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SCOTUS May Narrow Environmental Impact Studies · Bloomberg Law

0:03
Speaker 1: This is Bloomberg Law, with June Brusso from Bloomberg Radio.
0:09
Speaker 2: The Board was not heedless of environmental effects here. It
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Speaker 2: consulted with dozens of agencies, considered every proximate effect, and
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Speaker 2: ordered ninety one mitigation measures. Eighty eight miles of track
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Speaker 2: should not require more than thirty six hundred pages of
0:25
Speaker 2: environmental analysis.
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Speaker 3: Former US Solicitor General Paul Clement argued that federal regulators
0:32
Speaker 3: had done enough to consider the environmental impact of a
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Speaker 3: proposed eighty eight mile railway in Utah and shouldn't have
0:39
Speaker 3: to also consider upstream and downstream impacts that are remote
0:44
Speaker 3: in time and space. All parties agree that under the
0:47
Speaker 3: National Environmental Policy Act or NEPA, agencies only have to
0:52
Speaker 3: consider environmental effects that are reasonably foreseeable. But Justice is
0:56
Speaker 3: across the ideological spectrum struggle with how to define that.
1:01
Speaker 3: What would be the test here? Justice is Elena Kagan,
1:05
Speaker 3: Clarence Thomas, and Chief Justice John Roberts. Here's this eighty
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Speaker 3: eight miles of lying and railroads are going to cross
1:13
Speaker 3: it and wildfires are going to start as a result.
1:17
Speaker 3: Is that within time and space? But how far down
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Speaker 3: line or upstream or downstream should you love.
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Speaker 4: I have trouble seeing how this is going to work
1:29
Speaker 4: out as a practical matter if you're at the agency
1:33
Speaker 4: or the council for the private party. I mean, what
1:36
Speaker 4: are you going to do. You're going to say, Okay,
1:38
Speaker 4: I've identified this possible issue, but I think it's too
1:43
Speaker 4: far away.
1:44
Speaker 3: Clement did admit that his proposed test wasn't an easy one.
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Speaker 2: If I could give you a ten word test that
1:51
Speaker 2: took care of every hard case, I mean, you know,
1:54
Speaker 2: they give me tenure at Harvard, but.
1:57
Speaker 3: I think you know having I'm sure they give you
1:59
Speaker 3: that any That last comment coming from Justice Kagan, who
2:04
Speaker 3: was once the dean of Harvard Law School. Joining me
2:06
Speaker 3: is environmental law expert Pat Parento, a professor at the
2:10
Speaker 3: Vermont Law and Graduate School. Pat first tell us about
2:14
Speaker 3: the environmental concerns here.
2:16
Speaker 1: So this case involves a proposed eighty eight mile rail
2:23
Speaker 1: link in the Uinta Basin of Utah, which is huge.
2:29
Speaker 1: In fact, it's as big as Maryland, and it's loaded
2:32
Speaker 1: with all kinds of fossil fuels, including what's called waxy
2:37
Speaker 1: crude oil. I hadn't heard about that term before, but
2:41
Speaker 1: that's the product that they want to ship on this
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Speaker 1: rail line, and the Surface Transportation Board, which is a
2:47
Speaker 1: federal agency within the Department of Transportation, has the authority
2:51
Speaker 1: to license or approve construction of this link, which will
2:56
Speaker 1: take the oil from the Uina Basin east and connect
3:00
Speaker 1: it with the national railroad network and take it all
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Speaker 1: the way to the Gulf Coast where it will be
3:06
Speaker 1: refined into various products for both domestic and export consumption. Right,
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Speaker 1: So the concerns here are the drilling and the extraction
3:16
Speaker 1: that's going to occur as a result of providing this
3:20
Speaker 1: critical link. Without this railroad, this oil reserve couldn't be exploited.
3:24
Speaker 1: So it is a major resource with economic value and
3:29
Speaker 1: some jobs undoubtedly and income to Utah and the county.
3:33
Speaker 1: The Youth Tribe of Indians is involved in this, and
3:37
Speaker 1: they have concerns about the drilling which will potentially impact
3:42
Speaker 1: some of their resources. And there's concerns about spills, which
3:45
Speaker 1: are inevitable when you're moving oil by rail. There's always
3:49
Speaker 1: either chronic low level spills, leakages, or in some cases,
3:54
Speaker 1: of course worse than that, derailments, and we've seen that.
3:56
Speaker 1: But then of course downstream there's concerns about burning all
4:01
Speaker 1: of this spoiled duh and the impacts on climate change,
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Speaker 1: but also impacts on the communities around the refineries in
4:09
Speaker 1: the Gulf Coast Fort Arthur, Texas being as primary focus
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Speaker 1: of this. So a variety of environmental issues typical of
4:18
Speaker 1: a major infrastructure project like this.
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Speaker 3: So now tell us about the legal issue here.
