In short
Bloomberg Law Podcast Notes
Episode Summary Title: Weekend Law: Vampire Gun Rule & Trump Headed for SCOTUS Loss Host: June Grasso Guests: Adam Winkler (UCLA Law School), David Super (Georgetown Law)
This episode discusses two significant legal issues currently facing the Supreme Court of the United States (SCOTUS):
- The "vampire rule" in Hawaii regarding gun laws.
- President Trump's attempt to fire Federal Reserve Governor Lisa Cook.
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Key Discussions
- Vampire Gun Rule in Hawaii
- Definition: Hawaii's law restricts carrying guns onto private property open to the public (e.g., stores, hotels) without property owner consent.
- Name Origin: Dubbed the "vampire rule" because it mirrors the myth that vampires cannot enter private property without permission.
Oral Arguments Overview
- Justices' Skepticism: Conservative justices expressed doubts about the law's constitutionality:
- Chief Justice Roberts questioned why the Second Amendment was treated as a lesser right compared to the First Amendment.
- Justice Alito asked why property owners needed such a law, suggesting they could simply post signage to prohibit guns.
Second Amendment Context
- Historical Evidence:
- The law's challengers argue there is no historical precedent for requiring affirmative consent to carry firearms on private property.
- Hawaii cited historical laws (1833 and 1865), but justices questioned their relevance.
Main Arguments
- General skepticism regarding the necessity of the law.
- The potential for the law to nullify the right to bear arms, making it impractical for gun owners.
Implications of Ruling
- If the court rules against Hawaii, similar laws in California, Maryland, New York, and New Jersey may also be struck down, thus expanding gun rights further.
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- Trump’s Attempt to Fire Fed Governor Lisa Cook
- Background: The Supreme Court is hearing arguments regarding President Trump’s attempt to remove Cook based on allegations of mortgage fraud before her appointment.
Key Points from Oral Arguments
- Independence of the Federal Reserve: Justices expressed concern about the implications of allowing the President to fire a Fed governor without a proper process, which could undermine the Fed's independence.
- Justices Kavanaugh and Barrett questioned the potential erosion of the Federal Reserve's authority.
- Legal Standards:
- The Federal Reserve Act mandates "for cause" removal, meaning Cook could only be fired if she failed to perform her duties or committed wrongdoing.
- Cook's defense revolves around the assertion that even if the allegations were accurate, they do not meet the threshold for dismissal.
Judicial Skepticism
- Concerns Raised:
- Justices challenged the idea that the President could fire Cook without notice or a hearing, highlighting the need for procedural fairness.
- The Solicitor General's argument that social media posts constituted formal notice was met with skepticism.
Potential Outcomes
- Justices may prevent Trump from firing Cook, emphasizing the importance of the Fed's independence.
- A ruling against Trump could have implications on presidential power over independent agencies.
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Key Takeaways
- The episode highlights two critical cases that may redefine the scope of Second Amendment rights and executive power over independent regulatory agencies.
- The discussions reflect a broader concern about the implications of these rulings on the balance of power in the federal government.
- A ruling in favor of gun rights could lead to a significant shift in firearm regulation across several states, while a decision against Trump could reaffirm the independence of the Federal Reserve amidst ongoing political pressures.
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Conclusion This episode of Bloomberg Law provides insightful analysis on the ongoing legal battles surrounding gun regulation and executive authority. The discussions led by legal experts underline the significance of historical context in constitutional law and the potential repercussions of the Supreme Court's decisions on American governance and civil rights.
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Chapters
Tap a time to open that second in VOHawaii's Vampire Gun Rule Explained
1:49 to 4:19
An overview of Hawaii's law regarding guns on private property and its implications.
“like stores, hotels, and gas stations, without the consent of the property owner, is known as the vampire rule.”
Historical Context of Gun Regulation
4:19 to 8:59
Discussion on the historical basis for gun laws and their challenges in court.
“So why does the government say that violates the Second Amendment?”
Implications of the Supreme Court's Views
8:59 to 13:20
Examination of the conservative justices' perspectives on gun rights and property laws.
“Truth be told, that if we really seriously applied this Bruin test, then a whole raft of gun laws that are widely accepted would not be constitutionally permissible.”
