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Michael Jordan's Racing Team Sues NASCAR · Bloomberg Law

0:03
Speaker 1: This is Bloomberg Law with June Brusso from Bloomberg Radio.
0:11
Speaker 2: NASCAR is one of the most popular spectator sports in
0:15
Speaker 2: the country, but unlike other major professional sports leagues, NASCAR
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Speaker 2: is owned privately by the France family, and now two
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Speaker 2: racing teams are suing the Stock Car Series and its
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Speaker 2: chairman for anti trumpt violations, saying it exploited its position
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Speaker 2: to extract monopoly profits. Leading the way is NBA legend
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Speaker 2: Michael Jordan, a co owner of one of those teams.
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Speaker 2: He told Fox Sports that it hasn't been a fair
0:43
Speaker 2: playing field.
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Speaker 1: So the smaller teams as well. It's not just me,
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Speaker 1: I mean, obviously, I think everybody can. I have an
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Speaker 1: opportunity to be.
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Speaker 3: To chessco in any business that my voice is saying
0:54
Speaker 3: that it hadn't been what they hadn't been happening.
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Speaker 2: Joining me is Anti Truss law expert Harry First, a
0:59
Speaker 2: professor YU Law School. Harry tell us about this lawsuit,
1:04
Speaker 2: NASCAR is a.
1:04
Speaker 3: Little odd for a sports league. It's organized a little differently.
1:08
Speaker 3: Most sports leagues are owned by sort of the participants,
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Speaker 3: like the National Football League owns the league. The people
1:15
Speaker 3: who own the clubs the teams. The NCAA is run
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Speaker 3: by the universities, and the NBA is that's run by
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Speaker 3: the teams. The PGA about which we've talked the golfers
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Speaker 3: are supposedly running the PGA. But here NASCAR, the stock
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Speaker 3: car racing, the circuit or the league in a way,
1:36
Speaker 3: is run by apparently one family, this France family, who
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Speaker 3: puts together the racing circuit that NASCAR team owners drive on.
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Speaker 3: And they're sort of at the mercy, or so they
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Speaker 3: say in their complaint of NASCAR of how they run
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Speaker 3: the business and critically for them, how they split the money,
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Speaker 3: because the money, of course is in the broadcast rights.
2:02
Speaker 3: So there's been a lot of back and forth apparently
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Speaker 3: between the race car owners and the France family a
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Speaker 3: NASCAR about what the deal is going to be and renegotiations,
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Speaker 3: and recently the France family has sort of turned the
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Speaker 3: screws a little bit and made the next deal less attractive.
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Speaker 3: According to the complaint, the race car owners are barely
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Speaker 3: scraping by, hopefully not on the track scraping by, but
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Speaker 3: financially scraping by. Now Michael Jordan comes along and he
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Speaker 3: decides that he's sort of going to lead the charge
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Speaker 3: in not bowing to what the owner of NASCAR, France wants,
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Speaker 3: and instead is going to file this any trust suit
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Speaker 3: represented by a very good sports any trust lawyer. The
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Speaker 3: basic idea is they look at a number of the
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Speaker 3: contracts that NASCAR has entered into and look at its
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Speaker 3: acquisitions of the racing circuit of other tracks and say, hey, look,
3:04
Speaker 3: you're excluding competitors, you're fencing out others. You control this
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Speaker 3: sport and you are sort of taking all the money
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Speaker 3: for yourself. The great line is the France family and
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Speaker 3: NASCAR are monopolistic, bully.
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Speaker 2: That was a good line. So there's a noncompete. The
3:23
Speaker 2: teams have to agree not to race in any other circuits.
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Speaker 2: They have to buy their supplies and whatnot from NASCAR
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Speaker 2: approved dealers. And you mentioned the hardball tactics. NASCAR sent
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Speaker 2: a final take it or leave it charter in the
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Speaker 2: late afternoon early evening of September sixth, and the teams
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Speaker 2: were given until midnight to sign it, under the threat
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Speaker 2: that they would eliminate the charter system if a substantial
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Speaker 2: number of teams didn't sign. Several of the teams described
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Speaker 2: the signing as coerced it doesn't sound good.
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Speaker 3: That's a good way of putting it. Sounds like strong
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Speaker 3: arm tactics. The question is whether it sounds like an
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Speaker 3: anti trust case. And that's going to be the plaints
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Speaker 3: burden a little bit. And you know, bullying is bullying,
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Speaker 3: and we don't like bullies. But the anti trust laws
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Speaker 3: actually don't protect companies necessarily from bullying. What they want
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Speaker 3: is competition in the marketplace that helps consumers. So whether
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Speaker 3: NASCAR really has a monopoly is not so clear from
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Speaker 3: the complaint. They sort of skirt around it in a way.
