry licenses, a New
28:18
Speaker 5: York state driver's license and vehicle registration, a New York
28:21
Speaker 5: state voter registration, a license to practice law in New York,
28:25
Speaker 5: and he pays New York state taxes. Do any of
28:28
Speaker 5: those count toward residency?
28:30
Speaker 4: They will all be relevant if he actually had a
28:32
Speaker 4: home in New York. I mean again, I think if
28:34
Speaker 4: he had an actual home in New York and as
28:36
Speaker 4: well as an actual home in California, it would support
28:40
Speaker 4: his argument that New York is his primary home. But
28:43
Speaker 4: the problem is he has no home in New York
28:45
Speaker 4: at all. So I mean, I think those would have
28:48
Speaker 4: been relevant if it was more of a contest as
28:51
Speaker 4: to whether or not New York or California was his home.
28:54
Speaker 4: He had various legal ties to New York, but the
28:56
Speaker 4: low requires that he actually has an actual physical residence
29:00
Speaker 4: in New York, and that is one thing that he
29:02
Speaker 4: does not appear to have.
29:04
Speaker 5: And as far as the spare bedroom that he was
29:06
Speaker 5: supposedly renting out, court said quote, the court finds Kennedy's
29:11
Speaker 5: testimony that he may return to that bedroom to reside
29:15
Speaker 5: with his wife, family members, multiple pets, and all of
29:18
Speaker 5: his personal belongings to be highly improbable, if not preposterous.
29:23
Speaker 5: I mean, when you look at his testimony and the
29:25
Speaker 5: testimony of other witnesses, it seems almost like an open
29:29
Speaker 5: and shut case.
29:30
Speaker 4: I think that's right, I mean, in some sense. To
29:31
Speaker 4: Judge's first point was how strictly or loosely do I
29:36
Speaker 4: have to interpret residence, and she says, under New York
29:38
Speaker 4: state law, under near Court of Appeals decisions, some election
29:42
Speaker 4: qualifications can be interpreted loosely, but these very formal, specific
29:46
Speaker 4: ones have to be interpreted strictly so that the courts
29:50
Speaker 4: are consistent from case to case. So the first thing is,
29:53
Speaker 4: you really do have to show that you're a resident,
29:55
Speaker 4: and then she went through what that entails, and then
29:58
Speaker 4: there was extensive testimony from all the people who are
30:00
Speaker 4: arguably for letting him a home, and it was pretty
30:03
Speaker 4: clear that his connection to the place he's claiming to
30:06
Speaker 4: be a home is extremely attenuated. As he pointed out,
30:09
Speaker 4: it's one bedroom in somebody else's house. He's only been
30:11
Speaker 4: there one night in the entire time he's had a
30:14
Speaker 4: connection to it. He wasn't paying rent until this case
30:16
Speaker 4: became a case, and then he paid it retroactively back rent.
30:19
Speaker 4: And the home itself is under forclosure. And as she
30:22
Speaker 4: points out, he is an entire household in California, and
30:25
Speaker 4: it says seems unlikely that if he were to return
30:28
Speaker 4: to New York, he would be returning to that one
30:30
Speaker 4: bedroom with his whole household.
30:32
Speaker 5: He also claimed advice of counsel that his lawyer told
30:36
Speaker 5: him this was okay.
30:37
Speaker 4: It doesn't work. I mean, he's not being prosecuted for lying.
30:41
Speaker 4: It's just that he had a fell out a form
30:44
Speaker 4: and he filled out before him inaccurately.
30:46
Speaker 5: So he's appealing the decision in New York Appellate Court,
30:50
Speaker 5: and his legal team has said they're going to seek
30:52
Speaker 5: injunctive relief in federal court, and they're arguing that the
30:56
Speaker 5: US Constitution's Twelfth Amendment governs the residency of presidential and
31:02
Speaker 5: vice presidential candidates, not state law. And they made a
31:06
Speaker 5: similar argument before the judge in New York who rejected it.
31:10
Speaker 5: What do you think of that argument.