Gun Rights and Legal Precedents
14:01 to 15:35
Explore the Supreme Court's stance on gun rights and the complexities of historical analogies.
“Do you understand where the line is for the conservative justices?”
Trump and Federal Reserve Governance
17:54 to 24:19
Discuss the implications of Trump's attempt to remove Federal Reserve Governor Cook.
“The president, by your own admission, cannot fire someone for disagreeing with his policy choices.”
The Debate on Presidential Power
24:20 to 28:00
Analyze the arguments surrounding presidential authority in firing Federal Reserve officials.
“You can look at Russia, you can look at Turkey, you can look at other countries that do not have independent central banks, and they have enormous economic trouble as a result.”
Supreme Court Deliberations on Trump's Authority
28:00 to 29:32
Explore the Supreme Court's concerns over Trump's attempts to fire a Federal Reserve governor and its implications for presidential power.
“Federal Reserve from the Federal Trade Commission and all those others?”
Implications of President Trump's Actions
31:41 to 36:26
Discuss the potential consequences of Trump's actions on Federal Reserve independence and economic impact.
“Let's talk about the real world downstream effects of this.”
Court Dynamics and Legal Strategies
36:26 to 42:00
Analyze the dynamics of the Supreme Court's deliberations and the legal strategies being considered in the case against Trump.
“I mean, if one believes, as I do, that President Trump's time horizon here is very short, and he wants what he thinks is good for him right now and doesn't care about the long-term impacts, then that's of no concern.”
Analyzing Trump's Legal Challenges
42:00 to 43:32
A deep dive into the implications of recent court cases involving Trump and presidential power.
“So all they have to do is decide whether he did.”
Show all 11 chapters
Conclusion of the Discussion
43:32 to 43:45
Wrapping up insights from Professor David Super regarding ongoing legal matters.
“It's shaping up to be a more controversial term than I initially thought it would be.”
Transcript
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2:02And it looks like the Supreme Court's conservative justices are about to drive a stake into it. At oral arguments on Tuesday, the conservatives were roundly skeptical of the law. Chief Justice John Roberts wanted to know why the Second Amendment was being relegated to second-class status. It is a very clear constitutional right under the First Amendment. If I, for example, as a candidate for office, want to walk up to your door on private property and knock on the door and say, here, give me your vote, that's exercising the First Amendment right. But you say that it's different when it comes to the Second Amendment.
2:40And Justice Samuel Alito wanted to know why Hawaii even needed the law. So what then is the big deal about this statute? Why does it matter if store owners and owners of private property that are generally open to the public don't like guns? Why is it a big deal to say they want people carrying guns to stay out? Just put up a sign. My guest is a Second Amendment expert, Adam Winkler, a professor at UCLA Law School. Adam, explain the Hawaii law for us and why it's called the Vampire Rule. It's called the vampire rule because the traditional legend of the vampire is that they can't go onto private property without the owner's consent.
3:23And that's a real limit to vampires' ability to attack people and suck their blood if they can't break in or whatnot. So this case is Wolford versus Lopez. And the question in the case is whether the Second Amendment is infringed by a Hawaii law that requires gun carriers to obtain affirmative permission before bringing their guns onto private property that is otherwise open to the public. And so that's why it's kind of thought as the vampire rule. Do you, like a vampire, have to get affirmative permission? Now, of course, private property owners can prohibit guns from their property. The issue here is the default rule.
3:59Most states say that you can bring your guns unless the property owner affirmatively says no, you can't, typically by posting a sign that says no guns allowed. Hawaii and several other states have adopted a different rule. Property owners must affirmatively consent in advance to people bringing guns on their property. So why does the government say that violates the Second Amendment? Well, it goes back to this history and tradition test that was established by the Bruin case a few years ago. And in that case, the Supreme Court said that for a gun law to be constitutionally permissible, it has to be consistent with the tradition of gun regulation in the 17 and 1800s.
4:41And the gun challengers here are saying, one, that there isn't a history and tradition of a default rule requiring affirmative consent in advance for people to bring guns onto private property that's open to the public. And two, that the consequences of Hawaii's law are devastating for gun carrying. The Supreme Court has said you have a right to carry guns in public. And if the default rule established by Hawaii and several other states like California stands, then gun owners really won't be able to carry their guns around because they couldn't even stop at a gas station without affirmatively first getting consent.