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Speaker 1: So this has to do with the scope of the
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Speaker 1: Environmental Impact Statement that the Surface Transportation Board prepared for
4:32
Speaker 1: this project. And actually STB, as it's called, did you
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Speaker 1: know what you might consider a pretty thorough job. I
4:40
Speaker 1: mean it amounts to literally thousands of pages of analysis
4:45
Speaker 1: when you look at the whole administrative record. The eis
4:48
Speaker 1: itself has many hundreds of pages. I forget it, maybe
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Speaker 1: nine hundred, but a very substantial document. And they did
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Speaker 1: look at these upstream impacts of drilling and the downstream
5:00
Speaker 1: impacts of potential spills and the refinery, but they only
5:03
Speaker 1: did so to a certain level. And the DC Circuit,
5:08
Speaker 1: when this came to the DC Circuit for review, said,
5:11
Speaker 1: you know, STB, you did an okay job, but not
5:14
Speaker 1: good enough. You needed to delve more deeply into these
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Speaker 1: upstream downstream issues than you did. So what it comes
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Speaker 1: down to is how much analysis does NEPA require when
5:27
Speaker 1: you have an eighty eight mile project that is approved
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Speaker 1: by this agency, the STB, And how far beyond the footprint,
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Speaker 1: if you will, of the project does NEPA require you
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Speaker 1: to go when you're analyzing these more remote in time
5:44
Speaker 1: and distance problems. And that was the focus of the
5:47
Speaker 1: argument before the Supreme Court.
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Speaker 3: Was there an answer to what kind of test would
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Speaker 3: work here? I mean, did anyone have that answer?
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Speaker 1: Yes? Paul Clement, who's a former solicitor generally and I
6:00
Speaker 1: states for a while, so he's a very accomplished, seasoned
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Speaker 1: Supreme Court litigator and frankly did a terrific job representing
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Speaker 1: his clients, of course, who want to develop these oil reserves,
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Speaker 1: and his tests which he offered and explained over and
6:14
Speaker 1: over again to the court. He was up there for
6:16
Speaker 1: almost an hour being questioned by almost everybody on the bench,
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Speaker 1: and his test was the following. Number one, you do
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Speaker 1: take into account how remote in time and space are
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Speaker 1: the impacts that you're talking about? Number one? And number two,
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Speaker 1: how many of those impacts are actually within the jurisdiction
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Speaker 1: and authority of the agency in question, namely STV. His
6:40
Speaker 1: answer to both of those was a, the impacts, particularly
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Speaker 1: the refinery impacts, which are five hundred miles away or more,
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Speaker 1: are way too remote in time and distance and speculative
6:51
Speaker 1: in terms of what will actually happen and so forth,
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Speaker 1: and they're subject to other agencies jurisdiction, either state agencies
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Speaker 1: or federal agencies. Another agency that's involved with rail safety,
7:03
Speaker 1: for example, So when you talk about the condition of
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Speaker 1: the tracks and whether there's the potential for spills, his
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Speaker 1: argument is that's another agency's problem, that's not StB's concern.
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Speaker 1: And refinery operations that's again that's subject to Texas state
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Speaker 1: regulation for whatever that's worth, as well as you know
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Speaker 1: EPA and other agencies. So on his remote in time
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Speaker 1: and space argument, he said, these impacts that the DC
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Speaker 1: circuit found fault with are not required by NEPA. And
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Speaker 1: number two, he said, when you have these other agencies
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Speaker 1: with responsibilities and STB does not have any authority to
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Speaker 1: control these impacts, then NEPA doesn't require STB to have
7:43
Speaker 1: to analyze them. What's the point he said, of analyzing
7:47
Speaker 1: all this to the nth degree when they can't do
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Speaker 1: anything about it. And so that was his argument.
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Speaker 3: Did the challengers have a test.
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Speaker 1: Yeah, so the challengers said, well, first of all, NEPA
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Speaker 1: has always wired consideration of indirect effects, and these are
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Speaker 1: foreseeable indirect effects. And there really wasn't a whole lot
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Speaker 1: of argument. Even Clement conceded, these are foreseeable impacts. They
8:13
Speaker 1: may be difficult to quantify, although the environmental advocates that
8:18
Speaker 1: they weren't difficult to quantify. I mean, you know how
8:21
Speaker 1: much oil is going to be extracted, and from that
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Speaker 1: you can begin to calculate how much will be refined,
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Speaker 1: and what kind of spills might happen and so forth.
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Speaker 1: You know, the environmental groups challenging this project where I thought,
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Speaker 1: we're able to say, look, what we're asking for here
8:37
Speaker 1: is not that unreasonable. It's not that different from what
8:40
Speaker 1: courts have required in the past, and it should still
8:44
Speaker 1: be the test here that you know, when the agency
8:46
Speaker 1: undertakes to do an analysis, it needs to do it right.
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Speaker 1: And the response to that, because of course this kept
8:54
Speaker 1: going back and forth like a ping pong match, the
8:56
Speaker 1: response to that is, well, yeah, but what you're doing
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Speaker 1: is punishing the agency STB for agreeing to consider things
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Speaker 1: that it really doesn't control, and that can't be right.
