OA597: 5th Circuit Tells SCOTUS Hold My Beer

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 597. Wow, closing in on 600. Geez, I think that probably means we need new intro quotes. Better put that post up there. How's going, Andrew?

0:01:24 Andrew: I think it does. It's going okay. How's going with you?

0:01:33 Thomas: Oh, going great, except not really. The news is pretty weird today. I'm really looking forward to your breakdown. I think the Fifth Circuit is like your new arch nemesis.

0:01:42 Andrew: Yeah, this is absolutely an origin story episode. We get to hear how the Fifth Circuit was bitten by a radioactive vat of acid or something like that. And they've become a supervillain and Opening Arguments is the only thing that can stand in their way. So there you go.

0:01:58 Thomas: Yeah, I guess. Yes. And it's that time of the month when we do Law'd Awful Movies. So patrons at the $2 level and up look forward to a Law'd Awful Movies. We're recording this weekend. So as soon as I can get that edited for you, can't wait. It's going to be a lot of fun. Those are always so fun. They're funny and we learn a lot. Any other announcement stuff you want to talk about, Andrew?

0:02:04 Andrew: Yeah, a couple of things. A number of states had a spate of primary elections this past Tuesday, and obviously, top-line story is that Madison Cawthorn is out, defeated in his primary in his congressional district in North Carolina. That's always a great thing. You know, we're waiting to see if the Republican Party is going to field a which which dangerous lunatic the Republican party is going to field for their senatorial candidate in Pennsylvania. As of this record, quote, Dr. Oz is leading by a little over a thousand votes. So it's the more establishment candidate, former hedge fund guy, is expected to gain when they count the outstanding mail-in ballots. So, you know, we just don't we don't know.

0:02:56 Thomas: Oh, wow. Oh, they're counting mail-in ballots now, huh?

0:03:09 Andrew: Yeah, it's kind of weird.

0:03:11 Thomas: Weird.

0:03:11 Andrew: Of course, Donald Trump has already encouraged, quote, Dr. Oz to declare victory and withdraw because, you Know, mail-In ballots don't count. But my top line takeaway, lots of people are sort of trying to figure out what's Trump's influence. Is it been diminished because Cawthorn lost? And to me, the story is being a dangerous insurrectionist, being dangerously unhinged and disconnected from reality is not disqualifying in this Republican Party. And so the one sex committee is starting public hearings in June in a couple of weeks. And we have a lot of work to do with the electorate. So we'll see how that goes. And one or two lines you have seen, if you've been listening to this show since episode 590, at least, it was no surprise that Elon Musk announced he has, quote, put his deal with Twitter on hold.

0:04:04 Thomas: Hey, Hey, is that something you can just do?

0:04:06 Andrew: That's not a thing you can do. And we saw this coming. We told you the circumstances that would lead to this.

0:04:13 Thomas: I'm announcing to the bank that holds my mortgage that I'm putting that mortgage on hold. Like I'm just, you know, I'm going to look at it, see if I want it or not, want to pay that. And so it's on hold, what

0:04:18 Andrew: Yeah. Yeah. Yeah, We told you, you know, the net result of all of this is, although there is a billion dollar penalty attached to it, the language of the merger agreement is sufficiently ambiguous that Elon Musk is not going to write a check for a billion dollars, even if he backs out. He's going to tie this up in litigation for a decade and will manage to recoup the time value of having not turned over that billion dollars for a long period. So this is, it's ugly and we still don't know what's going to happen, but we told you so,

0:05:04 Thomas: Was this whole farce about? Like, oh, I've got I'm the followers to see if they're fake or something like that has some impact on the deal.

0:05:12 Andrew: You know, it is teeing up a set of arguments that says, oh, I didn't back out of this deal. You failed to disclose material conditions. The argument would be failure to disclose that, you know, X percent of your accounts are bots is on the order of you buy a house and they just replaced the roof last week because it's leaking and they didn't tell you that as part of their disclosures. You could, when your inspector comes in and is like, uh, you know, they just patched up this roof. That suggests that there's some kind of problem, and it turned out they didn't disclose that. You can invalidate that contract. You can say, hey, you had an affirmative duty to tell me about material conditions.

0:05:58 Andrew: You didn't, and by failing to disclose that, that means our deal is off. That's the argument he's setting up. It's obviously stupid when it involves Twitter bots, yes, but that's why he's doing it, so we'll keep you posted.

0:06:07 Thomas: Yeah, it's terrible. Yeah. Yeah. Yeah, I get that's why he's doing it, but I think people are wondering, like, that's obviously stupid and not going to work, right?

0:06:14 Andrew: Yeah. Yeah, it's obviously stupid and not going to work, but it's going to be one of 87,000 arguments that he raises in court for why he doesn't have to pay the billion dollars. And a court's going to have to evaluate all 87,000 of those.

0:06:33 Thomas: Not everyone is as knowledgeable as you, so some people need to be told that this is a feeble attempt to make an argument that he can back out of the deal, but it's farcical. Like, there's nothing there.

0:06:43 Andrew: Yeah, that is exactly right.

0:06:46 Thomas: I mean, it's like, I'm shocked to find out that gambling is happening in this establishment. You know, like – oh, the bots. I'm going to check if there's – this just in. There may be bot – like, shut up.

0:06:57 Thomas: But however, he may be that dumb. I don't know. Based on his tweets lately, did you know he's revealed that he's a voting Republican from now on? That's just shocker. I had to set up several fainting couches in a row. I just kept faintening from one to the next. Wow.

0:07:09 Andrew: You Mean, somebody who has publicly feuded with the SEC as for the past decade opined that government agencies should not regulate anything. I mean, you know, this is the idea that he's now flirting with the Republican party is just laughable.

0:07:28 Thomas: I mean, 2016 wants its Dave Rubin back. Like, that's the level of discourse. It's unbelievable. I used to vote Democrat because they were nice. Nice and now it's like it's so dumb that I maybe he's just trolling I don't know but he's today's thomas edison so it's that's fine yeah I did want to say one thing about Elon Musk, Andrew. Well, okay, two or three, a second or third genius though he undoubtedly is, mastermind that he is, he's succeeded in crashing Tesla stock all the way down to what, 700 now, and also Twitter, which he pledged to buy for, what was it, $54.20 a share, is now trading in the 30s. So, wow, genius, brilliant, Tony Stark, amazing. What a brilliant guy. That's a lot of money that's being lost. That's tremendous sums of money he's losing.

