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Weekend Law: Live Nation, A Justice Apologizes & Justice Dept Errors · Bloomberg Law

0:02
Speaker 1: This is Bloomberg Law with June Grossel from Bloomberg Radio.
0:12
Speaker 2: Days.
0:27
Speaker 1: Whether you're buying tickets for the upcoming concerts of VTS, Bruno,
0:32
Speaker 1: Mars or Shakira, you probably purchased them on Ticketmaster and
0:37
Speaker 1: may have experienced sticker shock, especially when looking at the
0:42
Speaker 1: added service fees. Music lovers who've been complaining for years
0:46
Speaker 1: about Ticketmaster's fees are surely reveling in a jury verdict
0:51
Speaker 1: that found that its parent company, Live Nation illegally monopolized
0:56
Speaker 1: the live events industry and overcharged fans for tickets to
1:00
Speaker 1: music performances. The verdict is a major win for a
1:04
Speaker 1: coalition of thirty four states in DC that pursued the
1:08
Speaker 1: case after the Justice Department walked away from it. Here's
1:12
Speaker 1: their attorney, Jeffrey Kessler.
1:14
Speaker 3: It's a great day for consumers and fans, and it's.
1:17
Speaker 1: A great day for the thirty four States District of Columbia,
1:21
Speaker 1: wife and honored to work for on this matter. But
1:24
Speaker 1: it will take quite a while, perhaps through years of appeals,
1:28
Speaker 1: for those fans to see if the verdict really leads
1:31
Speaker 1: to changes that make concerts more affordable. Even though the
1:35
Speaker 1: stage is set for a possible breakup of Live Nation
1:39
Speaker 1: and Ticketmaster. Live Nation continues to insist it's not a
1:44
Speaker 1: monopoly and says the jury verdict is not the last word.
1:49
Speaker 1: My guest is an expert in anti trust law, Harry First,
1:52
Speaker 1: a professor at NYU Law School. Harry, would you call
1:55
Speaker 1: this a landmark verdict? How would you characterize it?
1:59
Speaker 3: Yes, I think it is. It's landmarky in a number
2:02
Speaker 3: of ways. So monopolization cases historically are pretty infrequent. I
2:08
Speaker 3: say historically because you know recently there have been a
2:11
Speaker 3: couple of high profile monopoly cases. But you know, these
2:15
Speaker 3: kinds of cases, not a tech case in a direct sense,
2:19
Speaker 3: pretty unusual. So that's first landmark part. Second, a jury
2:24
Speaker 3: trial in a government case really unusual. The federal government
2:29
Speaker 3: hasn't paid attention to juries in any trust cases particularly,
2:33
Speaker 3: and I think during the Biden administration some good lawyers
2:37
Speaker 3: there said, you know, juries can be on our side.
2:40
Speaker 3: They understand when consumers are abused, So you have to
2:44
Speaker 3: be asking for money. Normally the Justice Department asks for
2:48
Speaker 3: an injunction, don't do this, or do this, so you
2:51
Speaker 3: have to ask for money to get a jury, and
2:53
Speaker 3: that's what they did. So they joined with the states
2:55
Speaker 3: who can ask for money on behalf of their citizens.
2:59
Speaker 3: So that's the second thing. It's a jury trial for money.
3:02
Speaker 3: Third thing is the government often settles cases saying, you know,
3:07
Speaker 3: it's really risky to go to trial. We can get
3:10
Speaker 3: a darn good, even better settlement. Makes no sense, of course,
3:14
Speaker 3: if you settle, you get less, but they often say this,
3:17
Speaker 3: and this has been true historically. So what happened here
3:21
Speaker 3: They got a worse settlement, They didn't go to trial,
3:24
Speaker 3: and there were the States sitting there, you know, messy
3:28
Speaker 3: plaintiffs saying no, you can settle for you, but you
3:32
Speaker 3: can't settle our claims, and so they didn't. So third
3:35
Speaker 3: landmark aspect. And usually when the States litigate and the
3:39
Speaker 3: Justice Department doesn't necessarily go so well for the States.
3:44
Speaker 3: So fourth landmark aspect.
3:47
Speaker 1: So let me backtrack a little and explain what happened.
3:50
Speaker 1: Days into the trial. The Justice Department dropped out and
3:53
Speaker 1: reached this eleventh hour deal which was reached in DC
3:57
Speaker 1: and was so secretive it even caught the government's own
3:59
Speaker 1: trial team by surprise, and the judge called the way
4:03
Speaker 1: he was informed about it mind boggling. But then more
4:05
Speaker 1: than thirty States said no, as you explain, we're not
4:08
Speaker 1: going to take that settlement and pressed ahead with the trial.
4:11
Speaker 1: Is this a black guy for the Justice Department? Should
4:14
Speaker 1: they be embarrassed?
4:16
Speaker 3: This Justice Department doesn't embarrass easily, so you know, in
4:20
Speaker 3: normal times, yes, but this was clearly something I had
4:24
Speaker 3: normal going on, which we still don't really know the
4:27
Speaker 3: backstory on. Frankly, and yes, they should be embarrassed is
4:33
Speaker 3: a nice word for saying it.
4:35
Speaker 1: Yes, you have to give it to the States. They
4:37
Speaker 1: had to scramble to take over the case because the
4:41
Speaker 1: Justice Department had been leading it. They had like thirty
4:44
Speaker 1: people on the trial team, and then the States come
4:47
Speaker 1: in and have to pick up just a week later
4:50
Speaker 1: where the Justice Department left off. It's amazing to me
4:54
Speaker 1: that they were able to do it as well as
4:56
Speaker 1: they apparently did.
4:58
Speaker 3: So I agree with that. I know this they you know,
5:00
Speaker 3: they weren't just sitting around, and I'm sure that they
5:04
Speaker 3: were familiar with the economist testimony and who was going
5:08
Speaker 3: to testify. But but yes, the leading war had been
5:12
Speaker 3: taken by the Justice Department, and it was a challenge.
