Weekend Law: Tariffs, Comey's Defense, Michael Jordan & NASCAR

0:00When you own your own business, you own every decision. Now own the card that rewards you for it. Chase Sapphire Reserve for Business is a pay-in-full card that elevates your travel experience and offers premium benefits that will take your business to the next level. Sapphire Reserve for Business offers 8x points on all purchases through Chase Travel, 3x points on social media and search engine advertising, airport lounge access, and more. Chase Sapphire Reserve for Business. It's the card that gives back all you put in. Learn more at chase.com forward slash reserve business. Chase for Business.

0:34Make more of what's yours. Accounts subject to credit approval. Restrictions and limitations apply. Cards are issued by JPMorgan Chase Bank NA, member FDIC. So there's a lot of noise about AI, but time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now, a global workforce of 300 ,000 can use AI to fill their HR questions, resolving 94 % of common questions. Not noise. Proof of how we can help companies get smarter by putting AI where it actually pays off, deep in the work that moves the business.

1:10Let's create smarter business. IBM. As a restaurant genius, I know the experience starts long before the food hits the table. Genius by Global Payments makes it easy Digital menus and price updates in real time No reprints, no surprises The kitchen and floor stay perfectly in sync So every dish arrives exactly as it should From game day crowds to memorable meals Big League reliability for any business That's genius

1:45June Grasso:This is Bloomberg Law with June Grosso from Bloomberg Radio. Why do you think Presidents Clinton, Bush, Obama have not used IEPA to impose tariffs? It's one of the most important cases of the term, a test of presidential power, where President Trump's signature economic policy is at stake, and a decision against him could mean refunding of more than$100 billion. And after nearly three hours of oral arguments on Wednesday, it appears that Supreme Court justices across the ideological spectrum are skeptical that Trump has the legal authority to impose billions of dollars in tariffs. Chief Justice John Roberts and Justice Sonia Sotomayor said the tariffs are taxes and the Constitution gives taxing power to Congress.

2:45It's a congressional power, not a presidential power to tax. And you want to say tariffs are not taxes, but that's exactly what they are. They're generating money from American citizens, revenue. The vehicle is imposition of taxes on Americans, and that has always been the core power of Congress. Trump is arguing that the International Emergency Economic Powers Act, or IEPA, gives him virtually unlimited powers to impose tariffs by executive order. But as several justices pointed out, the word tariffs is nowhere to be found in that law. Here are the Chief Justice and Justice Ketanji Brown-Jackson.

3:26June Grasso:Well, but the exercise of the power is to impose tariffs, right? And the statute doesn't use the word tariffs. Your argument suggests that we should see the word imposed, the phrase imposed tariffs. in that same series of things that the president could do. We don't see that word, and instead you take regulate and say that must mean that. No other president has tried to impose tariffs under IEPA, and Justice Neil Gorsuch, a Trump appointee, expressed alarm at the idea that Congress could delegate such seemingly unlimited power to the president. Congress is a practical matter. can't get this power back once it's handed it over to the president.

4:10It's a one-way ratchet toward the gradual but continual accretion of power in the executive branch and away from

4:18June Grasso:the people's elected representative. All three lower courts that ruled on the issue found the tariffs to be unlawful. My guest is Timothy Brightbill, partner and co-chair of the International Trade Practice at Wiley-Rhine. Tim, tell us what's at stake in this case. This case involves the centerpiece of President Trump's economic agenda. It's the biggest trade case the Supreme Court has ever heard. And it goes straight to the key constitutional issue of who has the power to impose tariffs, the U.S. Congress or the president. President Trump says the law that he used, the International Emergency Economic Powers Act, gives him the power to regulate imports and that that includes the power to impose tariffs, including fentanyl tariffs on China, Canada, and Mexico, and reciprocal economic tariffs on almost all countries.

