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Federal Workers Sue Trump & Vaping Case · Bloomberg Law

0:02
Speaker 1: This is Bloomberg Law with June Grossel from Bloomberg Radio.
0:08
Speaker 1: President Donald Trump started his second administration with the blitz
0:12
Speaker 1: of executive orders on issues ranging from trade, immigration, and
0:17
Speaker 1: US foreign aid to demographic diversity, civil rights, and the
0:21
Speaker 1: hiring of federal workers. Some orders were challenged in federal
0:25
Speaker 1: lawsuits before the end of his first day in office.
0:29
Speaker 1: Attorneys general from twenty two states have filed suits to
0:32
Speaker 1: block his executive order aimed at ending birthright citizenship, and
0:37
Speaker 1: the National Treasury Employees Union, which represents federal government employees
0:42
Speaker 1: and dozens of agencies, has launched a legal attack against
0:45
Speaker 1: Trump's Schedule F executive order. It's a directive to reclassify
0:51
Speaker 1: federal employees that makes it easier for his administration to
0:55
Speaker 1: fire career employees, basically reinstating the order Trump issued at
1:00
Speaker 1: the end of his first term, which was quickly revoked
1:03
Speaker 1: by President Joe Biden. Joining me is Anne Lafasso, a
1:07
Speaker 1: professor at the University of Cincinnati Law School and a
1:10
Speaker 1: former attorney at the NLRB, and will you explain what
1:14
Speaker 1: Schedule F is.
1:17
Speaker 2: Schedule F is a new classification of employees or sub
1:23
Speaker 2: classification that will remove employees that are currently in the
1:29
Speaker 2: Competitive Service into the Accepted Service. So there's three main
1:33
Speaker 2: classifications of employees. They are the Competitive Service, the Accepted Service,
1:39
Speaker 2: and the Senior Executive Service. So the Senior Executive Service
1:42
Speaker 2: are the super politicals that's you know, like cabinet members
1:46
Speaker 2: and the deputy to the General Council of sending the
1:48
Speaker 2: General Council. Those are the ones that have absolutely no
1:52
Speaker 2: job protection, and then the Competitive Service has all job protection.
1:57
Speaker 2: It's almost all federal jobs. And that was put in
2:01
Speaker 2: place over one hundred years ago by I think it
2:05
Speaker 2: was President Arthur. They were trying to get rid of
2:08
Speaker 2: cronyism that really started in the Andrew Jackson era to
2:13
Speaker 2: the Victor Goes the Spoils, which was the idea of
2:16
Speaker 2: just putting only loyalists into the government and then there'd
2:19
Speaker 2: be a lot of corruption. And Teddy Roosevelt was really
2:21
Speaker 2: involved in the Competitive Service and think this was really
2:24
Speaker 2: important to have civil servants. I mean, obviously everyone has
2:27
Speaker 2: their politics as citizens, but as government employees, they would
2:30
Speaker 2: just serve whoever the administration is and they would be experts.
2:33
Speaker 2: They're the ones who have to take the Civil Service
2:35
Speaker 2: exam and they're the ones who are the vast majority
2:41
Speaker 2: of employees for the federal government. The accepted service then
2:45
Speaker 2: are just exceptions to the competitive service where it doesn't
2:49
Speaker 2: make sense to give them this civil service exam like
2:52
Speaker 2: all attorneys or accepted service. In other words, the presumption
2:56
Speaker 2: is everyone in the government is competitive service unless there's
2:59
Speaker 2: an reception or unless you're a political appointee. The political
3:03
Speaker 2: appointees are very very few. They're the very top top people,
3:07
Speaker 2: and they have no job security. They often get fired
3:10
Speaker 2: when there's a new administration. That makes sense because they're
3:13
Speaker 2: calling the shots. They're saying, we're implementing the new administration's policies.
3:18
Speaker 2: The schedule S is essentially a way of reclassifying these
3:24
Speaker 2: competitive service employees so that they no longer have any
3:30
Speaker 2: job security. Now, the administration feels that they need to
3:35
Speaker 2: do this because it's hard to fire people, and they
3:39
Speaker 2: have made a case so that they need to be
3:41
Speaker 2: able to fire people because people are not doing their
3:43
Speaker 2: job well. And the president does have power to make
3:49
Speaker 2: changes in classifications where they're necessary for good administration.
3:53
Speaker 1: I mean, the theory of having career employees is that
3:58
Speaker 1: every time the administration changes, you don't want all the
4:02
Speaker 1: workers changing that would mean no institutional memory at all, exactly.
4:07
Speaker 2: So you have to have a balance between implementing policy
4:11
Speaker 2: and stability of a government. And so the civil service
4:16
Speaker 2: basically is running the governments and there's a few people
4:20
Speaker 2: that are the boss and they're implementing policy. But you know,
4:24
Speaker 2: I worked for the federal government ten years. I worked
4:26
Speaker 2: five years for the Clinton administration and five years for
4:28
Speaker 2: the Bush to administration, and my job did not change.
