Latest / Bloomberg Law / SBF's Appeal, TikTok Ban & Abortion on Ballots
Transcript
- 0:03Speaker 1: This is Bloomberg Law with June Brusso from Bloomberg Radio.
- 0:09Speaker 2: Sam Bankmin Freed is appealing his conviction and asking for
- 0:13Speaker 2: a new trial. The FDx founder argues that everyone rushed
- 0:17Speaker 2: to judgment after the company's collapse and that fair trial
- 0:21Speaker 2: principles were swept away in a quote sentenced first verdict
- 0:26Speaker 2: afterwards tsunami Bankman Freed was convicted in November of orchestrating
- 0:31Speaker 2: a year's long, multi billion dollar fraud at FTX, the
- 0:35Speaker 2: crypto empire that imploded in late twenty twenty two. He's
- 0:39Speaker 2: serving a twenty five year prison sentence imposed by federal
- 0:43Speaker 2: Judge Lewis Kaplan, and in the brief, blame is placed
- 0:46Speaker 2: on the judge. Bankman Freed's attorneys claimed that many of
- 0:50Speaker 2: the judge's rulings were not just erroneous, but unbalanced, repeatedly
- 0:56Speaker 2: putting a thumb on the scale to help the government
- 0:58Speaker 2: and thwart the defense. His lawyers asked the Second Circuit
- 1:02Speaker 2: to reverse his conviction and assign the case to a
- 1:05Speaker 2: new judge for a retrial. Joining me is Bloomberg Legal
- 1:08Speaker 2: reporter Christ Mesh, who covered the trial and has read
- 1:11Speaker 2: the legal brief a lot of it is a direct
- 1:14Speaker 2: attack on the trial judge Lewis Kaplan, and not just
- 1:19Speaker 2: incorrect rulings, but that he had a bias against Sam
- 1:24Speaker 2: bankman Fried and his trial team.
- 1:26Speaker 3: Yeah, it's a very interesting appeal. You know, most criminal
- 1:29Speaker 3: defendants who are convicted almost always launch an appeal, especially
- 1:33Speaker 3: white collar defendants, and they often attack legal rulings that
- 1:38Speaker 3: are made during the trial, whether it be during jury's
- 1:40Speaker 3: selection or you know, what witnesses were allowed to testify about,
- 1:45Speaker 3: and various things like that. But this appeal seems to
- 1:48Speaker 3: just kind of go beyond the normal challenges to legal
- 1:51Speaker 3: procedure and, like you said, directly attacks the trial judge
- 1:55Speaker 3: for a wide variety of what Sam bankwin Fried's lawyer
- 2:00Speaker 3: say are reversible errors, that he was biased against him
- 2:03Speaker 3: from the beginning. The one thing they really attack is
- 2:06Speaker 3: his decision to you know, not allow bankin Free to
- 2:11Speaker 3: use the defense that he was, you know, relying on
- 2:14Speaker 3: good faith on lawyer's advice, and that attacks what was
- 2:17Speaker 3: widely seen is kind of an unusual move to question
- 2:21Speaker 3: Sam bankmin Free outside of the presence of the jury
- 2:24Speaker 3: about his interactions with lawyers. It was very unusual move,
- 2:28Speaker 3: and don't see that a lot in trials, so it's
- 2:32Speaker 3: very reasonable to see his lawyers go after that. But
- 2:35Speaker 3: they've also kind of just talked about the fact that
- 2:38Speaker 3: the judge routinely had issues with his lawyers during the case,
- 2:43Speaker 3: you know, often interrupted cross examinations and frequently interrupted Sam's
- 2:48Speaker 3: own testimony to interject, and often just didn't think he
- 2:52Speaker 3: was telling the truth. So whether or not that is
- 2:55Speaker 3: a successful defense is yet to be seen. Trial does
- 2:59Speaker 3: or generally given a big leach when it comes to
- 3:03Speaker 3: their decisions and trials, but this is a pretty significant
- 3:07Speaker 3: argument on appeal, and it's going to force the government
- 3:10Speaker 3: to respond in length, and I anticipate that we're going
- 3:14Speaker 3: to hear a lot of questions from the appeals court
- 3:16Speaker 3: judges once this gets to an oral argument.
- 3:18Speaker 2: Well, as I recall, the judge was sarcastic at times
- 3:25Speaker 2: with the defense counsel and the defense.
- 3:28Speaker 3: For sure, I mean more than I've seen in many
- 3:30Speaker 3: criminal trials where judges are generally deferential and more serious
- 3:35Speaker 3: and more just kind of wedded to procedure, and Judge
- 3:37Speaker 3: Kaplan clearly was I don't want to say annoyed, because
- 3:41Speaker 3: you know, a judge's temperament on the bench and not
- 3:43Speaker 3: necessarily reflection of their personal animosity and more just you know,
- 3:47Speaker 3: an annoyance with failure to adhere to procedure and things
- 3:51Speaker 3: like that. But it was an unusual amount of in
- 3:54Speaker 3: trial commentary before the jury that I haven't really seen
- 3:58Speaker 3: in a lot of criminal trials.
- 3:59Speaker 2: Also, so you mentioned this, but they argued that so
- 4:03Speaker 2: before he allowed Sam bankmin Free to testify, he had
- 4:07Speaker 2: a little sort of wadeer of Sam Bankman Freed. He
- 4:10Speaker 2: put him on the stand and he asked him questions,
- 4:12Speaker 2: which was really unusual for a defendant who's going to testify.
- 4:17Speaker 2: And the Bank and Fried's attorneys say that was an
- 4:19Speaker 2: unprecedented proceeding that permitted a prosecutor to conduct cross examination
- 4:25Speaker 2: going way beyond the supposed purpose of this preview hearing.
- 4:29Speaker 2: I mean, it was a strange hearing.
- 4:31Speaker 3: There's no doubt about that. Basically, his lawyers say that
- 4:34Speaker 3: he was essentially deposed by the judge, especially when a
- 4:38Speaker 3: defendant testifies, as we all know, that is a rarity
- 4:41Speaker 3: in the United States criminal trials, just because of the
- 4:44Speaker 3: potential issues it raises in terms of what you can
- 4:47Speaker 3: be questioned about across examination, and it opens the door
- 4:50Speaker 3: to a whole lot of other acts that may not
- 4:52Speaker 3: have come into the case had you not got on
- 4:55Speaker 3: the stand. But the judge basically like not basically, you know,
- 5:00Speaker 3: Bankman free directly without the jury in there, and it
- 5:04Speaker 3: was just a very unusual proceeding. It was kind of
- 5:07Speaker 3: hard to believe it was happening at the time, but
- 5:09Speaker 3: you know, the judge wanted to hear from him, and
- 5:12Speaker 3: he was clearly skeptical of his testimony before he questioned him.