5:19So it would effectively nullify the right to bear arms. So as far as the history and tradition test, Hawaii did present historical evidence to support the gun law, including an 1833 law in place during the reign of King Kamehameha and an 1865 Louisiana law. But it didn't seem that was enough for the conservative justices. Brett Kavanaugh said there's no sufficient history. Case closed. Well, the real challenge of applying Bruins history and tradition test is in part that there's often not much of a tradition of anything when it comes to regulating guns besides sort of racist gun laws and, you know, a couple laws here and there.
6:02And so it's hard to find consistency or predictability. The Ninth Circuit here said that there was a national tradition of prohibiting the carrying of firearms on private property without consent. Yet several justices in the oral argument suggested there was no such history. And the challenge of Bruin with regards to, say, default rules for private property that's open to the public is that there really weren't default rules in either direction in the 17 and 1800s. And so once again, we're trying to figure out the constitutionality of modern laws by reference to analogies to a tradition that didn't exist in either direction in many of these cases.
6:43Justice Samuel Alito told Hawaii's attorney, Neil Katyal, you're relegating the Second Amendment to second class status. And the chief justice compared it to the First Amendment, allowing a political candidate to walk up to someone's door to campaign. Quote, you say it's different for the Second Amendment. What exactly is the distinction? Isn't the distinction obvious that in one you're carrying a weapon that can hurt people and the other you're carrying pamphlets? Well, it would seem that that would be a pretty viable distinction. It might not lead to the outcome that the challengers hope for or even might not necessarily lead to the outcome that Hawaii is hoping for.
7:22But it just highlights what's happened, a continuing rhetoric that we see among the conservative justices, which is that the Second Amendment, they feel, is being treated like a second-class right because courts are upholding gun laws. And in upholding gun laws, they are not treating the Second Amendment with the amount of respect that they want. What was surprising about this oral argument was not that some of the justices said that the Second Amendment is being treated like a second-class right. We've seen that argument made time and again by Clarence Thomas, by Neil Gorsuch, by Sam Alito. What was surprising in this case was that the chief justice voiced that concern.
8:02He suggested that the Second Amendment was being unfairly treated like a disfavored right distinct from the First Amendment. And that's surprising because the chief justice, we've sort of all thought to be somewhat reluctant to expanding Second Amendment protections beyond Bruin and Heller. And this suggested that maybe he did agree with the more conservative colleagues that the Second Amendment needs more protection, that the courts need to be striking down more gun laws right now. You're an expert on the Second Amendment. Do you think it's a disfavored amendment or it's being relegated to second class status?
8:37I personally don't, but I do recognize that the courts are really struggling right now to try to figure out what the Second Amendment means, where it applies, and what is constitutionally permissible. And I think it really comes back a little bit, at least to this history and tradition test established by Bruin. It has really left the lower courts in chaos. The Supreme Court said the reason why we need this history and tradition test is going to limit judicial activism, prevent judges from imposing their values on the Constitution, and provide more predictability. But instead, what we've seen is tremendous inconsistency in the lower courts, tremendous disagreement over the scope of gun laws, and in part because the history and tradition of gun regulation, there is a history and tradition, but it's very different kinds of gun laws than we have today.
9:24Truth be told, that if we really seriously applied this Bruin test, then a whole raft of gun laws that are widely accepted would not be constitutionally permissible. We didn't have background checks back in the 17 and 1800s or anything like it. We didn't have bans on felons possessing firearms or anything really like it. And we didn't have bans on the mentally ill possessing firearms back in the 17 and 1800s. These are all modern 20th century inventions. And yet the court says we have to find analogies back in the 17 and 1800s. It's proven very difficult for the courts. One difficult issue that's arisen in these cases is how to think about the history of racist gun laws in America.
10:07One thing there's been a lot of in the 17 and 1800s was gun laws that prohibited people who were African American, for instance, from possessing firearms. In these racist gun laws, the courts have kind of struggled with how to figure out how to apply them. And that came up in this case. You know, obviously, you can't look at those gun laws and say, well, there's a principle that we can discriminate on the basis of race in our gun laws today. No one would accept that conclusion. But do those laws nonetheless reflect a measure of governmental authority to regulate guns? And if they do, then it would seem that that's part of the history and tradition of gun laws and something that speaks to the extent of government authority to regulate guns.