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Speaker 1: So Clement also suggested that the Court could adopt what's
9:13
Speaker 1: known as the harmless error rule. Right. So what he's
9:17
Speaker 1: saying is all right, So STB didn't have an initial
9:21
Speaker 1: obligation to consider these impacts, but it did so voluntarily,
9:26
Speaker 1: and you shouldn't punish them for that, particularly when we
9:28
Speaker 1: said when you're flyspecking. That was the term he used
9:31
Speaker 1: flyspecking the analysis. So you know, here's what I would
9:36
Speaker 1: say as the bottom line. There's no support on the bench,
9:39
Speaker 1: either liberals or conservatives, to uphold the DC Circuit. That
9:44
Speaker 1: was clear. The liberal wing of the bench asked as
9:46
Speaker 1: many difficult questions of the environmental group and the environmental
9:50
Speaker 1: advocate as did the conservative justices, in some cases even
9:53
Speaker 1: more aggressive.
9:54
Speaker 5: Right.
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Speaker 1: So they were clearly signaling they were not going to
9:57
Speaker 1: be upholding the DC Circuit. And my reading is what
10:01
Speaker 1: they were really signaling to the rest of the conservative
10:04
Speaker 1: colleagues on the bench was, let's see if we can
10:07
Speaker 1: find a basis to overturn the DC Circuit's decision and
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Speaker 1: allow this project to proceed that doesn't do any more
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Speaker 1: damage to the NEPA process than quote is necessary to
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Speaker 1: decide this case. So that's what I'm going to be
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Speaker 1: looking for, not what the outcome is. The outcome's clear.
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Speaker 1: You know, NEPA has been in front of the Supreme
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Speaker 1: Court fifteen different times and has lost every single time.
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Speaker 1: This will make the sixteenth time that NPA will have
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Speaker 1: lost in the Supreme Court. That seems foreordained to me.
10:41
Speaker 1: But the real question is how broadly is the court
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Speaker 1: going to go in limiting the scope of NEPA analysis
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Speaker 1: In a variety of other cases, this is just you know,
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Speaker 1: one eighty eight mile rail line, right, But NEPA applies
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Speaker 1: to a huge number of federal actions, of course. So
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Speaker 1: that's what I'm going to be looking for. Will they
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Speaker 1: write a narrow opinion, overturn the DC circuit, let this
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Speaker 1: project be finished, and leave it the rest of it alone.
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Speaker 3: Coming up next on the Bloomberg Law Show, I'll continue
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Speaker 3: this conversation with Professor Pat Parento of the Vermont Law
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Speaker 3: and Graduate School. What happens to environmental reviews under the
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Speaker 3: upcoming Trump administration. I'm June Grosso and you're listening to Bloomberg.
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Speaker 3: Supreme Court seems almost certain to limit the scope of
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Speaker 3: environmental impact studies. The question is how the Court will
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Speaker 3: do so. The justices at oral arguments overwhelmingly suggested that
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Speaker 3: the US Court of Appeals for the DC Circuit went
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Speaker 3: too far when it required federal regulators to look at
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Speaker 3: potential effects on communities on the Gulf Coast in considering
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Speaker 3: whether to approve an eighty eight mile railway in Utah.
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Speaker 3: I've been talking to Professor Pat Parento of the Vermont
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Speaker 3: Law and Graduate School. Did it seem like some of
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Speaker 3: the justice is thought that they didn't need to adopt
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Speaker 3: a new test, that they could clarify the old one instead.
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Speaker 3: Justice amy Cony Barrett said maybe the Court should just
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Speaker 3: say what we've said before, but maybe put a little
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Speaker 3: bit more flesh on the bone.
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Speaker 1: Yes. In fact, she and Justice Kavanaugh both stressed that
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Speaker 1: when you have a question like this of the scope
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Speaker 1: of NIPA analysis and it's tied to the authority of
12:28
Speaker 1: the agency in question, right, that you should defer to
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Speaker 1: the agency's determination of what's an appropriate scope, and only
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Speaker 1: where that determination can be shown to be arbitrary and capricious.