- 5:16Speaker 3: He was skeptical of his testimony when he questioned him,
- 5:19Speaker 3: and then he was skeptical of his testimony when he
- 5:21Speaker 3: got on the stand. So that does seem to be
- 5:24Speaker 3: the heart of their attack on this procedure. And if
- 5:27Speaker 3: there is anything that might give the appeals court judges pause,
- 5:30Speaker 3: it might be that. But like I said, trial judges
- 5:33Speaker 3: are often given a lot of deference in terms of
- 5:36Speaker 3: their decisions. Eddy appeal is a long shot from a
- 5:39Speaker 3: jury conviction.
- 5:40Speaker 2: They do have a lot of a lot of latitude,
- 5:42Speaker 2: but there is a point where it stops. They also
- 5:46Speaker 2: said that the jury only saw half the picture because
- 5:50Speaker 2: the judge didn't allow some critical evidence in to back
- 5:54Speaker 2: up Sam Bankman freed contended that FTX had enough funds
- 5:58Speaker 2: to cover customer with so the government's narrative that the
- 6:02Speaker 2: money was lost permanently was incorrect. And in fact fgx's
- 6:08Speaker 2: customers are going to receive one hundred percent of their
- 6:10Speaker 2: money back, right right.
- 6:12Speaker 3: That is another key part of their appeal. And in fact,
- 6:15Speaker 3: there's an interesting parallel to that in the case of
- 6:18Speaker 3: Martin Trelley, who was you know, convicted a trial but
- 6:22Speaker 3: also argued that his hedge fund investors hadn't lost any money.
- 6:26Speaker 3: There was plenty of testimonies during his trial that, you know,
- 6:30Speaker 3: that they had actually made money rather than lost money
- 6:33Speaker 3: from the alleged conduct. But in the end that didn't
- 6:35Speaker 3: succeed for Martin, and it might be hard to say
- 6:38Speaker 3: that would succeed here.
- 6:39Speaker 2: Something that I thought was unusual when it was happening.
- 6:43Speaker 2: I don't know that it's reversible error, but they say
- 6:47Speaker 2: that the judge quote improperly brought a jurors to reach
- 6:51Speaker 2: a quick verdict because he invited them on the first
- 6:54Speaker 2: day to stay late and he offered rides home and meals.
- 6:59Speaker 2: I thought that was unusual. I mean, the trial had
- 7:01Speaker 2: been so long, what was the rush.
- 7:04Speaker 3: Yeah, that took a lot of people by surprise in
- 7:07Speaker 3: the press room and among the observers that day when
- 7:10Speaker 3: that happened, and a lot of us wondered if that
- 7:13Speaker 3: wouldn't brought the jury to come to a verdict that day,
- 7:15Speaker 3: and in the end they did. I think it was
- 7:17Speaker 3: about twenty or thirty minutes before eight o'clock. So that
- 7:21Speaker 3: is something they definitely probably shouldn't have raised in the
- 7:25Speaker 3: appeal brief and did, and it will be questioned, I don't.
- 7:28Speaker 3: You know, Judges often have a lot of latitude in
- 7:32Speaker 3: terms of how they instruct the jury. It's not unusual
- 7:35Speaker 3: to see a judge ask the jury if they want
- 7:38Speaker 3: to stay later in a case, you know, what time
- 7:42Speaker 3: they want to go to. They're often very hesitant to
- 7:45Speaker 3: kind of give them any kind of formal parameters for time.
- 7:49Speaker 3: You know. Generally, you know, work on a regular schedule
- 7:52Speaker 3: nine to five whenever the court is open, They go
- 7:55Speaker 3: home at a regular time during the day during the trial.
- 7:58Speaker 3: But when it comes to liberations, things are a lot looser,
- 8:02Speaker 3: and the judge is usually pretty hesitant to kind of
- 8:06Speaker 3: restrain them in any way from their deliberations if they
- 8:10Speaker 3: want to stay late and continue talking if they think
- 8:12Speaker 3: they're making headway, he will allow them to. But hearing
- 8:15Speaker 3: him directly say you can stay late tonight, you know,
- 8:18Speaker 3: as late as you need and promising the meals and
- 8:21Speaker 3: rides was was definitely unusual. Whether or not it's reversible error,
- 8:26Speaker 3: Like you said, who knows.
- 8:28Speaker 2: We've said unusual quite a few times in this short conversation.
- 8:32Speaker 3: There's a lot of different things about this case.
- 8:34Speaker 2: We should mention that Judge Kaplan has been on the
- 8:37Speaker 2: bench for a long time and is a very highly
- 8:40Speaker 2: respected judge.
- 8:42Speaker 3: There's no question about that. And he's had a lot
- 8:44Speaker 3: of experience with cases. I think he thinks he knows
- 8:47Speaker 3: the law very well. And as I've said numerous times
- 8:51Speaker 3: during this interview, judges have a lot of especially trial
- 8:54Speaker 3: judges have a lot of leeway. Now it's not inconceivable
- 8:58Speaker 3: that some part of free trial procedure could be caught
- 9:03Speaker 3: into question by the appeals court then maybe results in
- 9:06Speaker 3: a new trial or something, but it's hard to hard
- 9:10Speaker 3: to say at this point.
- 9:11Speaker 2: And when the judge sentenced bankman freed to twenty five years,
- 9:17Speaker 2: I mean, did he say anything during the sentencing that
- 9:19Speaker 2: hinted at bias?
- 9:21Speaker 3: I don't know. About bias. He didn't believe them. He
- 9:24Speaker 3: didn't believe Bankment freed. He essentially said he's a risk
- 9:28Speaker 3: to commit more crimes. He called him out for his lives,
- 9:31Speaker 3: and he was whether or not he was biased or not,
- 9:34Speaker 3: he just thought that he was clear that he thought
- 9:36Speaker 3: that he was not telling the truth.