10:50In this case, Hawaii relied on an 1865 law from Louisiana that restricted gun carrying on premises and plantations without the owner's consent. Neil Gorsuch said that that was an outlier and part of the Black Codes, and so it should be completely ignored. Ketanji Brown Jackson said no, said that if we ignore those laws, then we aren't really looking at the full history and tradition of gun regulation as Bruin requires. And so this has become a recurring problem in these cases, and it'll be interesting to see what the court here says that might sort that out. Liberal Justices Sonia Sotomayor and Ketanji Brown Jackson seemed open to the argument that the law is better understood as a matter of property rights and trespassing rather than as a gun regulation.
11:37But Justice Gorsuch rejected that outright. So what about property rights here? Well, it is a difficult issue, right? Because we do recognize that private property owners can prohibit people from coming onto their property. And even a property that's open to the public, generally, you can prevent someone from coming on your property if you don't want to do business with them. Obviously, with the exception of things that are prohibited by the Civil Rights Act or whatnot, you can't prohibit on the basis of race or sex or national origin. But generally, you could prohibit someone from coming onto your property if you didn't like the fact that they weren't wearing shoes or they weren't wearing a shirt.
12:13And what's at issue here is whether they could prohibit you from coming on if you'd have a gun. Now, obviously, there's a difference between not having a shirt and having a gun in that there is a constitutional right to have and to carry a firearm. But generally, we think that your constitutional rights do not extend onto someone else's private property. And so this case poses a real challenge to the court how to think about private property rights in the context of an amendment that does say that you can carry firearms in public. Would you say it's pretty clear that the conservatives intend to strike the Hawaii law down?
12:45It did seem like all six of the conservative justices voiced significant skepticism about Hawaii's law and are likely to vote to strike Hawaii's law down. There was some skepticism, however, by Amy Comey Barrett about whether this law was constitutionally invalid. She asked whether states could require consent before gun owners carry on to private property that isn't open to the public. And the lawyer for the challengers in this case said that states could not require such consent. And Justice Barrett voiced skepticism about that, saying, wait, so you're suggesting that states could not prevent people from bringing guns into my private home or the home of Neil Gorsuch?
13:30But nonetheless, she generally seems skeptical of Hawaii's law. And I would expect Hawaii's law to be struck down, at least based on the tenor of the oral argument. There are similar measures in four other states. California, Maryland, New York and New Jersey. If the court strikes down the Hawaii law, will those fall as well? It seems likely that's the case. You know, it's possible you might see a more narrow ruling that only looks at some of the particularities of Hawaii's law, but I don't think that's likely. Finally, the court has expanded gun rights since Bruin, but there have been cases here and there where they allowed restrictions like the ghost gun restrictions and the restrictions on people with domestic violence restraining orders against them.
14:15Do you understand where the line is for the conservative justices? Well, I think this is really a difficult issue. What the Supreme Court said in the Rahimi case, where they upheld the ban on domestic abusers subject to a restraining order from possessing firearms, is that there was a history and tradition of banning gun possession by dangerous people. Now, that seems like that would lead to believe that, you know, felons can be banned from having firearms. There's a case the Supreme Court set to hear later this term on whether unlawful users of controlled substances can be prohibited from possessing firearms.
14:48Presumably the reason there is because they're dangerous and one would think that the Rahimi case would lead to the substance abuser ban being upheld. But the difficulty even there is that Rahimi drew on analogies to some laws in the 1800s that actually didn't prohibit dangerous people from possessing firearms. They prohibited some people from carrying guns in some circumstances, but none of those laws that the court cited to prohibited someone from having a gun in their home and using it for self-defense, which is exactly what the substance abuser ban does and what the ban on felons in possession does.
15:23And so it seems like, again, it's going to be about the dueling analogies to a historical tradition that is ambiguous and frankly, just not that helpful in deciding the constitutionality of modern gun laws. It's been great having you on again, Adam. Thanks so much. That's Professor Adam Winkler of UCLA Law School. And now a note, Michael Bloomberg, the founder and majority owner of Bloomberg LP, the parent company of Bloomberg Radio, is a donor to groups that support gun control, including Everytown for Gun Safety. The thing about AI for business, it may not automatically fit the way your business works.