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Speaker 1: That's the sort of standard review test under the Administrative
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Speaker 1: Procedure active course. Only where you can show that you
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Speaker 1: know the agency made basically interrational determination of scope. Should
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Speaker 1: the court step in, Kavanaugh said, in light of the
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Speaker 1: re sense passage of what's called the Builder Bill by Congress,
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Speaker 1: this is the Infrastructure Bill, And in that bill they
13:06
Speaker 1: actually amended NEPA in a variety of ways, including putting
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Speaker 1: a page limit on environmental impact statements of one hundred
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Speaker 1: and fifty pages and putting a time limit on how
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Speaker 1: long the NEPA process could take, namely one year for
13:21
Speaker 1: certain kinds of important projects. And this kind of a
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Speaker 1: project would be included as a critical sort of energy
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Speaker 1: infrastructure project. Right, So Kavanaugh referred to that passage of
13:32
Speaker 1: that law and said, you know, there's no way agencies
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Speaker 1: can do everything that the DC Circuit is requiring them
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Speaker 1: to do in one hundred and fifty pages in a
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Speaker 1: year's timeframe. So he said the court should be giving
13:45
Speaker 1: different squared was the term he used to agency interpretations
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Speaker 1: of the scope of their analysis. So, yeah, I think
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Speaker 1: if this case, you know, comes out doing minimal damage,
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Speaker 1: let's put it that way to NEPA, it will be
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Speaker 1: for the Court to refer to this new congressional act,
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Speaker 1: the Builder Bill, and emphasized that courts should not be
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Speaker 1: second guessing agencies when they determine how far they're going
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Speaker 1: to go, and analyzing these indirect effects, taking into account
14:17
Speaker 1: time and distance and authority and so forth. So I
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Speaker 1: can anticipate seeing a decision that lays out more clearly
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Speaker 1: the role of the courts in reviewing cases like this
14:29
Speaker 1: and limiting judicial review, but maybe not going so far
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Speaker 1: as to adopt Clements tests, which would be a very
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Speaker 1: significant narrowing of NIPA analysis, and one in which the
14:41
Speaker 1: Biden administration, of course, in their argument because they're the
14:44
Speaker 1: defendant the STB is the defendant in the case, did
14:47
Speaker 1: not agree with Clement's tests. Edwin Needler, also a former
14:51
Speaker 1: Solicitor General, argued the case for the Biden administration and
14:55
Speaker 1: tried his best to distinguish his approach and the Biden
15:00
Speaker 1: administration's approach from what Clement was proposing. But frankly, that
15:05
Speaker 1: doesn't matter, does it. In light of who's coming to
15:08
Speaker 1: office in January. The views of the Biden administration will
15:11
Speaker 1: have no bearing whatsoever going forward.
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Speaker 3: So just back to Kavanaugh and the deference squared, he said,
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Speaker 3: it seems to me the difference of the courts has
15:21
Speaker 3: to be huge with respect to how the agencies think
15:24
Speaker 3: about the scope of what they're going to consider. How
15:27
Speaker 3: does that fit in with this court that last term
15:31
Speaker 3: throughout the Chevron doctrine, and you know, deference to agencies
15:36
Speaker 3: interpretations of ambiguous statutes. Now they're willing to give deference.
15:42
Speaker 1: Well, you know, they're all saying consistency is the hob
15:46
Speaker 1: goblin of small minds. So yeah, there's a little bit
15:53
Speaker 1: of inconsistency there, right, So we will defer to agencies
15:57
Speaker 1: when we like what they're doing, but not differ to
16:03
Speaker 1: them when we don't. I'm not going to go completely
16:05
Speaker 1: cynical on that, although I'm tempted, but certainly there's tension
16:10
Speaker 1: here between when you're going to give an agency difference
16:13
Speaker 1: and when you're not. So I would say this that
16:17
Speaker 1: when it comes to this narrower question of what's the
16:19
Speaker 1: scope of analysis with these indirect effects, these are you know,
16:24
Speaker 1: admittedly there's some speculation about exactly what these effects are
16:29
Speaker 1: going to be and how they're going to be handled
16:32
Speaker 1: by a variety of different agencies that have authority. So
16:36
Speaker 1: you know, this is a gray area of nep law.
16:38
Speaker 1: I have to say, and you know, reasonable people, I
16:42
Speaker 1: suppose can disagree about how far you should go. If
16:45
Speaker 1: I'm arguing the other side of this, what I'm going
16:48
Speaker 1: to say is, look, STD has a very clear binary
16:52
Speaker 1: decision here, right, either approve the new rail line or not.
16:57
Speaker 1: In the final analysis, It's a yes or no question.
17:01
Speaker 1: And to answer that question, you have to balance the benefits,
17:05
Speaker 1: economic and otherwise of the proposed rail line and the costs,
17:10
Speaker 1: including environmental costs. And I would argue including climates costs. Right,
17:15
Speaker 1: So I can make the argument that this is perfectly
17:19
Speaker 1: reasonable to require STV to look at lots of things
17:22
Speaker 1: that it doesn't control, because the one thing it does
17:26
Speaker 1: control is whether to allow this project to be built,
17:29
Speaker 1: and that turns on water. It's net and overall benefits
17:33
Speaker 1: versus its costs. Right, So you can make an argument,
17:37
Speaker 1: I think, And I've made these arguments in my past
17:40
Speaker 1: life because I wrote an odd article called small Handles.
17:43
Speaker 1: When do federal regulations privatize actions by others? And so
17:48
Speaker 1: I've made the arguments that it doesn't really matter what
17:51
Speaker 1: the scope of the agency's authority is. The question is
17:55
Speaker 1: should they approve this project or not? And that requires
17:59
Speaker 1: looking at as many things as you can reasonably consider,
18:04
Speaker 1: not looking at things that are purely speculative or you know,
18:08
Speaker 1: angels on ahead of a pen kind of calculations. But
18:12
Speaker 1: those things that you can reasonably foresee and calculate and
18:16
Speaker 1: way in the balance should be weighed. But that's not
18:20
Speaker 1: where this case is going to come out. I'm just
18:22
Speaker 1: telling you an alternative view of what NIPA might require
18:26
Speaker 1: of an agency like this, even though it doesn't control
18:30
Speaker 1: everything that happens as a result of its decision.
18:33
Speaker 3: So we should mention that Justice Neil Gorsitch recused himself
18:38
Speaker 3: just last week.