- 9:38Speaker 2: The state star witness Caroline Ellison, the former girlfriend of
- 9:42Speaker 2: Sam bankmin Fried, is going to be sentenced next week
- 9:46Speaker 2: by Judge Kaplan. Her lawyers filed papers asking that she'd
- 9:51Speaker 2: be given no jail time at all, citing her cooperation.
- 9:55Speaker 2: Do you know what the range is that she's facing, Well, the.
- 9:59Speaker 3: Guy lines range is life in prison, which is not
- 10:05Speaker 3: going to happen, and it is driven by the guide,
- 10:07Speaker 3: by the loss in the case, or the alleged losses
- 10:10Speaker 3: in the case, in the size of the fraud.
- 10:13Speaker 2: Her attorney's asked for no time, and the Probation Department
- 10:17Speaker 2: said no time, which I thought was unusual.
- 10:20Speaker 3: That's not really that unusual for cooperating witnesses. Yes, they're
- 10:24Speaker 3: asking for time to serve with three years of supervised relief,
- 10:27Speaker 3: and they're citing her extraordinary cooperation with that. I don't
- 10:30Speaker 3: know what the government will last. We'll see when they
- 10:32Speaker 3: file their sensing memo sometime this week.
- 10:35Speaker 2: The sentence will be solely up to Judge Kaplan. We'll
- 10:39Speaker 2: see how much he credits her cooperation. Thanks so much, Chris.
- 10:44Speaker 2: That's Bloomberg. Legal reporter Chris dol Mesh will be sentenced
- 10:48Speaker 2: in November and October, respectively. Coming up next on the
- 10:51Speaker 2: Bloomberg Laws Show. Since the reversal of Roe v. Wade
- 10:55Speaker 2: in twenty twenty two, every ballot measure on abortion rights
- 10:59Speaker 2: has been approved by voters. This November, an unprecedented number
- 11:03Speaker 2: of abortion initiatives are on state ballots, but some may
- 11:07Speaker 2: face uphill battles after rulings by state courts. You're listening
- 11:12Speaker 2: to Bloomberg. Since the overturning of Roe v. Wade in
- 11:17Speaker 2: twenty twenty two, legal battles over abortion laws have been
- 11:21Speaker 2: fought across the country in the more than twenty Republican
- 11:24Speaker 2: led states that have banned or restricted abortions. This November,
- 11:29Speaker 2: the battle will be decided by voters, as a record
- 11:32Speaker 2: number of abortion initiatives are on the ballots in at
- 11:35Speaker 2: least nine states. In the last two years, every ballot
- 11:39Speaker 2: measure preserving abortion rights has been approved by voters, but
- 11:43Speaker 2: can that record be preserved after legal Challenges by abortion
- 11:48Speaker 2: opponents have led to ballot measures with language describing a
- 11:51Speaker 2: fetus as an unborn human being, others with financial statements
- 11:56Speaker 2: about the negative fiscal impact of abortions, and even opposing
- 12:00Speaker 2: abortion measures on the same ballot in one state. Joining
- 12:04Speaker 2: me is Mary Ziegler, a professor at UC Davis Law School.
- 12:08Speaker 2: How would you characterize the challenges to abortion initiatives in general?
- 12:13Speaker 2: Are they technical or substantive?
- 12:16Speaker 4: Most of them are technicals. There are a lot of
- 12:18Speaker 4: them that involve whether a ballot measure satisfies what's called
- 12:21Speaker 4: the single subject requirement. There are challenges about the procedures
- 12:26Speaker 4: by which signatures were gathered or submitted. So most of
- 12:31Speaker 4: them either involve election law or the requirements for a
- 12:35Speaker 4: ballot to be put before voters. They don't actually deal
- 12:38Speaker 4: with substance.
- 12:39Speaker 2: Let's look at some of the states where they have
- 12:42Speaker 2: ballot measures. So in Arkansas, the Secretary of State rejected
- 12:47Speaker 2: it because they said they hadn't followed the rules to
- 12:50Speaker 2: paid canvassers.
- 12:52Speaker 4: Yeah, so essentially the people who were submitting the ballot
- 12:55Speaker 4: measure in Arkansas had been submitting required paper work for
- 13:00Speaker 4: paid canvassers on a rolling basis, and then when they
- 13:03Speaker 4: reached the requisite number of signatures, had finalized the paperwork.
- 13:07Speaker 4: The state complained that they hadn't essentially filed everything at once,
- 13:11Speaker 4: and as a result that it was hard for the
- 13:14Speaker 4: secretary to evaluate, especially paperwork about whether paid canvassors had
- 13:19Speaker 4: received training about signature gathering. So it was about that
- 13:23Speaker 4: paperwork and the timing of its submission.
- 13:25Speaker 2: Is it going to be on the ballot or no.
- 13:28Speaker 4: So the Arkansas Supreme Court affirmed that decision and that
- 13:32Speaker 4: will not be going before Arkansas voters in November.
- 13:35Speaker 2: So it was just because the Secretary of State was
- 13:37Speaker 2: finding it hard to count the signatures.
- 13:40Speaker 4: Yeah, I mean, it's it's pretty technical, right, So, I mean,
- 13:42Speaker 4: the dissenting judge and the Supreme Court's opinion said, essentially,
- 13:46Speaker 4: you know, all of the requisite paperwork was there, and
- 13:50Speaker 4: the complaint was about when and how it arrived. But substantively,
- 13:54Speaker 4: there were all the tools needed for the Secretary caarry
- 13:57Speaker 4: to evaluate the signatures. And the majority of actually said,
- 14:01Speaker 4: you know, we're going to enforce the letter of the law,
- 14:03Speaker 4: you know, a kind of formalism regardless of whether there
- 14:07Speaker 4: would have been a way to evaluate the signatures in
- 14:10Speaker 4: the training either way.
- 14:12Speaker 2: So still with the A's Arizona. So first, on the
- 14:16Speaker 2: proposed constitutional amendment, there's a description of a fetus as
- 14:20Speaker 2: an unborn human being that was approved by the state
- 14:23Speaker 2: Supreme Court.
- 14:24Speaker 4: Correct, Yeah, so the state Supreme Court approved that as
- 14:26Speaker 4: a description that could go before voters. Again, it's a
- 14:29Speaker 4: slightly different question because the Supreme Court didn't actually prevent
- 14:32Speaker 4: the measure from going before voters, but suggested that that
- 14:36Speaker 4: language wasn't misleading and that voters could, you know, essentially
- 14:40Speaker 4: wouldn't be adversely affected by it.