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17:54David Super:The president, by your own admission, cannot fire someone for disagreeing with his policy choices. You've conceded that, correct? Correct. All right. So it's not as if keeping her is going to tort any right he has to run the department, because he has none. He's conceded that. On policy, he does not. In the 112-year history of the Federal Reserve, no president has ever tried to fire a governor from the board, and the Supreme Court indicated they're unlikely to permit President Trump to be the first to do so. On Wednesday, Supreme Court justices across the ideological spectrum expressed concerns about the implications of Trump removing Federal Reserve Governor Lisa Cook over unproven mortgage fraud allegations, concerns that it would upend the Fed's independence and rattle the markets.
18:54Justices Brett Kavanaugh and Amy Coney Barrett, both Trump appointees, posed skeptical questions to the U.S. Solicitor General, who argues on behalf of the federal government.
19:05David Super:Your position that there's no judicial review, no process required, no remedy available, very low bar for cause that the president alone determines, I mean, that would weaken, if not shatter, the independence of the Federal Reserve. Justice Sotomayor brought up the public interest here. and we have amicus briefs from economists who tell us that if Governor Cook is, if we grant you your stay, that it could trigger a recession. Both Cook and Federal Reserve Chairman Jerome Powell sat through nearly two hours of arguments in the packed courtroom. Cook has denied any wrongdoing and the threshold for an emergency intervention by the court is high and includes a showing of irreparable harm to the president, something several jaunstices, including Ketanji Brown-Jackson, said there was no evidence of.
20:02So the question is, to what extent do we believe that the president or the public is harmed by allowing Ms. Cook to remain in her position for the pendency of this case? I'm not sure that we We have evidence here that Ms. Cook is an immediate threat to the public. The decision in this case could set a crucial precedent for the president's influence over the central bank and his attempt to further expand presidential power. My guest is constitutional law expert David Super, a professor at Georgetown Law. David, at this point, the Supreme Court doesn't have to definitively resolve whether Trump can fire Cook.
20:50The issue right now is whether Cook can stay on the job while her challenge to the firing plays out in the lower courts. If you just go by the oral arguments, did it seem like there were at least five justices who would vote to prevent Trump from firing Cook? I think so.
21:08David Super:The government's lawyer faced pretty tough questioning from seven justices, and it only takes five. There's a lot of niceties in this case, but what it comes down to is whether the Federal Reserve will be independent, whether it will exercise its enormous powers based on best expert judgment and the directions given by Congress, or whether it will be just a tool of the sitting president who can use it irresponsibly to advance his political fortunes. And explain the four cause requirement in the Federal Reserve Act. Certainly. The Federal Reserve Act creates the Board of Governors, allows the president to appoint people to that board with Senate confirmation, and provides that once appointed and confirmed, they cannot be removed except for cause.
22:00David Super:That effectively means that they must do something wrong or fail to do their jobs in order to be removed. It's not just up to the president to fire them anytime he wants. He can fire his chief of staff anytime he wants, but members of the Federal Reserve Board, he has to have a good reason, a cause to do it. Cook argues that even if the mortgage fraud allegations were true, that isn't grounds for firing her for cause. What did you hear from the justices on the for-cause requirement? Well, there was less clarity as to what they were thinking about that, at least my take on the argument. There are some statutes that provide considerable detail as to what is caused.
22:47David Super:This statute isn't really one of them. And some justices, particularly Justice Thomas, seem to be thinking that that difference between this and other laws means that anything that Trump says is cause is good enough. But there were other justices that seemed responsive to the notion that if the president can just make up any old cause he wants, that there is effectively no independence for the Federal Reserve. And I think that the extreme nature of the argument here that the solicitor gentleman had to make is going to bite them. The essence of Dr. Cook's argument is all this information was available before I was appointed and confirmed.
23:35David Super:Congress could have taken that into account in deciding whether to confirm me. They didn't. And the good cause requirement is supposed to relate to something one does on the job. I didn't have this job when I sought those mortgages that Trump is saying are improper. There was an extraordinary amicus or friend of the court brief filed in this case, signed by every living former chair of the Federal Reserve, as well as six former Treasury secretaries and other experts, warning about how a decision for Trump would affect the Fed's independence and the long term stability of the economy. And Justice Barrett took note of that.
