New SCOTUS Term & Thomas Disses Precedent

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1:43This is Bloomberg Law with June Grosso from Bloomberg Radio. The Honorable, the Chief Justice and the Associate Justices of the Supreme Court of the United States. Oye, Oye, Oye. The new Supreme Court term begins on Monday, and it promises to lead to several blockbuster decisions. On the docket, tariffs, voting rights, religion, transgender rights, copyright, and capital punishment. And looming over it all, several tests of President Trump's attempts to expand executive power. My guest is former United States Solicitor General Gregory Garr, a partner at Latham & Watkins. Greg, let's start with one of the biggest cases of the term where trillions of dollars in trade are at stake, as well as the extent of the president's authority.

2:40If you took away tariffs, we could end up being a third world country. Lower courts have ruled that Trump overstepped his authority in imposing the tariffs. But now it will be up to the Supreme Court to decide. It's a very important decision. And frankly, if they make the wrong decision, it would be a devastation for our country. We've taken in trillions of dollars. Craig, what are the issues here? So this case involves a challenge brought by small businesses to President Trump's tariff policy, imposing tariffs on products from companies around the world. Importantly, in this case, the president doesn't assert inherent executive power to impose the tariffs.

3:24Instead, he claims that Congress granted him the power under a 50-year-old statute called the International Emergency Economic Powers Act, or IEPA. And Section 1702 of IEPA has a long list of things that the president can do if he declares an emergency, as President Trump did here on the basis of foreign trade deficits and the fentanyl crisis as to certain countries. So when the president declares such an emergency, Congress authorized him to do a number of things, including to, quote unquote, regulate the importation of goods. So this statute doesn't mention tariffs expressly. Before this year, no president in IABA's 50-year history had ever invoked it to impose tariffs.

4:09And Congress has always explicitly imposed limitations on the exercise of tariffs when it's granted that power explicitly. But the president claims that the broad reference to regulate in this statute does authorize him to impose the tariffs. So far, he's lost that argument in each of the lower courts that has considered it. But the case is moving to the Supreme Court. And one of the signature projects of the Roberts Court has been the development of the so-called major questions doctrine, which is built on the age old principle that Congress does not hide elephants in mouse holes. So a couple of years ago, the Supreme Court in Biden versus Nebraska held that the Department of Education lacked authority to institute sweeping student loan forgiveness on the basis of a general emergency language in the HEROES Act.

5:01And before then, it held in a different case that the EPA couldn't rely on a general provision of the Clean Air Act to enforce sweeping climate change regulation. And the challengers in this case essentially argued that the same principle compels the conclusion that IEPA's general reference to regulate can't be interpreted to authorize the president to impose what would amount to one of the biggest tax increases in U.S. history, sort of the elephant of all elephants. Now, in response, the administration claims that the court has never applied the major questions doctrine to the foreign affairs context, and that in that context, the court should presume that Congress would give the president more leeway, which is actually something that Justice Kavanaugh suggested in a concurring opinion last year.

5:48Nevertheless, it seems hard to square the administration's position in this case with the application of the major question doctrine in other cases, particularly given that few presidential acts have had such a momentous economic sweep as the president's tariff program has. So this is a very big power he's asserting. And we're all waiting to see how the court reacts to this particular assertion. Of the cases the court is going to consider this term, do you think that this tariffs case presents the most significant test of Trump's attempts to expand presidential power? Well, this case is different in that, again, it really just concerns the scope of the authority that Congress granted.

6:33In other cases that I think we'll talk about, the question is the president's assertion of his own inherent constitutional authority. But this case really just boils down to a question of what Congress delegated. So, I mean, even if the administration did win this case, it would still leave to Congress the prerogative to change the law. On the other hand, the court might hold, again, following its major questions cases, that Congress simply didn't delegate this elephant to begin with. Okay, so going on to a couple of other cases that set up tests of presidential power over federal agencies that have been independent.