- 14:43Speaker 2: So I take it a lot of these challenges are
- 14:45Speaker 2: to the wording of the ballot measure, which can confuse.
- 14:49Speaker 4: Voters, right, I mean, I think that the objection to
- 14:52Speaker 4: that language was that it was very artisan, you know,
- 14:55Speaker 4: that it would essentially convince voters that measure should be rejected,
- 15:01Speaker 4: and that it took a position that was more aligned
- 15:03Speaker 4: with the pro life or anti abortion movement than a
- 15:06Speaker 4: neutral position. And so that was the objection that the
- 15:10Speaker 4: state Supreme Court rejected.
- 15:12Speaker 2: One of the proponents of abortion rights said that it's
- 15:16Speaker 2: going to be the longest ballot in state history. It's
- 15:19Speaker 2: going to have two pages and thirteen ballot measures taking
- 15:23Speaker 2: up the back of the second page. Was that inadvertent
- 15:27Speaker 2: or was that done to, you know, make it harder
- 15:29Speaker 2: to find the abortion measure?
- 15:31Speaker 3: Yeah?
- 15:32Speaker 4: I think that it was done to potentially diffuse these
- 15:35Speaker 4: kinds of legal challenges. I think supporters of abortion rights
- 15:39Speaker 4: in Arizona are aware of the fact that the Arizona
- 15:43Speaker 4: Supreme Court had allowed, you know, a pre Civil War
- 15:47Speaker 4: abortion band to go into effect. There's an assumption that
- 15:49Speaker 4: the court was and is quite conservative on questions of abortion.
- 15:54Speaker 4: So I think this was an effort to be thorough
- 15:56Speaker 4: and kind of block those kinds of challenges at the.
- 15:58Speaker 2: Past Florida, which it's gotten a lot of news because
- 16:02Speaker 2: the governor seems to have pulled out all the stops.
- 16:06Speaker 2: There's a Florida Cares website and it has the state
- 16:11Speaker 2: seal on it. I mean, has anyone challenged that using
- 16:13Speaker 2: the state seal and apparently there's misinformation on there.
- 16:17Speaker 4: I don't know if anyone is challenged it yet, but
- 16:19Speaker 4: I think this is sort of part of a broader
- 16:22Speaker 4: use of state power in Florida to try to block
- 16:24Speaker 4: the ballot or at least defeat the ballot initiative after
- 16:27Speaker 4: the state's effort to keep the ballot initiative from going
- 16:30Speaker 4: before voters failed. We've seen some analogical things happen in
- 16:34Speaker 4: Ohio before that state voted on its ultimately successful ballot measure.
- 16:38Speaker 4: We may see legal challenges to it, but I think
- 16:41Speaker 4: the Florida Supreme Court, like the Arizona Supreme Court, is
- 16:43Speaker 4: quite conservative, so those challenges may not work.
- 16:46Speaker 2: Governor Ron Dessand has had a squad of election police
- 16:50Speaker 2: going to the homes of those whose signatures are on
- 16:53Speaker 2: the petition for the abortion measure, questioning them. That has
- 16:58Speaker 2: to be at the very least a streful experience. Has
- 17:01Speaker 2: that been done before in other states.
- 17:04Speaker 4: I mean, it's certainly unusual. We haven't seen this kind
- 17:07Speaker 4: of level of I guess you could say intimidation before.
- 17:10Speaker 4: Governor Destantus' office argues that there are valid concerns about
- 17:16Speaker 4: essentially about fraud in the gathering of ballot signatures that
- 17:20Speaker 4: they're investigating. But of course, sending law enforcement of any
- 17:23Speaker 4: kind to somebody's door as part of a fraud investigation
- 17:27Speaker 4: before voting is even begun is going to have obviously
- 17:30Speaker 4: intimidating effects that I don't think are accidental. So I
- 17:33Speaker 4: think this is yet another thing that we're seeing in
- 17:36Speaker 4: this election of ballot initiatives that we haven't seen much before.
- 17:39Speaker 2: Also, the Florida Supreme Court is allowing a financial impact
- 17:43Speaker 2: statement to be included alongside the measure on the ballot.
- 17:48Speaker 2: That statement says an increase in abortions may negatively affect
- 17:52Speaker 2: the growth of state and local revenues over time. Is
- 17:57Speaker 2: that the first time that's happened a financial statement like that?
- 18:01Speaker 4: To my knowledge, it's the first time that it's appeared
- 18:03Speaker 4: on the ballot. Again, in Ohio, we've seen state lawmakers
- 18:07Speaker 4: and state resources used to make arguments against a ballot
- 18:10Speaker 4: initiative before, so that's not new, But I think the
- 18:13Speaker 4: focus on cost is new. I don't think that's surprising, again,
- 18:16Speaker 4: because abortion opponents have lost a lot of mass ballot
- 18:19Speaker 4: initiative campaigns, and so they're trying new strategies to see
- 18:23Speaker 4: if they can change their luck.
- 18:25Speaker 2: In Florida, sixty percent of voters are needed to pass
- 18:29Speaker 2: the abortion ballot measure. With these measures, is it usually
- 18:34Speaker 2: just a majority or sometimes a super majority required?
- 18:39Speaker 4: All of the ballot measures we've seen so far. Again,
- 18:41Speaker 4: not all of which were designed to codify reproductive rights.
- 18:44Speaker 4: Some of them were narrower, like rejecting an anti abortion proposal.
- 18:48Speaker 4: All of them just had majority requirements to pass. So
- 18:52Speaker 4: this is the first time we've seen a super majority requirement,
- 18:55Speaker 4: So it'll be interesting to see if that makes a
- 18:58Speaker 4: difference for abortion of oponents. Clearly, in Ohio there was
- 19:01Speaker 4: some belief that it would. There was an effort to
- 19:03Speaker 4: get Ohioans to raise the threshold for successful ballot measures
- 19:07Speaker 4: in a separate ballot measure. It fails, but Florida already
- 19:10Speaker 4: has the sixty percent threshold, so it'll be interesting to
- 19:13Speaker 4: see if that's enough. The help of working opponents serve
- 19:15Speaker 4: the momentum for abortion rights is just too significant.