5:15
Speaker 3: I mean, at first, they wanted to delay, they wanted
5:17
Speaker 3: to put it off by a month to prepare. So yeah,
5:21
Speaker 3: it's quite a challenge to step into the shoes, particularly
5:25
Speaker 3: when you're worried that the jury is looking and saying
5:29
Speaker 3: where are those other guys?
5:30
Speaker 4: You know?
5:32
Speaker 1: The jury four person said the verdict was influenced by
5:35
Speaker 1: those Live Nation internal documents. And we've talked before about
5:39
Speaker 1: those emails where Live Nations ticketing directors bragged about the
5:44
Speaker 1: outrageous prices, called customers so stupid, and boasted that the
5:50
Speaker 1: company was quote robbing them blind baby. And there was
5:54
Speaker 1: also a recording of an expletive filled phone call where
5:59
Speaker 1: Michael Rapina, the CEO of Live Nation, threatened the head
6:02
Speaker 1: of Barkley Center that he would withhold concerts after Barkley
6:06
Speaker 1: switched to a rival Ticketer, and followed through on those threats,
6:11
Speaker 1: according to testimony, And that's the kind of evidence that's
6:15
Speaker 1: made for jury trials.
6:17
Speaker 3: It sure is. Yeah, here you sort of have to
6:19
Speaker 3: pity counsel for Live Nation. They said, you know, please
6:22
Speaker 3: don't look over there at the car wreck. Really are
6:25
Speaker 3: we condemn bad driving? We really don't like it, and
6:29
Speaker 3: we're gonna deal with those bad drivers. Look over here,
6:32
Speaker 3: look at how much people like ticket Master they think
6:36
Speaker 3: our prices are great. I mean, maybe they had the
6:39
Speaker 3: real challenge and that's what makes the case a jury
6:42
Speaker 3: triable case. You know, Jeffrey Kessler said, who talks like this?
6:46
Speaker 3: I mean, really, it sounds like the mafia.
6:50
Speaker 1: The jury found that Ticketmaster had overcharged customers a dollar
6:53
Speaker 1: seventy two per ticket in twenty two states. That may
6:57
Speaker 1: sound like not much, but it adds up. The judge
7:00
Speaker 1: will calculate the damages, but that could amount to hundreds
7:04
Speaker 1: of millions of dollars.
7:06
Speaker 3: Well, I don't know the number of tickets sold, so
7:08
Speaker 3: it could be a lot of money. Yes, I mean
7:10
Speaker 3: how much each person will get is you know, it's
7:13
Speaker 3: not going to be huge for each person, but they're
7:16
Speaker 3: going to have to give back a fair amount of money.
7:18
Speaker 1: So the original goal of this complain from the Justice
7:23
Speaker 1: Department in twenty twenty four was to separate ticket Master
7:26
Speaker 1: from Live Nation. In your opinion, is that the only
7:30
Speaker 1: way to fix this market?
7:32
Speaker 3: That that is the remedy and that is the only way.
7:35
Speaker 3: I mean, this has been going on since twenty ten,
7:40
Speaker 3: so we're now in twenty twenty six and they've gone
7:45
Speaker 3: through two consent decrees where they say, oh, we promised
7:49
Speaker 3: we'll never do this again, and then they do it again,
7:52
Speaker 3: and you know why not. They make money out of it.
7:55
Speaker 3: And in truth, the only thing surprising to me is
7:59
Speaker 3: that we're Pino has to actually say what he said,
8:03
Speaker 3: and the guy from Barclays was too stupid to understand
8:06
Speaker 3: what he had to do, which was to use Live
8:08
Speaker 3: Nation and Ticketmaster. He thought he could do this scott free,
8:12
Speaker 3: when you know, there was testimony and Senate hearings that, well,
8:16
Speaker 3: we don't pressure them, but of course we do what's
8:18
Speaker 3: best for our business. What's best for our businesses. If
8:20
Speaker 3: a venue uses Ticketmaster and if they don't, well we've
8:24
Speaker 3: got the talent. Maybe we'll move them someplace else. Everybody
8:27
Speaker 3: knows that you can't unring that bell. So there really
8:31
Speaker 3: is no to my mind, effective way of ending this
8:35
Speaker 3: and getting some competition in ticketing. I mean, in the end,
8:39
Speaker 3: that's what you want. He won competition with Ticketmaster.
8:42
Speaker 1: Breaking up a company is a big ask. Do you
8:45
Speaker 1: think the judge will have enough nerve that's the only
8:48
Speaker 1: word I can think of to order Live Nation to
8:51
Speaker 1: be split up.
8:52
Speaker 3: I don't know. It's funny. The Justice Department had said
8:56
Speaker 3: before the trial this is the only effective remedy. And
8:59
Speaker 3: then when they settled, oh, the judge will never order it. Great,
9:03
Speaker 3: thank you very much. I don't know. I think it
9:05
Speaker 3: depends in part on how forcefully the case is argued.
9:09
Speaker 3: This is a very unusual case in the sense that
9:12
Speaker 3: you have an experiment. They tried a lesser remedy than
9:17
Speaker 3: keeping the two companies apart. We've tried this, We've seen
9:21
Speaker 3: how it works. It doesn't. The world is not going
9:24
Speaker 3: to look different. There's an old Supreme Court case that
9:28
Speaker 3: had the same sort of fact pattern. Government wanted to
9:31
Speaker 3: break up a company. The judge said, no, no, I
9:34
Speaker 3: don't want to do that. We'll issue some specific requirements
9:39
Speaker 3: they've got to go through. Ten years later, Justice Department
9:42
Speaker 3: comes back and says, we still enough competition. Supreme Court
9:45
Speaker 3: said ten years is enough break them up, And.
9:49
Speaker 1: With Live Nation it's sixteen years. So we'll see. There
9:53
Speaker 1: are other sanctions the judge could impose, right For example,
9:58
Speaker 1: he could force them to sell off some venue.