5:15Whereas the plaintiffs in this case say that Congress has that power and cannot delegate that power, and that IEPA, which has never before been used to impose tariffs, does not include that power and its work. So that is what is at stake. And of course, the tariffs under AIPA have led to collection of hundreds of billions of dollars of tariffs already. So it's very high economic stakes for the companies and industries that have paid those tariffs as well. There's always a textual analysis these days, and many of the justices were concerned that the text of the statute doesn't mention the word tariffs at all.

5:55Exactly. The argument focused quite heavily on this law used by President Trump, IEPA, and whether that law, which gives the president the power to regulate imports, also includes the power to impose tariffs. That really dominated most of the hearing, and the justices asked very difficult questions on both sides. The administration said that the ability to impose tariffs is a core application of the ability to regulate imports. In a historical context, said that, of course, the power to regulate imports would be read to include tariffs, because tariffs have been used throughout our country's history.

6:35On the other hand, several justices were skeptical of that. And the plaintiffs in this case said that when the delegation includes tariff authority, there is always specific language to that effect and that there are always conditions and tests and agency decisions that have to go into that tariff power. So there was a good amount of the argument focused on those issues. And again, whether power to regulate imports includes the power to impose tariffs. And what did you think about the Solicitor General's argument that the Trading with the Enemy Act of 1917 gives the president authority to impose these tariffs?

7:16The Solicitor General argued, yes, that the Trading with the Enemy Act was used to impose tariffs in a prior situation by President Nixon, and that there's no reason to think that anything had changed when IEPA had passed. On the other hand, the plaintiffs had a response to that in terms of the fact, again, that when tariffs are involved, there are always conditions on their use. There are always specific procedures. And also the fact that the reality is that no other president in 50 years has used PAIPA to impose tariffs. The major questions doctrine came up several times during the arguments.

7:57It basically says that when the executive branch takes an action with major political or economic significance, Congress has to have expressly authorized it. And the chief justice made it fairly clear that he thought the major questions doctrine applies here. Yes. So the question here is, does the major questions doctrine require a clear statement in AIPA that it includes the power to impose tariffs? And this court has not hesitated to start using that doctrine more broadly. But I think you're right that the justices had some concerns about pursuing it in this venue. And again, the question comes to, is the power to tariff implied in the power to regulate imports?

8:49Or if it's not, was this a question that Congress was required to state clearly that tariffs were a part of what was envisioned by the new law? The conservatives use the major questions doctrine to block several of President Biden's initiatives, like his student loan forgiveness program. If they allow Trump to impose these tariffs, do you think they'll have to explain why the major questions doctrine applied to Biden but not Trump? I think it's an interesting question whether they'll go there or whether they will just focus on the language of IEPA and this issue of whether the power to regulate imports includes the power to tariff.

9:32And I think several justices went down that road. I don't think just because these doctrines have been used in other cases, such as the Biden student loan forgiveness case, doesn't necessarily mean that they will have to address it in this opinion, if they have other bases for finding that the tariffs were legal or improper in any way. And Justice Gorsuch in particular expressed alarm about the seeming lack of limitations on the powers the president was claiming here. Justice Gorsuch asked the hypothetical of if Congress can delegate the tariff authority, what would prohibit Congress from delegating everything, including the power to declare war, which is clearly given in the Constitution to Congress.

10:19And so that was a very interesting discussion, certainly raising some concerns about the limits, if any, on the authority that the government was claiming. So where do you think the justices are going to come out here? Well, I'm not in the business of making predictions generally. My own personal view is that the court's three Democratic justices probably vote against these tariffs. And then the question is whether some of the majority of the court have similar concerns about the president's use of this law. And I do think that it's still a very close decision. It could go either way. I thought Chief Justice Roberts and Justice Barrett and Justice Gorsuch were perhaps more skeptical of the president's tariff authority under IEPA than the other justices.

11:06I guess the only other point I would make is, although it was discussed in the oral argument, I have a hard time seeing this court making a split decision that some of President Trump's tariffs are acceptable, but others are not. So if the court does rule against Trump, what happens next as far as his tariffs are concerned? Well, two things would happen. First of all, there would likely be some sort of a refund process for importers that paid the tariffs during this time. And there is some precedent for that before that was discussed during the oral argument, a situation where the court struck down a harbor maintenance tax.

