OA433: Google Antitrust and Purdue Pharma Plea

Transcript

This transcript was generated automatically and may contain errors — the audio is the record.

0:01:17 Thomas: Hello and welcome to Opening Arguments. This is episode 433. I'm Thomas. That's Andrew. How you doing Andrew?

0:01:24 Andrew: Hi, I'm fantastic Thomas, how are you?

0:01:26 Thomas: Well, you know, fine. I don't have a signature answer, I'm just realizing. What is mine is like a never sure how I am. Maybe that's my signature answer. I'm not Mr. Fantastic, I'll tell you that. But I am excited because we are not discussing anything involving the 45th president of the United States. It's not even gonna say it, yeah, if anyone even utters his name, I'm gonna bleep it, I'll zap it from the record, but what are we gonna talk about? Just

0:01:32 Andrew: Oh, exactly right, yeah, this is a 45 free zone for this episode. There you go, alright, excellent. Yeah, we're

0:02:03 Thomas: Nothing?

0:02:03 Andrew: Going to talk about...

0:02:04 Thomas: Just transformers for like 10 minutes.

0:02:06 Andrew: Oh my god, could... can I, can I tell you, just someday, like, my birthday's already passed, so you know, I just want one episode where I can just talk about transformers for like an hour, and I want you to like listen and ask good questions and pretend like you care and uh

0:02:13 Thomas: Yeah. Yeah. So at the end, then I'm like, oh, I didn't push record, ah, and then, like, is that... would that, that work? We'll do a for-fun episode that is mine and yours, interests, we'll just do segments on hockey and transformers, it'll be a lot of fun, I feel like

0:02:23 Andrew: Yeah. No, I am. Yeah. Andrew and Thomas's hockey and Transformers hour, I feel like has the potential to to break through in a way that opening arguments has not.

0:02:44 Thomas: Yeah Yeah, at least we know no one else is doing that podcast, like, there's no way, and we'd have to research, was there ever a hockey transformers crossover of any kind? Probably not, but you never know.

0:02:51 Andrew: Yeah. Yeah, no, there was a Teenage Mutant Ninja Turtles hockey crossover with Casey Jones, but uh, no, that's for as far as

0:03:04 Thomas: We'll have to we'll have to do a segment on that, all right, anyway, real show, what are we talking about?

0:03:05 Andrew: I know, uh no yeah anyway, real show, yep.

0:03:10 Thomas: We got Google. Oh, yeah. The antitrust stuff with Google and also the Purdue Pharma indictment over OxyContin. I saw both those headlines, and those are both things where you're like, hey, what's Andrew going to tell us happened here? And you're in luck because that's what's going to happen. OK, let's get to it.

0:03:25 Andrew: So so uh, I play a little game here, I will tell you one of these is a really, really good thing, one of these is a bad thing masquerading is a good thing, um, you want to, you want to guess which one is which?

0:03:42 Thomas: Really good thing, bad thing masquerading. I would have to guess that the Google thing is the bad thing masquerading as a good thing. But I'm not 100 percent confident, which which would then mean the Purdue Pharma is a good thing. I mean, I could certainly see there being a negative to Purdue Phharma, like we didn't get them for enough or that it's not going to be the right thing-y. So that's my current guess. Before we get to the answer, I do want to remind everybody, we will be streaming live on election night, November 3rd.

I would hope you knew when that was going to be, you know, because you've already made, or maybe you already voted so long ago by mail that you don't even care when election night is. Maybe that's why you wouldn't know. But anyway, November 3rd, that's going to be 5 Pacific, 8 p.m. Eastern, and we're going to go for a couple hours and hopefully it'll be great, fantastic, happy time and everyone will be happy. That's what I'm hoping. So make sure to look out for that link. It'll be on YouTube. We'll tweet it out. We'll put it out on all our social media, Patreon, all that stuff. And as Andrew noted last time, that's replacing our live Q&A for that month. It works out perfectly right about when we

0:04:15 Andrew: Yes yeah Yeah.

0:04:45 Thomas: Would do it anyway.

0:04:45 Andrew: And we're we're going to interact with everybody in the in the live stream, answer questions, talk about stuff. It's going to be it's going to be awesome. It is going to be a drinktacular good time.

0:04:49 Thomas: Yeah. Yeah. Yeah. It wasn't as though you and I were going to sit like the stream was going to be, we're going to sit in silence, staring at our screens, just hitting refresh. And like, if anything changes, we'll just be like, ah, and that's the stream.

0:05:02 Andrew: Yeah. A thing changed.

0:05:06 Thomas: No, we're actually going to answer questions and stuff. That'll be, I say we, I mean, Andrew or me.

0:05:09 Andrew: Yeah. I did. Or you. Or both of us. There we go. Yeah.

0:05:16 Thomas: Okay. So now that that preview is out of the way, I'm curious to find out the answer to the bar question question of which of these things is a good thing and bad thing.

0:05:28 Clip: The law breaking down

0:05:34 Andrew: So let's talk first about Google. I actually learned some stuff while reading this complaint. This is a 64-page complaint. It's an antitrust complaint. It is filed. If if you're wondering if this is going to give you some advance hint, it is filed as a collaborative effort between the U.S. Department of Justice and the states' attorneys general of Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, South Carolina and Texas.

0:06:08 Thomas: Is it a coincidence that those all sound kind of red leaning? Like I didn't hear a California. I didn't hear a New York.

0:06:12 Andrew: So, yeah, not just kind of red leaning, right? Right. Like all hard red states.

0:06:16 Thomas: Yeah. Well, no, I see here. We disagree. I think we're flipping Texas blue. I think Florida's just should be blue too.

0:06:18 Andrew: Right. Well, I mean that not as a prediction in the presidential election, but in terms of coordination between Republican governors and Republican state legislatures with Republican attorneys general. So, OK, so villains have have brought this case. What is the case? It alleges three violations of Section 2 of the Sherman Antitrust Act, 15 U.S.C. 2, which is delightfully straightforward, for, you know, all of these early 20th-century laws, right, are delightfully straightforward. It says, "Every person who shall monopolize or attempt to monopolize, or combine or conspire with any other person or persons to monopolize any part of the trade or commerce among the several states shall be deemed guilty of a felony, and shall be punished by a fine not exceeding $100 million if a corporation,"

0:06:34 Thomas: Gotcha.

0:07:19 Andrew: Or if any other person, a million dollars, or by imprisonment not exceeding 10 years, or or by both said punishments in the discretion of the court. So, totally straightforward.

0:07:30 Thomas: Well straightforward. I don't want to derail you. Please feel free to just ignore this. But my first thought was, well, how do we interpret this? Are we going to have to get into the minds of the people who wrote that law? And what do they mean by monopolize? Blah, blah, blah. Or would there be a better, different way to judge what exactly that entails?

0:07:34 Andrew: No, no, no.

0:07:50 Andrew: Yeah, you are exactly right that what this law does, and again, this is how laws are supposed to work, it defines a general principle, monopolization, and then to figure out what counts as monopolization we look to the history of, Yeah, of case law interpreting what counts as a monopoly. So first, I want to talk a little bit about, and I'm going to read paragraph 23 from the complaint because I learned something. So the complaint alleges various sentences that I think are fairly intuitive, right? Right. That you probably have a monopoly if the word Google is a synonym in common parlance

0:08:08 Thomas: Benjamin Franklin.

0:08:44 Thomas: Yeah.