0:07:28 Andrew: Yeah Yeah. Yeah. Yep. Sure. Yeah, absolutely.

0:08:21 Andrew: It's 30 percent of Tesla's value over the past month, which is essentially 30 percent of Elon Musk's net worth, which is tens, tens of billions of dollars. The scary thing is He's still the richest man on earth, right?

0:08:31 Thomas: Bazillions. Yeah. Really?

0:08:39 Andrew: That, yeah, you can take away 30% of his net worth. And, uh, yeah.

0:08:39 Thomas: Wow. He was that far ahead of Bezos, huh? Crazy.

0:08:46 Andrew: So terrifying. And again, all of it amounts to, wow, the world's richest man is out of touch. Who would have thunk it? So you're

0:08:54 Thomas: Yeah, exactly. Well, you're right. Let's move on to other horrible things.

0:09:00 Clip: Arrest a husband and wife for the same crime. Yeah, I don't think that that's true, Dad. Not that we're still...

0:09:09 Thomas: So Andrew, I saw this, This, the coverage, the Fifth Circuit is just, it just feels like they are testing the limits. You know, there's not even really a fence anymore with the Supreme Court, but they're testing, I don't know, the outer bounds of the earth to see how terrible they can make decisions and not have the Supreme court overrule them. This latest one involves the SEC and given the impression that they're essentially ruling the SEC just can't do anything, like they're not in charge of anything anymore and they don't exist. Am I exaggerating? What's happening here?

0:09:40 Andrew: You're exaggerating a little, but not much. This is an excellent description of the Fifth Circuit, as I called them on Twitter, a stalking horse for the right wing that thinks this Supreme Court is too tentative, right? It's too small-c conservative. And essentially, the strategy that they're employing, you've correctly described it, is to disregard Supreme Court precedent that they are pretty sure Sam Alito doesn't like anyway. That's what they did in affirming the constitutionality of Texas SB 8. And it's what they're doing in this particular case. Spoiler alert, this one pretty much overturns a 2018 Supreme Court decision written by Clarence Thomas. Okay.

0:09:55 Thomas: Yeah. Wow. That

0:10:26 Andrew: So yeah, that by the beacon of progressivism that is Clarence Thomas. This one, I think they're hoping flies beneath the radar. The Twitter outrage has been out there, but this is complicated, and I'm going to have to do an explainer of administrative law. And This is really, really important that you understand the game that's going on, because at minimum, what this is, is delivering a key undeserved win to a far-right Republican constituency. Constituency. That's the very minimum that this decision will do. What it is intended to do is continue the Republican Party's sole operating principle of arguing that government doesn't work and proving that by wrecking every lever of power they get their hands on.

0:10:26 Thomas: Flaming liberal. Yeah. All right.

0:11:22 Thomas: Yeah. This car doesn't work. See? Just drive straight into a wall at max speed. See? It doesn't look like It's broken.

0:11:26 Andrew: That is the Republican party, and I'm going to explain that. It's going to require a little bit bit of effort. So strap in.

0:11:34 Thomas: Well, if I know our listeners, like me, we are all ready for you to deliver us an administrative law breakdown. It's our favorite thing.

0:11:42 Andrew: Yeah. So let's kind of start at the top. And that is one of the things that I've always used as an illustration for why originalism is silly, and particularly the kind of strict constructionism of the text of the various terms of the Bill of Rights, is starting with, say, the Fifth Amendment. No person can be deprived of life, liberty, or property without due process of law. What's a liberty, what's a process, and how much of it are you do? And that is actually something administrative law answers. Generally speaking, the idea that you would read that literally, no person can be deprived of their liberty without due process of law. You would say, okay, does that mean, for example, that we have to have a trial on the merits every time government does something that changes my behavior? And the answer to that is very obviously not.

0:12:09 Thomas: Yeah. Yeah.

0:12:36 Andrew: Perfect example, the city council tomorrow decides to make the street out in front of your house a one-way street. Well, that interferes with literally 50% of your liberty, right? Like you can now only turn right, and all the things that involved you turning left and doing stuff now involve you having to to make three rights, right? So you cannot seriously argue that that doesn't constrain your liberty. But you know what process you're entitled to in connection with that? Almost nothing. You were not even entitled to notice that they're going to make it a one-way street before they start putting up the signs. They might hold a public hearing. And if you were paying attention and you happen to read your local newspaper or walk by your county councilman's office, maybe you noticed and maybe you attended.

0:12:37 Thomas: Yeah.

0:13:29 Andrew: But by and large, you could just wake up tomorrow and your street could be a one-way street. And if you try and argue that you've been deprived of your Fifth Amendment right to due process of law, they'll say, no, you got all the process to which you were due. How much was that process? Nothing, right? Or almost nothing. We changed the sign.

0:13:46 Thomas: Virtually nothing.

0:13:47 Andrew: Right. Yeah. We held a public hearing. It's not my fault if you didn't know when that was and didn't bother to attend. Okay. So then you can kind of go up in baby steps and every step you go up, you get a little bit more process. So for example, if you were denied unemployment or other federal, certain federal benefits, you'll get notice, but not a hearing. You'll get a letter in the mail that says, "Dear Mr. Smith, this is to inform you that your unemployment benefits will will stop as of May 30th, 2022." If you do nothing, guess what? They stop. It puts you on notice. If you want to bring a lawsuit or otherwise challenge that administratively, you can take advantage of whatever procedures are available to you. But if you do nothing, those benefits are just going to stop. All you get is notice. That's a step up from the one-way street, but it's still several miles away from being entitled to a trial before they take it. What about if your specific property is going to be rezoned?

0:13:47 Thomas: Yeah. Hmm.