11:43And there was basically a process where companies could file claims for the amount of the tax that they paid. So Justice Barrett was concerned that this could be a mess and could be very unwieldy. I guess the more important point is what will the president do going forward? And I think it's clear that tariffs are still a cornerstone of this administration's economic policy. And if the court says that the president cannot use IEPA, the president will likely pivot to one of several other trade tools that are available. And the court mentioned many of these, including Section 122, Section 232, the national security law, which the administration has already made quite a bit of use of in this administration, Section 301 and so forth.

12:30The limit on those laws is that they do require studies or actions by other agencies. So Section 232 requires a study and a report by the Commerce Department and consultation with the Defense Department in order to decide that imports of a certain product, like semiconductors or pharmaceuticals, are a threat to national security. Similarly, Section 301, which was the law used to impose tariffs on China during the first Trump administration, also requires a detailed study by the U.S. trade representative with public input. So those tools, for the most part, cannot be used as quickly as IEPA was used by President Trump.

13:15This case was fast-tracked by the court, so a ruling could come as quickly as the end of the year. Thanks so much for joining me, Tim. That's Timothy Brightbill of Wiley Ryan. Coming up next on the Bloomberg Law Show, prosecutors get a scolding from the judge in the case against former FBI director James Comey. I'm June Grosso, and you're listening to Bloomberg. The thing about AI for business, it may not automatically fit the way your business works. At IBM, we've seen this firsthand. But by embedding AI across HR, IT, and procurement processes, we've reduced costs by millions, slash repetitive tasks, and freed thousands of hours for strategic work.

13:59Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business, IBM. Support for this show comes from public.com. If you're actively involved in your portfolio, you probably catch yourself repeating the same actions. Buying the dip, manually sweeping idle cash, putting on a hedge. On public, you can now create AI agents that handle all these tasks on your behalf. Just describe what you want to do in plain English. Like, if the VIX hits 25, buy a put option on the S &P 500. Or, if my cash balance goes above$20 ,000, move the excess into my direct index.

14:38You approve the workflow and your agent handles the rest. Monitoring the market, watching for your conditions and executing your strategies exactly as defined. An investing platform driven by your intent, not just your clicks. You can also get full read and write access to your account via the public API. Go to public.com slash market and fund your account in five minutes or less. That's public.com slash market. Paid for by Public Investing. Brokered services by Open to the Public Investing, Inc., member FINRA and SIPC. Advisory services by Public Advisors, LLC, SEC Registered Advisor. Complete disclosures available at public.com slash disclosures.

15:18When you own your own business, you own every decision. Now own the card that rewards you for it. The Chase Sapphire Reserve for Business card brings the best Sapphire Reserve benefits to business owners who expect hardworking rewards. Designed to meet the needs of business owners at scale, this pay-in-full card elevates your travel experience and offers premium benefits and value toward business services that will take your business to the next level. Fuel your business and maximize rewards with 8x points on all purchases through Chase Travel, 3x points on social media and search engine advertising, annual partnership credits, and more.

15:53Make every journey more rewarding with a$300 annual travel credit and access to a network of airport lounges, whether you're looking for pre-flight productivity or time to rest and recharge. Chase Sapphire Reserve for Business. It's the card that gives back all you put in. Learn more at chase.com forward slash reserve business. Chase for Business. Make more of what's yours. Accounts subject to credit approval. Restrictions and limitations apply. Cards are issued by JPMorgan Chase Bank N.A., member FDIC.

16:23June Grasso:My heart is broken for the Department of Justice, but I have great confidence in the federal judicial system, and I'm innocent. So let's have a trial. But will the criminal case against former FBI Director James Comey even get to trial? Comey has pleaded not guilty to the charges of lying to Congress in 2020. And his defense has filed several motions to get the case dismissed before trial. They include a motion to dismiss because the government is engaged in a vindictive and selective prosecution, a motion to dismiss because the interim U.S. attorney was appointed illegally, and a motion to dismiss because Comey's testimony was literally true.