18:39
Speaker 1: Yes, so he did not say why. The speculation is
18:43
Speaker 1: that he or his family may have a financial interest
18:46
Speaker 1: in one of the parties that would benefit from this
18:48
Speaker 1: rail line. That's the speculation. But given credit, he was
18:52
Speaker 1: asked to refuse by the respondents who were, you know,
18:56
Speaker 1: the environmental concerns here, and he did, so, you know,
19:00
Speaker 1: we kudo to Neio Gorsics for that. I would say I.
19:02
Speaker 3: Would too, especially considering how many times Justices Alito and
19:08
Speaker 3: Thomas have been asked to recuse and they haven't.
19:11
Speaker 1: Yeah, at least one has paid attention to the sort
19:14
Speaker 1: of concern about ethics on the bench. But there's still
19:16
Speaker 1: five there's still five Conservatives, so there's clearly five votes
19:21
Speaker 1: to overturn the DC circuit. As I say, the question
19:24
Speaker 1: is how are they going to do it and will
19:26
Speaker 1: the Liberals have some influence on that? Can they convince
19:29
Speaker 1: their colleagues to limit the reach of whatever decision they make?
19:34
Speaker 3: So you mentioned the upcoming Trump administration. Do you think
19:38
Speaker 3: that they will just ignore any climate action at the
19:43
Speaker 3: federal level? I mean, what's the thought about how they
19:46
Speaker 3: might approach the environment.
19:48
Speaker 1: Well, you know, we might be happy if they did
19:51
Speaker 1: just ignore it, but they're not going to just ignore it.
19:53
Speaker 1: They're going to turn the clock back. They're going to
19:55
Speaker 1: reverse everything Biden did. They're going to try to claw
19:58
Speaker 1: back money under the Inflation Reduction Act. They're going to
20:01
Speaker 1: repeal the power plant rule, the tail pipe rule, the
20:05
Speaker 1: methane rule. They're going to require maximum oil and gas
20:09
Speaker 1: leasing both offshore and onshore on public lands right down
20:13
Speaker 1: the list. What they're proposing to do, and they're putting
20:16
Speaker 1: the people in place to do it, is to turn
20:19
Speaker 1: us completely around and go in the absolute wrong direction.
20:24
Speaker 1: Instead of facilitating the transition to a clean energy, clean
20:28
Speaker 1: transportation economy, which is well underway right instead of facilitating that,
20:34
Speaker 1: they're going to throw up roadblocks and try to stop it.
20:37
Speaker 1: It's really, frankly, to use a not technical term, insane
20:41
Speaker 1: what they're talking about. It doesn't make sense, economically, environmentally,
20:45
Speaker 1: public health. None of what they're talking about makes sense.
20:48
Speaker 1: Do some of these programs need improvement, of course they
20:51
Speaker 1: always do. Should Congress update some of these statutes to
20:55
Speaker 1: take account of new ways of dealing with these problems,
20:58
Speaker 1: of course they should. Should the federal government put some
21:01
Speaker 1: money into helping industry clean up, Yes, and so on.
21:07
Speaker 1: But that's not what we're going to see. I'm sure
21:09
Speaker 1: we're not going to see that.
21:10
Speaker 3: Can they do that in four years if they pay
21:13
Speaker 3: attention to the requirements of the law, the Administrative Procedure Act,
21:17
Speaker 3: et cetera.
21:19
Speaker 1: Well they didn't the last time, and Trump won. Of course,
21:21
Speaker 1: they lost most of their cases, almost eighty percent of
21:25
Speaker 1: the challenges. That this time around, their trying looks to
21:28
Speaker 1: learn from their mistakes, we'll see. You know, the top
21:31
Speaker 1: level people they're talking about are not capable. I don't
21:34
Speaker 1: think of implementing what Trump is talking about. So the
21:37
Speaker 1: real question is going to be who are they bringing
21:39
Speaker 1: in in the you know, second and third tiers of EPA,
21:44
Speaker 1: Department of Interior, Department of Energy, and so on. That
21:48
Speaker 1: level you know of the agencies is where the action is.
21:52
Speaker 1: And you know, if they get really capable people who
21:55
Speaker 1: have some experience in government with these agencies, then I
21:59
Speaker 1: do worry. And if they start, as I think they will,
22:02
Speaker 1: start driving out some of the career professionals, particularly for
22:06
Speaker 1: my old agency at EPA, people I know and admire greatly.
22:10
Speaker 1: If those people have had enough and are second tired
22:13
Speaker 1: of being abused and threatened, which they are being threatened,
22:17
Speaker 1: they're going to leave. And we're seeing that already. I'm
22:19
Speaker 1: seeing it because they're showing up on our doorstep asking
22:21
Speaker 1: for jobs at Vermont Law School, right, So that's a
22:25
Speaker 1: big concern. If they drive out the real professionals from
22:28
Speaker 1: these agencies and replace them with quote Trump loyalists, we're
22:32
Speaker 1: in serious trouble. Then we're talking about permanent damage to
22:37
Speaker 1: some of these institutions. That does worry me greatly, even
22:40
Speaker 1: more than what they're going to try to do with
22:43
Speaker 1: regulatory rollbacks, because we do have courts out there still,
22:47
Speaker 1: there are still good judges out there who are not
22:49
Speaker 1: going to let them run rampant over the rule of
22:52
Speaker 1: law and just do whatever they want, regardless of what
22:55
Speaker 1: the law and the APA requires. If they try to
22:59
Speaker 1: do what they did or they're gonna get stopped, They're
23:02
Speaker 1: gonna get slowed down. And in this case, delay is everything.