- 19:19Speaker 2: In Nebraska, for the first time in state history, they're
- 19:22Speaker 2: going to be conflicting petitions on the same ballot. On Friday,
- 19:27Speaker 2: the state's top court ruled unanimously against the argument that
- 19:31Speaker 2: the abortion rights amendment violated the state's single subject rule.
- 19:35Speaker 2: I think you referred to this before.
- 19:37Speaker 4: Single subject rules have been the subject of a whole
- 19:39Speaker 4: bunch of litigation in a lot of states. They're applicable
- 19:42Speaker 4: in a lot of state constitutional context, and essentially they
- 19:44Speaker 4: apply to say that a ballot measure can only discuss
- 19:47Speaker 4: a single subject. And the rationale for them is that
- 19:51Speaker 4: voters would get confused if you cram too much into
- 19:53Speaker 4: a single ballot measure, or particularly if you kind of
- 19:56Speaker 4: interpolate a really unpopular proposal into an otherwise popular ballot measure.
- 20:01Speaker 4: So the idea behind this suit in Nebraska was that
- 20:05Speaker 4: there was more than one subject being covered because the
- 20:08Speaker 4: ballot measure addressed abortion, abortion restrictions, and viability, which the
- 20:12Speaker 4: opponents said, we're discrete topics, and the Nebraska Supreme Court
- 20:16Speaker 4: rejected that idea and said, of course, if there's a
- 20:19Speaker 4: right to abortion, that's going to have obvious impact on
- 20:21Speaker 4: whether restrictions can be imposed on that right. That's one
- 20:24Speaker 4: in the same subjects, and that since the decision of Roe,
- 20:28Speaker 4: viability as a concept has been entangled with whether there
- 20:31Speaker 4: are abortion rights. But this kind of single subject rule
- 20:34Speaker 4: argument had been raised not just in Nebraska but in
- 20:37Speaker 4: a variety of other states as well, so we're likely
- 20:39Speaker 4: to see more of it.
- 20:41Speaker 2: So how will it work with two competing ballot measures.
- 20:45Speaker 2: I assume the language in each is going to be different.
- 20:48Speaker 4: It sounds so confusing, exactly. So the two Nebraska ballot measures,
- 20:53Speaker 4: the one that we were just discussing, the kind of
- 20:55Speaker 4: pro abortion rights ballot measure, looks a lot like a
- 20:58Speaker 4: lot of other ballot measures in the sense that it's
- 21:00Speaker 4: trying to establish some kind of reproductive right. The anti
- 21:04Speaker 4: abortion ballot measure kind of plays around with what is
- 21:07Speaker 4: currently the status quo in Nebraska, which is that abortion
- 21:10Speaker 4: is more or less legal until twelve weeks. But the
- 21:14Speaker 4: ballot measure, instead of saying, okay, let's stick with the
- 21:16Speaker 4: status quo, constitutionalizes it, meaning there would be no constitutional
- 21:22Speaker 4: possibility of allowing abortion after the first trimester. So it's
- 21:27Speaker 4: confusing both in the sense that voters have two ballot
- 21:30Speaker 4: measures and also because the second ballot measure may feel
- 21:32Speaker 4: to voters just like the status quo, but in effect
- 21:35Speaker 4: would be putting kind of a constitutional limit on when
- 21:38Speaker 4: abortion would be permitted.
- 21:40Speaker 2: So whichever measure gets more votes wins or is there
- 21:44Speaker 2: a thirty five percent threshold.
- 21:46Speaker 4: Yeah, it's kind of confusing.
- 21:48Speaker 3: It.
- 21:49Speaker 4: My best understanding from talking to people in Nebraska is
- 21:51Speaker 4: that if both of them have I mean, obviously the
- 21:54Speaker 4: easiest scenario is neither of them have the votes to pass,
- 21:57Speaker 4: or only one of them has the vote to pass,
- 21:59Speaker 4: in which case of neither of them have the votes
- 22:01Speaker 4: to pass, then it's just going to be whatever the
- 22:03Speaker 4: status quo is in Nebraska. If both of them have
- 22:07Speaker 4: the votes to pass, then that's when it gets complicated.
- 22:09Speaker 4: My best understanding is that the one with more votes
- 22:13Speaker 4: would be the one that would be enacted into law.
- 22:16Speaker 4: But you can bet that if both of them have
- 22:18Speaker 4: the votes to pass, that would get litigated.
- 22:21Speaker 3: I don't think that we would.
- 22:22Speaker 4: Just see that settled straightforwardly. I'd be a little surprised
- 22:25Speaker 4: if both of them did have the votes to pass.
- 22:27Speaker 4: Of course, because voters are seeing lots of ads that
- 22:30Speaker 4: juxtapose them and say that they're diametrically opposed.
- 22:33Speaker 2: It seems like with all this the confusion, intimidation, etc.
- 22:37Speaker 2: That it becomes even more important that voters be educated
- 22:41Speaker 2: about the ballot measures before going to vote.
- 22:44Speaker 4: I think that's right. There's also a question of just
- 22:46Speaker 4: how much misinformation is really penetrating or not penetrating. So
- 22:52Speaker 4: in another example, another single subject challenge and other challenge
- 22:56Speaker 4: that failed recently was in Missouri, where a ballot measure
- 22:59Speaker 4: will go for voters, and there the strategy has been
- 23:03Speaker 4: for conservatives to argue that the ballot measure, which would
- 23:08Speaker 4: create a right to reproductive healthcare, will actually force Missouri
- 23:12Speaker 4: to legalize cloning and gender affirming care, which they're arguing
- 23:16Speaker 4: would fall under the umbrella of reproductive healthcare. The goal there,
- 23:20Speaker 4: obviously is to convince Missouri voters who don't support gender
- 23:24Speaker 4: affirming care or cloning that this is like a trojan
- 23:26Speaker 4: horse that will cover those things when ultimately the interpretation
- 23:30Speaker 4: of the ballot initiatives language will be done by the
- 23:33Speaker 4: Missouri Supreme Court, which is generally quite conservative. So I
- 23:37Speaker 4: think there's also been an effort to confuse voters about
- 23:40Speaker 4: exactly what they're voting for. I don't know to what
- 23:43Speaker 4: extent that's working. In to what extent voters understand these
- 23:48Speaker 4: ballot measures based on what's going on more broadly in
- 23:50Speaker 4: their state when it comes to struggles over abortion, but
- 23:54Speaker 4: I think that'll be another big question going into the election.