31:11
Speaker 4: It's kind of a red herring. I mean, yes, New
31:14
Speaker 4: York State could not require him to be a resident
31:17
Speaker 4: of New York State. That would be unconstitutional. But New
31:20
Speaker 4: York State is not doing that. New York State is
31:22
Speaker 4: simply saying, in order to get on the ballot, you
31:24
Speaker 4: have to fill out a form, and you have to
31:26
Speaker 4: fill out the form accurately. And the Supreme Court is
31:30
Speaker 4: in the past recognized that states can set their own
31:33
Speaker 4: rules for getting on the ballot, provided that they're reasonable
31:35
Speaker 4: rules that they're not on duly burdensome, that they're not
31:38
Speaker 4: too hard to satisfy. You couldn't require somebody to have
31:41
Speaker 4: a humongous number of signatures in a very short period
31:44
Speaker 4: of time. That would be too burdensome. But I think
31:46
Speaker 4: a rule that simply states you have to put down
31:48
Speaker 4: your place of residence is the kind of rule that
31:51
Speaker 4: probably for most candidates, is not on duly burthensome. And
31:54
Speaker 4: the Court has recognized the right of state and effects
31:56
Speaker 4: that require certain forms to be filled out and order
31:59
Speaker 4: did on the ballot. So just to repeat, he does
32:01
Speaker 4: not have to be a New York resident, but he
32:03
Speaker 4: does have to fill out the form correctly.
32:05
Speaker 5: Could this open him up to challenges in other states
32:10
Speaker 5: because apparently his campaign used the same address to gather
32:15
Speaker 5: signatures in other states.
32:17
Speaker 4: That's an interesting question, and I would break it up
32:20
Speaker 4: into a couple of parts. So in a number of states,
32:22
Speaker 4: now he is actually on the ballot, he has been
32:24
Speaker 4: approved by the relevant decision maker, whether it's the Secretary
32:28
Speaker 4: of State of that state or possibly even by a
32:30
Speaker 4: court after a litigation. So one issue in those states
32:33
Speaker 4: would be can that be reopened once the person has
32:36
Speaker 4: actually gotten on the ballot and that would turn on
32:38
Speaker 4: the law of that state. Second question, and which would
32:41
Speaker 4: be true both in those states in the states where
32:43
Speaker 4: the prosecutor on the ballot has not been resolved, is
32:46
Speaker 4: you know, is this required on their forms? And how
32:49
Speaker 4: stringently or liberally do they apply the requirements of their forms.
32:54
Speaker 4: That would be a second question. Now the words some
32:56
Speaker 4: states might be willing to waive a mistake. New York
32:59
Speaker 4: was not. So those are really sort of two big
33:01
Speaker 4: open questions. He's on the ballot now and I don't
33:04
Speaker 4: know the exact number, but it's around twenty states that
33:07
Speaker 4: have been resolved, and that would turn on what their
33:10
Speaker 4: rules are on reopening a question like that. And the
33:12
Speaker 4: second would be, you know, was it required in these
33:15
Speaker 4: states to fill out this form to state a place
33:17
Speaker 4: of residents. That seems like a reasonable kind of a
33:19
Speaker 4: normal bureaucratic requirement, and it is I think relevant to
33:22
Speaker 4: the Twelfth Amendment problem of making sure you don't have
33:24
Speaker 4: two people from the same state, which is also happens
33:26
Speaker 4: to be your state.
33:27
Speaker 2: But then the.
33:28
Speaker 4: Question is how stringently are they going to enforce that rule?
33:31
Speaker 4: And different state courts might have different policies on how
33:35
Speaker 4: strictly or loosely they enforce a rule like that.
33:38
Speaker 5: Taking that into account, then might a New York Appellate
33:41
Speaker 5: court be willing to waive the mistake.