23:05
Speaker 1: The more that you can delay what Trump is trying
23:09
Speaker 1: to do, the more he becomes a real lane duck.
23:12
Speaker 1: And then that the midterm elections kick in, and then
23:15
Speaker 1: we see if maybe there's a turning point that will
23:19
Speaker 1: further limit the damage that Trump is threatening against environmental programs.
23:24
Speaker 3: President Joe Biden has said nobody can reverse the clean
23:27
Speaker 3: energy solutions that are already underway in this country. We'll
23:31
Speaker 3: see what happens come January. Thanks so much, Pat. That's
23:34
Speaker 3: Professor Pat Parento of the Vermont Law and Graduate School.
23:38
Speaker 3: Coming up next on the Bloomberg Law Show. Why is
23:40
Speaker 3: there an uptick in divorces after the Holidays? I'm June
23:44
Speaker 3: Grosso and you're listening to Bloomberg. 'tis the season, and
23:48
Speaker 3: you might notice an uptick in engagements of happy couples,
23:52
Speaker 3: But once the tree comes down, it's an uptick in divorces.
23:55
Speaker 3: You'll likely see. Joining me is an attorney who handles
23:58
Speaker 3: matrimonial and family law matters Lauren Crane. She's a partner
24:02
Speaker 3: at Bender and Crane, a female owned boutique law firm
24:05
Speaker 3: in New York. So is the holiday season a popular
24:08
Speaker 3: time for people to get engaged.
24:10
Speaker 5: A lot of people do get engaged in the holiday season.
24:13
Speaker 5: And typically people who do get engaged, they look forward
24:17
Speaker 5: to getting married and they start to plan forward, and
24:22
Speaker 5: it's really a celebratory time. But people who are getting
24:25
Speaker 5: engaged think about whether they get engaged on a holiday
24:28
Speaker 5: or not. So if you get engaged and you give
24:31
Speaker 5: someone an engagement ring on a holiday versus on any
24:34
Speaker 5: other day, if you actually don't get married, the ring
24:39
Speaker 5: and the purpose of the ring could become subject to
24:42
Speaker 5: a hearing. If one person says they were given a
24:46
Speaker 5: gift of an engagement ring on Christmas or New Year's
24:50
Speaker 5: versus another day, then it would be the person who
24:53
Speaker 5: gave the ring it would be their property.
24:56
Speaker 3: So after the engagement, the question of a prenup comes up.
25:01
Speaker 3: So a young couple starting out, neither of them has
25:04
Speaker 3: any substantial assets, do they really need a prenup?
25:08
Speaker 5: So it also depends on whether they have multi generational wealth.
25:13
Speaker 5: So a lot of times, people who haven't started working
25:16
Speaker 5: yet but their parents have money, they set up trusts,
25:19
Speaker 5: and those trusts can be the issue of litigation long
25:22
Speaker 5: term and a divorce, at least in New York. So
25:26
Speaker 5: if you're going to inherit money or you're a beneficiary
25:29
Speaker 5: of a trust, then you should look into a prenap. Also,
25:33
Speaker 5: if you have interest in a business that hasn't yet
25:36
Speaker 5: taken off, but you've been creating this business long before
25:39
Speaker 5: you got engaged. That business you've put sweat equity into
25:44
Speaker 5: and you may want to protect that in the case
25:46
Speaker 5: of a divorce.
25:47
Speaker 3: Let's say you have two people who are in graduate
25:49
Speaker 3: school or law school. Yeah, no assets, do they need
25:53
Speaker 3: a prenup?
25:54
Speaker 5: So in that case, again, I don't have so many
25:58
Speaker 5: facts about their ass that's outside of being in school.
26:03
Speaker 5: But if you already have a case where the parties
26:06
Speaker 5: one of them wants to work long term, one of
26:08
Speaker 5: them doesn't want to work, you know, there's lots of
26:11
Speaker 5: decisions you're going to make through a marriage, and so
26:13
Speaker 5: sometimes it's even easier just to set it out before
26:16
Speaker 5: you get married and set it out in a prenup.
26:19
Speaker 5: We've had that a few times in our office.
26:22
Speaker 3: And what does a prenup cover.
26:24
Speaker 5: Generally, so, a prenup can cover anything that the couple
26:28
Speaker 5: wants as long as it doesn't cover child's support or
26:31
Speaker 5: child's custody. So it can cover, at least in New York,
26:36
Speaker 5: spousal support, equitable distribution, which is how you would divide
26:40
Speaker 5: your assets once you get married. Can cover council fees
26:46
Speaker 5: in the event of the divorce, whether one person is
26:48
Speaker 5: waiving their right to receive counsel fees in the long term.