4:31
Speaker 2: The only thing that changed was the type of decisions
4:33
Speaker 2: that were coming down. And the Clinton administration they were
4:36
Speaker 2: more pro union and in the Bush administration they were
4:40
Speaker 2: more pro management. But I did the same exact thing.
4:43
Speaker 2: My job was to enforce whatever decision came down.
4:47
Speaker 1: This executive order from Trump complained that accountability among federal
4:52
Speaker 1: employees is currently sorely lacking. Any power they have is
4:56
Speaker 1: delegated by the president, and they must be accountable to
4:59
Speaker 1: the resident. What does this order actually do.
5:02
Speaker 2: It makes it easier for the president, through his administrators
5:07
Speaker 2: like general counsels and people like that, to fire employees. Basically,
5:13
Speaker 2: there's about fifty thousand people that they think could be
5:16
Speaker 2: affected by this order. I mean, there's three million little
5:20
Speaker 2: under three million people who look for the federal government.
5:22
Speaker 2: But this is going to have large effects. It's also
5:25
Speaker 2: possibly going to not just take away their due process rights,
5:28
Speaker 2: but also all their union rights because a lot of
5:31
Speaker 2: these competitive service people are actually unionized. Some of the
5:34
Speaker 2: accepted services are also unionized. They're in unions. And what
5:39
Speaker 2: this administration believes is that anything that gets in its
5:42
Speaker 2: way of efficiently firing someone is too much. It is said,
5:47
Speaker 2: it takes too long and it's too hard to fire people.
5:49
Speaker 2: That is just not true. Managers need to manage the
5:55
Speaker 2: way that you can fire someone. You just have to
5:57
Speaker 2: give them due process. In fact, all of Europe that way,
6:00
Speaker 2: all of Europe, there's no such thing as at will employment.
6:04
Speaker 2: You have to give people due process if you're going
6:05
Speaker 2: to fire them. So if you want to fire a
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Speaker 2: poor performer, and this is what Trump is mostly saying,
6:11
Speaker 2: he's complaining about it, poor performers, then you just have
6:15
Speaker 2: to document them and then you fire them. They get
6:18
Speaker 2: their due process and you prove your case. Yeah, it's
6:21
Speaker 2: different than if they're at will. You could fire them
6:23
Speaker 2: in one day. That is true, unless your reasons for
6:26
Speaker 2: firing them is unlawful under federal Estate law. But here,
6:30
Speaker 2: what he's really doing is taking away their due process rights. Now,
6:33
Speaker 2: federal law says that once an employee has due process
6:38
Speaker 2: rights under the Constitution, then you can't just take them away.
6:42
Speaker 2: So the NTU is saying that they're taking away these rights. Well,
6:46
Speaker 2: you can't just take away property right.
6:48
Speaker 1: So the National Treasury Employees Union sue Trump in DC
6:52
Speaker 1: federal Court on Monday to block the Schedule F executive order.
6:56
Speaker 1: They argue that it's contrary to congressional intent and violates
7:00
Speaker 1: the Administrative Procedure Act. So explain why they say it's
7:04
Speaker 1: contrary to congressional intent.
7:06
Speaker 2: First, Well, Congress created this whole system in order to
7:10
Speaker 2: give specifically to give job security to employees, so there
7:15
Speaker 2: wouldn't be a changeover for most employees from administration administration
7:20
Speaker 2: for one's ability and to combat cronyism, and so this
7:26
Speaker 2: would be contrary to the whole idea of stability. So
7:30
Speaker 2: that's I think is the most important thing that the
7:32
Speaker 2: union is arguing.
7:34
Speaker 1: And tell us about their claim that this order violates
7:38
Speaker 1: the Administrative Procedures Act.
7:40
Speaker 2: Well, the Administrative Procedures Act is the basis for making regulations,
7:47
Speaker 2: and these are regulations that have been put in and
7:51
Speaker 2: they have to be done in a certain way. And
7:54
Speaker 2: what Trump is trying to do by executive order is
7:57
Speaker 2: what is supposed to be done by m implementing regulations
8:02
Speaker 2: through a congressional act. So an argument is he's essentially
8:07
Speaker 2: usurping or commandeering the power of the legislature. Now he
8:12
Speaker 2: says he can do this because of his powers that
8:15
Speaker 2: Congress gave him under the Administry of the Procedures Acts,
8:19
Speaker 2: and the Union saying no, you have very limited powers
8:23
Speaker 2: under the Administrative Procedures Acts, and those are to create
8:28
Speaker 2: accepted service in the most limited circumstances, which is pretty
8:32
Speaker 2: much what the Act does say. But of course we
8:35
Speaker 2: know that words can be interpreted different ways depending on judges,
8:39
Speaker 2: and so they're going to litigate that. This is definitely
8:42
Speaker 2: going to be litigated. I mean, it's not going to
8:43
Speaker 2: be thrown out of court.
8:45
Speaker 1: Trumpett enacted this Schedule F executive order at the end
8:49
Speaker 1: of his first term, and Biden revoked it, and then
8:53
Speaker 1: the Biden administration's Office of Personnel Management published a final
8:58
Speaker 1: rule in May of twenty four to protect against this
9:03
Speaker 1: kind of executive action. So is that rule an obstacle
9:07
Speaker 1: in the way of Trump enforcing this executive order on
9:12
Speaker 1: Schedule F.