0:14:52 Andrew: You are planning on building an apartment complex and all of a sudden you get a notice that your piece of land and only your piece of land is about to be rezoned into a particular sub-district in which apartments are prohibited. Only single-occupancy family homes are permitted. Well, there you would get both notice and the notice would say, as part of this process, we're going to have a hearing and you are invited to attend the hearing. But it's not a quasi-judicial hearing. It's just like a meeting of the zoning board and they're going to get together and you you can come down and say, please don't. I would like to build this apartment complex and they'll, you know, listen to whatever you have. But at the end of the day, they're going to make a decision and they're not going to make a position based on what you would have to prove at trial.

0:15:44 Andrew: They're just going to base it on what they think politically is the right thing to do. So you get notice and you get a hearing, but you don't get the, what the law calls quasi-judicial protection around that particular activity. You just get the right to show up and sort of make your arguments and the government will figure out what they're going to do. Then kind of the apex of this administrative, what if you have a patent and there is a proceeding to cancel your patent and the argument is that the U.S. Patent Trade Office made a mistake when they issued it to you. The USPTO is supposed to search for prior art, and they don't issue you a patent. You know, if I were to say, like, "Hey, I'd like to patent this thing whereby we, you know, shoot electrons down a tube and project it on a screen and we could, you know, show moving pictures on it."

0:16:34 Andrew: I would call it televisor, right? Like the, you know, the USPTO would say, well, we think that your patent would probably infringe on these earlier patents that were issued. So we're not going to issue it, but sometimes they make a mistake and sometimes they issue it anyway. And then the holders of the prior patent are entitled to bring a particular kind of process. We're going to actually talk about this because this is the 2018 Thomas decision, to which I alluded to in the introduction, to say, hey, we want you to retroactively cancel this patent. Now, if I got the erroneously awarded patent, that would certainly deprive me of a kind of property. But we would do so in a situation that is a little bit less than a trial. It is, I get notice, hey, there's going to be this process, process, I get a hearing. And the hearing is what we call a quasi-judicial hearing in front of an administrative law judge. It looks like a courtroom. You admit evidence. I get to have my lawyer there, all of that sort of stuff. But the procedures might be a little different.

Like the administrative law judge may be able to hear hearsay testimony that wouldn't be admissible under the federal rules of evidence. The administrative law judge, you may not be entitled to a trial by jury. The the judge may be the sole fact finder. And there may be other issues. I may have expedited rights of what kind of motions that I can file or what kind of discovery that I'm entitled to, that sort of things.

0:17:11 Thomas: Yeah. I

0:18:01 Andrew: It's a way of saying, hey, this is really, really close to a trial, but it's not all the way there. And that process, that administrative law process is a thing that takes place every day. It's not just if you're getting your patent canceled, if you've emitted toxic waste into the air, if you were about to be committed, if you have a competency hearing, and if you've committed some kinds of insider trading, and that's what this case in particular is about.

0:18:31 Thomas: Was wondering how we were getting there.

0:18:32 Andrew: Yep. So important takeaways, administrative law proceedings never, ever, ever involve going to prison, depriving you of your liberty in that way of saying, oh, well, guess what? Now you will be in a federal prison. If you're going to be in a federal prison, you are entitled to a trial, a criminal trial on the merits. Okay. I want you to remember that, that we are talking about civil penalties at the maximum, your civil penalties and injunctions saying, hey, you're dumping too much pollution into the air, dump less and pay this money to remediate it. And administrative law decisions are always subject to review by at at least one court. So it's not as though this is the final adjudication.

0:19:20 Andrew: It's not the final adjudication on the merits. And we've talked about how courts will approach that administrative record on the record and defer to the fact findings below. But you still get to go into court in case one of these administrative law judges gets the law wrong. You will always have the opportunity to present your case on the law in front of Article 3 judges appointed by the president, confirmed by the Senate, and subject to all of the protections that you have in an Article III court. So that's what administrative law is at kind of a 30,000-foot level. So that is what we have here. And again, I want to stress this has been the law, the way in which these kinds of regulatory congressional statutes get applied that affect your behavior for the past 85 years.

0:20:15 Andrew: That brings us to the right wing Republican constituency and what this case is about. And this case is that 28 Patriot LLC versus the SEC. Yeah, yeah, exactly.

0:20:29 Thomas: 28 Patriot truck nuts, bald eagle. We'll see.

0:20:34 Andrew: So this is about a provision of the Dodd-Frank Act of 2010 that allows the SEC to bring certain kinds of enforcement actions before administrative law judges, and specifically about insider trading. Here was the status of the law pre-2010. The SEC could impose fines in administrative proceedings only on registered firms and individuals, such as brokers, investment advisors, and firms that registered securities with the Securities and Exchange Commission. So if you have publicly publicly traded stock, for example, then you are registered with the SEC. And then along came Bernie Madoff.

0:21:17 Thomas: Yeah.

0:21:18 Andrew: Bernie Madoff's investment scheme was non-registered security. That was the key to the whole thing, right? Was that you invested with him and he did this kind of mumbo jumbo and you got huge returns on your investment and all it was was a Ponzi scheme. Like he literally put your money in the bank and withdrew when other investors were like, well, it's time for me to cash out. So because he was not a registered broker dealer or a registered securities firm with the SEC, the SEC had to proceed against people like Bernie Madoff by bringing a regular lawsuit. They could not go to an administrative law judge to get fines or injunctive relief or anything against Madoff.

It wasn't something that they had initially considered in the original Sarbanes-Oxley Act. They were like, okay, yeah, no, we think that the kind of people that are likely to commit these kinds of Securities and Exchange Act violations are going to be, you know, insider trading of registered stocks, right? Right. Like, you know, and you didn't think about like, oh, what if somebody is running a Ponzi scheme outside? And by the way, as a slight sidebar, everybody, regardless of your political or economic bent, everybody agrees if there had been more SEC oversight of what Bernie Madoff was doing, that would have been the key to stopping this early.

0:21:24 Thomas: Oh, interesting. Hmm.

0:22:25 Thomas: Yeah. Yeah.

0:22:46 Andrew: Right. Like, yeah, right.

0:22:46 Thomas: So hold on. I'll just make sure. Less oversight wouldn't have stopped him? I just, okay. Just critical fact.