17:10And on Wednesday, a clearly exasperated judge scolded the prosecutors for the Justice Department's indict first and investigate second approach to the case. Magistrate Judge William Fitzpatrick then ordered the prosecutors to turn over to the defense a raft of potential evidence, including full transcripts of the grand jury proceedings. My guest is former federal prosecutor Robert Mintz, a partner at McCarter & English. Bob, how unusual is it for a judge to make these kinds of remarks that the Justice Department here indicted first and investigated second, and that the prosecutors may have mishandled some evidence.

17:55Well, it's very unusual for the judge to comment on the prosecutor's conduct and to comment on the evidence of the case this early in the process. And it suggests that the court, at least this judge, the magistrate judge who was handling this argument, has some serious questions about the procedures used by prosecutors and whether or not they had really put together the evidence necessary to pursue this case. And the warning that he gave prosecutors with regard to mishandling evidence turns on this whole question of evidence seized from search warrants way back in 2019 and 2020 in an unrelated investigation.

18:35And there's going to be an inquiry now into whether or not the information that prosecutors seized many years ago is being properly utilized in this prosecution. And that evidence was seized from Comey's friend and former attorney, Daniel Richman, as part of an internal investigation of leaks in the Russia case during the first Trump administration. Let's talk about the judge ordering the full grand jury transcripts to be handed over. That could be a treasure trove for the defense, which claims that there were severe and pervasive irregularities in the presentation to the grand jury by the newly installed interim U.S.

19:17attorney, Lindsey Halligan, who had no experience as a prosecutor. It's not unusual for transcripts of witnesses who might appear before the grand jury to be turned over to the defense. In fact, it's required. Prosecutors generally prefer not to have witnesses who are favorable to the government testify in the grand jury because then those statements and that testimony has to be turned over to the defense and it provides defense lawyers fodder for cross -examination if the witness testifies at trial in any way differently or inconsistently with the testimony they gave before the grand jury. But what's going to be interesting here for the defense team is not so much what was said from the witness, who in this case was an FBI agent who is simply summarizing the case, but the questions that were posed by the prosecutor, in this case, the interim U.S.

20:11attorney, Lindsay Halligan, how she presented the case to the grand jurors, how she presented the law to the grand jurors, how she may have answered any questions that grand jurors raised. because what happens during the grand jury process is that there's a grand jury foreman and the grand jury foreman has a conversation often when the prosecutor is outside of the grand jury room and then the foreman will ask questions on behalf of all the grand jurors. That happens fairly frequently and in this case we know that the grand jurors decided not to return an indictment on one of the three counts. So there's no question that there was some significant conversation and debate going on among the grand jurors and probably a number of questions that were posed to the prosecutor.

20:56The defense team is going to be very interested in seeing how Lindsey Halligan answered those questions. And they're going to be looking to see whether there's anything she did that they will argue was improper in front of that grand jury that could possibly taint the entire indictment. And if they can ultimately convince the judge that the irregularities are serious enough so that it taints the entire grand jury process and that indictment is thrown out, they may well have won their case because the statute of limitations, I'm sure they will argue, has now expired. Apparently, the government is concerned about turning over the grand jury transcripts because they agreed to turn over the evidence seized from Richmond, but they're appealing the magistrate judge's order to turn over the grand jury transcripts.

21:43Well, that's not surprising that they are appealing that because, again, it's so unusual for defense lawyers to get the actual presentation. And it's quite possible that there were some statements that were made that could be problematic for prosecutors. So they have now appealed the magistrate judge's decision that's requiring them to turn over the grand jury material to the district court judge. And they're basically arguing that the magistrate judge exceeded his authority in ordering the grand jury transcripts to be turned over. They're arguing that the defense team had already filed a motion to seek to get access to the grand jury presentation and that that was pending before the district court judge.