9:13
Speaker 2: So it's actually really basic constitutional law if you think about. So,
9:17
Speaker 2: what he's saying is that one I have constitutional power
9:21
Speaker 2: to do this, and two I have congressional power to
9:25
Speaker 2: do this, and no regulation basically can tell me that
9:29
Speaker 2: I can't do this. So what he's saying is that
9:33
Speaker 2: he has this authority and they have to be accounted
9:36
Speaker 2: directly to him. I think he would probably go so
9:39
Speaker 2: far as to say that to the extent that Congress
9:42
Speaker 2: took away that power, that it was unconstitutional. I'm going
9:46
Speaker 2: to guess that they will make that argument. Okay, So
9:49
Speaker 2: you see how that works is that there's a congressional act.
9:53
Speaker 2: Then there are the regulations, and that's an administrative act,
9:57
Speaker 2: which means this executive branch that was done through Brden
10:00
Speaker 2: to implement these what you're allowed to do. That's all
10:03
Speaker 2: administrative law. Then there's what the President is doing now,
10:07
Speaker 2: which is executive orders. And of course the courts will
10:10
Speaker 2: interpret these things. Now, remember Chevron has been overturned, which
10:15
Speaker 2: means none of these agencies getting different. So the courts
10:18
Speaker 2: are going to decide with very little input from the agencies,
10:23
Speaker 2: what this means. I mean, yes, the agencies can say
10:25
Speaker 2: what they think these regulations mean, and in the meantime,
10:29
Speaker 2: Trump will make its own regulations based on Congress's Act.
10:33
Speaker 2: But remember they have to implement what the Act says,
10:38
Speaker 2: unless under two circumstances can change. One is Congress has
10:42
Speaker 2: to change the Act to give the president more power,
10:45
Speaker 2: or two the president's can have to argue that to
10:49
Speaker 2: the extent that the Act is read as taking away
10:54
Speaker 2: power to do this from the president, it's unconstitutional.
10:58
Speaker 1: Stay with me and coming up, continue this conversation with
11:01
Speaker 1: Professor Ann Lafasso of the University of Cincinnati Law School.
11:06
Speaker 1: The Trump administration has ordered federal employees in DEI offices
11:12
Speaker 1: to be placed on paid leave by Wednesday at five
11:15
Speaker 1: pm as the agencies wind down diversity initiatives. I'm June
11:21
Speaker 1: Grosso and you're listening to Bloomberg. The National Treasury Employees
11:27
Speaker 1: Union launched a legal attack against President Donald Trump's Schedule
11:32
Speaker 1: F executive order. It's a directive that makes it easier
11:36
Speaker 1: for his administration to fire career employees who work across administrations.
11:42
Speaker 1: It's the latest lawsuit seeking to block Trump's efforts to
11:45
Speaker 1: cull the federal workforce. On Monday, unions and other groups
11:49
Speaker 1: file complaints in federal court seeking to end the Department
11:53
Speaker 1: of Government efficiency. I've been talking to an expert in
11:56
Speaker 1: labor law, Professor Ann Lafasso of the Universe Have Cincinnati
12:01
Speaker 1: Law School. It takes a while to change a regulation.
12:05
Speaker 1: Does the Trump administration have to change your regulation before
12:08
Speaker 1: they can start, let's say, firing people.
12:12
Speaker 2: Not according to them. First of all, they can always
12:14
Speaker 2: fire a b ses to senior executive service, but they
12:18
Speaker 2: want to fire more people. So what they're saying is
12:22
Speaker 2: that the mere executive order does the trick and that
12:27
Speaker 2: they can just do this now. Or what they're saying
12:31
Speaker 2: is they're reclassifying people, which under the Act they're allowed
12:34
Speaker 2: to do. Okay, so that's what they're really doing. So
12:37
Speaker 2: they're just saying, we are reclassifying people right now. Then
12:41
Speaker 2: what the Union is saying is the whole purpose of
12:45
Speaker 2: the reclassification is so they can fire them more easily. Now.
12:48
Speaker 2: They're not just taking that out of thin air. These
12:51
Speaker 2: are statements by Trump that you know, if you look
12:54
Speaker 2: at the twenty twenty executive Order that's been reinstated, it
12:57
Speaker 2: says all of this. I we read it last night.
12:59
Speaker 2: It says all of it. So what they're saying is,
13:01
Speaker 2: you know, listen to his words, this is what he
13:04
Speaker 2: wants to do, and he said he wants to do
13:06
Speaker 2: this also, so I don't think there's any doubt that
13:08
Speaker 2: that's the fact. So then the question is is he
13:12
Speaker 2: allowed to do this under these regulations and under this law,
13:17
Speaker 2: And even if he's not, are the laws unconstitutional which
13:21
Speaker 2: and he's allowed to do it anyway, or are the
13:23
Speaker 2: laws somehow wrong, incorrect or not being interpreted correctly. It
13:27
Speaker 2: is very complicated, and.