10:00
Speaker 3: I mean there is the venue side. I mean, over
10:02
Speaker 3: the time, Live Nation, which was not a monopoly originally,
10:06
Speaker 3: but because of the interconnection with Ticketmaster and controlling tickets
10:11
Speaker 3: and then controlling a lot of talent and then buying
10:15
Speaker 3: up venues. Yes, he could do that, but the heart
10:18
Speaker 3: of this thing is controlling the tickets, the ticketing. You know,
10:23
Speaker 3: the venues have to have a ticketing service. The system
10:26
Speaker 3: doesn't work if you can't sell a ticket to a
10:29
Speaker 3: concert live.
10:30
Speaker 1: Nation of course denies it an illegal monopoly and says
10:33
Speaker 1: the jury verdict is not the last word. It also
10:36
Speaker 1: predicted that once the remedies phase of the case plays
10:40
Speaker 1: out and appeals are resolved, the outcome likely won't be
10:43
Speaker 1: much different from the deal it reached with the federal government.
10:48
Speaker 3: Well, so there is a good question of how this
10:50
Speaker 3: is going to work. Now you have an effect dueling remedies.
10:54
Speaker 3: This is another unusual part where the federal government says
10:59
Speaker 3: xx is and the states may or may not. I mean,
11:02
Speaker 3: the States might join that, I doubt it, but the
11:05
Speaker 3: States could ask for more, and then the judge is
11:08
Speaker 3: going to have to try to see if he can
11:11
Speaker 3: mesh those two remedies, or maybe he'll, you know, grant
11:15
Speaker 3: the remedies in a Justice Department case and then grant
11:18
Speaker 3: what the States asked for. I don't know. This will
11:21
Speaker 3: be interesting to watch. It's not unprecedented, but it's pretty rare,
11:25
Speaker 3: so that'll be interesting to see.
11:28
Speaker 1: The judge has to approve the settlement that the federal
11:31
Speaker 1: government and some states made with Live Nation. Group of
11:34
Speaker 1: Democratic Senaters wrote to the judge after the verdict Wednesday,
11:39
Speaker 1: urging him to closely scrutinize the proposed settlement before he
11:44
Speaker 1: considers granting approval, saying the deal was negotiated under suspicious circumstances,
11:49
Speaker 1: which we've discussed, and doesn't go far enough in restoring
11:53
Speaker 1: competition or protecting customers, artists and independent venues. How unusual
11:59
Speaker 1: is it for a judge to reject a settlement that
12:02
Speaker 1: the Justice Department has reached.
12:05
Speaker 3: It's pretty unusual. A judge has to approve any trust settlements.
12:09
Speaker 3: There's a specific statute has to be approved as in
12:13
Speaker 3: the public interest. Courts of appeals have sort of kept
12:17
Speaker 3: the discretion of trial judges pretty narrow in this area.
12:22
Speaker 3: They can create, you know, a lot of smoke. It's
12:25
Speaker 3: hard for them to make really big changes in it.
12:28
Speaker 3: This is not the only case now being litigated like this.
12:31
Speaker 3: There's another merger case that was settled under well, suspicious
12:37
Speaker 3: would be even too polite a word, I mean the
12:40
Speaker 3: people involved have said there, you know, was just outright
12:44
Speaker 3: lobbying and no relation to the public interests. So this
12:48
Speaker 3: is a theme and it's unusual. You know, we've had
12:52
Speaker 3: concerns about settlements historically, but this is just a little different.
12:57
Speaker 3: It's not political value, it's just lobb issues. I think
13:01
Speaker 3: that's what this letter meant. It meant something smells in this,
13:05
Speaker 3: and judge you find.
13:07
Speaker 1: Out, Harry. I think most concert goers look at this
13:10
Speaker 1: verdict and ask, does this mean I'm going to be
13:13
Speaker 1: paying less for concert tickets? Is that happening anytime soon?
13:18
Speaker 1: Or is it ever happening.
13:19
Speaker 3: Here's my guess. Taylor Swift is going to look at
13:22
Speaker 3: this and say, great, I'll drop my ticket price in half,
13:26
Speaker 3: you know, and all the other big talents say, you know,
13:29
Speaker 3: enough of that high prices.
13:31
Speaker 4: No.
13:31
Speaker 3: So I think there may be a little disappointment in
13:35
Speaker 3: what the result will be immediately. If we're lucky, there'll
13:39
Speaker 3: be more competition and we'll have different kinds of ticketing
13:43
Speaker 3: services with different options, and maybe lower prices for the
13:49
Speaker 3: ticketing service itself, and maybe if there's some divestiture of
13:54
Speaker 3: the arenas, maybe lower prices on the talent. I don't know.
13:59
Speaker 3: Hard to see say how that'll all come out. But
14:01
Speaker 3: my guess is, you know, tomorrow the tickets for these
14:06
Speaker 3: big ticket concerts are not going to change, at least
14:10
Speaker 3: not very much.
14:11
Speaker 1: The Trump administration appears to be a lax enforcer of
14:15
Speaker 1: the anti trust laws. Do you think this verdict gives
14:18
Speaker 1: an impetus to the states and private parties to bring
14:21
Speaker 1: more anti trust actions.
14:23
Speaker 3: I mean, I think that that impetus has been there.
14:26
Speaker 3: The problems are there as well. Anti trust litigation is expensive,
14:30
Speaker 3: has to be highly resourced. Private parties have to have
14:34
Speaker 3: some confidence that they can collect because they usually bring
14:37
Speaker 3: these class actions where they get awarded a part of
14:40
Speaker 3: the recovery. So I don't know whether it gives them
14:43
Speaker 3: more incentive or it just makes it more important that
14:47
Speaker 3: they stay in the game. And this has been the
14:50
Speaker 3: game for a while, and it often heats up when
14:53
Speaker 3: the federal government's efforts seem misdirected, lack a daisical and so,
15:00
Speaker 3: but it's also something the federal governments to keep in mind.