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Speaker 3: No market share figures. What do they compete with Formula
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Speaker 3: one racing? I have no idea what these things are exactly,
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Speaker 3: but you know, what's their competitors? Do they really have
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Speaker 3: monopoly power? If they don't, the case dissolves, you know,
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Speaker 3: I mean, why don't these drivers go to some other circuit?
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Speaker 3: Why do they Why are they so stuck with NASCAR?
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Speaker 3: It's not so clear. It's not so clear to me
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Speaker 3: why the race car owners are allowed to negotiate together
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Speaker 3: against the owner of the circuit, because, in a sense,
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Speaker 3: they are selling their services. Normally, we don't allow firms
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Speaker 3: that are selling their services to negotiate together. They're forming
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Speaker 3: a league, of course, so there are anti trust complexities
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Speaker 3: that have yet to be surmounted. There's not a lot
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Speaker 3: of detail about who the other competitors might be, so
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Speaker 3: maybe there aren't, but they're still going to have to
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Speaker 3: prove things, and you know, there needs to be a
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Speaker 3: little more fleshed out about what the competition is exactly.
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Speaker 3: But if they are monopoly, some of the things that
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Speaker 3: they've allegedly done do sound like the things that courts
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Speaker 3: have been condemning recently from monopoly firms, like exclusionary contracts, exclusives,
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Speaker 3: you can only deal with me, not with others, And
5:46
Speaker 3: this is a problem in the golfing case as well.
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Speaker 3: So you know, that could be a problem for NASCAR
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Speaker 3: in the litigation.
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Speaker 2: As far as a preliminary injunction where the standards are
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Speaker 2: pretty high, do you think that they'll be able to
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Speaker 2: get a preliminary injunction?
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Speaker 3: Well, so we haven't seen the answer to the complaint yet,
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Speaker 3: so you know, I don't know. It has to be
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Speaker 3: in the public interest. My instinct is something's going to
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Speaker 3: be worked out with the parties. You know, they're not
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Speaker 3: going to throw everyone out of NASCAR. Something will get
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Speaker 3: worked out in some way so that the case can
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Speaker 3: move on and the business can move on, because that's
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Speaker 3: in everyone's interest. They've interestingly sued the head of NASCAR
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Speaker 3: as well personally, so I don't know, you know, they
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Speaker 3: have to prove a likelihood of success and they have
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Speaker 3: to prove that, you know, an injunction is in the
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Speaker 3: public interest, So hard to say exactly whether they're really
6:43
Speaker 3: going to be able to succeed with that at this point.
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Speaker 2: Can they get discovery before emotion to dismiss.
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Speaker 3: So judges don't have a bit of discretion on this.
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Speaker 3: The complaint will survive emotion to dismiss, and the motion
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Speaker 3: to dismiss is just on the face of the complaint,
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Speaker 3: so in some sense they don't need discovery to get
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Speaker 3: past that hurdle. Of course, it's sometimes put off the
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Speaker 3: emotion to dismiss and allow some degree of discovery, or
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Speaker 3: allow full discovery. There's a lot of sort of play
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Speaker 3: in the system. My guess is they'll survive emotion dismissed,
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Speaker 3: but in part depends on how NASCAR wants to respond
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Speaker 3: to this, and they may say they have no standing
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Speaker 3: to sue for damages because the injury is the competition,
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Speaker 3: not competitors, And they're just complaining that, you know, they
7:31
Speaker 3: want a different cut of the monopoly profits, not that
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Speaker 3: they really want competition in Stockhart racing. Maybe they're going
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Speaker 3: to you know, ring that bell to try to stop
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Speaker 3: obligation because you.
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Speaker 2: Never know what you find in discovery. Well, you never
7:47
Speaker 2: know about that email that shouldn't have been sent.
7:50
Speaker 3: No, you do know you'll find something. You'll find the
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Speaker 3: email that looks bad. It's lurking somewhere in all those
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Speaker 3: gigabytes or terabytes of data that everyone has. So yes,
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Speaker 3: discovery is something that's expensive and defenders would rather not
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Speaker 3: have happened because at this point they might not know
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Speaker 3: what's in their own file.
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Speaker 2: NASCAR has faced two anti trust actions over the last
8:17
Speaker 2: twenty five years, but those came from race tracks that
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Speaker 2: wanted cup races. NASCAR one one and settled the other.