0:08:44 Andrew: For searching the Internet. Right. Like that's good. Good line. Good line in your in your complaint. But specifically when you're talking about what the relevant markets are, it's important to figure out like what Google does. And what Google does is it uses programmers, uses programs called crawlers. Right. And those crawlers go through and discover Web pages, look at the Web pages follow links off the Web page and then report data back on those Web pages to Google that are then put into their sort of central filing system. So, question, I did not know this, understanding that Google is obviously the largest, right, that 95% of consumer searching on the internet is done on Google. Google, how many crawler based search engines, right? Search engines that, that crawl the internet. Um, do you think there are at any level, right. Uh, any, any size, any anything, any amount?

0:09:42 Thomas: Yep. Any amount, any size. So right, right now you mean, or in history or just Now? This Minute, uh, gosh, that's a tough one. I mean, I could think of a few. I, I guess I don't know if they're, now that you bring up crawler based, I don't know if there's any other way to do it. So if this would entail other search engines that some have some other method, I don't know, I guess like 17, two.

0:09:56 Andrew: Yeah. Yeah. Right. Right now.

0:10:16 Andrew: Yeah, that's about what I thought. Uh answer is two and a half. So I'm going to, I'm gonna read you paragraph 23.

0:10:25 Andrew: The United States has only three general search engines that crawl the internet. Google, Bing, Bing and to a lesser extent the privacy-focused search provider DuckDuckGo. DuckDuckGo combines search results from different sources including Bing, depending on the search query. A fourth general search engine, Yahoo, does not currently crawl the Internet and instead purchases search results for Bing. Bing, um,

0:10:21 Thomas: And a half. Okay, ask Jeeves. Oh, yeah.

0:10:54 Thomas: Jeevees.

0:10:54 Andrew: It, it, I was rather shocked at this right because I thought, yeah, yeah, right, they're used, I thought, okay, you got Google, you got Yahoo, you got Bing, you got Ask Jeeves, you've got Metacrawler, right? Yeah, like I, I thought the 17 number was a good, that was what I kind of had intuitively, intuitively in my head. Uh, no. Um, it's, it's Google, uh, it is the international joke that is Bing, uh, and then everything else buys stuff from Bing. Didn't know that. Um,

0:11:30 Thomas: But not from Google. I thought you were, are going to tell me everything buys stuff from Google. That's interesting.

0:11:34 Andrew: Yeah, that in terms of what, what gets bought from Google, that the web, the, that this complaint is, is very, very interesting. So, so now, snuck in that little bit in the fact pattern, but we're going to read our complaint the way we always do, backwards. So we already talked about how it is signed by the attorneys general of deep red states with Republican governors, legislators, legislatures and attorneys general. And then as we search backwards, we see that there are three specific violations alleged. This is subsection seven on page 55 under section two of the Sherman Antitrust Act.

0:12:21 Andrew: The first is for monopoly power in the market for general search services. That's what we just described, typing stuff into the Internet. And the specific allegation here is that Google has willfully maintained and abused its monopoly power in general search services through anti-competitive and exclusionary distribution agreements that lock up the preset default positions for search access points on browsers, mobile devices, computers, and other devices, require pre-installation and prominent placement of Google's apps, tie Google search access points to Google Play and Google APIs and other restrictions that drive queries to Google at the expense of search rivals. Second claim is in a monopoly on search advertising, right?

0:13:09 Andrew: And search advertising is the advertising that shows up at the top of your Google search. So I type in, And, you know, how do I repair my dryer and five graphics show up at the top? Those are paid advertisement that people have bought from Google to stick at the top of your search. And again, Google, the allegation paragraph 182, Google has willfully maintained and abused its monopoly power in search advertising through anti-competitive and exclusionary distribution agreements that lock up preset default positions, right, for search access points on browsers, mobile computers, mobile devices, devices, computers and other devices. And then the third category of monopolistic conduct is alleged in general search text advertising.

0:13:58 Andrew: And that's probably, I don't know your feelings about this. This has probably been, I think, the most annoying Google development over the past couple of years, that you now have to scroll through. Like when I type in, how do I fix my dryer? Not only do you get the obvious ads at the top, but you have to scroll through like eight different search text ads and there's a little line on there that says ad, but like, you know, you to get to the real results, yeah.

0:14:16 Thomas: Yeah. It's search text ads. So there's two different kinds of ads here. I'm going to search. I want to Google how to fix my dryer, how to fix my dryer. I spelled dryer live on air. Okay. Ad. I got that one. What's the other thing?

0:14:28 Andrew: Yeah. Yeah. Right.

0:14:39 Andrew: So you get the, the first is kind of a video, and then you'll see right on On.

0:14:45 Thomas: Oh, I have an ad blocker on. Maybe that's what's happening. I only see the video, and then it goes to results for me. Okay.

0:14:48 Andrew: Oh, yeah. Well, that's what's happening. Yeah.

0:14:53 Thomas: So no wonder, I'm confused.

0:14:54 Andrew: Do it on your do it on your

0:14:55 Thomas: No, no.

0:14:55 Andrew: Phone. OK.

0:14:57 Thomas: I'm just kidding. I went, like, in a browser. Okay, sure, this is live on air, everybody. I'm gonna get my dryer fixed by the time this is all over. I will definitely have a fixed dryer, um, thanks to Andrew. Okay, how to fix my dryer. Remember, so you get the ad, got another ad, and then a bunch of videos

0:15:00 Andrew: Yeah, yeah, Tyler, then you get a bunch of text ads that are, that look like search results but are actually text ads. Well,

0:15:16 Thomas: Text ads just not seeing it. I don't, what that is, okay, well, I'll take your word for it, this is a failure on air.

0:15:27 Andrew: This is why we do the show live. So

0:15:32 Thomas: Yeah, I'll pretend I see whatever you're talking about.

0:15:36 Andrew: Okay, good, breaking down these particular categories, right, I, I learned an awful lot, so now we kind of work backwards and say, uh, is, what are the facts that support each of these allegations? And this is a 64-page complaint. I would encourage everyone to read it. To me, the most interesting fact material occurs in Section 5, which begins on page 36, which is the allegations regarding anti-competitive conduct. And I learned things about how Google interacted with the market for Android phones. So before we talk about that, I want to talk about probably the most prominent antitrust case of the last 30 years. And sorry, and that would be the case against Microsoft, right? And we talked about how in the Microsoft antitrust case, there were two sort of primary allegations that were made that were anti-competitive conduct, right. The first was that Microsoft entered into a bunch of illicit arrangements with computer manufacturers to have Microsoft Windows pre-installed on the computer so that it was the default position.

0:16:28 Thomas: Huh.

0:17:16 Andrew: And then the second was that Microsoft engaged in a number of what we call illegal tying arrangements. Right. So in order to get Microsoft Windows that everybody wanted, you also had to like have pre-installed Internet Explorer, which everybody hated. Right. And both of those are specific kinds of anti-competitive conduct that take advantage of your monopolistic power, right? Say, oh, yeah, we got a thing everybody wants. Let's make sure that we make that kind of the default position.