0:22:50 Andrew: Exactly. So in 2010, Congress came together and they passed the Dodd-Frank Act. And Section 929P-A, which is codified at 15 U.S. Code 78U-2 subsection A, they got rid of this disparate treatment. They said the SEC can now seek fines from any firm or individual in an administrative proceeding. So in other words, you don't get to, you know, evade the SEC's jurisdiction by not registering your securities. If you're committing securities fraud, then the SEC can choose whether they want to go the whole file a lawsuit against you or whether they want to proceed in the administrative proceedings. And the idea was maybe that will help stop future Bernie Madoffs.

0:23:40 Andrew: This immediately drew the ire of one particularly important constituency to the Republican Party, and that is criminals who engage in insider trading. That is exactly right.

0:23:49 Thomas: Criminals? I love when I go to make a joke, but it's not because the Republican party is so bad. I it's just saying the thing that's not even a punchline. Okay.

0:23:52 Andrew: Right. Yeah, it just is the thing. Yeah. So they took to the pages of the Wall Street Journal to argue that now what effectively that did was allows the SEC to forum shop and to go what they call in-house and what the Fifth Circuit picks up and calls in-house, because they're more likely to get a favorable verdict from an administrative law judge. And so the idea is, oh, yeah, well, you're going to homer us.

You're going to stick us in these ad law courts and they're just going to rule in favor of the SEC. I will link one such law review article because this also spread from the pages of The Wall Street Journal to the academic journals in exactly the same way as when we discussed D.C. versus Heller. You try out goofball arguments first, kind of just generally spitballing, and then you work your way into law review articles, and then you get those law review articles cited in dissents, and then you get those dissents cited in Supreme Court opinions, and then you eventually convince the Supreme Court to radically rewrite the law. That's very clearly what the right-wing insider trader criminals who oppose this section of Dodd-Frank were trying to do. And as it turns out, by the way, everything that appeared in the pages of the Wall Street Journal was was bullshit. So

0:25:22 Thomas: No.

0:25:23 Andrew: Yeah, as it turns out, the SEC does no better in administrative proceedings than it does in court. It's just that the ad law proceedings are way more efficient. Due to internal regulations, for example, the entire ad law proceeding must be completed within a year. That is 17 CFR section 201.360A2. So there's no requirement that your trial be completed in a year. There are other things like, so as I alluded to in talking about administrative law generally, ALJs can hear any oral or documentary evidence except that which is irrelevant, immaterial, or unduly repetitious. So you don't waste time on motions in limine to exclude hearsay and that's it.

They're just like, yeah, now look, if it's relevant information, we want to hear it. You only get a limited number of depositions. You have limited access to the kinds of procedural motions that are used to draw out a trial. And so by every metric, these ad law proceedings are more efficient, but result in the same outcomes for individuals who are subject to SEC regulatory proceedings regarding insider trading. Let me quote from Tom or Scavalconia's article, Are the SEC's Administrative Law Judges Biased? An Empirical Investigation. This was issue 92 of the Washington Law Review, page 315 from 2017. Quote, as documented in this article, the evidence offered by the Wall Street Journal is deficient and its conclusions unfounded.

0:26:59 Andrew: This article compiles and analyzes a large data set of all enforcement actions from 2007 to 2015. Contrary to the claim advanced by the Wall Street Journal and critics of administrative adjudication, SEC litigations before ALJs remains rare. Although the number of contested actions filed in the administrative forum has increased since Dodd-Frank, this is mostly due to an increase in actions that could have been litigated before ALJs prior to the amendment. And more significantly, there was no robust correlation between the selected forum and the case outcome. Federal district court judges ruled for the SEC and against defendants in 88% of cases, Whereas ALJ has ruled for the SEC in 90% of cases. And kind of one more thing. So no difference in outcome, slight difference in efficiency. There's also this implication that, you know, you're just running roughshod over the civil liberties of the next Bernie Madoff.

0:27:50 Andrew: And turns out you're not. And here's why. Because in cases like this, there's a rare overlap of interests when Democrats control the presidency and therefore have executive agencies like the SEC staffed with progressives. Turns out progressives care about fairness, even for Republican criminals and scumbags. And when Republicans have control, they want to gum up the works as much as possible. And so you wind up with this rule, for example, this is 17 CFR 201.230A1, which says the Division of Enforcement of the Securities and Exchange Commission shall make available for inspection and copying by any party documents obtained by the division prior to the institution of proceedings in connection with the investigation leading to the division's recommendation to institute proceeding.

0:28:43 Andrew: The division must turn over all exculpatory evidence to the respondent before any hearing in any administrative proceeding. So let me explain what that means. We've talked about Brady and Giglio in the criminal context. The prosecutor has to turn over any exculpitary information they get. That doesn't apply when you're in a civil lawsuit. Suit. We talked about how John Eastman made that idiotic argument before the Central District of California and lost. And the court was like, no, you don't get Brady material in a civil lawsuit about whether your attorney-client privilege attaches. You only get it when you could be going to prison.

0:29:22 Thomas: Yeah. This was the, sir, this is a Wendy's of legal responses. Yeah. Is

0:29:25 Andrew: Yes. Yeah, that's exactly right. Except the SEC has voluntarily imposed upon that if it chooses the administrative pathway, it must comply with Brady. It must treat that as if Brady and Giglio applied, and they must turn over all exculpatory evidence to any defendant in any administrative proceeding. They don't have to do that if they just sue you because, again, not a criminal proceeding. It's an administrative proceeding, so there's no difference in outcome. There's arguably expanded protections available to you. You might ask yourself, what does that leave for why Republicans hate this process? And the answer is because it's more efficient, because it takes cases out of the general Article III courts and turns them over to administrative law judges who are specifically appointed because they have expertise in these kinds of cases.

0:30:24 Andrew: They don't want a rapid or efficient or just resolution of these cases. They want to make it harder for the SEC to do its job. That's it. It

0:30:35 Thomas: This the kind of thing that so obscure that they don't really even need to pretty it up with a fake excuse? Like nobody, nobody except you is really catching a lot of this stuff. They're just like gumming up the works behind the scenes.