13:30
Speaker 1: What's your opinion of this executive order?
13:33
Speaker 2: If I were a judge, I would say, he can't
13:35
Speaker 2: do this. I don't know what the courts are going
13:37
Speaker 2: to do, but my guess is that he's going to
13:40
Speaker 2: be cut back severely, and generally, the courts have not
13:44
Speaker 2: surprised me. I wasn't surprised by Roe being overturned. I
13:47
Speaker 2: wasn't surprised by a lot of things. So I'm not
13:49
Speaker 2: a person who just always picks the progressive side, because
13:52
Speaker 2: that's what I wish would happen. If you try to
13:54
Speaker 2: really think through and it seems like this is a
13:58
Speaker 2: step too far, but you know, you don't know. You know,
14:02
Speaker 2: you could get as a trial judge, you'd get someone
14:04
Speaker 2: like an alien cannon who does get overturned quite a bit.
14:07
Speaker 2: You might see the President win initially, and then it
14:11
Speaker 2: goes up to court appeals, and then it might go
14:14
Speaker 2: to an no bounk even which is the full court
14:17
Speaker 2: of appeals, and then it could go to the Supreme Court.
14:21
Speaker 2: So this could take years.
14:22
Speaker 1: If this litigation is going to go on for years,
14:26
Speaker 1: the key then would be whether the district court would
14:29
Speaker 1: grant some kind of injunction to stay the enforcement of
14:33
Speaker 1: this while the litigation proceeds.
14:36
Speaker 2: They may very well put in a planmary junction because
14:39
Speaker 2: they make a really good case for harm. Now I
14:42
Speaker 2: don't see a tro though a temporary restraining order, but
14:47
Speaker 2: then again it hasn't been implemented yet. Maybe if they
14:49
Speaker 2: try to implement it, they would. They're asking for a
14:52
Speaker 2: full restraining order right now, so this is just the lawsuit.
14:55
Speaker 2: So then if they do go into court for a
14:58
Speaker 2: preliminary or temper restraining order, which is before a full
15:02
Speaker 2: hearing could be made, then they have to do the
15:04
Speaker 2: four factor tests and the balance of equities, and with
15:07
Speaker 2: this would there be harm which basically which side would
15:10
Speaker 2: have greater harm. My guess is that it would be
15:14
Speaker 2: greater harm to fire all these people. Then the president
15:18
Speaker 2: will make some sort of national security argument that he
15:21
Speaker 2: has to have these people fired because it's turning the
15:23
Speaker 2: entire government. The other side goes, they, no, the government
15:26
Speaker 2: hasn't collapsed, and all these people are gonna be fired,
15:29
Speaker 2: and it's gonna not only hurt these fifty thousand people,
15:33
Speaker 2: but it's also going to hurt it's gonna have tertiary
15:35
Speaker 2: effects on the economy. Again, if you're gonna ask me
15:39
Speaker 2: what I thought, I would issue the temporary restraining order.
15:42
Speaker 2: But again it's going to depend on the judge, and
15:45
Speaker 2: then it will go to the DC Circuit, and then
15:48
Speaker 2: that could go much quicker, the temporary part, and then
15:52
Speaker 2: maybe that even goes to the Supreme Court, or maybe
15:53
Speaker 2: the Screme Court denies Tergerri on that and just lets
15:56
Speaker 2: whatever the DC Circuit does.
15:58
Speaker 1: And let's turn for a moment to the Department of
16:01
Speaker 1: Government Efficiency, which Trump established and is led by billionaire
16:07
Speaker 1: Elon Musk to cut federal government spending. Unions have filed
16:12
Speaker 1: in federal court against that department. Are the same issues
16:17
Speaker 1: involved or different issues.
16:19
Speaker 2: Well, I think they're overlapping issues there because that department
16:24
Speaker 2: is trying to get rid of what they see is
16:26
Speaker 2: a lot of government waste. And part of that, you know,
16:30
Speaker 2: what's the easiest thing to get rid of if you
16:32
Speaker 2: were a private company and this is being headed by well,
16:36
Speaker 2: I think Romaswani's out of it, but it's still with
16:41
Speaker 2: people with private enterprise experience, you know, like Elon Musk.
16:44
Speaker 2: Then the fastest thing to do always is to cut labor,
16:47
Speaker 2: because you can't just cut capital meaning leases and buildings
16:52
Speaker 2: and things like that right away. You know, you can't
16:54
Speaker 2: just get rid of a government contract right away, but
16:57
Speaker 2: you can get rid of employees. We can't because they're
17:01
Speaker 2: competitive service. So you see, that's what's going on here,
17:05
Speaker 2: and so that I think they are very very closely related.
17:09
Speaker 2: But remember the old adage that democracy stuck except for
17:14
Speaker 2: all the rest, the worse form of government, except for
17:17
Speaker 2: all the rest. You know, we trade a little bit
17:20
Speaker 2: of efficiency for freedom. Democracy means we're free. It means
17:25
Speaker 2: that we get a say. Getting a say is definitely
17:28
Speaker 2: less efficient than one person dictating what is going to happen.