And then let's make you also buy this thing everyone hates in order to get the thing that you want. I did not know that, again, from the allegations from this complaint, so, you know, Google get a chance to answer, but pretty detailed allegations that that Google went and did considerable research with respect to how to enter the market to compete with Apple, iOS, right, iPhones, right? And so 40% of mobile device usage comes from phones that use Android, right. And Android is an open source mobile operating system that, that Google developed, so you would sit there and think like, oh, yeah, great, Android, open source, uh, that makes total sense, how could that possibly have been an anti-competitive activity? And the answer is that while Google engaged in the development of the Android platform, platform, the entirety of that process,

0:19:06 Andrew: Was evidence, and again cited in the complaint, that they were concerned about how they leveraged that open-source platform to a closed consumer environment. So I'm to read from paragraph 65. Control over Android has always been a critical issue. Google Android's team leader asked at time, how do we retain control of something we gave away? Google's answer is a set of contractual carrots and sticks that empower Google to, quote, own the ecosystem, that is a quote from their development, and help thwart any alternative mobile ecosystem from developing that could support a different search provider. And the answer to that has to do with a process called forking, forking, and saying that very carefully on the show, um, it's

0:19:55 Thomas: Yeah. This, are we in a good place episode? And so you're actually saying something else or we mean actually forking.

0:20:02 Andrew: Actually called forking and the complete details at length Google's anti-forking agreements. So, so here's the way it works. Because Android is an open source platform, it is called forking when you take Android and then build a thing that deviate, right? Like it's the branch of a fork, right. You build something that sits on top of or uses the core of the Android OS, but then moves in a different direction, add something else into it. And so what Google did was provided all of these phone manufacturers that use Android open source operating systems with various benefits and also subject to certain penalties.

0:20:04 Thomas: Okay.

0:20:59 Andrew: The benefits were, in a couple of different cases, right, providing technical standards, working with them, providing specific data, particularly Google ad data, right? Right. And then tying that to anti-forking agreements, which forbid the manufacturers from developing or distributing versions of Android that do not comply with Google's specified technical standards. It has a document called the Android Compatibility Definition Document. And so manufacturers would agree to these agreements because they would give a license to distribute devices that have the Google apps that people want on them.

0:21:51 Andrew: Right. So when you're selling out your Android phone, you want to say, right, it has the Google Play Store. It has a Google search app. It has Chrome. It has YouTube. It has Gmail. It has Google Maps. All of those apps, in order to distribute them on an Android OS, Google required manufacturers to sign anti-forking agreements. As part of those anti-forking agreements contained in the CDD, the compatibility definition document, were, to summarize, a set of rules that required those phones to default to Google Chrome as the default browser, to use Google as the the default search engine, right? And you probably know this, but, or this, yeah, I know you have an Android phone, but even, so you're thinking, okay, well, that's 40% of the market. What about 60%, which are Apple iPhones, which is what I have? Google has a set of agreements with Apple where beginning in 2005, Apple began using Google as the preset default general search engine for the Safari browser, right? So it doesn't default to Google's browser. It defaults to Safari. But you type in a search in Safari, it uses Google, Right. And

0:22:42 Thomas: I have an Android phone, so yeah.

0:23:19 Thomas: Hmm.

0:23:20 Andrew: As incentive for that, Google gave Apple a significant percentage of their ad revenue derived from the search queries typed in on those devices. Right. So in other words, Google makes money based on the searches on iOS devices. And they said, hey, if you default to using Google, we'll cut you in on that revenue. 2016, so that was starting way back in 2005, which I guess was then Safari on Mac desktops, right? Because in 2007, that was extended to iPhones. In 2016 it was expanded to additional search access points. And you're sitting there thinking, what the hell is a search access point? That means Siri, Yeah. So when you ask Siri something, you're asking Google. It defaults to using Google. And it is incredibly interesting to me that to look at the idea is that this is a kind of tying arrangement, right? Right. A kind of way of saying that if you want to get our search data and the revenues therefrom, you will make the default position where it doesn't have to be. Right. Like Apple could have developed a crawling search engine. But but, you know, this is.

0:24:02 Thomas: Yeah, but why go to the effort? I mean, geez,

0:24:47 Andrew: Yeah, Well, that's... that's sort of the point. So today, this is paragraph 87: "Google has restrictive arrangements with nearly every significant non-Google browser other than those distributed by Microsoft, including Mozilla's Firefox, Opera, and UC Web. Those agreements generally require the browsers to make Google the preset default general search engine for each search access point on both their web and mobile versions." So in other words, they've insinuated themselves. So even when something seems to be a competing product, that competing product will default to using Google to search the web. And that is at the core of the allegations with respect to count one. I could talk about the others.

0:25:35 Thomas: How could we put a Stop to this? Hold on, let me Google how do I put a... damn it, oh.

0:25:41 Andrew: Yeah, So so spoiler, you got the bar exam question wrong. This is a lawsuit brought by monsters and supported by Red Wings, by Red Wing, by right wing reds, deep red states. But I think this is and who knows, the not who knows. We know the motivation. Right. Right wingers have been saying that Google is discriminating against conservatives since ever. However, this lawsuit does not allege that. Whether they have personal animus against Google, they probably do. Google's, by reputation, a pretty liberal company. And, you know, and it's it's upset the religious right and the conservative right an awful lot. I think if you if you believe in antitrust laws, this is this is a good lawsuit. I'm glad that it's brought. I'm glad that it is exposing an issue that I hadn't heard about. And there is zero chance. Look, yeah, if you reelect Trump, could he use this to lean on Google to control? Sure. Don't reelect Trump. There's not a chance. I mean, the answer, Google's answer is not due until well after the election, right?

0:25:46 Thomas: Yeah. Yeah.

0:26:57 Andrew: There is no chance that they can use this for undue influence to lean on Google in its election coverage, in hiding links to QAnon or whatever, not present. In the long run, you know, is there animosity? Sure. But it will be Joe Biden's DOJ antitrust division that takes over this lawsuit. This lawsuit will take years to go through. And I I imagine that that that blue states will probably join in 2021. It's a real issue. And how you fashion a remedy is going to be a function of how hard future antitrust divisions come down on what is a definable monopoly.

0:27:42 Andrew: And even if you want to say, okay, well, you know, just have one crawling service that goes through the internet and can give you your search answers, maybe let's not allow the company that maintains a natural monopoly in that, if that would be the argument, to tie a whole bunch of its other stuff in a whole bunch of other platforms to that, right? Right. Like because when you think about like, well, who would make a competitor to Google? Well, I'll give you a great example. If you had free and open competition among mobile devices, maybe somebody would have done that. Right. They would have said, oh, yeah, OK, right. Like Google controls, right, web searches on your home computer platform. But there was no reason to make Google the default search engine on mobile devices, but for all of these deals that that

0:28:04 Thomas: But

0:28:38 Andrew: Google cut with all the phone providers.

0:28:39 Thomas: I Sort of wonder If At this Point it's like the phone lines or something, you know? What do you think about that? I mean, are we to the point where, I mean, Google is synonymous with the internet, synonymous Was searching something. Should we just accept it and be like, okay, well, maybe this should be what government Controlled or something Or at least regulate. Like, this should be, there's no sense in somebody else making another Google. It just seems like a waste of time to me, but I could be wrong, I'm not, a not A Programmer, but

0:28:49 Andrew: Yep.

0:29:08 Andrew: Well, well, it's it's funny that you say no, no, I think That makes I think that makes I think that makes sense as a question. And it's funny that you use the phone lines as an example, because one of the things that we'll, we'll add to the whiteboard and I will promise we will deliver in a Biden administration is a deep dive on the breakup of AT&T over the phone line, which, you know, we've alluded to in. And yeah, but yeah,

0:29:10 Thomas: Okay Yeah Oh Wait, we've Talked about that Yeah Common Carrier, uh, that'd

0:29:42 Andrew: Yeah. So look, yep, yep. In the 1980s, right, the thought was that the way in which you effectively break up that monopoly was on largely geographic lines, right? Right. There was some there was

0:29:43 Thomas: Be telecom, Pacwest telecom, they had all the different divisions, yeah Maybe We'll do it by subject matter and And whoever gets the porn division of Google search results is like, that's the, all of it.