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Speaker 3: Well, I mean, usually the owner of a circuit has
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Speaker 3: a lot of discretion in deciding how it's going to
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Speaker 3: allocate games and so forth. The NFL has been through
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Speaker 3: this a lot as well. And you know, if you're
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Speaker 3: going to run a circuit, run a league, any of
8:41
Speaker 3: these things, you're balancing the number of races against you know,
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Speaker 3: too much, too few, and that's generally in the circuit's
8:50
Speaker 3: interest and they need to figure that out. So there's
8:53
Speaker 3: usual a lot of discretion with that, and unless they're
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Speaker 3: trying to exclude where it gets touchiers, if they're trying
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Speaker 3: to exclud some potential competitor, and that's what this case
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Speaker 3: seems to have over those other cases where the argument
9:07
Speaker 3: is that they acquired a circuit much like Facebook acquired
9:11
Speaker 3: WhatsApp or Instagram to suppress the competitor. So that's a
9:16
Speaker 3: different competition story.
9:19
Speaker 2: Let's move from race cars to handbags. This is an
9:23
Speaker 2: area I do have some expertise in. Is this, I
9:26
Speaker 2: guess the first foray of the FTC into fashion. It's
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Speaker 2: suing to stop the eight point five billion dollar deal
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Speaker 2: to marry the Coach and Kate Spade brands with Versace
9:39
Speaker 2: and Michael Core's, and the battle is over whether the
9:43
Speaker 2: deal would suppress competition in the category of accessible luxury handbags.
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Speaker 2: What is that? I mean, it seems made up.
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Speaker 3: My innits reaction is, of course it's made up. Market
9:56
Speaker 3: definitions are often made up in a sense, you know,
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Speaker 3: luxury fountain pens, premium ice, cream cases abound with those
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Speaker 3: kind of market definitions. I do want to back you
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Speaker 3: up for one second. Of very famous anti trust case
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Speaker 3: from the thirties was brought by the Federal Trade Commission
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Speaker 3: against the Fashion Originator's Guild of America, which was suppressing
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Speaker 3: knockoffs on Seventh Avenue by you know, companies that would
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Speaker 3: get the high fashion stuff and quickly turn out knockoffs
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Speaker 3: that looked alike. So the fashion industry wanted to stop that,
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Speaker 3: and the Federal Trade Commission stopped them from doing it.
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Speaker 3: So not the first time, Just to give a little history,
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Speaker 3: It's not often perhaps, but this is an eight and
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Speaker 3: a half billion dollar acquisition, so there are a few
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Speaker 3: zeros attached to it. Now, your question is does this
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Speaker 3: make sense as a market And you know, key to
10:54
Speaker 3: all of this and mentioned this with you know, stock
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Speaker 3: car racing is assessing what the universe competitors might be,
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Speaker 3: or as you know, we call it market definition. So
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Speaker 3: that's the start of every anti trust case. Not necessarily
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Speaker 3: the finish. Current law gives some latitudes. Even though you know,
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Speaker 3: a handbag's a handbag and a lot of things can
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Speaker 3: serve the same function. Current law gives the plaintiffs a
11:20
Speaker 3: chance to look at how consumers actually behave patterns of trade,
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Speaker 3: the way things are recognized. The Wall Street Journal actually
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Speaker 3: ran a story sort of as the Commission is considering
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Speaker 3: this case, where they use this category of accessible luxury.
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Speaker 3: So the industry seems to recognize this. That's the first thing. Yes,
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Speaker 3: it seems a little cooked, and that's always a danger
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Speaker 3: in anti trust cases, but it may be backed up
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Speaker 3: with how the parties themselves the market, and more importantly
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Speaker 3: in this case, I think who the parties themselves saw
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Speaker 3: as their close competitors, because that's really the key to
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Speaker 3: the theory of what's going on, and that corps saw
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Speaker 3: Coach and Kate Spade and vice versa as close competitors
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Speaker 3: and looked at pricing data based on those and paid
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Speaker 3: a lot of attention to that to those as competitors. Obviously,
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Speaker 3: there are lots of handbags and you know, lots of sellers.
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Speaker 3: But if they paid close attention to those, and it's
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Speaker 3: backed up by data that consumers see them as pretty
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Speaker 3: close by, or you know, they consider one or the other,
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Speaker 3: that will probably be enough for the Federal Trade Commission's case.
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Speaker 3: You know, the first leg of showing that the effect
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Speaker 3: of the merger may be the less competition.
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Speaker 2: All right, coming up next, I'll continue this conversation with
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Speaker 2: NYU Law professor Harry First and we'll talk more about
12:45
Speaker 2: this handbag deal. You're listening to Bloomberg. I've been talking
12:49
Speaker 2: to anti trust law professor Harry First of NYU Law
12:53
Speaker 2: School about the FTC trying to block tapestries eight point
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Speaker 2: five billion dollar acquisition of Capri Holdings, saying the deal
13:02
Speaker 2: would eliminate head to head competition between the fashion companies
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Speaker 2: brands like Coach and Michael Core's in the so called
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Speaker 2: affordable luxury handbag market. It seems like there's a lot
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Speaker 2: of competition in the handbag market, and it's a market
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Speaker 2: that's easy to enter.