17:33
Speaker 2: So there is built into a democracy from inefficiency it's
17:38
Speaker 2: not profit runs. And I think that the Trump administration
17:44
Speaker 2: has done a great job of marketing of government employees.
17:47
Speaker 2: There's slackers. They are not doing their jobs, and that's
17:51
Speaker 2: like a stereotype. I worked for ten years and I'm
17:54
Speaker 2: going to tell you I worked. I also worked till
17:57
Speaker 2: nine o'clock at night. I worked from home, you know,
18:00
Speaker 2: addition to what I was working in the office. And
18:03
Speaker 2: I didn't see a lot of slackers. I know that
18:05
Speaker 2: say I'm a godal, but that's my experience at the
18:07
Speaker 2: National Air Relations Board. So it's not that it's just
18:11
Speaker 2: the things take time, just like lawsuits take time, and
18:15
Speaker 2: it's because we have a democracy and that's about freedom.
18:20
Speaker 2: So the other side, I think, if they were going
18:23
Speaker 2: to market this properly, should be talking about that this
18:28
Speaker 2: is really a war on democracy. And then and Trump's
18:32
Speaker 2: going to say, no, this is to make our democracy stronger.
18:36
Speaker 2: That's the rhetoric that I think is going to be employed.
18:39
Speaker 2: And the counter to what Trump is saying is that
18:41
Speaker 2: it's actually a war in democracy. Democracy has built into
18:44
Speaker 2: it a certain amount of inefficiency because you get to
18:48
Speaker 2: hear different points of view. By the way, also, I
18:50
Speaker 2: want to make this point when I was in the government,
18:53
Speaker 2: and this is the true for every attorney in the government.
18:56
Speaker 2: It is our job when political tells us we want X,
19:01
Speaker 2: and we want it done using why means, let's say
19:05
Speaker 2: why means is unlawful. It was my job to tell them, one,
19:09
Speaker 2: you can't do it that way because why is unconstitutional
19:13
Speaker 2: or it's unlawful or whatever it is. However, I'm looking
19:17
Speaker 2: for solutions to still try to get you to X. So,
19:20
Speaker 2: for example, one thing he could do is the long solution,
19:26
Speaker 2: go to Congress, put a new bill in, change the
19:29
Speaker 2: laws right. That takes time. I think some of the
19:33
Speaker 2: things he's done are actually unconstitutional. I might be wrong,
19:36
Speaker 2: but it's certainly an argument. And what I would be
19:40
Speaker 2: telling someone is it would be my job as a
19:43
Speaker 2: lawyer to say, hey, you can't necessarily do it this way.
19:48
Speaker 2: It's going to take longer. In fact, I did that
19:51
Speaker 2: at the NRB. I never thought my job was in
19:54
Speaker 2: danger because I did my job and the politicals didn't
19:58
Speaker 2: like it. I never had a problem with you. It's
20:00
Speaker 2: not one Republican, not one Democrat, telling them what I
20:04
Speaker 2: thought the law was and showing them my reasons, and
20:06
Speaker 2: they could reject it. They were lawyers also if they
20:09
Speaker 2: didn't like what I said, but it was my job
20:12
Speaker 2: to be as honest as possible about what the law
20:14
Speaker 2: was so that they don't get in trouble. So I
20:18
Speaker 2: think that's another thing that people have to understand. It's
20:21
Speaker 2: not disloyal to tell the president or his agents that
20:27
Speaker 2: what they're doing is unconstitutional. It's actually loyal to protect them.
20:32
Speaker 2: So I think that's a really important point for people
20:36
Speaker 2: to understand.
20:38
Speaker 1: Trump has directed that all federal employees of diversity, equity
20:43
Speaker 1: and inclusion offices be placed on administrative leave with pay
20:49
Speaker 1: by five pm Wednesday. This follow is an executive order
20:53
Speaker 1: he's signed on Monday, ordering a sweeping dismantling of the
20:57
Speaker 1: federal government's diversity and inclusion programs.
21:02
Speaker 2: So what he's doing is he's limiting the damages because
21:06
Speaker 2: if you put them on paid leave, then they're not
21:10
Speaker 2: being injured. Well, they're being injured psychologically, but they're not
21:13
Speaker 2: being injured monetarily, So it's terribly inefficient. Well, I guess
21:19
Speaker 2: he doesn't see it as inefficient because he doesn't believe
21:21
Speaker 2: in DEI, so there's no job to perform. So what
21:24
Speaker 2: he's essentially saying is these jobs no longer really exist.
21:28
Speaker 2: But to be on the safe side, we're going to
21:30
Speaker 2: give them paid leaves, and that would only be a
21:34
Speaker 2: monetary loss if they're forced to take their own annual leave.
21:37
Speaker 2: So he's just giving extra leave to them, because each
21:40
Speaker 2: of them is entitled to a payout of their annual
21:43
Speaker 2: leave when they leave if they separate from service, not
21:46
Speaker 2: their sick leaves, but they are entitled to their annual leave,
21:50
Speaker 2: and you can you can accumulate that. At least when
21:53
Speaker 2: I was there, you were able to accumulate that. And definitely,
21:55
Speaker 2: so if you have a year's worth of annual leave,
21:58
Speaker 2: then they would owe them a year's worth of staff.