26:52
Speaker 5: It can also cover state rights upon a person's death,
26:56
Speaker 5: so it can cover a array of issues.
27:00
Speaker 3: In the movies, prenups cause problems. In real life does
27:04
Speaker 3: it cause problems?
27:05
Speaker 5: So prenups sometimes do cause problems, but remember these are
27:09
Speaker 5: problems that people would face once they get married. People
27:14
Speaker 5: go into a marriage or a wedding and they envision
27:18
Speaker 5: their wedding day, but they don't envision the next day
27:20
Speaker 5: when they have to budget to pay for a house
27:24
Speaker 5: or a vacation or any of your ongoing expenses. So
27:28
Speaker 5: although you look forward to the wedding, you don't think
27:31
Speaker 5: about the next steps that once you're married, and then,
27:34
Speaker 5: in the unfortunate stance that you actually do get divorced,
27:38
Speaker 5: then they don't think about that. But prenups are conversations
27:42
Speaker 5: that couples are going to have in the long term,
27:44
Speaker 5: whether they have it before they get married or after
27:47
Speaker 5: they get married.
27:48
Speaker 3: What about getting a post nup instead of a pre nup?
27:51
Speaker 5: So we've done a few post nups in our office,
27:54
Speaker 5: and they sometimes are post nups just to sity. You know,
28:01
Speaker 5: how you envision certain property that you acquire during the
28:04
Speaker 5: marriage would proceed. But there's a lot more documents that
28:09
Speaker 5: have to be exchanged because you're already married, versus a
28:12
Speaker 5: prenuptial agreement when you haven't yet been married.
28:15
Speaker 3: So is there any point in doing a post up
28:17
Speaker 3: or just wait for the divorce?
28:20
Speaker 5: So in some instances a postnup would work. If someone's
28:23
Speaker 5: gifting the money to a child, a parent is gifting
28:27
Speaker 5: money to one of the spouses and they want to
28:29
Speaker 5: buy a house, and the parents want to ensure that
28:31
Speaker 5: that house goes to the person they're gifting in the
28:34
Speaker 5: event of a divorce. Or sometimes you know, people have
28:38
Speaker 5: resets in their marriage, so they do a ponent agreement,
28:42
Speaker 5: but it doesn't automatically lead to a divorce. So it's
28:46
Speaker 5: very different than a divorce.
28:48
Speaker 3: Do you find that after the holidays people split up more? So?
28:53
Speaker 5: I think that sometimes when you go from the Thanksgiving
28:56
Speaker 5: holiday to the Christmas holiday, people are spending a lot
28:59
Speaker 5: more family time, and so sometimes that can awaken them
29:04
Speaker 5: to realize that maybe they do want to get a divorce.
29:07
Speaker 5: And before they would get a divorce, you should always
29:11
Speaker 5: consult with you know, one or two attorneys and make
29:14
Speaker 5: sure you meet an attorney that you like and you
29:17
Speaker 5: fit with, and then you can proceed to plan. A
29:21
Speaker 5: divorce doesn't happen overnight because remember you're married, so you
29:25
Speaker 5: know a lot of people who have kids, they don't
29:27
Speaker 5: want to ruin a Christmas holiday or a vacation that
29:31
Speaker 5: they have planned during that time. So typically we see
29:34
Speaker 5: an uptick of calls to discuss the possibility of having
29:38
Speaker 5: a divorce after Thanksgiving, and then people tend to file
29:42
Speaker 5: for divorce after Christmas.
29:45
Speaker 3: Do more people file for divorce when it's a boom
29:49
Speaker 3: economy or more people file in a recession? If you know?
29:53
Speaker 5: So in New York it doesn't matter in our particular
29:58
Speaker 5: cases because typically people have large wealth in Manhattan. Our
30:05
Speaker 5: typical clients, you know, our private school parents who can
30:10
Speaker 5: afford the lifestyle in New York, so a boom or
30:13
Speaker 5: a bus economy doesn't really affect our business in that way.
30:16
Speaker 3: I've heard this term gray divorce boom. What is that?
30:21
Speaker 5: So that's the after the kids have left the house,
30:25
Speaker 5: when they've graduated and you know, their kids have gotten married.
30:29
Speaker 5: Some families are starting more families are starting to get
30:32
Speaker 5: divorced later in life. And the reason is is people
30:37
Speaker 5: tend to reevaluate their lives later. People I think are
30:41
Speaker 5: living longer and they've come to the realization that they
30:45
Speaker 5: want to die married to this person, so they want
30:48
Speaker 5: to get divorced later in life, even though it may
30:50
Speaker 5: be more complicated.
30:52
Speaker 3: You think it's more complicated because if the kids are
30:54
Speaker 3: out of the house, doesn't that take one big factor,
30:58
Speaker 3: you know, one troublesome fact out of the divorce.
31:01
Speaker 5: Yes, But then you have a much longer term marriage.