0:30:45 Andrew: It it is because as I'm about to run relatively quickly through this case on the merits, you will see that that even for an activist court, two out of the three arguments that this court makes are just saying that the law says X when the law says not X. I wish I could tell you I was making that up, but this is the worst veneer. This was a three-judge panel of the Fifth Circuit, and the dissenting judge is a 200-year-old Reagan appointee. Like, oh, I'm not making that. When I say 200, I mean this judge's age is not available on the internet. I looked, and they got their law, they got their JD in 1960.

0:31:35 Thomas: Wikipedia is like, like, there's no date of birth. This person's just always been here. We don't, no one can verify.

0:31:39 Andrew: They got leur jd en 1960 so they are 62 years of age, plus the fact that they were not a fetus when they graduated from law school, so 65 plus whatever age they were upon entering law school. Average law school admission age, 27. So, you know, that this, this judge is in their 80s or 90s, and again, lifelong conservative Reagan appointee, and his dissent is basically like, I don't understand why you're lying about the law.

0:31:43 Thomas: Yeah.

0:32:12 Thomas: What are you guys, senile or something? What's going on? I This episode is brought to you by Buck Mason Clothing. We all have our favorite go-tos, shirts, sweaters, jeans, that stuff you wear all the time. Well, as I was getting dressed this morning, I realized a lot of my go-to's are from Buck Mason. Ever since I got some Buck Mason clothing, I'm wearing it all the Time. I'll tell you why. It's because of the high quality mostly for me. I hate thin, cheap clothing that wears out after you wash it a couple times. That is the exact opposite of Buck Mason . I got this really cool heavy cotton t-shirt that is just, it's thick with two C's. I'll say, I'll put it down. That thing is not going anywhere. It's not going to get worn out because it's so well-made. I love it. Buck Mason's clothes are second to none. They're timeless and they never go out of style. Everything I've gotten from them fits right out of the box and it becomes my new favorite. Buck Mason has all the essentials, jeans, shirts, jackets, and so much more.

0:32:14 Andrew: Yeah, exactly right.

0:33:07 Thomas: I love the tailored look and fit of their t-shirts. And I already told you that even after I put them through the wash a lot of times, because I wear them a lot, they still look just as good as when I got them. I think that once you try Buck Mason, they'll become your go-to's too. Head over to buckmason.com slash OA and get a free t-shirt with your order. That's B-U-C-K-M-A-S-O-N dot com slash OA to get a Free T-Shirt with your first order. One more time, buckmaison.com slashoa.

0:33:37 Thomas: I wanted to ask when you reference the Republican efforts to gum up the works, are you referring to just the fact that the Republican or sort of conservative court is ruining things? Are there like bills you're referencing? Or when you say they're doing this, how are they doing this? A

0:33:37 Andrew: Right. Mm-hmm.

0:33:53 Andrew: So what I mean is that at every level, when Republicans have the opportunity to exercise sizable power, one of the things that they do is make it difficult for government agencies to do their job. So legislatively, we've talked about this. Why did Newt Gingrich have as the first element of the contract with America, the Congressional Review Act that allows Congress to go back and just invalidate executive branch rulemaking within a certain period of time? Because they they want to make it easier to get rid of those kinds of regulations. Why did Donald Trump for a dozen different federal agencies simply stop staffing them? So for example, one of the things that we talk about on yesterday's cleanup on all 45 is that Joe Biden finally was able to nominate seven members to fill expired terms on the bipartisan US Sentencing Commission. And the answer to that was because these terms expired while Trump was president and Trump just didn't want the Sentencing Commission to do its job.

0:34:08 Thomas: Little

0:35:01 Andrew: And so he knew that if he didn't fit, put anybody right, like forget putting hacks in there. If he just didn't fill those spots, the commission would fail to have a quorum and by its rules, couldn'T meet. So yeah. So when I say that, I mean, It's kind of was. But but yeah, you know, so so so that is correct. Like when I say that, I mean, at every level, take a look like every time a Republican does a thing, take a look and ask, does this make it harder for government to do its job? And almost always the answer to that is, it does. And it does because it wants to reinforce that central idea that government doesn't work. So for example, this, and by the way, this opinion is rife with dog whistles. You want a great example? Look at pages 15 to 16, which says, this is perhaps a runner up in the competition for the quote, nine most terrifying words in the English language, end quote, footnote eight. And then it goes on, but fear not the dissenting opinions proposal. And And you're sitting there going, wait,

0:35:18 Thomas: Bit of paid vacation for the other commissioners at least okay who benefits yeah yeah yeah isn't

0:36:14 Andrew: What the hell is that? That is footnote eight.

0:36:15 Thomas: That that reagan quote I'm from the government and I'm here to help

0:36:19 Andrew: CF Ronald Reagan Presidential News Conference, August 12th, 1986. Yeah, that

0:36:19 Thomas: Or something yeah and even the 900-year-old Reagan guy was like this is why I'm not even been going for this.

0:36:29 Andrew: Is exactly right. So what does this opinion do? I need to add just one more preliminary before I get into the what it does. A particularly terrifying aspect has to do with the internal Fifth Circuit rules, which this court specifically cites, that says, oh, hey, by the way, if we have multiple reasons for arriving at a particular conclusion, all of them are technically binding precedent. So this is page 19, footnote 9. This is an alternative holding that provides grounds for vacating the SEC's judgment. This circuit follows the rules that alternative holdings are binding precedent and not obiter dictum, right? Not dicta. So there are three specific holdings and now they are, as of right now, the law of the Fifth Circuit and all three are completely bonkers in every conceivable way.

0:36:30 Thomas: Wow.

0:37:29 Andrew: The first is that the SEC has no power to choose to bring enforcement actions before an administrative law judge because they are not enforcing a public right. I know I need to break that down a little bit. And to do that, we will go back to that breathtakingly liberal 2018 Clarence Thomas opinion. Because this is the most recent discussion by the Supreme Court on what the public right doctrine is. And let me explain what's at stake. The ruling is if the government is vindicating a private right, then it must do so in court. What's a private, right? A private right is something that is cognizable at common law.