7:09They involve Trump firing a member of the Federal Trade Commission, Rebecca Slaughter, and a Federal Reserve Board Governor, Lisa Cook. Slightly different issues. So let's start with the FTC commissioner and the law there that says commissioners can only be removed for cause. Right. And this is one of the cases where the president is asserting his own inherent authority. And Congress has imposed a limitation on the president's removal authority with respect to heads of the Federal Trade Commission and requires the president to show cause, things like malfeasance or neglect of duty or the like, before he can actually remove the official.

7:46And in this case, the president removed the official Rebecca Slaughter, commissioner of the FTC, simply because he disagreed with her as a matter of policy. So this case tees up a challenge to a 1935 decision called Humphrey's Executor, where the court upheld Congress's imposition of a for-cause requirement on the president's removal of commissioners of the FTC. So it's basically just a redo and a chance for the Supreme Court to reconsider its Humphreys Executor precedent. The administration here is arguing, first of all, that the FTC has changed a lot since the day of Humphreys Executor. In essence, this is not your grandfather's FTC.

8:27It's got a lot more executive authority. And so whatever sort of constitutional basis the court had for its decision in Humphreys Executor, that shouldn't apply to the FTC today. The administration also argues that if the court doesn't accept that, it should just go ahead and overrule the Humphreys' executor decision, which is something a number of the more conservative justices have expressed a willingness to do in recent years. And the administration is also arguing that even if the president did do something wrong here, a court couldn't actually order the reinstatement of the official mislaughter here.

9:02The only remedy would be one for back pay, which is actually the remedy that was sought in the Humphreys executor case. So this is a major test of executive power. And really, although the case arises in the context of firing an individual, ultimately, it's about the president seeking to gain control of so-called independent agencies by being able to place his own preferred heads of those agencies in place. So the court has been chipping away at Humphrey's executor for a while. And Justice Elena Kagan said in one of her recent decisions that, you know, they're raring to get rid of Humphrey's executor.

9:38Do you think Humphrey's executor can survive this term? You know, it sure seems like they are raring to get rid of it. And, you know, I probably would put my money on the side of it not surviving. That said, I mean, it would be fairly easy for the court to say that the FTC today is much different than the FTC in Humphrey's executor time. And so to, you know, further narrow Humphrey's executor. But I do think it's the case that the justices probably have just had enough. So I think Humphrey's executor's days may be numbered. The court refused to let Slaughter return to her job as the litigation goes forward.

10:13And that sets it apart from the next case we'll talk about involving Trump's attempts to fire Federal Reserve Board Governor Lisa Cook. And this week, the court said that Trump can't fire Cook as the litigation is proceeding. Is that difference significant? Yeah, I think it is. I mean, it's the one time among all the other officials that the president has fired that the Supreme Court has declined to grant the administration's request to permit it to actually remove the official once and for all. And instead, what the Supreme Court did here was set the case for argument on the administration's emergency request in January.

10:53Cook's case is different. Cook is a member of the Board of Governors of the Federal Reserve. And here, the president isn't claiming that he had the right to fire Cook for any reason. He claims that he had cause based on allegations that she had engaged in mortgage fraud before she became a member of the Fed. So that's one way in which the case is different than the slaughter case. And then also, the Supreme Court has indicated in prior opinions that the Fed may be different and that it's what the Supreme Court called a uniquely structured and quasi-private entity with a unique history. So even if the court is poised to overrule Humphrey's executor in the case of an FTC official, it's not at all clear that the court is poised to reach anything like that result in the context of the Fed, which I think many believe is uniquely important in terms of its insulation from immediate presidential control.

11:47Let's turn to a business case where Cox Communications is trying to overturn a$1 billion verdict in a suit by the music industry. This case involves the important copyright question of whether an internet service provider can be held contributorily liable for its customers act of copyright infringement. So the internet service provider allows streaming and someone at his home improperly downloads music. The Court of Appeals held that a culpable intent to facilitate infringement could be inferred simply on the basis that the internet service provider continued to provide services after it knew that those services were being used to commit direct infringement.