- 23:57Speaker 2: Yeah, I mean, so far, every with all these legal
- 24:01Speaker 2: challenges having led to language that's unfavorable in some states
- 24:06Speaker 2: confusion in others. Even opposing abortion measures on the same
- 24:12Speaker 2: ballot in Nebraska could we see some of these initiatives
- 24:15Speaker 2: defeated in November for the first time since Roe was overturned.
- 24:20Speaker 4: Yeah, it's definitely possible. I mean, it's worth emphasizing, right
- 24:24Speaker 4: that what the abortion rights movement is trying to do
- 24:26Speaker 4: in this election is objectively harder in a variety of ways.
- 24:29Speaker 3: Right.
- 24:29Speaker 4: So, there are several states in which ballot measures are
- 24:32Speaker 4: going forward that are just much more conservative than any
- 24:34Speaker 4: we've seen ballid initiatives in to date. So as much
- 24:37Speaker 4: as Ohio as a red state, Ohio is not as
- 24:39Speaker 4: conservative as South Dakota or Missouri, right, I mean, we're seeing,
- 24:45Speaker 4: for example, a competitive Senate election in Ohio. We're not
- 24:49Speaker 4: seeing anything like that in South Dakota.
- 24:51Speaker 3: Right.
- 24:52Speaker 4: So, one, you're just going to much more conservative states
- 24:55Speaker 4: with actual measures backing reproductive rights in other words, not
- 24:59Speaker 4: just saying something more incremental like we saw in Kentucky
- 25:02Speaker 4: or Montana in twenty twenty two. It's harder because in
- 25:05Speaker 4: some instances, like in Florida, they're super majority requirements. It's
- 25:09Speaker 4: harder in some instances because the state, as in Florida,
- 25:13Speaker 4: is using resources to try to defeat the ballot measures.
- 25:16Speaker 4: It's also harder, I think because you're seeing something in
- 25:20Speaker 4: a presidential election year where people me who are conservative
- 25:24Speaker 4: may change the way they're thinking of this issue in
- 25:26Speaker 4: part because they vote the same up and down the ballot.
- 25:29Speaker 4: And there's confusion as we see in Nebraska when you
- 25:32Speaker 4: have more than one ballot measure that voters can choose
- 25:35Speaker 4: between without necessarily understanding the stakes. So I think that
- 25:39Speaker 4: it's definitely possible. It's one of the toughest tests, for sure,
- 25:43Speaker 4: that we've seen with ballot initiatives since jobs.
- 25:46Speaker 2: We'll be following all these ballot measures come November. Thanks
- 25:49Speaker 2: so much, Mary. That's Professor Mary Ziegler of UC Davis
- 25:53Speaker 2: Law School coming up next. TikTok does not fare well
- 25:58Speaker 2: in the DC Appellate Court. I'm June Gross. When you're
- 26:01Speaker 2: listening to Bloomberg, time maybe ticking away for TikTok, and
- 26:06Speaker 2: it's more than one hundred and seventy million US users.
- 26:10Speaker 2: The Chinese owner of the wildly popular social media app
- 26:15Speaker 2: has until January nineteenth to sell the app or face
- 26:19Speaker 2: a ban in the US, and it appears the DC
- 26:22Speaker 2: Appellate Court is not going to be much help, judging
- 26:25Speaker 2: by the grilling TikTok got from a three judge panel
- 26:29Speaker 2: which was skeptical that the law banning the video sharing
- 26:32Speaker 2: app would violate the company's free speech rights. Joining me
- 26:37Speaker 2: is Matthew Shettenholm, Bloomberg Intelligence litigation and government analyst. Matt
- 26:42Speaker 2: explain the issue here why TikTok has been under scrutiny
- 26:46Speaker 2: for so long.
- 26:47Speaker 1: So TikTok fell under scrutiny for two main reasons. One
- 26:52Speaker 1: a concern about potential propaganda that with TikTok's parents being
- 26:59Speaker 1: low lo caated in China, that there was the potential
- 27:04Speaker 1: for China to influence the content that one hundred and
- 27:08Speaker 1: seventy million Americans are seeing. And a second concern is
- 27:13Speaker 1: with data privacy, that all this information about what one
- 27:18Speaker 1: hundred and seventy million Americans are clicking on or even
- 27:22Speaker 1: where they're located is potentially again running back to a
- 27:28Speaker 1: company with that's located in China, and that potentially raises
- 27:33Speaker 1: concerns with China's access to potentially very sensitive data. And
- 27:38Speaker 1: so those two things really drove legislators into passing what
- 27:44Speaker 1: became law in April.
- 27:46Speaker 2: And tell me about that law.
- 27:48Speaker 1: Basically, this law says it passed in late April, as
- 27:51Speaker 1: I said, and it says it from two hundred and
- 27:53Speaker 1: seventy days after that passage, which takes us to January
- 27:57Speaker 1: nineteenth of twenty twenty five. On that gate, no company
- 28:03Speaker 1: can carry TikTok in an app store or carry it
- 28:08Speaker 1: on a server in a way that allows the app
- 28:12Speaker 1: to be distributed or updated or maintained in the United States.
- 28:17Speaker 1: And if companies continue to carry it in their app
- 28:20Speaker 1: stores or to carry it on servers, they would face
- 28:23Speaker 1: severe potential liability and penalties and enforcement. And the only
- 28:28Speaker 1: path around that is that Congress allowed is for TikTok
- 28:32Speaker 1: to divest the company, for the company to be sold
- 28:35Speaker 1: to a company that doesn't have a parent located in China.
- 28:39Speaker 1: But TikTok has said, look, that is not feasible. We
- 28:43Speaker 1: are not able to do a divestiture in two hundred
- 28:46Speaker 1: and seventy days technically legally for a number of reasons.
- 28:50Speaker 1: So they've effectively told the court, look, that's not happening.
- 28:53Speaker 1: And instead of doing that, they've they've brought a First
- 28:56Speaker 1: Amendment challenge to try to challenge the court. And that's
- 28:59Speaker 1: what what we heard at the DC Circuit on Monday
- 29:02Speaker 1: morning was the argument in that case.
- 29:05Speaker 2: So The hearing was scheduled for fifty minutes and it
- 29:07Speaker 2: ran for about two hours. And what was the main.