0:38:16 Andrew: So for example, you breach a contract with the government, they sue you to get the money back. That's a right by the government that they are seeking to vindicate. They're not protecting the public. They're saying, hey, you broke your contract with the government. We want that money back and we're coming after you for it. And that has been the kind of thing the Supreme Court's like, yeah, okay. In those cases, right, like the Department of Transportation hires us to put up billboards and we take the government's money and do nothing. Because we're not a billboard company. Are you kidding me?

0:38:53 Thomas: But we do like taking money. So that part we did well.

0:38:55 Andrew: Yes. Right. And so, you know, we take some lavish vacations and, you know, and we spend all the money and now the government wants to come back after us to get that money back. The idea is the government could not create a special administrative law court of getting the money back and force us into that. They're coming after us to vindicate their private right to the benefit of that contract, and they have to sue us in an actual court in which we would be entitled to a jury. But if the government is vindicating a public right, a right on behalf of the public, then they can do so in an administrative context. And again, classic example, Environmental Protection Agency. The law says you can only emit one part per million of some hazardous chemical.

0:39:42 Andrew: EPA inspectors come out to our factory and say, "You're emitting two parts per million of this toxic chemical. So we're going to bring you in an administrative proceeding that can tell you, that can award injunctive relief, say, stop emitting so much toxic chemicals, and also pay to remediate the toxic chemicals you've already spilled." So the question, you could imagine that those two seem to be pretty good good polls of the private right is the government's private right to come after you for money that it's owed. The public right is, yeah, we're vindicating the public's right to clean air to something that didn't exist. And this is the test before the statute created that particular right.

0:40:28 Andrew: Right. And the right doesn't really invest in one individual. Like, it's not like when the factory is producing two parts per million of the toxic chemical. It's not that that hurts Thomas Smith specifically. Right. It hurts everybody. That's why we have an EPA, because, you know, now all of us kind of have this public smug thing going on. So the question of whether something fits within a public right or a private right was most recently adjudicated by the Supreme Court in a case called Oil States Energy Services versus Greens Energy Group in 2018. And this was that patent case that I talked to you about. And basically, the allegedly infringing party that was set to have its patent canceled said, look, you can't use this. And the procedure is called inter partes review. View. The idea was, you can't stick me in this farce of an administrative law proceeding if you're to take away my patent.

0:40:44 Thomas: Yeah.

0:41:31 Andrew: That's a kind of property, and I should get to go to court and have a Seventh Amendment right to a trial by jury before you take it away. And by the way, exact same argument, if slightly stronger in the case of the patents. It has the same kind of allegations of it's an insufficient process, and the idea that the patent is your property is a wrinkle that we don't even have here because it's not like insider trading is a special kind of property that you have. But Clarence Thomas, and by the way this was a seven to two decision with Gorsuch and Roberts in dissent, so a very weird alignment, Clarence Thomas said granting a patent is a public right, not a private right. So it can be properly assigned by Congress for adjudication in a non-Article 3 tribunal.

0:42:19 Andrew: That is, you don't have to go to a court. And that goes all the way back to a 1977 decision called Atlas Roofing. And that '77 case says, defines public rights. It says, in cases in which public rights are being litigated, that is cases in which the government sues in its sovereign capacity to enforce public rights created by statutes within the power of Congress to enact. So that's the definition. And you put all of that together.

0:42:56 Andrew: And insider trading, you bet your ass it does. Is the SEC an arm of the government? Yep. And are they suing to enforce the public's right, which is kind of a amorphous thing in knowing that they're not going to get defrauded? Yep, yep. And yep, so slam dunk, this is a public right. Correct. Not if you just make things up. And a hundred percent well

0:43:19 Thomas: That's the answer to almost every question about the Supreme Court currently.

0:43:22 Andrew: And this is the fifth circuit but what the two two-judge panel, the two judges in the majority said was, no, no. There's a 1989 case called Gran Financiera, which really says, you know, this kind of looks like a common law fraud case. And so therefore, it transforms it from a public right into a private right. They're really trying to prevent fraud.

And you don't have to take my word for it that this is a gross misreading of the Grand Financiera Court, again, 1989 decision of the Supreme Court, I can read you from the Grand Financier Court and see if you can spot the crucial difference. I might help you a little bit in how I read this quote. The crucial question in cases not involving the federal government is whether Congress, acting for a valid legislative purpose pursuant to its constitutional powers under Article I, has created a seemingly private right that is so closely integrated into to a public regulatory scheme as to be a matter appropriate for agency resolution with limited involvement by an Article 3 judiciary. If a statutory right is not closely intertwined with a federal regulatory program Congress has the power to enact, and if that right neither belongs to nor exists against the federal government, then it must be adjudicated by an Article III court. So I don't know if you

0:44:10 Thomas: Right. The loud

0:44:43 Andrew: Spotted the

0:44:44 Thomas: Part. I think the loud part was the answer to your question.

0:44:45 Andrew: Clue there. Yeah, Grand Financiera was about a bankruptcy trustee and a bankrupt estate. It did not involve the government at all in any way. And so saying Grand Financiera means that, oh no, this definition that goes back to the 70s and was cited by Clarence Thomas is no longer apposite, is just lying about the law. There is no other way to put it. And in fact, I continue to prove it because the very end of the 2018 oil states energy case, right? The Clarence Thomas 7-2 decision quotes Grand Financiera. It says, in addition to the other arguments, oil states challenges inter partes review. That's the process of retroactively invalidating the patent. Under the Seventh Amendment, the Seventh Amendment preserves the right of trial by jury. This court's precedents established that when Congress properly assigns a matter to adjudication in a non-Article 3 tribunal,

0:44:55 Thomas: That

0:45:47 Andrew: The Seventh Amendment poses no independent bar to the adjudication of that action by a nonjury fact finder, citing Grand Financiera.

0:45:58 Thomas: Not only seems clear, that seems perfectly clear.

0:46:01 Andrew: Because look, you have to dig into the merits of these cases, but this is just a court smashing wildly out of context a case that Clarence Thomas has said, look, this does not mean what you think it means, to say you must grant a Seventh Amendment trial by jury to anybody accused of violating the Securities and Exchange Act laws. And that's nonsense. There's no other way to put it other than to say it's contradicted by the words of the cases that they try to cite. There are more arguments here. That's argument one. And all of this, I cannot imagine that the SEC is not going to petition for an en banc review by the full Fifth Circuit. But the Fifth Circuit is full of monsters.