15:04
Speaker 3: They don't have a monopoly on enforcement. You know, they
15:07
Speaker 3: may prefer all this stuff to go away, but the
15:10
Speaker 3: states may have other ideas.
15:12
Speaker 1: And perhaps winning ideas like continuing this trial. So he's
15:16
Speaker 1: great to get your insights, Harry, thanks so much. That's
15:19
Speaker 1: Professor Harry First of NYU Law School. Coming up next
15:23
Speaker 1: on Bloomberg Law. A rare apology from a justice. I'm
15:27
Speaker 1: June Grosso and you're listening to Bloomberg. Justice Sonya so
15:31
Speaker 1: to Mayor was on the road about a week ago
15:34
Speaker 1: speaking about her latest children's book and her experiences as
15:38
Speaker 1: a Supreme Court justice during a Q and A at
15:41
Speaker 1: the University of Alabama Law School on April ninth, when
15:45
Speaker 1: Sotomayor was asked how she builds bridges across ideological lines
15:50
Speaker 1: with her colleagues, her answer was blunt.
15:53
Speaker 2: If you mean bridges by bridges, convince them that they're wrong.
16:04
Speaker 2: I just sent so much. I'm not very successful.
16:07
Speaker 1: Two days earlier, during an appearance at the University of
16:10
Speaker 1: Kansas Law School, the liberal justice had taken a personal
16:14
Speaker 1: swipe at one of those colleagues from across the ideological divide.
16:19
Speaker 1: She criticized Conservative Justice Brett Kavanaugh for a concurrence where
16:24
Speaker 1: he wrote that legal residence detained in ice immigration stops
16:29
Speaker 1: promptly go free after a typically brief encounter so Tomyor said,
16:34
Speaker 1: this is from a man whose parents were professionals and
16:38
Speaker 1: probably doesn't really know any person who works by the hour.
16:42
Speaker 1: That rare personal criticism of a colleague led to an
16:45
Speaker 1: equally rare apology from Soda Mayor. Joining me is David Super,
16:50
Speaker 1: a professor at Georgetown Law. David on Wednesday, so eight
16:54
Speaker 1: days after those remarks, Soda Mayor said in a statement
16:58
Speaker 1: that her remarks were in a appropriate I regret my
17:01
Speaker 1: hurtful comments. I have apologized to my colleague. Do you
17:05
Speaker 1: think a public apology was really necessary morally necessary?
17:10
Speaker 4: No, because what she said was true, both in its
17:15
Speaker 4: specifics and in its generality. But practically, I'm very glad
17:20
Speaker 4: she did it because she has an unusual role that
17:25
Speaker 4: you and I don't. She has to work with six
17:27
Speaker 4: people who don't agree with her much, and letting personalized
17:32
Speaker 4: comments get into that is going to make it harder
17:35
Speaker 4: for her to put together the votes for a majority opinion,
17:39
Speaker 4: or when she does put together the vote's going to
17:42
Speaker 4: make it harder for her to negotiate a good majority opinion.
17:46
Speaker 4: So the kind of comments she made are appealing to
17:51
Speaker 4: many of us that are frustrated with the court. In
17:54
Speaker 4: general and that justice in particular. But I don't think
17:57
Speaker 4: it was wise, and I think she made the right choice.
18:00
Speaker 1: And you rarely hear justices criticizing each other, especially personal criticism.
18:06
Speaker 1: Actually I can't think of another time.
18:08
Speaker 4: You don't usually hear that, and I think the reason
18:11
Speaker 4: you don't is because they're afraid that it will interfere
18:16
Speaker 4: with their ability to work with one another in the future.
18:18
Speaker 4: But when justices believe that there already is no ability
18:24
Speaker 4: to work together, frustration can boil over. There are not
18:29
Speaker 4: a lot of controversial cases on with Justice Soto my
18:33
Speaker 4: Orange Justice Kavanaugh have been on the same side, and
18:36
Speaker 4: there have been quite a few where it's been otherwise.
18:39
Speaker 4: But I think that the point that she's making, perhaps
18:43
Speaker 4: more bluntly than some would, is an important point. And
18:47
Speaker 4: about the shadow docket, Justice Kavanaugh asserted as a indisputable
18:53
Speaker 4: fact that US citizens and legal permanent residence are immediately
18:58
Speaker 4: let go. There's overwhelmed. Evan is that's not true? And
19:02
Speaker 4: if the Supreme Court was taking cases that were properly
19:05
Speaker 4: developed in the lower courts on the facts, it would
19:08
Speaker 4: know that's not true, and it could say we don't care,
19:13
Speaker 4: or it could say we will allow orders designed to
19:17
Speaker 4: make that so or it could say this means these
19:20
Speaker 4: stops are inappropriate, but it wouldn't be able to make
19:25
Speaker 4: absolute assertions of fact that are simply false. And if
19:29
Speaker 4: you want to decide cases on the law, maybe there's
19:32
Speaker 4: an argument for an emergency docket, although I don't agree
19:37
Speaker 4: with it. But if you want to decide cases on
19:40
Speaker 4: the fact, which he's doing there, then you have to
19:42
Speaker 4: let the lower courts develop the facts.
19:45
Speaker 1: And by the way, those are now referred to as
19:47
Speaker 1: Kavanaugh stops. And at an appearance two days after those remarks,
19:52
Speaker 1: so Tomayor seemed to be going out of her way
19:55
Speaker 1: to describe the collegiality on the court.
19:58
Speaker 2: I look to them as people to have a relationship
20:01
Speaker 2: with them, and I dare say that with virtually all
20:07
Speaker 2: of them, I certainly have a civil relationship, and with
20:12
Speaker 2: many of them, I think I dare say that I
20:14
Speaker 2: have a friendship.