33:44
Speaker 4: It's not out of the question. I mean, you know,
33:46
Speaker 4: there is a tension between you know, making someone available
33:49
Speaker 4: to the voters, and it's not relevant to his eligibility
33:53
Speaker 4: to be elected or his seriousness as a candidate. It
33:55
Speaker 4: doesn't affect whether or not he's over thirty five and
33:57
Speaker 4: a citizen. That's basically the eligibility to press. And many
34:01
Speaker 4: states do require that you gather a certain number of
34:03
Speaker 4: signatures that either you be nominated by your party, or
34:06
Speaker 4: that if you're running as an independent, you get a
34:08
Speaker 4: certain number of signatures, or running is a new party
34:11
Speaker 4: that your new party gets a certain number of signatures,
34:13
Speaker 4: And those are all designed to establish that the candidate
34:17
Speaker 4: is serious not trivolous. He's presumably satisfied that. So I
34:21
Speaker 4: could imagine a court saying that a question that doesn't
34:24
Speaker 4: bear on his eligibility to serve and seriousness as a
34:28
Speaker 4: candidate might be one that we would be willing to wigh.
34:31
Speaker 4: He is running for a national office, and there is
34:34
Speaker 4: some argument that court should be less restrictive because I mean,
34:39
Speaker 4: he was going to be really in contention that having
34:41
Speaker 4: a rule like this to knock somebody off the ballot,
34:44
Speaker 4: that would affect a serious national candidate sort off. You
34:46
Speaker 4: don't want individual states to be doing that. So that
34:49
Speaker 4: would be one possibility. But the other would be that
34:50
Speaker 4: the court might also stick with what this lower court
34:53
Speaker 4: said is to some things which are not that burdensome,
34:56
Speaker 4: it's best to be absolutely strict. Otherwise the chance pols
35:00
Speaker 4: are explaining a role in different judges applying the same
35:02
Speaker 4: rule differently in different cases whom's very large. So there
35:05
Speaker 4: was an argument from consistent application a fairly straightforward rule
35:10
Speaker 4: that says you should enforce it, versus the argument that
35:13
Speaker 4: this does not really go to either his eligibily disserve
35:17
Speaker 4: or his seriousness as a candidate. So maybe you waive it.
35:20
Speaker 4: I mean, I could see it coming out either way.
35:22
Speaker 5: And so what's your gut feeling about what an appellate
35:24
Speaker 5: court might do.
35:26
Speaker 4: It's very hard to imagine that an appellate court will
35:28
Speaker 4: overturn this on the facts. But the real question is
35:31
Speaker 4: what do you do with it? Basically, do you let
35:33
Speaker 4: go and say, well, you know, we don't have to
35:35
Speaker 4: interpret it that strictly or do you do with the
35:37
Speaker 4: trial court didn't say, well, you know, our presence requires
35:40
Speaker 4: strict application and he's not a resident.
35:43
Speaker 5: This challenge was brought by four voters with the backing
35:47
Speaker 5: of the democratically aligned Clear Choice Action. Right, the Democrats
35:53
Speaker 5: have dedicated a substantial legal and ground operation to challenging
35:58
Speaker 5: third party candidate ballid access.
36:01
Speaker 4: That's right, although it's interesting now at Lisa clink to
36:03
Speaker 4: recent surveys, it's now unclear from whom Kennedy pulls more votes,
36:08
Speaker 4: Harris or Trump. So it's true, and he began obviously
36:11
Speaker 4: he was a Democrat. He comes from an obviously extremely
36:14
Speaker 4: distinguished and famous Democratic family. I think people assume Democrats
36:17
Speaker 4: assume that he's going to draw mostly Democrats. I guess
36:20
Speaker 4: recent polling surveys suggests that may be closer to fifty
36:23
Speaker 4: to fifty as whether he's pulling from Trump or Harris.
36:25
Speaker 4: So it's not one hundred percent clear. This is all
36:28
Speaker 4: right strategy for the Democrats. But this is the strategy
36:31
Speaker 4: they've been pursuing.
36:31
Speaker 5: Thanks for being on the show, rich that's Columbia Law
36:34
Speaker 5: School professor Richard Ruffault. And that's it for this edition
36:37
Speaker 5: of the Bloomberg Law Podcast. Remember you can always get
36:40
Speaker 5: the latest legal news by subscribing and listening to the
36:43
Speaker 5: show on Apple Podcasts, Spotify, and at Bloomberg dot com,
36:47
Speaker 5: slash podcast, slash Law. I'm June Grosso and this is
36:51
Speaker 5: Bloomberg