12:30And what the challengers argued here, pointing to prior Supreme Court precedent in this area, is that mere knowledge of an actual infringing use is insufficient to impose secondary liability on the seller of goods or services, and that instead, what the copyright infringement law requires is a culpable intent to facilitate direct infringement. And that would be like evidence that the merchant urged another to infringe or actually set up a platform that lacked any significant non-infringing uses. Anything apart from that, the internet service provider, Cox Communication here, argues it would create a substantial disincentive for the provision of universal internet service, which could affect all of us, or at least anyone in a home or a teenager has improperly downloaded music.

13:17Yeah, Cox Communication argued that grandma will be thrown off the internet because Junior visited and illegally downloaded songs. Coming up next, more with Gregory Garr on transgender rights, religion, and voting maps. I'm June Grosso, and you're listening to Bloomberg. This message is brought to you by Apple Card. Apple Card puts the power of titanium in the palm of your hand. What does that mean? It means the power to earn unlimited daily cash back on your purchases every day. It means a materially different credit card accepted anywhere in the world. MasterCard is accepted. Ditch the plastic.

13:54Upgrade to titanium. Apply in the Wallet app on iPhone today. Subject to credit approval, Apple Card is issued by Goldman Sachs Bank USA Salt Lake City branch. Terms and more at AppleCard.com. The official language of football is trash talk. late night group chats, memes, and unbelievable highlight clips. That's why Boost Mobile brings you our new global connection plan. The first plan ever made for WhatsApp. Get unlimited data, talk and text, international roaming, and calls to over 100 countries for just$40 a month. $40 price includes$5 a month auto pay discount. After 40 gigabytes of premium high-speed data, speeds will be lowered.

14:30Coverage not available everywhere. Visit store or boostmobile.com for details. If your best finance people are doing expense reports, chasing receipts, or spending time on month-end clothes, it's time to get Brex AF, a gentic finance that eliminates that work before it starts. Learn more at brex.com slash AF. Lindsay Hecox is a transgender woman who participated in club-level running and soccer at Boise State University and believes she should be able to play sports like everyone else. I don't even think most of my teammates would even think of me as trans. I just look like a regular girl. But in 2020, Idaho passed the first of its kind law barring transgender women and girls from participating on female sports teams.

15:21A federal appellate court ruled that the ban violated the Equal Protection Clause and couldn't be enforced. But now, Hecox's case, along with that of a 15-year-old transgender girl from West Virginia, is before the Supreme Court. I've been talking to former U.S. Solicitor General Gregory Garr, a partner at Lethem & Watkins. Greg, these are two of the most closely watched cases of the term, where the court is going to decide whether states can ban transgender women and girls from competing on female athletic teams. The Ninth Circuit blocked Idaho's ban based on the Equal Protection Clause, but the Fourth Circuit blocked West Virginia's ban based on Title IX, which prohibits sex discrimination in federally funded educational programs.

16:12Tell us about the issues here. So it wouldn't be a Supreme Court term without a return to the culture wars. And this case definitely presents that. And the cases from both circuits do present the different questions of the Equal Protection Clause in Title IX and challenges to the validity of state laws that prohibit transgender girls and women from competing in girls and women's sports. These are laws that I think about half of the states have. And the main legal question in the case is whether it's sex discrimination when a state mandates that only biological females can compete in female sports.

16:47Both cases involve transgender girls who want to compete on female cross-country teams. So last year, as you remember, in U.S. v. Skirmeni, the court held that a Tennessee law banning puberty blockers and hormone therapy for transgender minors did not engage in sex-based discrimination, violating the Equal Protection Clause. And it seems likely that the court will reach a similar conclusion here. In fact, picking up on Justice Ginsburg's own writings, the government argues that the laws here simply take into account the physical differences between men and women, and that therefore they don't really engage in impermissible discrimination to begin with.