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Speaker 3: Yeah, And in that Wall Street Journal article, they said
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Speaker 3: a search of Macy's website for bags price from one
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Speaker 3: hundred to five hundred dollars yields results for more than
13:28
Speaker 3: seventy brands. So that sounds like a lot of competition.
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Speaker 3: And you're right that this is going to be the argument.
13:35
Speaker 3: On the other hand, I'll put it back to you.
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Speaker 3: Apparently the defend economic experts testify that people who buy
13:43
Speaker 3: Coach would consider Prada and Burbery. Now is that true?
13:47
Speaker 3: Isn't it true? I don't know personally, But the question
13:51
Speaker 3: again in the end is, you know not is there
13:54
Speaker 3: a whole universe? But if Cores raises its price by
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Speaker 3: a little, what brand will consumers switch to? And if
14:02
Speaker 3: a lot of consumers switch to either Coach or Kate Spade,
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Speaker 3: this means I think the FDC is going to argue,
14:11
Speaker 3: this means that by having all three brands, they could
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Speaker 3: raise the corese price a bit and what they used
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Speaker 3: to lose because these were separate companies in terms of business,
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Speaker 3: they'll retain because people will now switch to Coach or
14:27
Speaker 3: Kate Spade. So this would give them the ability to
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Speaker 3: raise price on these bags in a way that they
14:35
Speaker 3: couldn't before. And I think that's going to be a
14:38
Speaker 3: key to the government's complaint, is that by putting the
14:43
Speaker 3: brands together, they'll do things that they couldn't do if
14:46
Speaker 3: the brands were competing.
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Speaker 2: The FDC says that working in middle class women will
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Speaker 2: suffer harm if the acquisition goes through. I mean, is
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Speaker 2: it really harm if you don't get to buy one
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Speaker 2: handbag as opposed to the other. I mean, it's not
15:01
Speaker 2: like groceries.
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Speaker 3: Well, yeah, I wish I could parry that by saying,
15:05
Speaker 3: excuse me, this bag is important. Well, the harm that
15:08
Speaker 3: they're saying is is not that they won't be able
15:10
Speaker 3: to buy the bag. So one of the stories is
15:12
Speaker 3: that Cores has been suffering because they've had to discount
15:17
Speaker 3: some suffering. Cores may be suffering, but consumers are, like
15:21
Speaker 3: Corps bags, presumably are pleased with this. Now is the
15:25
Speaker 3: merger supposed to end that suffering by how by allowing
15:30
Speaker 3: Cores to raise its price? So what will buyers of
15:36
Speaker 3: Cores bags then do? Will they be harmed? Well, maybe
15:40
Speaker 3: some of them just won't buy handbag. I guess not.
15:43
Speaker 3: But maybe some of them will pay the higher price,
15:45
Speaker 3: or maybe some of them will say, now step up
15:48
Speaker 3: to that Kate Spade that I wouldn't have before. So
15:51
Speaker 3: they're now spending more So from the point of view
15:56
Speaker 3: of the company, they keep the sale, and consumers now
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Speaker 3: instead of being able to pay a lower price for
16:02
Speaker 3: the Cores one have to pay either pay a higher
16:05
Speaker 3: price or switch to something they would not have bought before. So,
16:10
Speaker 3: you know, are they harmed in a way that we
16:12
Speaker 3: think of for consumer welfare? The answer would be yes,
16:16
Speaker 3: you know, they would be better off with competition between
16:19
Speaker 3: the brands, and in fact, that's what the Supreme Court
16:22
Speaker 3: has emphasized. Inter brand competition is supposed to be a
16:25
Speaker 3: key thing, and you know, now Tapestry says, well.
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Speaker 1: Not so much.
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Speaker 2: The trial's over. The judge is going to rule, we
16:33
Speaker 2: expect soon. Would a victory here for the FTC in
16:38
Speaker 2: any way expand what the FTC is doing or is
16:41
Speaker 2: it just another in a line of cases?