22:01
Speaker 2: So if you have two weeks, you get two weeks
22:03
Speaker 2: of salaries. So if he's just giving them leave right now, additionally,
22:07
Speaker 2: there's no harm to them.
22:08
Speaker 1: But what about the firing. Is he allowed to fire?
22:11
Speaker 1: If he's doing away with DEI completely.
22:14
Speaker 2: That would have to be litigated. Let's just say let's
22:17
Speaker 2: do it a little less controversially. Okay, let's say there
22:20
Speaker 2: really is something that's redundant, like we don't need this
22:22
Speaker 2: anymore because we don't need people who run copy machine.
22:27
Speaker 2: You remember back in the seventies. How you like xerox things. Okay,
22:31
Speaker 2: we don't do that anymore, and we can't find new
22:33
Speaker 2: positions for them. You can make a position redundant, so
22:37
Speaker 2: that's easy. The question would be that would be litigated.
22:40
Speaker 2: Is allowed to just say we don't need any of
22:43
Speaker 2: these people. Oh and by the way, we can't find
22:46
Speaker 2: jobs for them anywhere, So that's going to have to
22:49
Speaker 2: be litigated, and his position will be that these jobs
22:53
Speaker 2: no longer exist, and then that's a finding of fact
22:57
Speaker 2: and law that some judge is going to have to decide.
23:01
Speaker 1: I see so much litigation ahead for so many of
23:05
Speaker 1: these executive orders. We'll have to see how the courts
23:08
Speaker 1: respond to them. Thanks so much, Anne. That's professor Ann
23:11
Speaker 1: Lafasso of the University of Cincinnati Law School. Coming up
23:15
Speaker 1: next on the Bloomberg Law Show. The Supreme Court justices
23:19
Speaker 1: seem skeptical of the government's arguments that it should curb
23:23
Speaker 1: where e cigarette manufacturers can sue in order to cut
23:27
Speaker 1: back on form shopping. I'm June Grosso, and you're listening
23:31
Speaker 1: to Bloomberg. A case at the Supreme Court about the
23:36
Speaker 1: proper place to sue the federal government highlights how far right.
23:41
Speaker 1: The nation's most conservative appeals court has shifted with opinions
23:45
Speaker 1: that the Supreme Court has increasingly had to push back on.
23:49
Speaker 1: It's one of thirteen cases this term out of the
23:52
Speaker 1: US Court of Appeals for the Fifth Circuit. That's more
23:55
Speaker 1: than twenty percent of the Supreme Court's current workload. The
24:00
Speaker 1: statute at the heart of the oral arguments on Tuesday
24:03
Speaker 1: limits where tobacco companies can challenge the Food and Drug
24:07
Speaker 1: Administration's denial of an application to sell their products. The
24:11
Speaker 1: Fifth Circuit is the only circuit to sign with manufacturers,
24:16
Speaker 1: and the government said that has led almost all challenges
24:19
Speaker 1: to FDA denials to be brought in that circuit. Joining
24:23
Speaker 1: me is healthcare attorney Harry Nelson, a partner at Leech
24:27
Speaker 1: Tishman Nelson Hardiman. Harry tell us about the issue before
24:31
Speaker 1: the Justices.
24:32
Speaker 3: And the ability of private parties to essentially shop for
24:37
Speaker 3: where they want to challenge the FDA. Right, the FDA
24:41
Speaker 3: has the authority under this law It's fifteen years old,
24:44
Speaker 3: called the Family Poking Prevention and Tobacco Act to regulate
24:48
Speaker 3: tobacco products. And so when R. J. Reynolds had a
24:53
Speaker 3: FDA denial on an attempt to market mental labored e
24:58
Speaker 3: cigarette even though based in North Carolina, and they could
25:02
Speaker 3: have filed in federal court there in the fourth federal circuits,
25:05
Speaker 3: they looked around and they realized that they would get
25:08
Speaker 3: a much more favorable audience in the fifth Circuit down
25:13
Speaker 3: in Texas and Mississippi, and so they went over to
25:17
Speaker 3: shop as people adversely affected by the law to get
25:20
Speaker 3: a decision. And so the FDA essentially is challenging that,
25:24
Speaker 3: and now the federal government is pushing back, and the
25:27
Speaker 3: question is where does this case need to be heard.
25:30
Speaker 3: So it's an interesting case because it goes to the
25:34
Speaker 3: ability of people challenging the federal government generally the FBA
25:38
Speaker 3: in particular, to shop for places where they may have
25:43
Speaker 3: a strategic advantage based on the judges that we'll hear it,
25:46
Speaker 3: based on private previous decisions, and so you know, it's
25:51
Speaker 3: an interesting case that sort of pits on the one side,
25:54
Speaker 3: sort of the free market and the opportunity for in
25:58
Speaker 3: this case, tobacco product manufacturer and retailers to choose a
26:03
Speaker 3: place where they think they're going to have the best
26:05
Speaker 3: chance of preventing their case, and on the other side,
26:09
Speaker 3: a federal agency the FDA that's afraid of its regulations
26:13
Speaker 3: being more vulnerable because of that of that choice. Even
26:17
Speaker 3: though its specifically a tobacco case, it has a lot
26:19
Speaker 3: of implications for other industries, for drugs, for food, about
26:22
Speaker 3: you know, the power of federal agencies.