31:05
Speaker 5: So then there's an issue of spousal support if one
31:08
Speaker 5: person didn't work, and how long they would pay spousal
31:12
Speaker 5: support for. And also, as you're married longer, your assets
31:16
Speaker 5: become more and more entangled, so it may not be
31:19
Speaker 5: so easy to piece apart all of your assets. You know,
31:23
Speaker 5: you may have investments in private equity funds that you
31:27
Speaker 5: can't easily retrieve. It can't happen a short term marriage,
31:30
Speaker 5: but in a longer term marriage, the longer you're married,
31:33
Speaker 5: the more entwined your assets are.
31:35
Speaker 3: In most divorces, is it the children that are the
31:39
Speaker 3: biggest issue or.
31:40
Speaker 5: Is it money, So that really depends on the case.
31:44
Speaker 5: A lot of times parents are able to come together
31:47
Speaker 5: and realize that they're separating, and they try and protect
31:50
Speaker 5: their children from the being intricately involved in their divorces,
31:55
Speaker 5: such as getting an attorney for the child or testifying
31:58
Speaker 5: before a judge and closed chamber. So they choose to
32:01
Speaker 5: settle that issue very quickly through either a mediate or
32:05
Speaker 5: some use a family therapist, and so that issue can
32:09
Speaker 5: be taken off the table. However, in cases of high conflicts,
32:13
Speaker 5: where maybe there's abuse or the people never were able
32:16
Speaker 5: to communicate very well together, that can make custody much
32:21
Speaker 5: more involved and it can last much longer, so it
32:26
Speaker 5: can become much more contested. As they say, however, it
32:31
Speaker 5: also involves money because children cost money, so at times
32:36
Speaker 5: they're intertwined. So if one parent has more money, or
32:40
Speaker 5: one parent has less money, or they earn equally, it
32:43
Speaker 5: can be how expenses are paid for the kids, so
32:46
Speaker 5: it can become more complicated.
32:49
Speaker 3: Have you seen any changes in divorce, any patterns that
32:53
Speaker 3: are different in the last let's say ten years or so.
32:56
Speaker 3: Or is divorce still divorce?
33:00
Speaker 5: Divorce is still divorce no matter what time or what date.
33:06
Speaker 5: But divorce is still messy. And however, it's really guided
33:11
Speaker 5: by the two people who are married, and they should
33:15
Speaker 5: try and work together. Cases do tend to linger longer
33:20
Speaker 5: in the court system.
33:21
Speaker 1: Now.
33:22
Speaker 5: The divorces right now in New York can take between
33:25
Speaker 5: two and six years to actually finalize. So I would
33:29
Speaker 5: say that that is the only biggest changes that now
33:32
Speaker 5: it's taking significantly longer. I don't know if it's due
33:35
Speaker 5: to more filings or the reason that they do tend
33:39
Speaker 5: to take longer.
33:40
Speaker 3: That's a long time to wait for a divorce. So
33:43
Speaker 3: I also wanted to talk to you about no fault divorce.
33:46
Speaker 3: How many states have no fault divorce?
33:49
Speaker 5: All fifty states have no fault divorce. New York was
33:52
Speaker 5: the last to get no fault divorce and that was
33:54
Speaker 5: in twenty ten.
33:55
Speaker 3: And are some states moving or thinking about or trying
34:00
Speaker 3: in some way to get rid of no fault divorce.
34:04
Speaker 5: I hope they're not because no fault divorce would only
34:06
Speaker 5: clog court systems more. And also when I was practicing
34:11
Speaker 5: before twenty ten, we had one case that was going
34:14
Speaker 5: to go to trial over a false divorce. Now, in
34:17
Speaker 5: a false divorce, you can have a jury trial, unlike
34:20
Speaker 5: just a divorce matter, where a jury could decide whether
34:24
Speaker 5: one person can prove that they have the grounds as
34:28
Speaker 5: they call it, to get a divorce, such as cruel
34:31
Speaker 5: and usual punishment, stuff like that. They can they can
34:36
Speaker 5: try and prove that they were abused, and it can
34:40
Speaker 5: retrigger the person who has been abused. It's a horrible
34:43
Speaker 5: process fault divorce, if you think about it. If a
34:46
Speaker 5: person has to prove that the other that their spouse
34:50
Speaker 5: was horrible to them during their marriage, and they have children,
34:53
Speaker 5: no matter the age of the children, these two people
34:57
Speaker 5: are eventually going to sit at their children's and they
35:00
Speaker 5: are going to remember everything that was testified at that trial,
35:04
Speaker 5: which will have nothing to do with their children, but
35:07
Speaker 5: just how they treated each other during their marriage, which
35:10
Speaker 5: would prevent them from actually working together for the benefit
35:13
Speaker 5: of their kids and their grandkids.
35:15
Speaker 3: That's one change in the Law. I guess we can
35:17
Speaker 3: applaud thanks so much for coming on the show. Lauren.
35:20
Speaker 3: That's Lauren Crane of Benderin Crane. And that's it for
35:24
Speaker 3: this edition of the Bloomberg Law Podcast. Remember you can
35:27
Speaker 3: always get the latest legal news by subscribing and listening
35:30
Speaker 3: to the show on Apple Podcasts, Spotify, and at Bloomberg
35:34
Speaker 3: dot com, slash podcast, slash Law. I'm June Grosso and
35:38
Speaker 3: this is Bloomberg