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Speaker 3: Well, it's not high tech. It's actually not an unusual
16:50
Speaker 3: theory to me. It's it's within what we might call
16:54
Speaker 3: conventional analysis in the sense that most merge enforcement has
17:01
Speaker 3: been done against horizontal mergers, mergers between competitors. That's what
17:06
Speaker 3: this is. I mean, if they win, that's what the
17:08
Speaker 3: court's saying, that they were really direct competitors. It uses,
17:13
Speaker 3: in a sense, familiar theories the government has been using
17:15
Speaker 3: for a decade. Really, you know, nothing new here that
17:19
Speaker 3: questions does it apply to these facts? So I don't
17:23
Speaker 3: think this is breaking new ground. It's confirming the ground
17:26
Speaker 3: that courts have been going on now really consistently with
17:31
Speaker 3: the government's cases, which is being willing to look at
17:35
Speaker 3: the patterns of trade, look at how people operate, not
17:38
Speaker 3: be super reliant on you know, economists and economic models.
17:44
Speaker 3: So I think it's that sort of case, not not
17:47
Speaker 3: a oh my god, this is something really new.
17:50
Speaker 2: I want to turn for a moment to the Google
17:53
Speaker 2: anti trust case, which was the biggest anti trust case
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Speaker 2: of the summer, perhaps of the year. And the question
18:00
Speaker 2: now is what remedies the government is going to ask for.
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Speaker 3: I have to say, I don't know what the government's
18:07
Speaker 3: going to ask for, and the government is still being
18:11
Speaker 3: maybe koi is the word shy. I don't know exactly.
18:17
Speaker 3: All the government has filed has been this framework for remedies.
18:22
Speaker 3: You know, their shows they're thinking about it, which is
18:24
Speaker 3: very nice. They've been litigating this case for four years.
18:27
Speaker 3: It's nice that they're now thinking about now that they've
18:30
Speaker 3: caught the bus, what do they want to do with it.
18:32
Speaker 3: I hope they really have an idea in mind and
18:33
Speaker 3: they're not just now trying to figure this out. So
18:37
Speaker 3: one of the things that people have been talking about
18:39
Speaker 3: is to you know, restructure Google in a way that
18:43
Speaker 3: would force them to sell some of their assets, maybe
18:46
Speaker 3: get rid of their interests, their their own brand of Android,
18:52
Speaker 3: maybe to vest chrome. Maybe there are other things, so
18:57
Speaker 3: that is a possibility. The government sort of tea that
19:00
Speaker 3: in its papers said it could include these things. Maybe
19:06
Speaker 3: Google plays also at the app store, So possible, But
19:11
Speaker 3: I don't know whether they'll ask it, and I don't
19:12
Speaker 3: know whether the judge would order it even if I asked.
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Speaker 2: Why is the government playing coy? What's the point a
19:18
Speaker 2: surprise attack?
19:20
Speaker 3: I don't know for sure. Sometimes, I mean, one strategy
19:25
Speaker 3: is to play close to the vest so that you
19:28
Speaker 3: don't really you wait until the last minute to tell
19:32
Speaker 3: your opponent exactly what you want. Another thing is the
19:36
Speaker 3: government might not want to royal the markets unduly, and
19:41
Speaker 3: you know, by indicating it's going to ask for X
19:44
Speaker 3: and then maybe not get it, and it affects, you know, markets,
19:48
Speaker 3: These are market events, so the governments can be a
19:51
Speaker 3: little cautious about that. I have no idea whether you know,
19:54
Speaker 3: someone in the Justice Department is thinking about the election
19:57
Speaker 3: says let's not put anything crazy out here until after
20:01
Speaker 3: the election. I have no idea. So it could be
20:03
Speaker 3: any of those things, And it could be that they
20:05
Speaker 3: don't know for sure because they're still talking to people
20:10
Speaker 3: in the industry and to experts about what might work
20:15
Speaker 3: and thinking about what legally they can ask for, So
20:20
Speaker 3: all those are possible. I don't have any way really
20:23
Speaker 3: of choosing what it might be.
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Speaker 2: The Google case was a Justice Department case. The FTC
20:30
Speaker 2: and the Justice Department do they divvy up these cases
20:33
Speaker 2: where you'll take this, I'll take that. I mean, how
20:36
Speaker 2: does it work out in.
20:37
Speaker 3: These tech cases. Apparently what they did, and this was
20:41
Speaker 3: in the Trump administration, is they did divide them up
20:45
Speaker 3: two industries for each, So the FTC got Amazon and
20:50
Speaker 3: Facebook and the Justice Department got Google and Apple. They
20:55
Speaker 3: don't know how that was done, you know, presumably some
20:58
Speaker 3: agreement between maybe the Attorney General, the head of any
21:02
Speaker 3: trust division, and the then chair of the Federal Trade Commission.