0:30:02 Andrew: Yeah. That's all.

0:30:07 Thomas: There'll be a lot of fight. Maybe the porn revision will be so big. They'll have to divide it by like specific interest, you know?

0:30:16 Andrew: And then all those companies will be forced to get Orwellian, like, you know, new speak names. Right. So it wouldn't just be like, hey, we're Google porn. It would be like we we are the enhanced enhanced browsing surfaces.

0:30:22 Thomas: Yeah. Yeah. Entertainment division. Yeah. And I just wonder if there's some huge scheme, like Google, when you actually, when you Lexus something, are you actually Googling? And then then that opens up the wild plot. You know, we could do that, make our own lot off a movie where Google is like affecting the the precedent that you might find when you're doing research to rule on the case or to, you, you know, like when the judges, you, whatever you call clerks, are like having to research out. They're like, oh, wow, there's actually this case that says such and such.

0:30:57 Andrew: Yeah, it would not surprise me if the internal Lexis and Westlaw search, like, use Google algorithms. Right. Like it. I don't know that they do. It doesn't say that in this complaint. But the idea that the tentacles run deep. I'll leave you with with one last question. Right. Which is computer. So this is the overall market share for search engines on computer on the desktop. OK. On of that, Google is 82 percent of that market. Bing is 12. Yahoo, which buys its results from Bing, is four and DuckDuckGo is two percent. Okay. How large do you think Google's share of mobile devices is? Yeah, it's 94%, right?

0:31:45 Thomas: Google. 100% or 99.7%. Okay. Okay. I

0:31:51 Andrew: Yahoo is two, Bing is two, DuckDuckGo is two, uh,

0:31:54 Thomas: Want to know who is Yahoo searching on their phone. Someone's dad has like the first, like the first Blackberry or whatever, like the earliest phone that could still search Yeah.

0:31:55 Andrew: Yeah. Um. Yeah. And he just searches a lot, right. It's

0:32:08 Thomas: And it's just stuck on like Bing or whatever. He doesn't, and he doesn't even know it. Yeah.

0:32:12 Andrew: It's still it's So running the same search from 2007, it actually, there's a little asterisk here, an asterisk, and it says, actually, this is Dave from Des Moines, Iowa. So there you go. There's lots more I could talk about this. We are going to follow again. This will take years to to develop and and it is worth following. It will be a long running story. But I promised you something Something that Bill Barr's Department of Justice is doing right. And I think this is something they're doing right, regardless of their motives. And I know people are going to write in and this and that conspiracy theory. It doesn't matter. If this was Barack Obama's DOJ, we would say Sean on you for noticing the level of anti-competitive conduct that

0:32:21 Thomas: Yeah. Or

0:33:05 Andrew: Hurts consumers. And good on them.

0:33:08 Thomas: Well. I fell into your trap, so now you have to tell us about the thing that's not as good as we might have hoped it was.

0:33:13 Andrew: Yeah. And This took a lot of unpacking, and since I've already given away the punch line, uh, that will, that will control how. Something that seems like it requires Purdue Pharma to turn over $5.5 billion, right, you'd be like, well, that seems like a good thing, right. Right. Here's why it isn't. And look, this is not a disaster of a deal, but nobody is talking about the fact that this deal, probably for the reasons that I'm about to explain, is incredibly favorable to Purdue Pharma. So let's talk about what what's going on. Purdue Pharma, as we've talked about on the show before, manufactures OxyContin. They are, if not single-handedly, predominantly responsible for the opioid epidemic in the United States that has claimed hundreds of thousands of lives, specifically prior to 2010. So Purdue Pharma entered into a settlement with the government in 2007 because what OxyContin is, is the painkiller with along with a timed release Right. So they took an existing product and added to that product a time release mechanism.

0:33:57 Thomas: A

0:34:48 Andrew: And so the idea was that way you don't prescribe multiple doses every couple of hours. You give somebody a single pill and they take it all day and it's time released. And part of what Purdue Pharma pushed in that, in its advertising, was in this first wave, was to have doctors prescribe higher dosages that would then be administered over the time release, over the course of the day, instead of fewer, smaller dosages that you take individually, as a form of convenience. Then they quickly realized, whether by design or or by happenstance, that they were now moving out large quantities of of high-strength oxycodone, and that catalyzed abuse and also made it incredibly easy to turn it into a substance that was then easy to to abuse.

The first formulation, again, I'm oversimplifying here, but basically like you pulled open the capsule and ground up the stuff that was contained in the pill, and all of us, and then you snorted it, and it went from time release of 80 milligrams of OxyContin, over of oxicodone, over an eight hour period to a direct Hit Yeah right to something that that could could be very easily abused. And they tracked data that showed at the prescriptions, knew their sales were driven around questionable at best prescriptions. And and I'm going to talk about some of these with respect to the side deals that Purdue cut with individual doctors who prescribed orders that were that tripped every possible red flag. Right. So 2007, Purdue Pharma enters into a settlement with the U.S. government that's a slap on the wrist and they reformulate OxyContin.

0:36:17 Thomas: Lot right away somehow

0:37:10 Andrew: That comes out in 2010. And that reformulated OxyContin is harder to crush up. Right. I don't exactly know in what way, but the complaint filed against them said reformulated OxyContin was more difficult to crush or dissolve. But the FDA cautioned that the reformulation is not completely tamper resistant, and those intent on abusing this new formulation will likely find a means to do so. OK, so they roll that out in April of 2010. In August, they discontinue the original version. Then in 2010, they notice, this is a a sales presentation in September.

0:37:56 Andrew: Right. So they stop making the old formulation in September, and then in August, and then then in September, they're like, uh, our sales on OxyContin are way, way down, and the allegation is they're way down because people who were crushing up the pills moved on to a different manufacturer of oxycodone that was easier to crush up and use. Yeah, yeah.

0:38:24 Thomas: I mean, I've, I've seen and read some stuff about this. I didn't realize the main source of abuse was the crushing up of the pills. Is that really like, the, that's, I thought people were just taking too many. Okay.

0:38:32 Andrew: Yeah Uh, well, there is that, and we're, but no, as the soon as they introduced the revised formulation, their profits went down. And then Purdue Pharma, and this is what has given rise to the criminal conduct, Purdue Pharma then engaged in a series of internal tactics of, OK, well, our sales are way down. How do we get them back up again? And the answer is, paragraph 25 of the complaint, Purdue engaged in strategies that resulted in prescriptions of its drugs for uses that were not for a medically accepted indication, were unsafe, ineffective, medically unnecessary, and diverted for uses That lacked a legitimate medical purpose. And then it goes through in details exactly what this means. And so, for example, they instructed their sales force to look at certain sub slices of both doctors and pharmacists.

0:38:39 Thomas: Wow. Yeah.

0:39:43 Andrew: So they analyze their internal data. And for example, three highest deciles, right, so splitting it into tenths, the three highest deciles of prescribers in Purdue's internal data wrote 1.5% of all opioid prescriptions nationwide, but 80% of the OxyContin prescriptions, right? Right. So in other words, a very, very tiny number of people drove almost all of the OxyContin sales. And so what Purdue Pharma did was where there were individual doctors, they hired these doctors to speak at conferences and gave them hundreds of thousands of dollars in speaking fees. They intervened when pharmacies would like trigger red flags of you're coming in to get an awful lot of OxyContin. They would call up and lean on the pharmacies and say, oh, no, you should release these prescriptions. They encouraged their prescribers, their physicians, to prescribe not just high volumes, but also the highest dosage, the 40 milligram and 80 milligram pills of OxyContin.