- 29:10Speaker 1: Issue, certainly the First Amendment. So TikTok threw a number
- 29:14Speaker 1: of arguments against this law. Its lead argument was the
- 29:19Speaker 1: First Amendment, and that's all the court reached. It's all
- 29:21Speaker 1: the court talked about. We never reached the takings clause
- 29:25Speaker 1: claims or the Bill of Attainder issues. This is going
- 29:29Speaker 1: to be won or lost for TikTok on the First Amendment.
- 29:32Speaker 1: And TikTok really made the argument that this is an
- 29:36Speaker 1: unprecedented speech restriction in the United States, that this is
- 29:41Speaker 1: one of the leading social media apps. One hundred and
- 29:44Speaker 1: seventy million Americans use this for communicating for speech every day,
- 29:49Speaker 1: and you're forcing the sale of it. And it says
- 29:52Speaker 1: if you would force the sale of politico or twitter
- 29:56Speaker 1: x because you don't like the owner, because the government
- 29:58Speaker 1: doesn't like who's control, and you're going to force a
- 30:01Speaker 1: sale of it, they say that's unprecedented for the government
- 30:05Speaker 1: to use that level of control and to do it
- 30:08Speaker 1: for secret reasons. A lot of the evidence was secret,
- 30:11Speaker 1: and so the briefing focused on that issue. The argument
- 30:15Speaker 1: focused on the First Amendment issue, but probably not in
- 30:17Speaker 1: the ways that TikTok would have liked.
- 30:19Speaker 2: Tell us why TikTok didn't fare well.
- 30:22Speaker 1: Yeah, I thought it was a very tough day for TikTok.
- 30:26Speaker 1: Even though the court explored the First Amendment issue, it
- 30:29Speaker 1: didn't do it in the ways that I think TikTok
- 30:32Speaker 1: would most like. TikTok really pushed the arguments that this
- 30:36Speaker 1: should be subject to strict scrutiny, which is the highest
- 30:40Speaker 1: level of First Amendent scrutiny, and it's very tough for
- 30:43Speaker 1: the government to win a case that is governed by
- 30:45Speaker 1: that standard. I saw little appetite from the three judges
- 30:49Speaker 1: on the panel to go to strict scrutiny. They didn't
- 30:52Speaker 1: want to go there. Where they wanted to go was
- 30:54Speaker 1: intermediate scrutiny, which is an easier test for the government
- 30:58Speaker 1: to pass, and so I think that was a concern.
- 31:01Speaker 1: One of the judges on the panel, Naomi Rao Trumpt appointee,
- 31:06Speaker 1: brought up a nineteen eighty eight case that the government
- 31:09Speaker 1: hadn't even cited about the government's ability to shut down
- 31:13Speaker 1: an office with ties to a foreign country of concern
- 31:18Speaker 1: and said, look, we rejected a First Amendment case in
- 31:21Speaker 1: that and similarly, another judge, Douglas Ginsburg, a Reagan appointee
- 31:25Speaker 1: on the panel, really expressed sympathy for the government's interest
- 31:30Speaker 1: in managing national security threats and foreign affairs. You know,
- 31:34Speaker 1: TikTok pushed the point that, look, Congress never made findings
- 31:38Speaker 1: about what is wrong with TikTok. They passed this very quickly,
- 31:43Speaker 1: and if you look at the law, there are no
- 31:45Speaker 1: reports tied to this legislation saying why you needed to
- 31:49Speaker 1: take this extreme measure. I thought that might get more
- 31:52Speaker 1: traction with these judges, but instead they were much more
- 31:56Speaker 1: deferential to Congress, much more concerned about stepping on Congress
- 32:03Speaker 1: on a national security matter, something these judges aren't expert on.
- 32:07Speaker 1: Neilmi Rao at one point said, look, you're asking us
- 32:10Speaker 1: to treat Congress like an agency the way we would
- 32:13Speaker 1: review a federal agency, and we don't do that in
- 32:16Speaker 1: the same way. And basically, there was a sense that
- 32:19Speaker 1: they were going to be much more deferential to Congress's
- 32:22Speaker 1: judgments on these national security threats. And so if I
- 32:25Speaker 1: was TikTok walking out of that argument, I would be
- 32:28Speaker 1: concerned the.
- 32:29Speaker 2: Government's lawer said, there are just reams of information that
- 32:32Speaker 2: are going back to China. Is the information secret and
- 32:35Speaker 2: we haven't seen it, or is there no information that
- 32:39Speaker 2: they keep claiming that TikTok is a threat.
- 32:42Speaker 1: I think the government is willing to concede that so
- 32:45Speaker 1: far they haven't seen direct evidence of China doing what
- 32:50Speaker 1: they're most concerned about, China influencing the propaganda, or China
- 32:57Speaker 1: diving into this personal data. What the govern government has said, though,
- 33:01Speaker 1: is that there is an extreme risk with this setup,
- 33:05Speaker 1: with allowing a parent of TikTok to be in China,
- 33:10Speaker 1: and that in itself is so inherently risky that it's
- 33:14Speaker 1: reasonable for the government to proactively address it and not
- 33:17Speaker 1: to shut down TikTok necessarily, but to say that you
- 33:21Speaker 1: will be shut down unless you sell the company to
- 33:23Speaker 1: someone that doesn't have a parent in China. And we're
- 33:26Speaker 1: kind of reading through the lines a little bit because
- 33:29Speaker 1: a lot of the briefing material was redacted and confidential.
- 33:35Speaker 1: I think dozens of pages in the government's brief, but
- 33:39Speaker 1: I do think in other parts that weren't redacted, they
- 33:41Speaker 1: did concede that we don't have hard evidence of this happening. Yet,
- 33:45Speaker 1: and so I thought TikTok might get a little more
- 33:47Speaker 1: traction on the fact that the government's doing a lot
- 33:50Speaker 1: of this for secret reasons. And what's really remarkable. Sometimes
- 33:54Speaker 1: you'll see cases with redacted information that the public can't see,
- 33:58Speaker 1: but at least both sides of the case can see it. Here,
- 34:01Speaker 1: even TikTok can't see the evidence against it. The government
- 34:05Speaker 1: was only sharing this information with the courts on an
- 34:07Speaker 1: ex part day basis, and so that's sort of remarkable
- 34:10Speaker 1: in a first anemic case. But if you look through
- 34:12Speaker 1: the transcript of yesterday's two hour hearing, that got mentioned
- 34:16Speaker 1: hardly at all. And so TikTok, Yeah, TikTok made very
- 34:20Speaker 1: little traction about raising concerns about the government using secret
- 34:24Speaker 1: evidence for this, and instead, you know, you heard a
- 34:27Speaker 1: lot about sympathy to the government in addressing a national
- 34:30Speaker 1: security threat. So concerning if your TikTok, I'd think you.