21:06
Speaker 3: So I think that was sort of an ad hoc
21:08
Speaker 3: thing that usually the cases go to the agency that
21:12
Speaker 3: has had some prior experience with the industry, and these
21:15
Speaker 3: fights are generally held in merger cases where notification has
21:21
Speaker 3: to be given to both the Justice Department and the
21:23
Speaker 3: Federal Trade Commission, and then the two agencies have a
21:28
Speaker 3: liaison procedure to decide who gets what, and sometimes they
21:33
Speaker 3: get pretty contentious, actually, but these monopolization cases were more
21:38
Speaker 3: unusual because the government hadn't really filed a major case
21:41
Speaker 3: since Microsoft twenty years before.
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Speaker 2: Always a pleasure to have you on Harry. That's NYU
21:47
Speaker 2: law professor Harry First. The Supreme Court seems unlikely to
21:52
Speaker 2: side with an American citizen challenging the revocation of her
21:56
Speaker 2: spouse is visa a visa which was revoked because of
21:59
Speaker 2: a sham marriage. Join me is immigration law expert Leon Fresco,
22:04
Speaker 2: a partner Holiday Night. Leon tell us what this case
22:07
Speaker 2: is about.
22:07
Speaker 1: So let's start with the simple facts of the case.
22:10
Speaker 1: You have a US citizen here whose name is Amina Buarfa,
22:15
Speaker 1: and what she's trying to do is she's trying to
22:17
Speaker 1: do what many people, almost a million people a year do,
22:21
Speaker 1: and that is to take a foreign national and convert
22:24
Speaker 1: their status from either undocumented or some other visa status
22:30
Speaker 1: to the status of a lawful permanent resident on the
22:34
Speaker 1: basis of a marriage to US citizens. And so this
22:37
Speaker 1: person Buarfa marries her husband. That petition is approved. But
22:42
Speaker 1: then what happens is as the petition starts to go
22:44
Speaker 1: toward the final step of what's called the background check
22:48
Speaker 1: approval process, it actually gets revoke because they say that
22:53
Speaker 1: the foreign national who is marrying the US citizen here
22:57
Speaker 1: had entered into a previous marriage solely to evade the
23:00
Speaker 1: immigration laws. So the point was they couldn't be approved
23:04
Speaker 1: because then this marriage was not deemed to be a
23:06
Speaker 1: valid marriage. Had that been an original decision denying the application,
23:13
Speaker 1: that decision could have been reviewed by a federal court.
23:17
Speaker 1: But because it was a revocation of an approved decision,
23:23
Speaker 1: the question is is that review barred because the ability
23:28
Speaker 1: to revoke such a petition is discretionary, and because of that,
23:34
Speaker 1: there's all these statutes in the Immigration Code that say
23:37
Speaker 1: there's no judicial review of discretionary immigration decisions, which is
23:41
Speaker 1: something the Supreme Court over the last two three years
23:44
Speaker 1: has really been focusing on and eliminating as much judicial
23:48
Speaker 1: review as possible on all of these questions where they're
23:52
Speaker 1: starting to dean these things discretionary. And so the incongruency
23:57
Speaker 1: year is does Supreme Court want to create this perverse
24:02
Speaker 1: incentive where it gives, basically, in difficult cases, the immigration
24:09
Speaker 1: authority the ability to avoid review by saying, look, why
24:14
Speaker 1: don't we just grant it and then revoke it a
24:16
Speaker 1: few days later, and then that way it can't be
24:18
Speaker 1: reviewed as opposed to just denying it, and then this
24:22
Speaker 1: can get judicial review. And so that's the debate here.
24:27
Speaker 2: If someone's accused of a prior sham marriage, would they
24:30
Speaker 2: ever be allowed to stay here as a permanent residence.
24:34
Speaker 1: Well, so one of the questions was is this really
24:37
Speaker 1: a discretionary decision or not? Because but the justices were
24:42
Speaker 1: trying to figure out was is if the US Citizenship
24:46
Speaker 1: and Immigration Services sometimes let the occasional sham marriage through
24:52
Speaker 1: on discretionary factors, then this is clearly a discretionary thing,
24:58
Speaker 1: and so hence it's not reviewable. But the odd sort
25:02
Speaker 1: of argument that the plaintiff were making here is they
25:06
Speaker 1: never let the sham marriages through, which is a point
25:09
Speaker 1: that the government attorney didn't really have all her facts
25:11
Speaker 1: straight here. Odd are there any such cases where the
25:15
Speaker 1: government would let them slide? And I doubt she would
25:18
Speaker 1: want to make such a pronouncement because it would make
25:20
Speaker 1: the government look bad if there were such cases that
25:24
Speaker 1: the government let slide. So the case sort of has
25:27
Speaker 1: this assumption in it that if the government knows there
25:30
Speaker 1: is a sham marriage, it would revoke the petition, hence
25:34
Speaker 1: making it a little bit more difficult to say that
25:37
Speaker 1: this is a discretionary revocation as opposed to one that
25:41
Speaker 1: would be done in every single case.
