FBI Raid & Arizona Republicans Challenge National Monument

18:28Barbara McQuade:We don't even have copies of what they took. So it's a problem. What are they doing with them? Where are they? Who has them?

18:33June Grasso:Lots of questions and not many answers. And Democrats in Congress are questioning why Tulsi Gabbard, the director of national intelligence, was at the Fulton County search last week. Senator Mark Warner raised concerns about her presence because the search was a law enforcement action.

18:53Barbara McQuade:What the heck is she doing on the FBI serving a domestic warrant? If this doesn't concern the heck out of every American, it sure as hell should.

19:03June Grasso:Gabbard also facilitated a phone call between those FBI agents and President Trump after the search warrant was executed. And Warner is calling on her to testify in person before the Senate Intelligence Committee.

19:18Barbara McQuade:To see her skulking around in a baseball cap, the picture that was posted, you never thought you could make this stuff up.

19:25June Grasso:I've been talking to Barbara McQuaid, a professor at the University of Michigan Law School. Barbara, adding to the oddity of the search was the appearance of the director of national intelligence, Tulsi Gabbard, who later said that President Trump directed her to be at the search. And then afterwards, President Trump spoke to the agents on the phone, on speakerphone.

19:50Dave Owen:All of this highly irregular and bizarre. So there are two reasons it's bizarre to me that Tulsi Gabbard was there. Number one, a person at her level, the director of national intelligence, like she should have better things to do. Right. They have trained agents for this work. You would not expect the attorney general to be there. You would not expect the head of the FBI to be there. Right. These are this is in the trenches kind of work that agents are trained to do and do every day. So the idea that she's there and she's there like, you know, in a ball cap and like, what, is she rolling up her sleeves and grabbing evidence?

20:24Dave Owen:I don't think so. So just bizarre that she's physically present at the scene, first of all. Second of all, this really feels like something way beyond her remit. Her job is to coordinate intelligence collection among the 18 intelligence agencies in the federal government and then to report to the president about the results of those findings to answer any questions he may have to advise him about threats to the national security. These are threats coming from foreign actors. So that suggests that there is some foreign nexus to this search. I can't imagine what that would be. It kind of goes back to some of those conspiracy theories.

21:06Dave Owen:Remember when Sidney Powell was saying things like Dominion falsely, I'll add, Dominion voting machines were programmed by Hugo Chavez in Venezuela? Like what? And then I remember there was some tie to Italy that caused William Barr to actually travel there with John Durham when they were investigating the origins of the Russia investigation. They never found anything there. The inspector general never found anything relating to these things. It seems like it was all just wild, crazy stuff that was manufactured. But here we are again with some suggestion that there's some foreign nexus to all of this.

21:44Dave Owen:I don't know what it is, but if there's not any foreign nexus, highly improper for Tulsi Gabbard to be there. But if she's there, it does raise this specter of is there some foreign nexus to this? And I just can't imagine where this is going. But brace yourself, June.

22:01June Grasso:Well, what I was going to say is, you know, people might say, well, let them investigate. If there's nothing there, then no harm, no foul. But you don't know if there could be, you know, manufactured crimes or, as you said, the risks of undermining the midterm elections. I mean, there's so much that could happen. You know, it's unsettling, to say the least.

22:23Dave Owen:It really is. And I think one of the great harms of this administration is because of some of the acts they've engaged in, you know, just like misleading us about what happened on the ground in Minneapolis with these shootings, when we can see with our own eyes that it's not what they say. I think that some courts have said they've lost the presumption of regularity that our federal government has always enjoyed, that we trust that when they say they're going to do something, that's what they're doing, and that we have to sort of, you know, trust and wait and see what happens. But I think the track record of this administration has made us all very skeptical, and I worry that that kind of skepticism will continue even after this administration ends.

23:05June Grasso:Thanks so much, Barbara. It's always a pleasure having you on. That's Professor Barbara McQuaid of the University of Michigan Law School.