24:18David Super:Well, the elephant in the room is the copious evidence that non-independent central banks are very bad for countries' economies. You can look at Russia, you can look at Turkey, you can look at other countries that do not have independent central banks, and they have enormous economic trouble as a result. The justices know this, and even if philosophically they'd like to let Trump have his way, I think they don't want to be blamed for throwing the economy into a recession. And to her credit, Justice Barrett put that out on the table and gave the Solicitor General the opportunity to respond. He didn't do much with it, but she gave him a chance.
25:02Cook is also arguing that she should have been given notice and an opportunity to be heard to contest the allegations before she was fired. And all the Trump appointees pushed the Solicitor General to explain why that wasn't done. With the question sort of hanging in the air, what was the president afraid of? You know, Justice Gorsuch posited a sit down across the table in the Roosevelt Room, where the president provides Ms. Cook, Governor Cook, with the evidence and waits to hear what her response is, gives her a chance to defend herself. I mean, it just wouldn't be that big a deal.
25:36David Super:And what's the fear of more process here in the sense that process protects you in the sense of helping you make better, more accurate decisions? And it helps process helps you then convince people on the outside that you've made a considered thorough, appropriate decision. What's the concern about more process? And some of the justices seemed almost incredulous that the solicitor general was contending that Trump's social media posts constituted formal notice to Cook. Certainly, social media, particularly one's own personal social media platform, is not a conventional way of giving notice. It's a way of doing public politics.
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26:21David Super:The solicitor general actually went even farther than you say and suggested that the failure of Dr. Cook to tweet back at Trump should be held against or should be held as an admission that what Trump said was true. If I was held responsible for every tweet I ignored, I would be in a very bad way. And there was no hearing. There was no pretense of a hearing. And the argument that the Solicitor General was forced to make is that she got the equivalent of a hearing in public in getting adverse social media posts from Trump and not responding to them. That's an argument that even most conservative justices seem to have a great difficulty to follow.
27:12Unlike past arguments, it was really an uphill battle for the Solicitor General. Did any of his arguments seem to resonate with the justices?
27:21David Super:Well, the biggest advantage that the president has in this case is that the Supreme Court is pretty clearly going to strike down security of tenure requirements for the vast majority of executive branch officials. That's the Trump versus slaughter case. An oral argument on that made pretty clear that the court is going to overrule Humphrey's executor and allow the president to fire at will members of even very sensitive boards like the Federal Trade Commission. So the question here has always been, can the Supreme Court find a way of differentiating the Federal Reserve from the Federal Trade Commission and all those others?
28:07David Super:And that's, I think, what the Solicitor General was trying to go with here is to suggest that the court should just treat this case like any other. Once you look at the specifics, the accusations against her fall apart in your hands. She was obviously given no hearing. And as several justices, including Justice Kavanaugh pointed out, if you allow the president to make up anything and call it cause, then you have effectively ended the Fed's independence, and that makes them very nervous. It's a high bar for the Supreme Court to intervene on an emergency basis and includes a showing of irreparable harm to the president.
28:51And as many of the justices pointed out, you know, where's the irreparable harm to Trump?
28:56David Super:Well, we have gotten accustomed over the last year to the Supreme Court finding that any potential impairment of President Trump's powers is an irreparable injury. But if I ask you to go way back in time one year, that was very extraordinary. And getting the Supreme Court to intervene in lower court cases was very difficult throughout most of this country's history. So perhaps the court will revert to that and say, we shouldn't get involved until this gets fully aired out the lower courts. Coming up next, more with Professor David Super on what the decision might look like. I'm June Grosso, and you're listening to Bloomberg.
29:39The 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. Now 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. For many men, mental health challenges aren't recognized until they've already taken a toll. Work pressure, financial stress, changing relationships, and traditional expectations around masculinity can quietly wear men down, often without clear warning signs.