20:15
Speaker 4: I mean, these are professionals, and I'm always a little
20:20
Speaker 4: skeptical about the claims that these people are big friends
20:24
Speaker 4: of one another. I know Justice Ginsberg and Justice Clia
20:29
Speaker 4: went to the opera together, but I think that in
20:33
Speaker 4: many ways, these are nine independent offices, each in the
20:38
Speaker 4: same building, that interact mostly through paper and occasionally in
20:44
Speaker 4: fairly formal ways, like oral arguments in conference. So I'm
20:48
Speaker 4: not sure that this changes a great deal. I don't
20:51
Speaker 4: see a lot of outward evidence of much comedy. The
20:55
Speaker 4: Court is working very, very fast. I'm sure it is
21:00
Speaker 4: jamming that the descending justices to work to all hours
21:04
Speaker 4: to get their descents out, rather than holding up and
21:07
Speaker 4: giving them a little bit of time, which has been
21:09
Speaker 4: done on very very big cases in the past.
21:12
Speaker 1: Another liberal justice made some critical remarks this week, but
21:16
Speaker 1: about the Court's emergency docket, not about any justice in particular.
21:21
Speaker 1: In a lecture at Yale Law School on Wednesday, Justice
21:24
Speaker 1: Katanji Brown Jackson expressed concerns that the Court's handling of
21:29
Speaker 1: its emergency docket is having an enormously disruptive and potentially
21:35
Speaker 1: corrosive effect on the federal judiciary.
21:39
Speaker 5: So the Court has left confusion in its wake, and
21:43
Speaker 5: it offers little guidance because it ordinarily does not spell
21:46
Speaker 5: out the circumstances giving rise to its own equities evaluation,
21:51
Speaker 5: making it incredibly difficult for lower courts to understand which
21:56
Speaker 5: facts were important to the state determination and thus es
22:00
Speaker 5: identify like cases.
22:03
Speaker 1: David, will you explain the confusion in the lower courts
22:07
Speaker 1: about orders from the emergency docket that Jackson is referring to.
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Speaker 4: The lower courts are bound by the Supreme Court's holding.
22:17
Speaker 4: But if it's only holding is that an injunction in
22:21
Speaker 4: this case or that is stayed, and they don't give
22:25
Speaker 4: us any reasoning, then the lower courts are not bound
22:30
Speaker 4: by reasoning that they are speculating. They're bound by what
22:34
Speaker 4: the Court tells us to decide cases.
22:37
Speaker 1: We've seen pushback from federal district court judges, especially after
22:41
Speaker 1: Justice Neil Gorsuch scolded them for not following shadow docket
22:46
Speaker 1: rulings and accuse him of defying the Supreme Court. And
22:50
Speaker 1: now that's billed over into the appellate courts. Last week,
22:54
Speaker 1: judges on the Fourth Circuit, we're trading insults about how
22:58
Speaker 1: much weight to give the Supreme Court. It's rulings from
23:00
Speaker 1: the shadow docket. And this was an on bank panel.
23:04
Speaker 1: So all the judges on the Fourth Circuit, so tell
23:07
Speaker 1: us what the majority decided in that case.
23:09
Speaker 4: Yeah, the case was about an injunction limiting Doz's access
23:16
Speaker 4: to extremely sensitive social security information on you and me
23:21
Speaker 4: and hundreds of millions of other people. And the Supreme
23:25
Speaker 4: Court had previously held that an earlier lower court injunction
23:30
Speaker 4: in that case could not be enforced until appeables were
23:35
Speaker 4: fully exhausted up to the Supreme Court. And so what
23:39
Speaker 4: the majority in the Fourth Circuit decided was that it
23:44
Speaker 4: was going to send the case back down to the
23:46
Speaker 4: district court. It was not going to purport to reinstate
23:52
Speaker 4: an injunction because the Supreme Court had pretty clearly said
23:55
Speaker 4: it couldn't do that.
23:56
Speaker 1: And that prompted a rebuke from Judge James Win, joined
24:00
Speaker 1: by four other judges and descent. He wrote that to
24:03
Speaker 1: treat interim orders as binding precedent abandons our long held
24:07
Speaker 1: jurisprudence of deciding constitutional law through reasoned opinions, not emergency
24:13
Speaker 1: motions made under intense time pressure. So basically we don't
24:17
Speaker 1: have to follow those Supreme Court orders. Is that just
24:19
Speaker 1: utter defiance of the court.
24:22
Speaker 4: It's absolutely not defiance. It's actually a very traditionalist and
24:26
Speaker 4: the Supreme Court has lectured us often on the importance
24:30
Speaker 4: of following the rules that were in place when the
24:33
Speaker 4: Constitution was adopted. And this is although it doesn't call
24:36
Speaker 4: itself originalists. This is originalist in that courts have two
24:42
Speaker 4: entirely different functions that they often perform in the same case.
24:45
Speaker 4: They decide the rights of the parties before them, and
24:48
Speaker 4: they make precedent for the future. Those are different functions.
24:52
Speaker 4: And nobody, not the concurring justices, not Justices Jackson, and
24:58
Speaker 4: so to nobody questions that the Supreme Court can decide
25:02
Speaker 4: the rights of the parties before it on the shadow docket.
25:05
Speaker 4: The question is whether when it issues an order for
25:08
Speaker 4: the parties in front of it without an opinion or
25:11
Speaker 4: without a meaningful opinion, if that should be also treated
25:15
Speaker 4: as president and the history is that court's issue opinions
25:23
Speaker 4: to tell us why they're deciding things. Often the parties
25:27
Speaker 4: are making half a dozen different arguments and knowing that
25:31
Speaker 4: that party one doesn't tell you which of those six
25:34
Speaker 4: arguments was persuasive with the court. And if we just
25:38
Speaker 4: guess as to why the Court did what it did,
25:41
Speaker 4: will often be creating a law out of thin air,
25:45
Speaker 4: playing ventriloquist, which is not the lower court's job. It's
25:48
Speaker 4: not any of our jobs.
25:50
Speaker 1: In a case on the emergency docket where the Supreme
25:52
Speaker 1: Court allowed President Trump to remove three democratic members of
25:57
Speaker 1: the Consumer Products Safety Commission, so that its interim order
26:01
Speaker 1: informs how a lower court should exercise its equitable discretion
26:06
Speaker 1: in like cases. In her speech, Jackson criticized that guidance,
26:11
Speaker 1: if we can call it guidance, will you explain what
26:14
Speaker 1: the court was trying to get across there?