23:12Barbara McQuade:Support for the show comes from Public. Public is an investing platform that offers access to stocks, options, bonds, and crypto. And they've also integrated AI with tools that can assist investors in building customized portfolios. One of these tools is called Generated Assets. It allows you to turn your ideas into investable indexes. So let's say you're interested in something specific like biotech companies with high R &D spend, small cap stocks with improving operating margins, or the S &P 500 minus high debt companies. Chances are there isn't an ETF that fits your exact criteria. But on public, you just type in a prompt and their AI screens thousands of stocks and builds a one of a kind index.

23:52Barbara McQuade:You can even backtest it against the S &P 500. Then you can invest in a few clicks. Go to public.com slash market and earn an uncapped 1 % bonus when you transfer your portfolio. That's public.com slash market. Ad paid for by Public Holdings. Brokered services by Public Investing, member FINRA SIPC. Advisory services by Public Advisors, SEC registered advisor. Crypto services by ZeroHash. Sample prompts are for illustrative purposes only, not investment advice. All investing involves risk of loss. See complete disclosures at public.com slash disclosures. Hello, hello. I'm Malcolm Gladwell, host of the podcast Smart Talks with IBM.

24:29Barbara McQuade:I recently sat down with IBM's chairman and CEO, Arvind Krishna. And I asked him, how can companies use AI to its fullest potential to create smarter business? My one advice to them, pick areas you can scale. Don't pick the shiny little toys on the side. For example? If anybody has more than 10 % of what they had for customer service 10 years ago, they're already five years behind. If anybody is not using AI to make their developers who write software 30 % more productive today with the goal of being 70 % more productive. Yeah. Wow. So we are not asking our clients to be the first experiment on it.

25:18Barbara McQuade:We say, you can leverage what we did. We're happy to bring out all our learnings, including what needs to change in the process, because the biggest change is not technology. It's getting people to accept that there's a different way to do things. To listen to the full conversation, visit ibm.com slash smarttalks.

25:42June Grasso:If you follow markets, you know the value of long-term thinking. You plan, you diversify, you prepare for volatility. But even the best strategies can't prevent every bad day. For more than 75 years, Cincinnati Insurance has helped individuals and businesses navigate tough moments with expertise, personal attention, and independent agents who focus on relationships, not transactions. The Cincinnati Insurance Companies. Let them make your bad day better. Find an agent at CINFIN.com. Arguments at the Ninth Circuit Court of Appeals could determine whether state legislatures can bring lawsuits over the objections of the state's governor and attorney general.

26:30June Grasso:The Ninth Circuit held oral arguments in a case where Republican lawmakers in Arizona sidestepped the Democratic state governor and attorney general in challenging the Ancient Footsteps National Monument, created by former President Joe Biden on federal land in 2023. The monument designation will help preserve 1 ,500 square miles and turned a decades-long vision for Native American tribes and environmentalists into a reality. But Republican lawmakers and the uranium mining industry that operates in the area had opposed the designation. The appeals court will decide whether state lawmakers have standing to challenge the White House's use of the Antiquities Act to create national monuments.

27:19June Grasso:My guest is an expert in environmental law, Dave Owen, a professor at the University of California College of Law in San Francisco. There were oral arguments in this case before the Ninth Circuit on Tuesday. Tell us about the underlying case.

27:35Barbara McQuade:The underlying lawsuit is about the designation by President Biden of the Ancient Footsteps National Monument in Arizona. And the plaintiffs are claiming that this designation was unlawful because basically it's too broad.

27:53June Grasso:To get the side straight, it's the Republican-controlled Arizona legislature that filed the lawsuit challenging the monument. But the state's governor, a Democrat, and the state's attorney general, another Democrat, opposed the lawsuit.

28:11Barbara McQuade:Yes, that's exactly right. There's a group of plaintiffs, including the state legislature, and the state itself, as represented by the attorney general's office, has intervened on the side of the defendants, on the side of the federal government.

28:26June Grasso:President Trump has not been supportive of national monuments, shall we put it that way? So is it a surprise that the Trump administration is lining up here with the Democratic governor and attorney general?