17:26Now, Now, the plaintiffs sort of counter with the Supreme Court's decision in Bostock versus Clayton County, where the court held that discrimination based on gender or sexual identity is discrimination on the basis of sex under Title VII. But the Supreme Court distinguished and I think limited Bostock in the Scrimetti case last year. And I think that challengers probably have a hard argument in pushing Bostock to the Supreme Court in this case. The supporters of these laws also argue that allowing biological males to compete in women's sports would defeat the whole purpose of Title IX. So, you know, this is, again, one of these cases that really sort of hits hard on the culture wars.

18:07And the courts, I think, will be following up on its decision last year in Scrimetti, and we'll see what it does. And it also wouldn't be a Supreme Court term without a religious rights case. a Rastafarian wants to sue prison officials in Louisiana who forcibly shaved him bald in violation of his religious beliefs. The court has considered a lot of cases involving the rights of Christians, but I don't know of any until now involving the rights of Rastafarians. Yeah, and the court's been very active in the area of religion recently and, you know, generally is sided with proponents of religious liberty.

18:43The facts of this case are really pretty extreme and outrageous. In this case, it's brought by a Rastafarian inmate who is suing a state prison official under what's called the Religious Land Use and Institutional Persons Act, or ARLUPA. And he claims that when he was transferred to a new prison, the prison official allegedly handcuffed him to a chair and actually shaved his head, even though he told the guard that he had taken a religious vow not to cut off his hair, which he had honored for over a decade, and actually handed the guard a copy of a Fifth Circuit decision holding that cutting the hair of a Rastafarian inmate would violate the inmate's religious liberties.

19:21So the inmate brought suit seeking monetary damages against the prison officials involved in this process. So under a different law, the Religious Freedom Restoration Act, the Supreme Court has held that inmates can get money damages against federal officers who violate their religious liberties. And so the basic question is whether the same rule would apply to the state officers under Arlupa, the parallel statute. And it would seem like the answer would have to be yes. But the state argues that because Arlupa was passed under Congress's spending clause power, where Congress generally attaches strings to federal funding grants, the state argues that a different rule applies because the state has never agreed to these sorts of terms to be subjected to money damages suits.

20:06And then the state also argues that if the court accepts the inmate's position, it's going to only exacerbate the shortage of people who are willing to serve as prison guards. I'm not sure that that's going to be enough here. I mean, I think that the facts of this case in particular may weigh on the court and the Trump administration here is actually supporting the inmate in this case so that the state may have an uphill battle on its hands. But we'll see. The only case I can remember recently where religious rights didn't win at the court was the case you argued in one last term on the effort to create the country's first faith-based charter school.

20:44So we'll see what this term brings. Let's turn now to congressional maps, a hot topic lately. the court is going to hear a case involving Louisiana's map that could have implications for elections in dozens of congressional districts with predominantly minority populations. And this case was already argued at the Supreme Court. Yeah. So the case was argued and briefed last term and the court couldn't reach a decision. So they set it for re-argument and consideration this term. And this case really has sort of had a long and torturous history already. So after the 2020 census, Louisiana legislature, like many states, went back and redrew its congressional maps.

21:26And the new map it drew had one majority Black district out of six districts statewide. At that point, a group of Black voters brought suit against the state, arguing that the plan impermissibly diluted the votes of Black residents in violation of Section 2 of the Voting Rights Act, because nearly a third of the state's population is Black. So the lower courts ultimately ordered the state to draw a new map, and the new map contained a second Black majority district, but this time a group of non-Black residents went to federal court and argued that the 2024 map impermissibly took race into account in the other direction, and so it was itself invalid.