0:40:12 Thomas: I

0:41:02 Andrew: Some of these. So, so all of that, you're listening to all of them in the background. You're like, well, that sounds bad. Um, it's, it's way worse than you could possibly imagine, than I had possibly imagined.

0:41:13 Thomas: This is so horrible, and I hope that, you know, I know the punchline was already revealed that this was not maybe the best outcome here, but God, I hope there's something we can do to bring all these people to justice and get all the money that they ever made out of all this, and and take it from them, and put it into rebuilding these places that they've ruined.

0:41:23 Andrew: Yep.

0:41:33 Andrew: And and and there is, and this will end with with some optimism. So Their sales plan, specifically Purdue Pharma instructed its sales representatives to call on the highest volume, volume OxyContin prescribers at least 24 times a year and heavily favor promoting OxyContin over other Purdue Pharma opioids in their messaging. Their focus, the single core objective, is to make sure we're making calls on the highest potential customers with the right frequency to maximize prescribing potential. End of quote. That's a, that's a quote from a Purdue Phasma email. So that's, that's what you call a bad document, document. Then there are three doctors. This begins on page 28 of the complaint. That are They're not named. They're called Dr. One, Dr. Two and Dr. Three. But but these are individuals, right?

0:41:36 Thomas: Okay, good.

0:42:24 Andrew: This is not markets. These are not pharmacies. This is a guy. So from January 2010 through May 2018, Purdue representatives detailed, that is, called on, Dr. One at least 300 times. During this time, the doctor caused the submission of a high number of OxyContin claims to Medicare. Purdue knew that Dr. One was prescribing medically unnecessary opioids. From 2009 to 2011, Purdue received at least three separate reports from Medicare about Dr. One. Internally, a Purdue sales representative reported, pharmacist says they've had all kinds of problems with abuse and diversion of OxyContin. Pharmacist said he and other doctor are too loose when writing prescriptions of OxyContin, he says the patients he thinks are selling their prescriptions.

0:43:13 Andrew: He has notified the doctors, but nothing has changed, changed. Same sales rep, uh, six months later, the pharmacy manager says that Dr. One is known as the Candy Man because she will immediately put every patient on the highest doses of narcotics that she can, whether it's OxyContin or another product. He says that when he goes to local pharmacist meetings, when her name comes up, everyone in the room cringes and moans because of her practices. He says she is doing all kinds of wacky dosing and tablet strengths. He feels like she is not, not doing what she should be doing with medication on occasion. He has refused to fill prescriptions from her office. He said he's been seeing some crazy dosing of OxyContin coming in. That's June of 2010. One month later, new sales report.

0:43:59 Andrew: Another physician said he had a patient from the doctor who was on 80 milligrams five times a day. He thought this was over the top and asked me what the maximum dose was. He felt this patient was definitely exceeding it. I told him again. Now, this is the Purdue sales rep talking back. I told him since it was a single entity opioid, there is no ceiling dose. It is only limited by side effects. He said he would not continue this type of dose. I could read lots and lots more, but Purdue's conduct is unconscionable. So they've now pled guilty to three counts of conspiracy. The first is what they call a dual object conspiracy. That is a conspiracy to violate two laws at the same time, and that is to defraud the United States, that is defrauding Medicare, and to violate the Food, Drug, and Cosmetic Act.

0:44:53 Andrew: The second count is a conspiracy to violate the Federal Anti-Kickback Statute, that is by paying off all these doctors with these lavish speaking gigs to continue to overprescribe OxyContin. And the third is another count of violating the anti-kickback statute in connection with an outfit called Practice Fusion. I had to learn a lot about Practice Fusion, but it is a so it's an online it's an electronic health records platform that doctors use. And as far as I can tell, like they got the Practice Fusion people to like code in. Again, I'm I'm distinctly not a doctor.

0:45:38 Andrew: I'm trying to read this from court pleadings, but I'm envisioning this sort of like, you know, MedRx, like, you know, when you, when you type in like, uh, you know, I have a fever of 102 and chills, and, you know, my tongue is dry, what, you know, what, what, what symptoms you know, know what. Yeah. It

0:45:56 Thomas: Smash some pills. Oh, is that what it tells you?

0:45:58 Andrew: It And so it spits back, uh, you know, like, like WebMD, you know, will say like, well, you know, 70, this is probably the common cold, 20, it's, you know, pneumonia, four percent it's that, right? Um, I, I think that this Practice Fusion was like an internal product, uh, that doctors used that was this sort of cloud-based electronic health records platform, and the Purdue people got it to spit out like, maybe you should take some oxycodone here.

0:46:28 Thomas: Yeah.

0:46:28 Andrew: Right, like, yeah, so that's kind of a holy clown horn moment. Um.

0:46:33 Thomas: It's like the doctor, hey, this search was probably stressful for you as a doctor as well. Why don't you smash a few pills?

0:46:37 Andrew: Yeah. Yeah, why? So, plea agreement, uh, has an agreed disposition, and I'm going to read it to you. It says the U.S. and Purdue agree that the appropriate disposition of this case is as follows. One, a fine. The sentence imposed shall order a criminal fine in the amount of $3,544,000,000. Two, forfeiture. Purdue consents to the entry of a forfeitor judgment, judgment in the amount of $2 billion. Three, restitution, no restitution. Four, probation, no probation. Now, you might be sitting there thinking, what's the difference between a fine and a forfeiture? And the difference has everything to do with the fact that Purdue, as we have discussed previously, is presently in Chapter 11 bankruptcy as a result of all of the claims across the country, both civil and criminal, against Purdue for causing the opioid crisis.

0:47:38 Andrew: So in a bankruptcy, you can't get money in or out of the debtor's estate, right? That has to be approved by the court. So forfeiture gets super priority, right, it is what we call an administrative claim. And so it means you get to go get that money immediately paid out of the bankruptcy. And as I was reading this, I'm like, all right, look, getting $2 billion from Purdue Pharma right now, okay, I can live with that. Because the rest of it that the three and a half billion, that's just going to be a general unsecured claim.

0:48:24 Andrew: And so it will get paid out, you know, at the very bottom of the bankruptcy after all the vendors are paid and taken care of. But OK, two billion dollars right on top. Sounds good. Except depth. Five pages later in the plea deal detailing how the forfeiture works is this section, which says, "Purdue agrees that it shall tender to the U.S. Marshals a $225 million payment in partial satisfaction of the forfeiture judgment within three business days following the entry on the the judgment of conviction." So, OK, two billion, they're going to get what, 11 percent of that up front, 225 million within three days.

0:49:14 Andrew: OK, then on the next section, order to avoid this is the bottom of page nine to the top of page 10, in order To avoid the unnecessary imposition of duplicative fines, penalties and or forfeiture of the same or similar misconduct, the United States agrees to credit against the $2 billion forfeiture judgment $1.776 billion of the value distributed or otherwise conferred in settlement of claims asserted by state, tribal, or local government entities under the plan of reorganization in bankruptcy. Yeah, I know that's A lot of legal gobbledygook. Here's what it means. It means of that $2 billion in forfeiture, Purdue is going to pay $225 million within three days of this getting approved by the judge. And that's all they're ever going to play on this. The remainder of that $1.776 billion then becomes converted into an unsecured claim for all of the state claims against Purdue Pharma related to causing the opioid crisis, which, again, will get handled when Purdue is converted into a trust to pay out the balances on claims of all of the different people who have sued it and who have claims against it.