22:26and that the magistrate judge was at that point only appointed to deal with the question of potential privileged materials. And in requiring that the grand jury material be turned over, he went beyond the scope of the authority that was delegated to him by the district court judge. Bob, in terms of the motion to dismiss the indictment, because Lindsey Halligan was illegally serving when she brought the charges against Comey, U.S. Attorney General Pam Bondi filed a court document on Monday saying that she had retroactively given Halligan the additional title of special attorney. I mean, I too would like to go back in time and correct some of my mistakes.

23:11But will a court allow her to go back to September and basically say, oh, I meant to give her this title too? I think the argument by the attorney general that she can retroactively give Eastern Virginia's top prosecutor an extra title in order to try to defend against the claims that Halligan was improperly appointed is probably not going to gain a lot of traction with the courts. Typically, the courts will look at the facts at the time and whether or not the appointment was proper under the rules, under the regulations, under the statutes at the time of the appointment. And I think it's an uphill battle to argue that even if there was a deficiency, then that can be remedied retroactively by an appointment.

23:53In one of the motions to dismiss, the defense claims the indictment is hopelessly vague and defective on its face, that Senator Ted Cruz's questions to Comey were fundamentally ambiguous, and that Comey's response was literally true. Let's listen to the exchange between Cruz and Comey. What Mr. McCabe is saying and what you testify to this committee cannot both be true. One or the other is false. Who's telling the truth?

24:24June Grasso:I can only speak to my testimony. I stand by what the testimony you summarized that I gave in May of 2017. So the defense wants the prosecution to tell them which of Comey's statements are you claiming were false. Yeah, and that's exactly why false statement prosecutions are extremely difficult, because you have to parse through exactly what was the question and what was the answer and demonstrate that at the time the answer was given, it was not only false, but it was intentionally false and that it was false about something that was material. So in this case, the prosecution is based on a hearing before the Senate Judiciary Committee on September 30th, 2020.

25:07And at that hearing, Senator Ted Cruz asked Mr. Comey whether he had authorized someone at the FBI to be an anonymous source in news reports. The indictment says Mr. Comey misled the committee by saying that he had not done so. Now, Comey's lawyers have attacked that indictment by saying that the questioning by Mr. Cruz was vague and imprecise. And they point out that at the time that Senator Cruz was questioning Mr. Comey about whether he had authorized anybody to leak information, that Senator Cruz was referring to Andrew McCabe, who once served as Mr. Comey's deputy at the FBI and was not referring to Daniel Richman, who had been a former FBI employee and later became the attorney for James Comey.

25:49So they're arguing that the indictment is defective on its face because in order to prove that Mr. Comey lied, you have to show that there was a clear question and that he gave a clearly false, a knowingly false answer to it and that he had an intention to mislead the committee and that the information he provided that was false was material and that this somehow obstructed the relevant congressional proceeding. They say that that information is not contained in the indictment And one of their motions is a requirement that the government provide that information. So what you have here basically is an argument that the indictment is defective on its face.

26:27So in other words, it's not an argument that the government has its facts wrong because a factual dispute is something that has to be resolved by a jury at trial. They are arguing that this is a decision that really needs to be made by the judge because on its face, the government is unable to prove the charges. The allegations in the indictment simply are not enough to sustain a valid conviction. And that's why they're filing this whole slew of arguments to try to get this case dismissed before it ever goes to trial. And prosecutors would not be able to bring the charges again because the statute of limitations has run out.

27:05And supposedly that's why the indictment was rushed through. Comey's indictment came just five days after President Trump had demanded on Truth Social that Attorney General Pam Bondi bring charges against Comey, New York Attorney General Letitia James and Senator Adam Schiff. So legal experts were talking about a selective and vindictive prosecution motion even before the defense made that motion in the case. Comey's motion papers include a 60-page long list of links that detail Trump's negative comments about him over the years. How strong is their vindictive prosecution motion? I know it's very hard to get a case dismissed on those grounds.