25:44
Speaker 2: Chief Justice Roberts told the attorney for the visa applicant,
25:49
Speaker 2: this is an easy case. Just file another visa application
25:53
Speaker 2: and you'll get judicial review if it's denied.
25:56
Speaker 3: I mean, I get the government's position, as far as
25:58
Speaker 3: I can tell, is that you just won't take yes
26:00
Speaker 3: for an answer. You want there to be review rather
26:05
Speaker 3: than review after revocation. And they're saying you can get
26:09
Speaker 3: that kind of just apply again and you'll get exactly
26:12
Speaker 3: what you would have you think you're entitled to, which
26:14
Speaker 3: is judicial review of the decision. What more can what more.
26:20
Speaker 2: Do you want?
26:21
Speaker 1: Well, this is a complicated argument in the following sense.
26:24
Speaker 1: So number one, what the Chief Justice was saying is
26:29
Speaker 1: after this revocation occurs, there is nothing because this person
26:34
Speaker 1: is in the United States right now preventing them from
26:37
Speaker 1: filing a new application, which they assume would just be denied,
26:42
Speaker 1: and they could just get judicial review of this new application.
26:45
Speaker 1: And they did, yes, already get review in the Board
26:48
Speaker 1: of Immigration Appeals, but they didn't get review in the
26:51
Speaker 1: federal court. But they could get review in the federal
26:54
Speaker 1: court if they just filed a new application, So which
26:57
Speaker 1: point the plantiff said, yeah, but now we're delayed several years,
27:00
Speaker 1: and so why is that fair? And the court seem
27:03
Speaker 1: to have no simpathy for that. But where this is
27:06
Speaker 1: actually quite a compelling argument is this many times in
27:11
Speaker 1: other contexts where there are green card petitions, not in
27:15
Speaker 1: this sham marriage context, but for instance, someone argues that
27:19
Speaker 1: they are an expert in a particular job, and so
27:23
Speaker 1: the government agrees with that, and then one year later
27:26
Speaker 1: revokes it say no, actually, you're not an expert at
27:29
Speaker 1: a particular job. A lot of times in those cases,
27:33
Speaker 1: two problems exist. Number one is that there is this
27:36
Speaker 1: sort of statute of limitations whereby the person had to
27:40
Speaker 1: file their application before a certain date that they would
27:44
Speaker 1: have lost their status on a non immigrant visa. And
27:49
Speaker 1: the whole success of that green card application is because
27:54
Speaker 1: they filed it before a certain date. So if you
27:57
Speaker 1: were to revoke that one and just say well, you
27:59
Speaker 1: can always file again, no, in those cases you couldn't.
28:02
Speaker 1: That person would be in illegal status and they couldn't
28:06
Speaker 1: file a new green card application, and so that would
28:10
Speaker 1: be a huge problem, and it was not raised unfortunately
28:13
Speaker 1: by the attorney. The other one that the plane of
28:16
Speaker 1: slawyer did mention was this concept of if your petition
28:20
Speaker 1: gets revoked, then you have to apply again. You start
28:23
Speaker 1: with a new date in line, which means that where
28:27
Speaker 1: there is a line for green cards, which exists in
28:30
Speaker 1: a lot of the categories, you move from the front
28:32
Speaker 1: of the line all the way to the back of
28:34
Speaker 1: the line, which could mean ten, twenty, thirty, forty years
28:38
Speaker 1: of additional ways. And I think the court understood that
28:41
Speaker 1: but basically said those people can bring that case later,
28:44
Speaker 1: which I don't think would actually be true, because I
28:46
Speaker 1: think this authority either exists or won't exist to revote
28:50
Speaker 1: these petitions. But nevertheless, the court appeared did not have
28:53
Speaker 1: sympathy for.
28:54
Speaker 2: This argument, because the Chief Justice at one point said, Okay,
28:58
Speaker 2: the government made a mistake, and you know you're set
29:01
Speaker 2: back two years or whatever, but you know we are
29:04
Speaker 2: where we are. Was any justice sympathetic to this argument.
29:08
Speaker 1: I didn't see a lot of sympathy to that argument.
29:11
Speaker 1: I actually thought, just as Thomas, interestingly enough, showed a
29:14
Speaker 1: little bit of sympathy to the fact that at the
29:17
Speaker 1: end of the day, if you were revoking for any
29:21
Speaker 1: other reason that might make sense. But if you're revoking
29:24
Speaker 1: for the exact same reason that was the reason that
29:26
Speaker 1: was approved, that maybe this didn't make sense and this
29:30
Speaker 1: wouldn't be considered a discretionary determination. But I ultimately don't
29:36
Speaker 1: see any of the justices want to rule in favor
29:39
Speaker 1: of the plaintive year and so it seems very difficult
29:42
Speaker 1: to see that there'd be any sympathy for this argument.