26:16
Speaker 4: The question is what kind of precedent is it? And
26:20
Speaker 4: the Justice there says that it informs what the lower
26:26
Speaker 4: courts can do, but only in like cases. When you
26:29
Speaker 4: don't have much of an opinion from the Supreme Court,
26:33
Speaker 4: it's very hard to know what like cases are, and
26:38
Speaker 4: it can inform only to the extent that it provides information.
26:43
Speaker 4: And if they don't tell us what's important, then it's
26:47
Speaker 4: very hard for lawyers or judges or voters to know
26:52
Speaker 4: how they are to change what they're doing. Also critical
26:56
Speaker 4: here that the Justice mentions equitable question. Equity is not
27:01
Speaker 4: a system of rigid rules. Equity is a system of
27:06
Speaker 4: judges applying judgment, and that judgment should be consistent with
27:11
Speaker 4: the general principles of our system. But it's never a
27:15
Speaker 4: rigid process, and so asking lower court judges to act
27:20
Speaker 4: rigidly in an equitable case is like asking for a
27:25
Speaker 4: ocean without any water, it doesn't work that way.
27:28
Speaker 1: And continuing that analogy, there's been a stream of criticism
27:33
Speaker 1: of the emergency docket, known as the shadow docket, for
27:36
Speaker 1: its lack of transparency, and the Court perhaps recognize the
27:40
Speaker 1: criticism by taking some of the shadow docket cases and
27:45
Speaker 1: putting them on the regular docket so there could be
27:48
Speaker 1: full briefings in oral arguments. That was done, for example,
27:51
Speaker 1: in the birthright citizenship case. As always, thanks for joining me, David.
27:55
Speaker 1: That's Professor David Super of Georgetown Law coming up next
27:59
Speaker 1: on Bloomberg Law. The errors being made by Justice Department
28:03
Speaker 1: lawyers are testing the patience of judges and the credibility
28:07
Speaker 1: of the Justice Department. I'm June Grosso and you're listening
28:11
Speaker 1: to Bloomberg. Todd Blanche, now the acting Attorney General and
28:17
Speaker 1: once President Trump's defense lawyer, recently cheered the fact that
28:22
Speaker 1: all the Justice Department lawyers who were involved in the
28:25
Speaker 1: past investigations of Trump have either been fired or resigned.
28:31
Speaker 6: There is not a single man or woman at the
28:34
Speaker 6: Department of Justice who had anything to do with those prosecutions.
28:41
Speaker 1: So two hundred experienced lawyers are no longer at the
28:44
Speaker 1: Department of Justice. Add that to more than three thousand attorneys,
28:49
Speaker 1: many veteran career lawyers in leadership positions, who left the
28:52
Speaker 1: department last year. The result is a smaller, less experienced
28:57
Speaker 1: group of lawyers handling an eva expanding universe of litigation.
29:03
Speaker 1: Could that be connected to the hundreds of instances of
29:06
Speaker 1: Justice Department lawyers being scolded by judges for making false, misleading,
29:11
Speaker 1: or inaccurate representations in court in defense of Trump policies.
29:16
Speaker 1: Last week, a federal judge in Manhattan ordered Justice Department
29:20
Speaker 1: lawyers to preserve all internal communications after they disclosed they'd
29:26
Speaker 1: been relying on incorrect information in their arguments for months
29:30
Speaker 1: in a fight over the administration's migrant arrest tactics. Could
29:35
Speaker 1: sanctions be in their future? My guest is former federal
29:38
Speaker 1: prosecutor Robert Mintz Apartment macarter in English. So Justice Department
29:43
Speaker 1: lawyers are representing government agencies? What are their duties when
29:47
Speaker 1: appearing in court for those agencies?
29:49
Speaker 6: When you go into court as an assistant US attorney
29:53
Speaker 6: or any attorney representing the Department of Justice, you always
29:57
Speaker 6: bring with you the credibility of us years and years
30:01
Speaker 6: of attorneys who have stood in your shoes before you
30:04
Speaker 6: addressing the court, and there's a tremendous responsibility to make
30:08
Speaker 6: sure that anything you say to a judge is one
30:11
Speaker 6: hundred percent accurate. And if you don't know the answer,
30:13
Speaker 6: you tell the judge you don't know the answer, and
30:15
Speaker 6: you'll get the correct information back to the judge at
30:18
Speaker 6: some point. Because in order for the Department of Justice
30:21
Speaker 6: to be able to advocate effectively on behalf of the
30:24
Speaker 6: federal government, it's critical that judges can rely on the
30:28
Speaker 6: representations of government lawyers. And so it's incumbent on DOJ
30:33
Speaker 6: prosecutors and other lawyers representing the government to make sure
30:37
Speaker 6: that whatever information they're conveying on behalf of their agency
30:41
Speaker 6: clients or on behalf of the Department of Justice is accurate.
30:45
Speaker 6: And what we've seen here is a slow but steady
30:48
Speaker 6: erosion of that confidence of the federal courts that Department
30:53
Speaker 6: of Justice lawyers are giving them information that is accurate.
30:57
Speaker 6: And it's come about as a result of a series
30:59
Speaker 6: of cases in which Department of Justice lawyers have been
31:02
Speaker 6: forced to make embarrassing corrections about information that they frankly
31:06
Speaker 6: should have known about.
31:08
Speaker 1: The Justice Department lost about a quarter of its attorneys
31:12
Speaker 1: last year about thirty four hundred. A lot of them
31:15
Speaker 1: were experienced career prosecutors. So can these errors in court
31:20
Speaker 1: be explained by the inexperience of the attorneys or are
31:24
Speaker 1: they not doing enough preparation or something else.