0:46:45 Thomas: Well, I was going to say, is that any better?

0:46:46 Andrew: Yeah. This opinion is so bad, is so utterly devoid of legal reasoning that I have some hope. But no, it could get through. And again, activists, Supreme Court, we'll find out. The second reasoning is more terrifying than the first. And instead of involving lying about a prior court case, involves literally lying about the black letter law, the statute itself. And again, I'm going to prove this to you. So it is the non-delegation doctrine. The non-Delegation Doctrine is a sparsely invoked and discredited idea that Congress may not that there are certain core functions that Congress cannot delegate to an executive branch agency. Again, remember, all executive administrative law, the idea is, you know, you think of the model being the gun ban.

0:46:51 Thomas: Yeah, yeah, yep,

0:47:43 Andrew: Congress says it's our legislative intent to prohibit semi-automatic firearms. We're going to list some of them. And then we're goingto say and we delegate to the executive branch and specifically the Bureau of Alcohol, Tobacco and Firearms to supplement this list as appropriate. Appropriate

0:47:55 Thomas: Yep. Otherwise, you'd have to pass a bill every time there's like a new gun, which seems not like the best way to do it. Yeah.

0:48:02 Andrew: Right and that would be unbelievably stupid unless you're a republican

0:48:06 Thomas: Well,

0:48:06 Andrew: And that's your goal, to make it impossible for legislatures to cover another good illustration of, you know, how this dovetails into their whole overall plan. So the non-delegation doctrine says even if you were clear in what you're delegating to an executive branch agency, there are some things you just can't delegate. Put a pin in that one. In particular, the Fifth Circuit says you cannot delegate unless you have articulated, quote, "an intelligible principle by which the executive agency should then use its discretion in upholding the law." Here's what they say. "Next, Congress did not provide the SEC with an intelligible principle by which to exercise that power."

0:48:51 Andrew: We recognize that the Supreme Court has not in the past several decades held that Congress failed to provide a requisite intelligible principle. Yeah, they're even more candid with that the next sentence. But neither in the last 80 years has the Supreme court considered the issue when Congress offered no guidance whatsoever. The last time it did consider such open-ended legislation was in 1935 and concluded that the Congress acted unconstitutionally. So yes, this is citing an 87-year-old case. Put a huge pin in that because I'm going to talk about the case in a second. But notice that the key to this factual idea, so the Fifth Circuit concedes, yeah, okay, we get it. The Supreme Court has not ruled something non-delegable in 87 years, but they haven't had a case like this where there was no guidance given by the Congress to the executive agency. C. And you might look at that and go, all right, bring that argument on.

0:49:50 Thomas: Isn't this like saying the Supreme Court has not ruled that segregation is unconstitutional for a hundred years or whatever? You know, isn'T it like, oh,

0:49:58 Andrew: Yeah, it is very much like that, but it is worse in the sense that I'm going to read to you 15 U.S.C. section 78 U-2 subsection C.

0:50:09 Thomas: Great. I love when you read me 15. that's just what my brain heard during that

0:50:16 Andrew: Well, this is the subsection. Subsection A is what I read toyou earlier. That's what allows the SEC to bring an administrative action against any individual, not just a covered party. Subsection C is titled "Determination of Public Interest." And so if you're sitting there thinking, wow, yeah, it would be, I guess it would be really bad if Congress offered no guidance whatsoever to the SEC, it's kind of hard to square with 15 U.S.C. section 78 u-2c which says, in considering under this section whether a penalty is in the public interest, and that is, remember, if it's in the pub, public interest, that's why you would want to bring it as a regulatory administrative action rather than go to the courts, the commission or the appropriate regulatory agency may consider: one, whether the act or omission for which such penalty is assessed involved fraud, deceit, manipulation, or deliberate or reckless disregard of a regulatory requirement.

0:51:12 Andrew: Two, the harm to other persons resulting either directly or indirectly from such an act or omission. Three, the extent to which any person was unjustly enriched, taking into account any restitution made. Four, whether such person has previously been found by the commission or another regulatory body or another self-regulatory organization to have violated federal securities laws. Five, the need to deter such persons from committing such acts or omissions. And six, such other matters as justice may require. And I elided over some, some internal citations and the like. But to say Congress has given no guidance as to how to determine whether something is in the public interest when the law says "determination of public interest," here's Congress telling the SEC exactly what factors they should consider: the nature of the offense, the harm, unjust enrichment, previous recidivism, need to deter, such other interests as justice may require.

0:52:04 Andrew: This is explicitly the thing that this holding says that the Congress didn't do. So, okay, they're just lying about what the law says. And you don't even get to these. So therefore, we would default to this 1935 opinion. If an opinion is from the Supreme Court and is from 1937 or earlier, it should immediately send up a little warning flag, particularly if it has to do with economic regulations, because those cases are from the court's Lochner era, in which we have discussed at great length the most, yeah, right, the most uniformly agreed upon, right? Like this court makes fun of the Lochner Era. This court says, yeah, we can't go back to just,

0:52:13 Thomas: Yep yep the second worst era yeah

0:52:45 Andrew: You know, right.

0:52:46 Thomas: This court ought to take a look in the Lochner mirror there's

0:52:48 Andrew: Yeah, I know. That's a good one. I like it. But the most uniformly agreed-upon worst era in our Supreme Court history, and this case that the Fifth Circuit cites is a case called Panama Refining Company versus Ryan from 1935, which struck down a portion of Roosevelt's National Recovery Act. This was the act requiring permitting the president through executive agencies, through the Department of Interior to stop interstate commerce in what was called hot oil, which was when one state would produce amounts of petroleum over that state's allocated limit and then secretly ship it across state lines to sell in other states to undercut those states' domestic production of oil.

0:53:38 Thomas: A state limit on what

0:53:40 Andrew: Yep. And again, early 20th century, but right, this is Great Depression. So the idea was you had big oil producing states.

0:53:40 Thomas: Yeah uh I'm an oil man they

0:53:47 Andrew: Yeah. You had big oil producing States like Texas.