- 34:35Speaker 2: Give TikTok just a twenty percent chance of a success
- 34:38Speaker 2: at the DC circuit.
- 34:40Speaker 4: Yeah.
- 34:40Speaker 1: So, I mean, going into this argument, I viewed this
- 34:43Speaker 1: as a very close case, and on the briefing, I
- 34:46Speaker 1: thought TikTok did a pretty good job of raising concerns
- 34:49Speaker 1: that might give these judges pause about allowing such a
- 34:53Speaker 1: drastic measure. But TikTok got so little traction with those
- 34:58Speaker 1: three judges yesterday. Two of the three the two Republican
- 35:02Speaker 1: appointed judges on the panel. You know, I find it
- 35:05Speaker 1: very difficult to see them ruling for TikTok. The Obama
- 35:09Speaker 1: appointee maybe he was a little more more neutral on
- 35:12Speaker 1: the panel, but still, most likely this is going to
- 35:16Speaker 1: lead to a decision at the DC Circuit that upholds
- 35:20Speaker 1: Congress's law and most likely leaves that January nineteenth deadline
- 35:25Speaker 1: for an effective man in place. And so I think
- 35:28Speaker 1: I think we're likely to see that decision by early December.
- 35:33Speaker 2: TikTok, if it loses, could appeal to the full DC Circuit,
- 35:38Speaker 2: which would have more Democratic appointees on it, or could
- 35:43Speaker 2: try to go to the Supreme Court. What do you
- 35:45Speaker 2: think it's likely to do?
- 35:47Speaker 1: That's exactly right. So the problem here is that time
- 35:50Speaker 1: is extremely tight. Normally you'd pursue every option you can.
- 35:55Speaker 1: And so, okay, let's try from asking the full DC
- 35:58Speaker 1: Circuit first and if that fails, and then we'll go
- 36:01Speaker 1: to the Supreme Court. But when TikTok has to do
- 36:03Speaker 1: all of this by January nineteenth, then it might not
- 36:06Speaker 1: see a decision until maybe December. So time could be
- 36:10Speaker 1: really short here. And if this decision goes the way
- 36:14Speaker 1: I think is most likely at the DC's Circuit with s.
- 36:17Speaker 1: Shrievasen he's the chief judge, was the Obama appointee on
- 36:21Speaker 1: this panel. If he rules against TikTok, and to Republican
- 36:25Speaker 1: appointed judges rule against TikTok, I don't think there's going
- 36:29Speaker 1: to be much chance that En Bank the DC Circuit
- 36:32Speaker 1: is going to second guest those three judges. And given
- 36:35Speaker 1: the shortness of time, I think TikTok says, look, we're
- 36:38Speaker 1: not going to win at the DC Circuit. Let's try
- 36:41Speaker 1: at the Supreme Court. That's our best bet. And asking
- 36:44Speaker 1: the Supreme Court justices this is such an unprecedented First
- 36:48Speaker 1: Amendment issue for the government to do this, we should
- 36:52Speaker 1: at least ask the Supreme Court to freeze this January
- 36:55Speaker 1: nineteenth deadline and take up this case to consider the
- 36:59Speaker 1: employ First Amendment issues. And so I think that's what
- 37:02Speaker 1: you'll see if TikTok loses in December, is an emergency
- 37:05Speaker 1: request to the Supreme Court to hit pause on this,
- 37:09Speaker 1: low this down, and let's think about whether the government
- 37:12Speaker 1: really satisfied the First Amendment or not, because.
- 37:15Speaker 2: It doesn't seem like this Supreme Court would be any
- 37:18Speaker 2: more sympathetic than the judges at the DC Circuit.
- 37:21Speaker 1: Were I agree with you. And especially one thing that
- 37:24Speaker 1: came up at the DC Circuit yesterday was when the
- 37:27Speaker 1: Supreme Court on July first decided the Net Choice case,
- 37:31Speaker 1: the First Amendment case. There, Justice Barrett put in a
- 37:35Speaker 1: sentence in her opinion that said, look, even though look,
- 37:38Speaker 1: this opinion gives First Amendment rights to these social media companies,
- 37:41Speaker 1: maybe the analysis is different when there are ties to
- 37:45Speaker 1: a foreign company. And the judges at the DC Circuit
- 37:49Speaker 1: yesterday kind of latched onto that and said, yes, it's
- 37:52Speaker 1: different in matters of foreign control. And with the Supreme
- 37:56Speaker 1: Court makeup of six Republican appointed judges three Democrat appointed judges,
- 38:02Speaker 1: I think it's very likely that a majority of that
- 38:05Speaker 1: court is going to agree with this panel for DC Circuit,
- 38:09Speaker 1: which also is to Republican appointed judges one Democrat appointed judge.
- 38:14Speaker 1: It's going to be a really tough decision to reverse
- 38:17Speaker 1: at the Supreme Court. I think TikTok is really up
- 38:20Speaker 1: against it in trying to do that. It is possible,
- 38:23Speaker 1: I guess that the Supreme Court would say, look, it's
- 38:27Speaker 1: at least important, and so this is important enough, we
- 38:29Speaker 1: should hear it and slow it down. But TikTok ultimately
- 38:33Speaker 1: winning is going to be a really tough sell with
- 38:36Speaker 1: the Supreme Court.
- 38:37Speaker 2: Great analysis, Matt, not for TikTok, though, Thanks so much.
- 38:41Speaker 2: That's Matthew Shettenhelm, Bloomberg Intelligence, Litigation and Government analyst. And
- 38:46Speaker 2: that's it for this edition of the Bloomberg Law Show.
- 38:49Speaker 2: Remember you can always get the latest legal news by
- 38:51Speaker 2: subscribing to the Bloomberg Law Podcast or downloading this show
- 38:55Speaker 2: at Bloomberg dot com, slash podcast, slash Law. I'm Drewan
- 38:59Speaker 2: Brosso in your listen ink to Boomberg