0:49:51 Thomas: What does that mean?

0:50:41 Andrew: Whether that is 50 cents on the dollar or 10 cents on the dollar, or one cent on the dollar, I don't know. But what I do know is the priority claim, right, which is the forfeiture, the one that they could get right now off the top, the federal government is taking 11 cents on the $1 on that. They are taking $225 million and that's it. It. Now, is there a light at the end of this tunnel? There is a light at the other of the tunnel.

0:51:14 Thomas: Well, you promised us one, so

0:51:15 Andrew: I did.

0:51:15 Thomas: There better be.

0:51:18 Andrew: This deal has no jail time for any of the Sacklers. That's the family that controls Purdue Pharma. This is a closed corporation, right? And while this contains an agreement not to prosecute Purdue Phasma in connection with these claims, which is terrible, does not contain any agreement not to prosecute the individuals, the Sacklers. The U.S. government, and state attorneys general are free, and New York has already brought a case against the SACKLERS in their individual capacities. Capacities, um, now those cases are going to be harder to prove, right, because they're going to claim that they were acting on behalf of a company, but when you do illegal stuff, that does not, that, that, that pierces the corporate veil, right, and again, yeah, it, it, that's not, a that's not a bad thought process here.

0:52:16 Thomas: We're right back to, oh no, I was going to bring it up, but I can't. We're right back to somebody, uh, lying about sexual assault for their job kind of I was gonna ask about states, yeah, so who is responsible for this terrible sweetheart deal that for some reason they're getting, geez

0:52:37 Andrew: Yeah, this is Rachel Honig, the U.S. attorney from the District of New Jersey, who was the lead U.N. U.A. attorney on this case. A bunch of other folks, including Owen Foster from the district of Vermont, and then a bunch of people who work in Rachel Honigs office. Let me be clear about this. OK, I am not saying that this is and we did this on our non you know who show. I'm not saying that this deal is I've Googled a whole bunch of stories that were describing it, and they link back to a single AP report, which describes it this way.

0:53:31 Andrew: Drug maker Purdue Pharma, the company behind the powerful prescription painkiller OxyContin that experts say helped touch off an opioid epidemic, will plead guilty to federal criminal charges as part of a settlement of more than $8 billion, the Justice Department announced Wednesday. And what I want to say is that $8 billion figure is wildly inflated, as I just described. You can get there, but what they're going to get is $225 million dollars directly from the bankruptcy. And then everything else is thrown in as part of the plan of reorganization.

0:54:05 Thomas: So That does that mean, like, they're their dead creditors or whatever get the money? How? Yeah.

0:54:09 Andrew: In which it works, when you declare bankruptcy, and particularly a chapter...

0:54:13 Thomas: An order, well, we don't have time for a bankruptcy deep dive, but

0:54:15 Andrew: But yeah, what happens is everything gets frozen, right? And then the idea of a plan, whether it is a plan for reorganization or a plan for liquidation, which is chapter seven, is that you resolve all the outstanding liabilities and you resolve those in some kind of priority order, right?

0:54:33 Thomas: What if their outstanding liabilities are just the money for bribing doctors to over-prescribe this crap, Dr.

0:54:44 Andrew: And that is right, is absolutely one of the challenges, right, is how do you look back and say like, oh, So, you know, there will be in there like claim number 3872465 by, you know, Dr. Singh, by and against, that says, you know, unpaid, yeah, unpayed invoice for, yeah, for services provided on blah, blah, blah, right? And how do you know if that was a payoff or not, right, it, it.

0:55:01 Thomas: Feelgood, Dr. Roberts, yeah, well, I would hope that this would be investigated, you know, handled by, I guess, the bankruptcy court, I don't know, like, I hope somebody's looking into it, yeah

0:55:20 Andrew: It. But but the bankruptcy court. Yeah. The bankruptcy court's primary objective. And I know this, having litigated. I am not a bankruptcy attorney, but I have litigate claims that were part of a bankrupt estate. Right. And the bankruptcy court's primary motive is to protect the similarity of creditors. Right? So in other words, what a bankruptcy court cares about, when, think about how you pay your bills, right? And you might pay them on a, like, first in, first out basis, right, but you get to decide how your money is spent and who you're stiffing if you're sniffing any of your creditors. And you can pay like one guy 100 cents on the dollar, and you could pay somebody else nothing and force them to come sue you.

0:56:14 Andrew: The idea behind bankruptcy is put a hold on everything. It's called the automatic stay. And then the court says, we want you to treat everybody who is legally similar the same way. And we want them to suffer the same. Right. We do not want, you know, for example, if you had to suppose.

0:56:34 Thomas: You don't want to play favorites

0:56:35 Andrew: Yeah. If you had two different properties were that were mortgaged to two different banks, we wouldn't say like, OK, well, you can pay off Bank A a hundred cents on the dollar and then Bank B gets nothing. Right. You would say, all right, Bank A and Bank B are each going to get fifty seven cents on a dollar. What happened?

0:56:53 Andrew: Right. And that's, that's the fun way, over simplifying. That's the fundamental objective of a bankruptcy court. So whether the bankruptcy court is going to be empowered, or is going to think that it is even appropriate to look into the substance of general unsecured claims, I don't know. And I would be highly skeptical that they would. So we need to follow this. The next story will be, because this is going to be approved, the next story is going to be, what does the Purdue Pharma reorganization look like? And at the end of the day, the Sacklers took billions of dollars of money out of Purdue Pharma. This was a privately held corporation. So, you know, there aren't the same, isn't the same kind of accountability that you have in a publicly traded company. And, yeah, and

0:56:35 Thomas: Yeah okay yeah it's a nice mom and pop family business of killing hundreds of thousands of people, well,

0:57:46 Andrew: Until those folks are in jail and or are paying back huge amounts of restitution and penalties, then I don't think you can say anything like justice has has been done here. So, yep.

0:58:01 Thomas: We'll need to keep at it and hopefully states can do separate suits and stuff, yeah, that's uh, that's rough. Okay, well, we did it, we didn't reference, I think we're gonna have to give a pass to our uh to our top patrons if they reference 45, but we, we didn't have to. Good job, Andrew. You completed your task.

0:58:07 Andrew: Yep.

0:58:21 Andrew: And, and look, the Sacklers are not individually exempted from this in this non-prosecution agreement. Make sure, right, be informed and stay on your elected officials to go after them, because they profited from killing people, and we can make sure that they're held to account.

0:58:36 Thomas: Well said.

0:58:37 Clip: And thank you, Let's go!

0:58:39 Thomas: Now it's time to thank our top patrons, our Hall of Famers, our all-time greats on patreon.com/law. You folks are the best, you make the show happen. Here's your special shout-outs. Start us out, Andrew.

0:58:50 Andrew: Thank you to New Book, The Greatest Gift of All: A Logical Path from Religion to Humanism, by Mark McLean, out November 30th. Pre-order now. To Nevin Dudes's Cow, Wesley Glenn Brock, becoming a patron to get five episodes a week, now to catch up on months of backlog, that is a fantastic idea. Matt Rogers for Virginia's 47th House District. At Casa Agria is the best brewery. At Emperor's Brewery is a close second. Guys, I'm still waiting for my samples to validate this. Bradford Kitey, Great Dooku, Tree, A Turn Tree General for the Galactic Republic and District of Hyrule.