28:39Barbara McQuade:I would say at this stage of the litigation, it is not surprising. At this stage of the litigation, the question at issue is whether the plaintiffs have standing to sue. And the federal government almost always is arguing for more restrictive standing for lawsuits against the federal government. And so it has an institutional interest that cuts across administrations at limiting its own ability to be sued. And since that's all that's at stake right now, no, I think it makes sense. It's not surprising that the federal government is aligned.

29:14June Grasso:A federal judge dismissed the lawsuit. Why did he or she dismiss it?

29:19Barbara McQuade:So the reason is a legal doctrine called standing. Standing just means that the plaintiffs have to have a direct personal stake in the lawsuit. They have to be threatened with some sort of injury, and it has to be both plausible and not too speculative. And then the court has to be able to fix the problem by ordering the defendants to do something differently. And so what the court said is that the legislature does not have standing because it is not authorized to claim injury on behalf of the state. Instead, it can only sue to defend some sort of injury to its ability to function as a legislature.

29:59Barbara McQuade:And there's no such injury here. And then the other plaintiffs who are local governments and private entities, the court said that their claims of injury were very speculative and therefore did not provide a basis for the lawsuit to go forward.

30:14June Grasso:During the oral arguments before the Ninth Circuit, the deputy solicitor general said, the attorney general represents the state here in federal court, not the legislature, not the treasurer. I mean, that seems like a basic concept to me that it's the attorney general who represents the state.

30:31Barbara McQuade:It is basic. I mean, I think that's why the legislature lost on that grounds the first time through. That's why it will lose again on those grounds on appeal. It's hard to predict the outcomes of cases sometimes, but I don't think this particular issue, the outcome, is at all difficult to predict.

30:49June Grasso:So what did the legislature argue at the Ninth Circuit to try to show they had standing?

30:56Barbara McQuade:Well, the first thing to note is that the legislature's argument for standing was hardly mentioned by the plaintiff's attorneys on the oral argument yesterday, which I think is a pretty strong tell that the plaintiff's attorney knows that this is not a winning argument. Instead, the plaintiff's attorneys chose to focus on claims of injury by local governments that think their ability to get revenue related to uranium mining by other third parties will be limited if the monument designation stands. But the legislature's argument in the past has been that the fact that this monument is designated means the legislature is going to have to worry about some other related legislation and kind of keep track of this issue.

31:45Barbara McQuade:And therefore, that's going to affect its ability to function as a legislature. And of course, you know, you can make that argument about anything the federal government does in a state. And that's, I think, partly why that argument didn't go anywhere with the court.

31:57June Grasso:This is all about uranium in the future?

32:00Barbara McQuade:Yeah, the basic argument, the local government, I mean, I think part of this is just ideological. The federal government comes in and takes lands in a rural area. They're all federal lands. So this is not the federal government grabbing lands from anybody else, but it is taking lands in a rural and conservative area with an economy that has traditionally been somewhat focused on resource extraction and saying these lands aren't going to be available for resource extraction anymore. And so that gets people upset. So that's the general reaction. It has a lot to do with just general hostility to the federal government.

32:35Barbara McQuade:But the more specific argument was that the promising mineral that exists on these lands is uranium. and maybe uranium prices will rise and demand will increase and then mining companies will come in and that will lead to indirectly to revenue for the local government. And the loss of that revenue, therefore, is their claimed injury.

32:59June Grasso:Along those lines, Judge Michelle Friedland, a Barack Obama appointee, said, how does anyone know whether it would make sense to open up new uranium mines six years from now? Explain what the judge was getting at there.

33:41Barbara McQuade:this regulation is going to change market conditions in a way that hurts me, and therefore I have the ability to sue. And stated generically the way I've just stated it, that's an argument nobody would disagree with, at least that it's valid sometimes. The question in this case is whether it's just too speculative for this particular action to be changing market conditions in a way that would actually impact the plaintiffs. If you start getting a very long chain of causation with a lot of very uncertain links, then at some point the courts will say, this is just speculation. And really, this case is not about arms to your market position.