26:24
Speaker 4: Just to clarify, the Fifth Circuit, which is the most
26:28
Speaker 4: conservative circuit in the country, is the only circuit that
26:32
Speaker 4: sided with manufacturers on this issue.
26:36
Speaker 3: Exactly. Yeah, the Fifth Circuit has reliably over the last
26:39
Speaker 3: few years become the most conservative circuit and it's the
26:42
Speaker 3: only one that really where the FDA didn't prevail on
26:46
Speaker 3: its authority to limit these tobacco products from the market.
26:50
Speaker 4: The law says that any person adversely affected by a
26:55
Speaker 4: denial can challenge in their home circuit or the DC Circuit.
27:00
Speaker 4: They certainly don't want to go to the DC Circuit,
27:02
Speaker 4: which has expertise and administrative law. So the question then
27:06
Speaker 4: was whether these retailers were adversely affected.
27:10
Speaker 3: That's a big question. The FDA is making other arguments,
27:13
Speaker 3: you know, is challenging whether retailers can go to court
27:16
Speaker 3: whole The question is do they have the right to
27:17
Speaker 3: go to court to challenge a public health decision by
27:20
Speaker 3: the sea in the first place. And then the other
27:22
Speaker 3: question is where if they are allowed to go, where
27:24
Speaker 3: do they get to go in the time when we're
27:27
Speaker 3: watching the power of federal agencies sort of the weekends.
27:31
Speaker 3: This is another case that would strengthen certainly anyone challenging regulations.
27:36
Speaker 1: Several justices suggested that the plain language of the statute
27:40
Speaker 1: includes retailers because they're adversely affected by the denial, just
27:45
Speaker 1: as Sprett Kavanaugh said, retailers are losing money by not
27:50
Speaker 1: being allowed to sell these products, and that sounds like
27:53
Speaker 1: adversely affected. So did it seem like a majority of
27:57
Speaker 1: the justices were leaning toward RJR and threetailers here?
28:03
Speaker 3: I think there is going to be some sympathy within
28:06
Speaker 3: the particularly within the conservative justices, for giving more freedom
28:12
Speaker 3: to parties to choose where to file their cases. You know,
28:16
Speaker 3: On the one hand, r JR Is based in North Carolina.
28:19
Speaker 3: On the other hand, they sell their products nationally, so
28:21
Speaker 3: you know, so there certainly is an argument if you're
28:24
Speaker 3: interested in the freedom of companies, of private actors who
28:28
Speaker 3: are selling products all over the country. It's not like
28:31
Speaker 3: r J. Reynolds has no tie. It's just that they
28:33
Speaker 3: have the strongest tie in the place where they're based.
28:36
Speaker 3: So I think that the conservative justices are going to
28:39
Speaker 3: be receptive to the idea that plaintiffs as long as
28:44
Speaker 3: they have some basis for why they're choosing the place
28:46
Speaker 3: they're choosing, they should have more choices in filing their cases.
28:51
Speaker 3: And I think they'll be less sympathetic to the FDA,
28:53
Speaker 3: which is warning that you know, essentially this is like
28:56
Speaker 3: forum shopping, where basically you get to choose the most
28:59
Speaker 3: favorable I mean, ironically, a lot of this actually highlights
29:03
Speaker 3: the way that our courts have become so politicized, and
29:05
Speaker 3: that there is that's a difference, you know, in this
29:08
Speaker 3: one area where the Fifth Circuit has been a reliable
29:11
Speaker 3: sort of gadfly for conservative causes, I mean, an interesting flight.
29:15
Speaker 3: But I would not bet against the private party here.
29:18
Speaker 3: I would not be betting on the FAA in the case.
29:20
Speaker 1: The Assistant Solicitor General said about seventy five percent of
29:24
Speaker 1: e cigarette cases were filed in the Fifth Circuit, all
29:28
Speaker 1: of them by out of circuit applicants trying to use
29:30
Speaker 1: the tactic.
29:31
Speaker 4: So, since the Fifth Circuit is often.
29:34
Speaker 1: The outlier among the circuits.
29:37
Speaker 4: Does that mean that the Supreme Court's going to have
29:40
Speaker 4: to intervene in all these cases.
29:43
Speaker 3: Yeah, I mean, I think it's putting the pressure on
29:46
Speaker 3: the Supreme Court not only to decide what the power
29:48
Speaker 3: of the FEA is, but to decide on these important
29:51
Speaker 3: jurisdictional questions that really drives strategy of where litigation gets filed,
29:56
Speaker 3: how it gets processed. So I do think this case
29:59
Speaker 3: is one of self world that's putting more and more
30:01
Speaker 3: pressure on the Supreme Court to you know, be the
30:04
Speaker 3: referee about our entire legal framework when it comes to
30:07
Speaker 3: sederal agencies.