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0:59:39 Thomas: No

1:00:04 Andrew: Drew collins

0:59:59 Thomas: Well, and yeah, and that's why they changed it this time, anyway, yeah

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Well, good job at Hans Royal, Mike Hall, An Old, Mad, Blind, Despised, and Dying King, That Dickens, Always with the Compliment, Fly Like a Hot Dog Freedom Eagle, Say It with Me: Amicus Angry Mac Face, Cory Seeger Is My Favorite Cory, well, you should be happy about that, Cory Booker is okay too, I guess, sorry, Andrew, Uncle Frank Is Too Far Gone, Statehood for DC, Puerto Rico, American Samoa, Guam, Northern Mariana Islands, and the U.S. Virgin Islands, Center Black Trans Sex Workers, The Books That Burn Podcast, Reviewing Fictional Depictions of Trauma Since 2019, Vote, Vote, Vote, and Get a Flu Shot If You Can, yeah, do

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1:01:16 Thomas: I did got my flu shot, good job, do that everybody buddy, please.

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1:01:59 Thomas: It course. Yeah.

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1:03:34 Thomas: Maybe it's yeah. Maybe it'S like

1:03:36 Andrew: I don't know.

1:03:36 Thomas: A breakdown of it or something. Who knows?

1:03:37 Andrew: Yeah, well, we'll have to check it out. But I'm kind of scared to type QAnons into Emily Rainbow Spence. Duncan Dixon. Coffee Terry Cannon. Vote or be complicit. Jason Copas. Hotspear.com supports the Jujitsu Court Act of 2021. We're with you, Hotspeer. Punching fascist is not enough. Get into good trouble. Take it away, Thomas.

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1:04:47 Thomas: Every time I hear someone mention Griswold, I pretend it's a lawsuit about dumping sewage in a storm drain. Uh, Esther's full C. Okay. Um, I shake my, yeah.

1:04:55 Andrew: Uh, Great National Lampoon's Christmas Vacation joke

1:05:00 Thomas: Oh Yeah. It took me a second. Yeah. I remember now, I, oh, that guy is so nuts now. Oh, geez. He's a Trumper. Oh no, I can't edit that out. Me. I can't mention it during this. I shake my little tush on the catwalk, on the catwalk. I shake my little tish on the catwalk. Philip Kizer. Andrea the Arbitrary and Capricious. Eric Alsman. I like traffic lights. I like traffic lights. Stop equivocating. They're not the same. Vote Biden by Don 2020. Taco Bell puts beans in their items, not pins, just saying. Oh, okay. That's the

1:05:00 Andrew: There, yeah.

1:05:31 Thomas: First good argument I've heard but We can still pin the, the rapper. I don't know. I gotta abseon terrified for future and lost any shred of hope for dignity for humanity, humanity pain. Strumpet Trambliss. Drinking, drinking burgandy and reading Outbreak, a crisis of faith by No Illusions and Andrew Torrez. Highly recommended. Yeah, I just, uh, bought some burgundy glasses recently. They're so classy and fun. So I could do that same thing. A world without simile wouldn't be like anything. The wandering gambler. We're no strangers to love. You know the rules, and so do I. The full commitment's what I'm thinking of. People like to do song lyrics,

1:05:32 Andrew: That's a strong strong argument Yeah.

1:05:55 Andrew: Riedel Good

1:06:08 Thomas: I guess, or something. Scotus uses the Bob's Country Bunker model of religious tolerance. Milo Mead song is working the polls. Therese Chan, Boston Live Show 2021 with lobsters and karaoke. Join your labor union. Together we bargain, alone we beg. I move for a bad election thingy. Well, we'll see. Ipso Fatso. James K. Doctor at night, homeschooling our kids in the day. Pretty sure my wife's a superhero. Chad T. Anonymous. Put some beans on it are my favorite reminders, pins are close second. How dare you, we had a poll about this in the group, we've solved this, pins are better. Wordorigins.org, your source for legal terms from 13th century Saxony. Stop, ask a question, T. Gomez would ask. R.I.P. Notorious RBG. Hope you all are safe and well, have a good week. Air Bud 69, it's a dog-eat-dog world out here. Video

1:06:17 Andrew: For You, Milo They

1:07:01 Thomas: Killed the Patreon pun. Liz Constitutional Kumite Weeks. Derek, terrified we'll be pecked to death by lame ducks. Adam, ducks don't really peck, do they? Adam Costa. Jay Aldenwalt. A string, maybe it's like terrified we're going pecked We'll crapped on by lame duck. Ducks do a lot of crapping. Less pecking? I don't know. They don't have the sharp beaks like the chickens. Boy, I grew up, we had chickens on our property. Those, those things, they'll get you a different, they, they also crap a lot. They do both. Anyway, Buttercup spooky cat hotel.

1:07:21 Andrew: Do, do That Yep.

1:07:35 Thomas: Now, now on Facebook, Rhonda 2020, because why the F not the coronavirus apocalypse is making me too depressed to think of anything clever this week. Malika Chandler, tricycler manslaughter. Do I get any fame and fortune for making an eighties reference that even Andrew didn't get? I guess so. Soggy pants, Matthew Vernon, international cocaine importers, Inc. Adopt a homeless pet and oppose declaring, declawing and ear docking. Don't take legal advice from laser beam monstrosity attorney at law. Heather L. Jeremiah's fancy microwave emporium. Ian and Ali. Danny Rosari. David and Brooklyn. Eli Bosnick. Sam Denao. Miss Poon says pins are better than beans. Okay. Mitchell. No commute. So behind on podcasts. Drop what you're doing because Trump's about to ruin the votey dance.

1:08:21 Thomas: Natasha Crunchwrap wants you to support the Justice Policy Institute. Sam Buck. I agree with that 100%. And Conrad Michaels oh where if we we made it okay thank you so much all

1:08:32 Clip: Oh, no associate of this firm has ever failed the bar exam. No kidding.

1:08:38 Thomas: Okay, now it's time for T3B answer time. Oh, don't feel confident on this one. Let's see how I did.

1:08:45 Andrew: Yeah, this was a question about what we used to call judgment notwithstanding the verdict, or J-N-O-V. And it's J-NOV because there are like some Latin words in there that I don't know, and I'm not going to try and pronounce them and look them up even if I could. And that is the question of, can you ask a court to say, I don't care what the jury says. I want you to decide as a matter of law that you are going to direct a verdict one way or the other. And in the criminal justice system, you cannot do this. Right. If if a jury comes back with a verdict of not guilty, you don't get to say no, that that should right.

1:09:01 Thomas: Yeah, right. I kind

1:09:33 Andrew: That should be guilty.

1:09:33 Thomas: Of feel like there, this could be where I made a mistake. I was sort of thinking of this as a criminal thingy.

1:09:38 Andrew: In this is a civil case alleging breach of contract and fraudulent misrepresentation. And the question is, can can you ask a court to direct a particular verdict based on the evidence? And the answer is yes. OK, but we're not necessarily out of the woods yet. And the reason for that is think about the way the life cycle of a trial. Right. Right. We've talked about how you file your complaint. Your complaint says on information and belief for the things you don't know, you get discovery for the things you hope to find. But when discovery is over, it's then a question of what does the evidence show? Right. And you move for summary judgment that It says, hey, all the evidence is in and there is no evidence that my client was ever on your property. Therefore, we're going to dismiss. We're goingto say that you should move for summary judgment.