34:22It is about you just don't like

34:25Barbara McQuade:what the government did, and you just have generic hostility to it. And so here, again, what Friedland is getting with that question is, are we dealing with a situation here where the harm that you are claiming, which is harm to your local government finances, based on the assumption that someday in the future, uranium mining is going to pick up again and do so in ways that bring revenue to you? Are you just completely speculating there?

34:54June Grasso:Did it seem to you like all three judges were skeptical about the plaintiffs having standing?

35:01Barbara McQuade:No, I wouldn't say all three. Concerned accounting. She seemed less skeptical. Although, if I'm an attorney trying to read the tea leaves of oral argument, which is always a dangerous thing to do, I did not hear her tip her hand either way. She was asking the questions one might ask if you're trying to throw softballs or if you are trying to see if there's anything to the plaintiff's argument. You know, if you're basically saying, I don't think you have anything here, but I'm going to ask you the most sympathetic questions I can just to see if you can come up with something compelling. So it's hard to know what the motivation behind those questions was.

35:40Barbara McQuade:But she did not seem as thoroughly skeptical as the other two judges did.

35:45June Grasso:But you think that the legislature is going to lose here?

35:49Barbara McQuade:I think if the plaintiffs win on this appeal, which is just about allowing the case to go forward, it would be based on injuries to the local governments in the area. I do not think anybody even seemed interested in the legislature's claims to have standing.

36:10June Grasso:If the legislature loses and this goes to the Supreme Court, Chief Justice Roberts has said he's skeptical about the use of the Antiquities Act. So do the plaintiffs have an advantage at the Supreme Court?

36:24Barbara McQuade:So let's separate it out into if this particular decision that's at issue right now, if there's an appeal on that, and then the broader question of if the case continues forward and goes to the merits, whether there might be a Supreme Court problem. So first off, I don't think the United States Supreme Court is going to be at all interested in the legislature's theory of standing here. I think it's going to look at that and say, no, states get to define who speaks for them in court. We're not going to mess with that. I also think in general, the Supreme Court is going to be somewhat skeptical of the plaintiff's general theory of standing just because of the speculative nature of it.

37:06Barbara McQuade:And even if the Supreme Court might sympathize with the merits of the plaintiff's claims here, I don't think you are going to have five justices or four on the court who are interested in expanding standing for potentially speculative harms and taking up a case just for that basis. So I think probably this case gets dismissed on standing grounds and a certain petition, if one is filed, is not accepted. I think that is the most likely outcome. But your other question was, well, what about, you know, maybe it's not this monument, maybe it's another monument. The court has shown some, or Chief Justice Roberts, but I don't think it's just him, has shown hints of interest in claims that monument designations are overly broad.

37:52Barbara McQuade:Now, it's hard to know what to make of those because broad monument designations have been with us as a nation for over a century. This is not a new practice. It's been around for a very, very long time. most of those broad monuments in hindsight are designations that people have been very glad about. At least a majority of the American public has been very, very glad about and a majority of the states in which they are located have been glad about. And so, you know, there's a bunch of reasons why the Supreme Court might think this is not an issue that's really important enough to be worth our time or that we feel strongly enough.

38:29Barbara McQuade:But it's hard to know. And it's all speculation there.

38:31June Grasso:Recent Democratic presidents, I'm thinking former presidents Biden, Obama and Clinton, have expanded national monuments. Why is it that the Republicans seem to be not in favor of national monuments generally, and the Democrats seem to be in favor?

38:50Barbara McQuade:Small correction there. By geographic area, the largest national monument designation ever, by a huge margin was from George W. Bush. And it was the Hawaiian Islands, Northwest Hawaiian Islands National Monument. So it's an incredibly remote area, but it's enormous. And so it's not always the case that monument designations are a democratic presidential thing. And there was some controversy. That was not like an easy, nobody cares, you know, I can win without making any money. There were fishing interests that were upset about that designation. But you are right with the general trend that designating monuments is much more a thing that Democratic presidents do.