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31:36See complete disclosures at public.com slash disclosures. Let's talk about the real world downstream effects of this. Because if this were set as a precedent, it seems to me, just thinking big picture, what goes around comes around. All of the current presidents' appointees would likely be removed for cause on January 20, 2029,
32:04David Super:if there's a Democratic president, or January 20, 2033. And then we're really at at-will removal. So what are we doing here? Concerns about the unique nature of the Federal Reserve were at the center of the Supreme Court oral arguments over President Trump's attempts to fire Fed Governor Lisa Cook. So far, the court has largely accommodated Trump's assertions of sweeping presidential power, lifting about 20 lower court rulings that were blocking his agenda. But that success may be coming to an end. Conservative and liberal justices alike signal they'll defy Trump as he tries to exert control of the nation's central bank by firing Cook based on unproven allegations that she'd committed mortgage fraud before her appointment by claiming two properties as her principal residence.
33:01Cook denies the allegations and argues that even if they were true, that doesn't constitute grounds for firing her for cause. Chief Justice John Roberts seemed to agree, disputing Solicitor General John Sowers' claim that the misstatements, even if inadvertent, constituted at least gross negligence. Even if it was inadvertent or a mistake, it's quite a big mistake, so to speak, in a key financial representation made in the context of interest. Well, I mean, I suppose we can debate that, how significant it is in a stack of papers you have to fill out when you're buying real estate. The chief also seemed a bit perturbed with the solicitor general's rather extreme position that the courts can't even review the president's decision to fire a Federal Reserve governor, and that they basically have no role whatsoever to play.
33:53General Sauer, if you're correct that courts do not have the authority to reinstate a removed officer, why are we wasting our time wondering if there's cause or not? Because even if we say, yes, there is cause, shouldn't have removed her, but we don't have the authority to order her reinstatement. How is that consistent with the time and energy being spent on determining if there's cause? Even one of the most conservative justices on the court, Samuel Alito, expressed some annoyance with the administration and its rush to push the case forward. Is there any reason why this whole matter had to be handled by everybody, by the executive branch, by the district court, by the D.C.
34:40Circuit, in such a hurried manner? You began by laying out what you claim to be the factual basis for the for-cause removal. But no court has ever explored those facts. Are the mortgage applications even in the record in this case? Two lower courts block Trump from removing Cook while the legal fight moves forward. I've been talking to constitutional law expert David Super, a professor at Georgetown Law. David, let's talk about the extreme nature of the administration's position here, that the president doesn't have to provide any notice, any hearing to a Fed governor before firing them, and that the courts can't review that decision.
35:24The chief basically said, why are you wasting our time here? Was the administration going too far for most of the justices?
35:32David Super:I think so, because the Solicitor General's position is that the courts can't look at this. And if the president can fire a Federal Reserve governor based on anything the president makes up, and no matter how absurd and unfounded it is, it can't be reversed, then effectively there is no for-cause requirement in the Federal Reserve statute. And these people all serve at the pleasure of the president. Many, many economists across the political spectrum believe that losing the independence of the Federal Reserve would in the long term reduce investment and increase inflation in this country. And Justice Kavanaugh in particular seemed very concerned about the repercussions, making that what goes around comes around argument and ending by saying, so what are we doing here?
36:26Yes.
36:27David Super:I mean, if one believes, as I do, that President Trump's time horizon here is very short, and he wants what he thinks is good for him right now and doesn't care about the long-term impacts, then that's of no concern. But the whole reason we have the Supreme Court with life tenure is so that they can look at the long term. They can look at the long term impact on the long term impact on the economy. And that, I think, is where a court that is generally very sympathetic to President Trump's agenda starts getting extremely nervous. I wonder what you think about the timing here of the Justice Department's criminal investigation into Fed Chair Jerome Powell.
37:08The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public rather than following the preferences of the president. Isn't that investigation a bad look here? Because it tends to show that Trump is trying to reshape the Fed, that it's all about interest rates rather than about the actions of one Fed governor.
37:32David Super:Yes, I think that is certainly in the back of the justices' minds. chairman powell sitting there in the courtroom watching all of this so obviously if they needed any reminding he was there in the flesh i don't know why they thought that was a good idea particularly timed when they did it and particularly against someone like chairman powell who was appointed by president trump and is pretty widely approved of across the political spectrum particularly among his fellow Republicans. That strikes me as a remarkably ham-handed and tone deaf thing to do. I wouldn't like the administration's chances in this case, even without the Powell investigation.