31:28
Speaker 6: I think it's a combination of inexperience and understaffing. The
31:31
Speaker 6: experience of the lawyers going into court representing the United
31:34
Speaker 6: States government is absolutely critical. US attorney's offices are generally
31:39
Speaker 6: around the country considered training grounds for exceptional attorneys.
31:45
Speaker 1: The job of a.
31:45
Speaker 6: Federal prosecutor has historically been something that is an extremely
31:51
Speaker 6: sought after position, and so the Department of Justice really
31:55
Speaker 6: has its pick of attorneys in selecting assistant US attorneys
31:59
Speaker 6: and offices around on the country. And what they do
32:01
Speaker 6: is they try to train those attorneys.
32:03
Speaker 1: They do not.
32:04
Speaker 6: Select attorneys who necessarily have any criminal experience when they
32:08
Speaker 6: pick people who will be representing the Department of Justice
32:11
Speaker 6: in criminal cases. Instead, they bring in attorneys that they
32:14
Speaker 6: believe are among the best and the brightest, and they
32:17
Speaker 6: train those lawyers using the more experienced attorneys in the office. So,
32:22
Speaker 6: as an example, when a new attorney comes into the
32:24
Speaker 6: office and tries his or her case for the first time,
32:28
Speaker 6: they will have a second chair with them. They will
32:30
Speaker 6: have a more experienced attorney sitting next to them and
32:34
Speaker 6: assisting them throughout that trial. And that's the way these
32:37
Speaker 6: attorneys learn. The problem right now is that there has
32:40
Speaker 6: been a mass exodus of experienced attorneys from the Department
32:43
Speaker 6: of Justice, from US Attorney's offices around the country, and
32:47
Speaker 6: so that level of experience and oversight is simply not
32:50
Speaker 6: there right now.
32:51
Speaker 4: And we've seen case.
32:53
Speaker 6: After case where inexperienced attorneys who have not been given
32:57
Speaker 6: the guidance that is necessary to make sure that they
33:00
Speaker 6: are doing the job they're supposed to be doing, are
33:02
Speaker 6: placed in positions in front of judges and can't really
33:06
Speaker 6: effectively advocate on behalf of the government. And in the
33:09
Speaker 6: course of all of this, they are losing the confidence
33:12
Speaker 6: and the trust of the judiciary in the representations that
33:16
Speaker 6: they often make to the court during these matters.
33:20
Speaker 1: And Bob, you are a federal prosecutor. It used to
33:23
Speaker 1: be hard to get into the Justice Department, right, but
33:25
Speaker 1: now they're deciding that they're going to take people right
33:28
Speaker 1: out of law school.
33:30
Speaker 6: Yeah, when I applied to the US Attorney's office, there
33:32
Speaker 6: was something like fifty to seventy five applications for every
33:35
Speaker 6: single position, and that was generally true around the country,
33:39
Speaker 6: whether you're in the Southern District of New York, the
33:41
Speaker 6: District of New Jersey, Chicago, Los Angeles, or other offices
33:45
Speaker 6: around the country. These jobs are extremely highly sought after
33:49
Speaker 6: because it gives a young attorney the opportunity to practice
33:53
Speaker 6: at the highest level, to be able to litigate in
33:56
Speaker 6: federal court on behalf of the United States government, and
33:59
Speaker 6: some of them most complex and interesting cases that you'll
34:02
Speaker 6: ever handle as an attorney. And so these are positions
34:06
Speaker 6: that typically you find the best and the brightest, coming
34:10
Speaker 6: out of the best law schools, coming out of the
34:12
Speaker 6: best clerkships. And it's from this pool of applicants that
34:16
Speaker 6: they have over many, many years drawn assistant US attorneys
34:20
Speaker 6: from around the country, many of whom go on to
34:23
Speaker 6: the federal banks or other prestigious jobs in the law.
34:26
Speaker 6: And right now they're facing a real exodus of that
34:30
Speaker 6: type of talent, and that has created the crisis that
34:33
Speaker 6: we're facing right now with the judiciary and with the
34:35
Speaker 6: Department of Justice.
34:37
Speaker 1: During the past year, many judges have issued opinions with
34:40
Speaker 1: strong language calling out violations of court orders. Minnesota's chief
34:47
Speaker 1: US district judge threatened to hold Ice in contempt for
34:50
Speaker 1: violating orders more than one hundred times in cases brought
34:54
Speaker 1: by immigrants in his court. If Ice or any other
34:58
Speaker 1: agency doesn't follow a judge's order, is the Justice Department
35:02
Speaker 1: attorney responsible for that in any way?
35:05
Speaker 6: Well, that's exactly the argument that the Department of Justice
35:08
Speaker 6: has made in these cases. Essentially, the DOJ has argued
35:13
Speaker 6: that the attorney representing the agency in federal court doesn't
35:17
Speaker 6: control the agency, and the.
35:19
Speaker 4: Government lawyers do not.
35:20
Speaker 6: By representing an agency in a district court personally guaranteed
35:24
Speaker 6: the agency's compliance with court orders. So we have these
35:28
Speaker 6: circumstances where federal prosecutors and other Department of Justice attorneys
35:33
Speaker 6: are being asked to convey messages back to the agency
35:37
Speaker 6: to make sure that an agency carries out a judge's order,
35:40
Speaker 6: and if the agency fails to do that, the prosecutor
35:43
Speaker 6: or attorney is getting essentially caught in the crossfire where
35:46
Speaker 6: some judges have entered contempt orders personally against the attorneys
35:51
Speaker 6: for the failings of the agencies. The Department of Justice
35:54
Speaker 6: has argued that that's unfair because they can't control the agencies,
35:58
Speaker 6: But it really is in large measure and failure of
36:01
Speaker 6: the entire system, because the agencies should be following the judges'
36:05
Speaker 6: orders and the agency's failure to do that really reflect
36:09
Speaker 6: a breakdown in the communications between the judiciary and the
36:14
Speaker 6: executive branch and is something that is going to take
36:17
Speaker 6: a long time to repair given all the damage that's
36:20
Speaker 6: been done over the past several years.