39:33Barbara McQuade:And I think the reasons are fairly straightforward. The people who oppose these designations are typically people in very rural parts of the West, and then extractive industries that are not voting for Democrats or contributing money to Democrats, no matter what. So the people who are offended by these actions, there's no political loss on the Democratic side. And they're widely popular. I mean, even like, you know, Utah is a kind of a funny example. Utah aggressively markets its national monuments in its tourism materials, while at the same time, the Utah political establishment is like almost duty bound to complain about them constantly.

40:16Barbara McQuade:And so I think the more interesting question, honestly, on the political side is why the Republicans are so opposed. When monuments tend to be popular, they tend to be good for business development. And I think the basic reason is that there's sort of a core and entrenched part of the Republican Party that cares very deeply about these issues, and it sees them as symbolically important to broader questions about the role of the federal government in the West. And it really demands that the Republican political establishment get upset, at least in the West, get upset about monuments. You know, I would guess that a lot of those representatives and senators, if you gave them truth serum, would say, yeah, actually, these designations have been great for our state.

40:59Barbara McQuade:They have key constituencies that hate them. And so I've got to oppose.

41:02June Grasso:Can a later president alter a national monument that a prior president has put in place?

41:09Barbara McQuade:And there's two schools of thought on that question. One school of thought is that because the governing statutes speak very specifically about designating monuments and say absolutely nothing about shrinking them, that that silence implies that there is not an ability for a later president to reduce a monument. On the other side, people have argued that the power to designate inherently also conveys the power to reduce. I think that second argument is a little strange. I mean, usually we don't convey broad sweeping powers, presidents through statutory silences, but that's the argument that others have made.

41:51Barbara McQuade:And that question has not been tested by the Supreme Court. That would most likely be the case that eventually might come up to the Supreme Court. It'll either be a designation case where the question is, was this designation too broad in the first place, or it will be a monument shrinking case. But because we've had four-year flip-flops, designation shrinking cases haven't yet been around long enough to make it to the Supreme Court.

42:18June Grasso:I always find the subject of national monuments so interesting. So thanks so much for joining me today. That's Professor Dave Owen of the UC College of the Law, San Francisco. And that's it for this edition of the Bloomberg Law Show. Remember, you can always get the latest legal news on our Bloomberg Law podcast. You can find them on Apple Podcasts, Spotify, and at www.bloomberg.com slash podcast slash law. And remember to tune into the Bloomberg Law Show every weeknight at 10 p.m. Wall Street time. I'm June Grosso, and you're listening to Bloomberg.

42:58June Grasso:If you follow markets, you know the value of long-term thinking. You plan, you diversify, you prepare for volatility. But even the best strategies can't prevent every bad day. For more than 75 years, Cincinnati Insurance has helped individuals and businesses navigate tough moments with expertise, personal attention, and independent agents who focus on relationships, not transactions. The Cincinnati Insurance Companies. Let them make your bad day better. Find an agent at CINFIN.com.

43:37Barbara McQuade:With Bali from iShares, you get access to both monthly income and growth potential in one simple ETF. It's the best of both worlds. Discover Bali, iShares large cap premium income active ETF. iShares, the market is yours. Visit www.iShares.com to view perspectives for investment objectives, risks, fees, expenses, and other information that you should read and consider carefully before investing. Risks include principal loss and the use of derivatives, which could increase risks and volatility. Monthly income is not guaranteed. Prepare by BlackRock Investments, LLC. Travel smarter, not harder at America's Best Value In by Sonesta.

44:07Barbara McQuade:With convenient locations from coast to coast and value-packed comfort at every turn. It's a practical choice for road trips, quick getaways, and everyday travel that keeps things simple without sacrificing comfort. And when you're a Sonesta Travel Pass member, staying at America's Best Value In means earning points toward free nights, upgrades, and more every time you stay. Go to Sonesta.com to book your stay and unlock the best rates with Sonesta Travel Pass. Here today, roam tomorrow. Join now at sinesta.com. Terms and conditions apply.