22:04So the state went to the Supreme Court, said it was between a rock and a hard place, and asked the court to resolve it, and as you noted, the court wasn't able to do so last term. So it set up for re-argument again and basically upped the ante by asking the parties to brief the question of whether the state's intentional creation of a second majority minority district to comply with the Voting Rights Act actually violated the Equal Protection Clause. So now the court is faced with the question that is sort of long beleaguered the court in voting rights cases, which is how do you square the fact that you have to take race into account to comply with the protections of the Voting Rights Act with the fact that the Constitution and Equal Protection Clause generally prohibits states from taking race into account and making important decisions.

22:45So this case could definitely have a major effect on Section 2 litigation going forward. The government, for its part, argues that Section 2's results test is unconstitutional if it requires the states to draw majority-minority districts where race predominates, and that basically what a plaintiff has to show to prevail under its view of the Voting Rights Act is it must show that the new district is superior under race-neutral districting principles. So the Voting Rights Act is one area where we've seen some consequential decisions in the past few years, and this is a case that definitely should be followed closely.

23:21The court gutted part of the Voting Rights Act in a Shelby County v. Holder case in 2013, and some justices have questioned the constitutionality of race-based districts. A quote that challenges used here was one from Justice Brett Kavanaugh, the authority to conduct race-based cannot extend indefinitely into the future. Does it seem as if the court is heading in that direction to get rid of the consideration of race in map drawing? Well, the hesitation and reluctance and hostility to consideration of race in a number of areas, including affirmative action and the like, has definitely been one of the sort of emphases of this court.

24:03Interestingly, the court just a couple of years ago in a case out of Alabama by a 5-4 vote upheld a map that was challenged out of Alabama. So it would be, you know, something of a right turn for the court to go ahead and invalidate Section 2 of the Voting Rights Act on constitutional grounds more broadly. And we don't know. I think based on the fact that the court was unable to reach a decision last term in this case, it suggests that the justices are struggling. The fact that they've added this broader constitutional question doesn't mean that the justices have to resolve it on that basis. I think if there's anything we can sort of speculate at this point is that the justices are closely divided on this issue.

24:44So the court is going to hear another death penalty case. It heard a couple last term. This time it's about what defendants have to show in order to prove that they're mentally disabled and thus ineligible for the death penalty. The death penalty has actually been a pretty interesting area for this court. Last term, it had three death penalty cases, and the death row inmate won in all three of those cases. And so this term, as you said, it's revisiting the constitutional limits on the execution of intellectually disabled individuals. In a case called Atkins v. Virginia, the court held that the Eighth Amendment prohibits the execution of individuals who are intellectually disabled, which has generally been defined to mean someone having an IQ of 70 or below.

25:30And so the question in this case is, what are courts supposed to do when they're presented with multiple IQ scores, one of which falls below the line? And in this case, the inmate had multiple IQ scores of 75, 74, 72, 78, and 74 again. And so all five of these scores were above 70. But one of the scores, the 72, actually falls below the line if you accept the standard range for error, which would put a score at 69. The Court of Appeals nevertheless held that the death sentence should be set aside. The inmate argues that it was right and that you could actually just look beyond the low IQ score.

26:09And if you look sort of holistically at the evidence, including testimony about the inmate's intellectual disability, that it was unconstitutional to execute him. But the state argues that the fact that there are so many scores above 70 should be in itself decisive and that this is an area where the courts should defer to the state's judgment, at least where it's based on multiple ISQ scores above 70. So it's an interesting question. And again, I mean, this court, you know, maybe a little bit against what some might expect has actually been more receptive to the claims of death row inmates. But we'll see if last term's run of successes carries over into this term.

26:50The court's going to be accepting more cases as the term goes along. You have the shadow docket so active. But do you think that in the end, this term is going to be, you know, the headlines afterwards will be about the expansion or perhaps limitation of presidential power? No question. One of the big sort of headline questions of this term will be the exercise of executive power. I mean, we have an administration that is boldly exercising executive power across a number of fronts, and those cases are now coming to the Supreme Court. So I think that it's likely that that will be one of the headlines of this term, whether the headline is that the president has succeeded in expanding executive power or that the Supreme Court has pushed back against assertions of executive power, we don't know.