29:46
Speaker 2: I mean, you have a sham marriage here, so it
29:49
Speaker 2: doesn't really evoke much sympathy someone trying to get around
29:52
Speaker 2: the rules.
29:53
Speaker 1: Yes, I mean, this is another problem of bad fact
29:55
Speaker 1: make bad law. And there certainly could have been a
29:59
Speaker 1: different where the government would have brought the case in
30:02
Speaker 1: a flip side of the circuit split where it was
30:05
Speaker 1: the ninth Circuit. And I actually had a case like
30:08
Speaker 1: this where the ninth Circuit was there was a revocation
30:12
Speaker 1: of someone's employment based visa on this exact thing where
30:16
Speaker 1: the government had said this person was an expert. And
30:19
Speaker 1: then basically what happened was the government didn't like that
30:23
Speaker 1: this person was not cooperating with the government to give
30:26
Speaker 1: all sorts of secrets from their own country, which this
30:28
Speaker 1: person didn't have to do after the law. So they
30:31
Speaker 1: basically made up that the person was no longer an
30:35
Speaker 1: expert and revoked their position. And if it had been
30:38
Speaker 1: that kind of case, I think the Supreme Court would
30:40
Speaker 1: have viewed it a lot differently. But here the bad
30:43
Speaker 1: facts to make bad law situation is one where yeah,
30:47
Speaker 1: you're starting with a marriage that has a lot of
30:50
Speaker 1: components of fraud in it. And the question is why,
30:54
Speaker 1: if this is ultimately going to be rejected when it
30:57
Speaker 1: all shakes out, do we need to make a Supreme
31:00
Speaker 1: Court case out of it?
31:01
Speaker 2: So what did they take this case?
31:03
Speaker 1: Very odd? But I think there is this circuit split,
31:06
Speaker 1: and I think that the circuit split is something they've
31:08
Speaker 1: wanted to resolve and something the government wanted to resolve.
31:12
Speaker 1: I mean, I think when the government saw this appeal
31:15
Speaker 1: being taken, they were sort of saying, yeah, yeah, go
31:18
Speaker 1: for it. It takes the case so that they could
31:21
Speaker 1: finally close this circuit split up in a way that
31:24
Speaker 1: was beneficial toward the government and against judicial review of
31:27
Speaker 1: these kinds of cases.
31:29
Speaker 2: And the government's attorney said there are more than nine
31:31
Speaker 2: hundred thousand of these kinds of visa cases. Is that possible?
31:37
Speaker 1: Correct? Believe it or not. That's a normal number because
31:40
Speaker 1: it's not a cap category, and it's pretty much been
31:43
Speaker 1: that way for the last twenty years. It's been somewhere
31:48
Speaker 1: between seven hundred and nine hundred thousand per year of
31:52
Speaker 1: US citizens marrying foreign nationals and trying to get them
31:56
Speaker 1: green cards.
31:57
Speaker 2: So and explain why you think this case is so
32:00
Speaker 2: important beyond the marriage context.
32:03
Speaker 1: The government they actually do this practice of revoking petitions
32:08
Speaker 1: so that they don't have to get them reviewed by
32:10
Speaker 1: the federal courts. Instead of just denying it in the
32:13
Speaker 1: first instance, they'll approve it and then revoke it. That
32:16
Speaker 1: people know that happens, and it doesn't happen a lot,
32:18
Speaker 1: but it happens a handful of times this year in
32:21
Speaker 1: some very complicated cases. And that's the kind of thing
32:26
Speaker 1: where I think it would have been much more useful
32:27
Speaker 1: to talk about those cases and to not provide a
32:30
Speaker 1: path for the service to be able to do that,
32:34
Speaker 1: whereas they just stayed focused on just this marriage issue
32:38
Speaker 1: and how the marriage statute operates within this discretion, which
32:43
Speaker 1: I think just everybody's eyes lies over, yeah, and didn't
32:47
Speaker 1: allow for what the real states are here.
32:50
Speaker 2: Thanks so much, Leon. That's Leon Fresco of Holland and Knight.
32:54
Speaker 2: And that's it for this edition of the Bloomberg Law Podcast.
32:57
Speaker 2: Remember you can always get the latest legal news by
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Speaker 2: and at Bloomberg dot com, slash podcast, slash Law. I'm
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Speaker 2: June Grosso and this is Bloomberg