36:22
Speaker 1: Also, there is an additional factor here, and that's that
36:26
Speaker 1: some former employees say that new policies at the Justice
36:29
Speaker 1: Department have discouraged attorneys from challenging the accuracy of the
36:34
Speaker 1: information they're getting from agencies. And we've seen instances where
36:38
Speaker 1: an attorney will admit something in court and then they're
36:41
Speaker 1: fired the next day. So there's a different mindset at
36:45
Speaker 1: this Justice Department.
36:47
Speaker 6: What you're touching on here is really at the heart
36:49
Speaker 6: of this issue because it really goes down to something
36:52
Speaker 6: that is known in the law as the.
36:54
Speaker 4: Presumption of regularity.
36:56
Speaker 6: It's a concept where judges rely on this principle that
37:00
Speaker 6: essentially means they trust the government to share accurate information
37:04
Speaker 6: and they trust that the government is acting in good faith,
37:07
Speaker 6: and in order to ensure that that baseline level of
37:11
Speaker 6: confidence remains, there has to be this understanding that prosecutors
37:16
Speaker 6: will make efforts to fairly inform the court of information,
37:21
Speaker 6: information that may not necessarily be helpful to the government's case,
37:26
Speaker 6: but information that is nonetheless accurate. And it's more important
37:30
Speaker 6: that prosecutors give accurate information to the court than that
37:33
Speaker 6: they give information that is necessarily going to further advocate
37:37
Speaker 6: on behalf of the government's interests. And so this concept
37:40
Speaker 6: of candor to the court is something that all lawyers
37:43
Speaker 6: are responsible for. Ethically speaking, all lawyers have an obligation
37:48
Speaker 6: to make sure that whatever information is provided to the
37:50
Speaker 6: court that it is not knowingly false. But federal prosecutors
37:54
Speaker 6: and Department of Justice lawyers have an even higher standard
37:58
Speaker 6: because although they're advocating on behalf of a client, in
38:01
Speaker 6: this case, the United States government, they also have a
38:04
Speaker 6: duty to fairness and justice, and that means that there
38:08
Speaker 6: are certain times where federal prosecutors have to provide information
38:12
Speaker 6: to a court that may not be helpful to the
38:15
Speaker 6: government's case. Prosecutors in criminal cases, as an example, have
38:19
Speaker 6: a duty to provide exculpatory evidence to the defense. They
38:23
Speaker 6: have to give the defense information that may hurt their
38:26
Speaker 6: case and help.
38:27
Speaker 4: The defendant's case.
38:28
Speaker 6: But that's a duty that's placed upon federal prosecutors, and
38:31
Speaker 6: it's an obligation that other lawyers.
38:33
Speaker 4: Do not have to comply with.
38:35
Speaker 6: But it underscores this point that federal prosecutors have to
38:39
Speaker 6: make sure that whatever information they're providing to the court
38:42
Speaker 6: is not only advocating on behalf of their client, but
38:45
Speaker 6: is also fair and accurate. And I think what's happened
38:48
Speaker 6: here is we've seen instances where zealous advocacy on behalf
38:52
Speaker 6: of the administration has in some instances overridden the candor
38:58
Speaker 6: to the court that all lawyers, and particularly federal lawyers,
39:02
Speaker 6: are obligated to provide. And that's why we're seeing instances
39:05
Speaker 6: where judges have become skeptical of representations made by government
39:09
Speaker 6: lawyers during the course of certain cases, particularly immigration cases.
39:14
Speaker 1: And recently in a Fourth Circuit case involving Doge, where
39:18
Speaker 1: the government lawyers had made a correction admitting after the
39:22
Speaker 1: court issued an injunction that they'd given the court incorrect information,
39:26
Speaker 1: and the appellate judges disagreed about how to handle that admission.
39:31
Speaker 1: And one judge wrote that this shows that quote, going forward,
39:36
Speaker 1: we should not accord the defendants the government any benefit
39:39
Speaker 1: of the doubt or readily trust in anything they say.
39:43
Speaker 7: That's pretty astonishing, absolutely, I mean, you don't typically see
39:47
Speaker 7: those kinds of statements coming from the court, and you're
39:50
Speaker 7: absolutely correct that you're seeing judges grappling with this issue
39:54
Speaker 7: in different ways.
39:55
Speaker 6: Where some judges are being quite direct and quite pointed
39:59
Speaker 6: in their criticism of the government's lawyers, others are giving
40:02
Speaker 6: the government lawyers the benefit of the doubt somewhat more
40:06
Speaker 6: now understanding that some of these mistakes may be the
40:09
Speaker 6: result of being understaffed and simply an experience, but nonetheless
40:14
Speaker 6: you can tell that the patience of the federal judiciary
40:18
Speaker 6: is being frayed as they have to deal with these
40:21
Speaker 6: inaccuracies and misrepresentations, whether or not they're done intentionally, but
40:26
Speaker 6: it is something that is creating havoc in the federal courts,
40:29
Speaker 6: and some judges are simply more fed up with the
40:32
Speaker 6: situation than others and are expressing that directly on the
40:36
Speaker 6: record during court proceedings, which is something that we've really
40:39
Speaker 6: never seen before.
40:40
Speaker 1: Well, federal judges are usually dealing with heavy dockets and
40:43
Speaker 1: mistakes mean that cases take longer. Thanks so much for
40:47
Speaker 1: joining me again, Bob. That's Robert Mints of McCarter and English.
40:51
Speaker 1: And that's it for this edition of The Bloomberg Law Show.
40:54
Speaker 1: Remember you can always get the latest legal news on
40:56
Speaker 1: our Bloomberg Law Podcast. You can find them on Apple
40:59
Speaker 1: pod podcast, Spotify, and at www dot bloomberg dot com
41:04
Speaker 1: slash podcast slash Law, and remember to tune into The
41:07
Speaker 1: Bloomberg Law Show every weeknight at ten pm Wall Street Time.
41:12
Speaker 1: I'm June Grosso and you're listening to Bloomberg