30:09
Speaker 1: And there is another case before the Supreme Court on
30:12
Speaker 1: the vaping issue and whether federal regulators misled companies before
30:18
Speaker 1: refusing to allow them to sell those sweet flavored vaping products.
30:25
Speaker 3: The other case before the Supreme Court it relates to
30:27
Speaker 3: flavority cigarettes. This is the FDA versus Wages in White
30:31
Speaker 3: Lions case, and that case is really focused on the
30:35
Speaker 3: fact that the FEA denied an application to market flavored
30:39
Speaker 3: e liquid with names like Rainbow Road and Cremberula, and
30:43
Speaker 3: the FDA basically argued that these products were just too
30:46
Speaker 3: risky because they're going to you know, recruit more young
30:50
Speaker 3: people to smoke so that case was actually already heard
30:53
Speaker 3: in December, and there seems here also to be like
30:57
Speaker 3: a divide between the justices about the FDA's power and
31:01
Speaker 3: whether the FDA had given sufficient guidance to manufacturers to
31:05
Speaker 3: allow them to respect public health norms while still creating
31:11
Speaker 3: legitimate products that met public safety standards. So it's another
31:15
Speaker 3: case that sort of hinges on the FDA authority in
31:18
Speaker 3: enforcing public health protection, particularly with the products that appeal
31:21
Speaker 3: to kids. Yeah, it's interesting to see as we're starting
31:25
Speaker 3: a new presidential administration, you know, with a lot of
31:28
Speaker 3: questions about power federal agencies, whether we're in an environment
31:31
Speaker 3: where where some of the public safety and public health
31:34
Speaker 3: protection is going to get rolled back.
31:36
Speaker 4: And that was also out of the Fifth Circuit.
31:38
Speaker 3: Yes, the Fifth Circuit also, by the way, was the
31:40
Speaker 3: circuit where we had the challenge to the abortion medication
31:44
Speaker 3: at the FDA. So the FDA has been a significant
31:49
Speaker 3: sort of brick in the wall of our public health
31:52
Speaker 3: and safety architecture, and so a lot of the challenges
31:56
Speaker 3: to how we're doing things, to what you know private
31:59
Speaker 3: parties can do, to what you know companies can sell,
32:02
Speaker 3: to you know, what kind of reproductive health medications are
32:05
Speaker 3: on the market. These are all questions that run through
32:08
Speaker 3: the FDA, and the fifth Circuit seems to be the
32:12
Speaker 3: home address for people who want to challenge those might.
32:15
Speaker 4: The FDA change its approach to vaping in the Trump administration,
32:20
Speaker 4: he has promised to save vaping, right.
32:24
Speaker 3: I do think that you know, with RFK, I presumably
32:27
Speaker 3: at the HELM, you know, we have this really interesting
32:30
Speaker 3: split where you have, on the one hand, make America
32:32
Speaker 3: healthy again and a lot of initiatives to push public health,
32:36
Speaker 3: but also this greater sort of Trump push for more
32:41
Speaker 3: personal autonomy, more personal freedom, and for companies to have
32:45
Speaker 3: more freedom from regulations. And so I do think we
32:49
Speaker 3: are going to see more permissive activity, and I think
32:53
Speaker 3: one of the questions will be how the public reacts.
32:57
Speaker 3: And I think there is a divide between, you know,
33:00
Speaker 3: people who take seriously the risk that more kids get
33:03
Speaker 3: hooked on tobacco and all the public health risks that
33:07
Speaker 3: come with that, versus this push for more personal freedom
33:11
Speaker 3: in the sense that we went too far. The predictions
33:14
Speaker 3: about what's going to happen at the FDA are you know,
33:18
Speaker 3: all over the place. It's a dangerous time to be
33:20
Speaker 3: doing too much guess work with the new administration and
33:23
Speaker 3: a lot of new cooks in the kitchen.
33:24
Speaker 1: I mean, even after the oral arguments, the Trump administration
33:29
Speaker 1: could come in and say we've changed our position on this,
33:32
Speaker 1: and the Supreme coolu.
33:34
Speaker 3: The Trump administration can use the rule making process to
33:37
Speaker 3: go back and reevaluate FDA standards. It could certainly liberalize
33:41
Speaker 3: some of the rules or establish new public safety standards.
33:45
Speaker 3: And you know, for example, you could have people who
33:48
Speaker 3: are satisfied with labeling warning on the outsides of these products,
33:52
Speaker 3: but not actually preventing you know, products from coming into
33:55
Speaker 3: the marketplace just because they seem to be targeting appealing
34:00
Speaker 3: to kids.
34:02
Speaker 1: So two vaping cases to watch out of the Supreme Court.
34:05
Speaker 1: Thanks so much, Harry. That's Harry Nelson of Leech Tishman
34:09
Speaker 1: Nelson Hardiman. And that's it for this edition of The
34:12
Speaker 1: Bloomberg Law Show. Remember you can always get the latest
34:15
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34:18
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34:23
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34:30
Speaker 1: Wall Street Time. I'm June Grosso and you're listening to
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