1:10:33 Thomas: Yeah, this is where I get confused on things. This is an important lesson. So a judge is able to just say, yeah, no, this evidence sucks. I don't even want it to get to a jury. It's not worth it.

1:10:35 Andrew: Yep.

1:10:44 Andrew: Right. And so that's what happens in the summary judgment phase. But suppose the judge says, no, there seems to be a genuine issue of material fact here. You've said, yeah, or or they filed a motion for summary judgement that was denied. Right? Right. Like we don't know. Right.

1:10:47 Thomas: Okay. Well, in this question, it sounds like nobody filed the motion. So that nobody, yeah. No, this one said neither party filed for a motion for judgment.

1:11:04 Andrew: For judgment as a matter of law. Right, that's not that's separate from moving for summary judgment before the trial. Right.

1:11:06 Thomas: Yeah. Oh, it is?

1:11:11 Andrew: Yeah. Yeah, we don'T know. So I'm about to get there. So we DON'T know if either party moved for summary judgment, but if they did, it was denied. And then you go to trial and then suppose the judge says, yeah, that'S right. You say you have a witness who can testify that Mr. Mr. Smith was indeed on your property. So that's a material dispute. We're going to go forward. We're gonna have a trial. But then suppose I put my witness up and he sucks, right? And seriously, like this happens.

1:11:11 Thomas: Jeez. Okay. Okay.

1:11:40 Thomas: Your Honor, let the record show this witness sucked.

1:11:44 Andrew: And suppose, right, like that happens. I say, did you see Mr. Mr. Smith on.

1:11:50 Thomas: And you're like, I own a computer store, I'm legally blind, but I'm pretty sure there was a sticker on the laptop that Mr. Smith gave me that showed that it was his. Lat, never mind, it's okay, different thing. So.

1:12:01 Andrew: Right. And so the witness doesn't say what what you expected him to say, if that happens. And again, you you I'm about to explain why these motions are commonplace, but they are not granted in a commonplace fashion. You might move for a directed verdict. You would say, Hey, Your Honor, you denied our motion for summary judgment because you said we were going to hear from this witness that was going to place, you know, my client at the scene. But my client definitely was not there. And the witness didn't testify as to that. And so now there's no reason for this case to go to the jury. I want you to direct a verdict in favor of the defendant or in favor OF the plaintiff.

1:12:48 Andrew: And the judge has the power to do that. The rule that allows them to do that is Rule 50 of the Federal Rules of Civil Procedure. The question is, did that was that followed here?

1:13:01 Thomas: In this Question that didn't really happen, did, or or so there wasn't a party, okay, so it wasn't to file a motion for judgment before the case went to jury, but after it went to a jury. There seems to be guilty.

1:13:10 Andrew: Yep. After it goes to jury. Right. Now it comes back and the jury says we are going to we're going to find for the plaintiff. Right. And then the defendant is like, wait a minute. How could you possibly find for The Plaintiff? If, you know, the evidence is insufficient, we are moving the court for a directed verdict.

1:13:16 Thomas: Yeah. Yeah, I feel like this was B.

1:13:33 Andrew: And and and and in fact, it was B. Right. And so what happened? So you were correct that you would not be able to take up the defendant's challenge here for a corrected verdict, not because determination of the sufficiency of evidence is solely within the jury's province. Right, it's always up to the jury, yep, Yep, uh, because what the federal rules prevent you from doing is gaming the system of saying, "We're gonna wait, get a jury verdict back, and then if we don't like it, then we're going to move for a directed verdict." It's like, no, if you think you got a directed verdict, move for it now, as

1:13:39 Thomas: Yeah, yeah. Well, I've now learned that it isn't. Yeah yeah.

1:14:09 Thomas: Yeah so

1:14:10 Andrew: A result, what that means is in basically every civil trial, you make a Rule 50 motion at the conclusion of the trial for a direct verdict, and the judge denies that verdict.

1:14:22 Thomas: That just happens every time just to say you did.

1:14:23 Andrew: Yeah. And it in order to preserve your rights. Yeah, exactly.

1:14:27 Thomas: So it oh and that's the part of the question I guess we haven't even talked talked about. So this is all about preserving an appeal for later.

1:14:34 Andrew: Because that's the question is, should the appellate court consider the wholesalers challenge? Right. Not should they rule, but should they even think about it at all? Is it is it is a matter that is preserved for appeal? Appeal.

1:14:43 Thomas: Yeah. So I at least identified that part.

1:14:48 Andrew: That's right. And here the defendant waited until after the jury verdict came in, and Rule 50A says that you may move for judgment as a matter of law at any time before the case is submitted to the jury. So there you go.

1:15:04 Thomas: Okay. Answer B. I blew that one. That was a tough one. I, I sort of was on to answer B at first, and then I just missed it, and I went, went out and, you know, had a different theory of the, uh, the case. So, well, that's the end of my arrogance. I've learned a valuable lesson. And I'll never I'm

1:15:20 Andrew: I've learned something here today, Thomas. This exactly right

1:15:24 Thomas: Sure I'll never be arrogant about answering questions correctly again, I blew it that was not even close, totally blind, issue of full apology, I need to play the shame music right now

1:15:29 Andrew: Yeah

1:15:36 Clip: Wrong! Hide my head, I wanna drown my sorrow. No tomorrow, no tomorrow. You lose!

1:15:50 Thomas: Okay, Andrew, hop in your time machine, tell us who this week's big winner is, definitely bested me, did better, good job to this person, here we go

1:15:58 Andrew: Well, Thomas, I think we both knew who was going to be this week's winner when we saw it on Twitter, but that is Keith Brown, who writes, "I won't offer an answer because I'm an attorney for the Michigan Court of Appeals, but I laughed out loud when Thomas said an appeal on the sufficiency of the evidence wasn't a thing, as I was working on an appeal challenging the suiciency of the the evidence." So, Keith, congratulations, not only on being this week's winner, but being, I think, the first T3BE winner not to actually name the answer. We know you got it right. Congratulations, great way to, uh, get it, get on board there. And everyone give them follow on Twitter, that is at keith brown oh seven K-E-I-T-H-B-R-O-W-N, zero seven, on Twitter. And congratulations, Keith, for being this week's winner, and good luck with that appeal challenging the sufficiency of the evidence.

1:16:49 Thomas: Right, that's our show. Thanks so much for listening, and we'll see you Friday. And we're getting real close, folks, make sure you voted, make sure to join us on our live stream on election night. We'll see you then. Bye.

1:16:56 Andrew: Bye

1:17:02 Clip: I move for a bad court thingy. You mean a mistrial? Yeah, that's why you're the judge and I'm the law talking guy.

1:17:36 Clip: www.openargs.com. Be sure to join the Facebook group at facebook.com/groups/Yodel Mountain and follow us on Twitter at OpenArgs. This podcast is a production of Opening Arguments Media LLC, all rights reserved. It is produced with the assistance of transcriptionist Heather Leverage, production assistant Ashley Smith, and additional contributions from Morgan Stringer and Debra Smith. Special thanks to Teresa Gomez, who runs our live shows and heads up the OA Wiki, follow at OA Wiki on Twitter. Additional thanks to the moderators of the Opening Arguments Facebook community, Emily Waters, Alicia Cook, Eric Brewer, Natalie Newell, Brian Ziegenhagen, and Teresa. And finally, thanks to Thomas Smith, who edits the show and created the fabulous theme music, which was used with permission.