38:17David Super:But they basically gave the court no room to pretend that a ruling against Dr. Cook is compatible with an independent Fed. You know, the tone of the arguments changed completely when the solicitor general sat down and Lisa Cook's attorney, former Solicitor General Paul Clement, stood up to argue. As you know, he's one of the premier Supreme Court litigators. This is the fifth time he's argued before the court since October. And it's hard to describe, but it seems less like the justices are questioning him and more like they're having a discussion. There was even laughter as he sort of sparred with Justice Neil Gorsuch.
38:59That's part of the reason I resisted the idea that you have to go to Mandamus, Because I do think you would have declaratory judgment. I do think declaratory judgment... I asked you to put that aside for the moment. No, and I tried to as long as I could. All right. Then I give up. Then to answer your question, I really had to get to declaratory judgment.
39:17David Super:Former solicitor Clement is an extraordinarily skilled lawyer in general and Supreme Court practitioner in particular. But he's also extremely conservative and is not likely to take a conservative majority of the court for a ride to somewhere they don't want to go. So people have been hiring Solicitor General Clement, I think, to provide reassurance in cases that might otherwise feel uncomfortable to this very conservative supermajority. So what do you think a decision in the case will look like? Well, the justices have several ways of dealing with this. If we assume, which after argument I think we can, that a majority of the court does not want a highly politicized Federal Reserve and needs to find some way of keeping Dr.
40:09David Super:Cook on the board, they've got several ways to go. They can say that the hearing was improper or the absence of a hearing and the notice was improper. They can say that something that happened prior to her taking the job doesn't count as good cause. They can say that the lower courts need to look into the merits of this. or, and this is something Justice Barrett seemed interested in, they can simply say that President Trump is not suffering any legal injury from having Dr. Cook continue to serve, and therefore he simply doesn't qualify for a stay of the lower court's injunction. Is it possible that even Justice Alito might vote against the Trump administration here?
40:59David Super:I mean, he asked reasonable questions, but the tone struck me as being largely sympathetic with the president. And I think he is more committed than most to the unitary executive theory, which this would have to be an exception to. When they write their opinion, do they have to explain away that exception to the unitary executive theory and also their likely decision allowing Trump to fire the FTC commissioner? They've got various ways of hiding. The simplest is, because this is a preliminary stage, is to simply say that President Trump hasn't qualified for a stay and decided entirely on procedural grounds.
41:45David Super:They also could say that they're not required to consider what standards are appropriate for removing Federal Reserve governors because in this case, the president claimed to comply with the law. So all they have to do is decide whether he did. They have a number of ways of hiding my guess is that they will not be eager to explain how what they're doing here is consistent with what they're going to do in the FTC case, because let's face it, it isn't. In this case, they know how they want to come out, which is against Trump and in favor of Federal Reserve independence. And they have a huge obstacle to doing that, which is their desire to end the independence of all the other boards.
42:31David Super:So the whole argument was basically the justices feeling around for a way that they could decide this case the way they want to without undermining what they're doing to the FTC. And I think at the end of the day, there were enough paths open to them where they could do that and they will do that. And the solicitor general had to hang his hat entirely on consistency with what they're doing in the FTC case because the actual decision on Dr. Cook is essentially defensible. Would you say that along with the tariffs decision, which we're still waiting for, that this is one of the most important decisions of the term as far as the expansion of presidential power?
43:16David Super:Well, these two plus the Federal Trade Commission case, but I think everyone believes that case is going to expand presidential power radically. So people, I think, are not spending as much time thinking about that since they feel they already know how it's coming out. It's shaping up to be a more controversial term than I initially thought it would be. Thanks so much, David, for going through all the ins and outs of the case. That's Professor David Super of Georgetown Law. 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.
43:52You 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.
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From the publisher
Second Amendment expert Adam Winkler, a professor at UCLA Law School, discusses the SCOTUS oral arguments on a Hawaii gun law called the “vampire rule.” Constitutional law expert David Super, a professor at Georgetown Law, discusses SCOTUS oral arguments on President Trump’s attempt to fire Fed Reserve Governor Lisa Cook. June Grasso hosts.
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