0:53:51 Thomas: Drank our milkshake and I sorry I don't know if you've seen that movie okay

0:53:52 Andrew: Yeah, it's okay. I have not. So I'm just kidding. I'm just laughing for pity. But the point is this regulation is a perfectly normal regulation. It is one about the level of interstate commerce in oil. Texas shipping oil to Oklahoma. Nobody, I don't care, maybe Samuel Alito and these two judges on the Fifth Circuit, but nobody thinks that this is the kind of thing that the federal government couldn't delegate to an executive branch agency. You would delegate this to the Department of Energy or the Department of Transportation today. You would say, for interstate shipments of oil, we will allow, like, you know, as determined by the Secretary of Transportation, the appropriate percentage share of what oil can be shipped.

This is commonplace regulation, and it was struck down by an overreaching Lochner-era Supreme Court, and this was one of the decisions that was leading to, right, there was no one straw that broke the camel's back, But citing to Panama Refining Company versus Ryan, it is referred to in law school textbooks as the hot oil case. It is of a party, too. It's quite as bad as citing to like Dred Scott or citing to Korematsu, but it's close. This is a repudiated, reviled opinion that led to the Supreme Court saying, okay, yeah, we went too far with the whole Lochner thing. Yes, Congress can regulate business. And there are only two cases, this is one of them, that have ever held that congressional power is non-delegable.

0:53:57 Thomas: Yeah

0:55:31 Andrew: So the entire argument here is premised on a doctrine so discredited that Samuel Alito makes fun of it today. Samuel Alito makes fun of the court that came up with it today, I suspect he is a willing participant in the idea of non delegation. But again, this was the most activist time in our court's history. And this is what the Fifth Circuit has cited to say. Nope, non-delegable. You cannot take securities regulations and delegate the enforcement of that to the Securities and Exchange Commission. If this seems like a rather implausible result for something that's existed for 90 years, welcome to today's right wing judiciary.

0:56:19 Andrew: They're not done. And I'm going to try and go really quickly here because I know we're deep in the weeds. There's a third argument in which they say, oh, and by the way, all of these administrative law judges also are improper because they can only be fired for cause. They can't just be dismissed at the whim of the president. And that violates a 2010 decision called Free Enterprise Fund. And the problem with that is, again, the Free Enterprise Fund decision in 2010 specifically says, oh, by the way, this decision does not apply to administrative law judges because, quote, unlike members of the commission to which that case applied. Slide, many administrative law judges, of course, perform adjudicative rather than enforcement or policymaking functions or possess purely recommendatory powers, end of quote.

0:57:17 Andrew: So briefly, the free enterprise case was challenging another provision of the Dodd-Frank Act, the creation of the Public Company Accounting Oversight Board. And the idea was that you couldn't, the next ex-president couldn't just fire all the members of the PCAOB. They wanted to build in some independence. So it said, hey, you can only fire these people for cause. But the Supreme Court said, no, that interferes with the executive branch's unilateral authority to be able to control its own policymaking. We're not going to stick the executive bench with a policymaker that the president can't remove. And you can sort of see some merits in that argument, right? Like Like, we want Biden to be able to fire Betsy DeVos. So you wouldn't want the next Republican president to come in, staff up executive agencies with a bunch of hacks, and then pass a law that says, oh, by the way, you can't fire any of these people. Like, you know, OK, so I get that. But remember, the key justification is because Betsy Devos makes policy. They are engaged in policymaking functions.

And that decision explicitly said, yeah, you might be thinking, does this apply to administrative law judges? It does not apply to administrative law judges for two reasons. The first was we're not sure that administrative law judges are officers of the United States. Now, there's been a subsequent case since then that confirms that they probably are. I don't know that it's a good opinion, but nevertheless, not worth challenging on that.

0:57:57 Thomas: That makes sense yeah

0:58:46 Andrew: And number two, hey, administrative law judges don't make policy. They just adjudicate things and they make recommendations. So it's not the same. You don't have an absolute right to dismiss them because they're not essential to you promulgating your vision from the top down. All they're there to do is to make recommendations and to adjudicate disputes. So made up out of whole cloth. So those were the three reasons that the court articulated. And as bad as this is on the merits in terms of gumming up the SEC, which it will, it's going to take for cases in Texas, Louisiana, and Alabama, and it's going to stick those, all of them in federal court, which federal courts are grossly overworked. Its logic would apply to any of the 26 different government agencies, all of which use hearings before administrative law judges to adjudicate disputes.

0:58:52 Thomas: Yeah.

0:59:48 Andrew: And that includes the Department of the Interior, the Department of Labor, of Transportation, of Education, as we mentioned before, the the EPA, the Federal Energy Regulatory Commission, the National Transportation Safety Board, the Department of Health and Human Services, of Housing and Urban Development, the National Labor Relations Board, 26 separate government agencies currently use this process to adjudicate hundreds of thousands of administrative claims every single year. And if this opinion is allowed to stand and if it goes up to the Supreme Court, very likely will be read into law by at least the five howleriest of the howler monkeys.

1:00:33 Andrew: And notwithstanding what Clarence Thomas said four years earlier, because this throws an unbelievable monkey wrench into, quote, the administrative state. And each of the last three nominees have specifically given speeches decrying the administrative state. Because remember, if you get split government or if you have less fewer than 60 votes in the Senate, we're watching this right now with Joe Biden, you can gum up the works as much as possible, prevent a Democrat from passing legislation. But the one thing you can't stop them doing is you can stop them from engaging in executive actions, from making sure that the executive branch carries out their vision, moves the country in a slightly more progressive way, unless you do everything you can to make it impossible for the executive branch to do its job as well.

1:01:29 Andrew: And that's why they hate the administrative state. It is a thing you you can do when they're trying to stop you from doing everything else. It's really, really dangerous, and hopefully we've convinced you just how bad this opinion is.

1:01:42 Thomas: So there's a chance that an en banc decision would go the other way, because this is that bad. Short of that, we have to hope that the Supreme Court, it's

1:01:51 Andrew: We We have to hope that you win, Clarence Thomas. But do not, you know, who was, uh, okay, you know, you might say, all right, you know, you went, you went on and on about how this was a Thomas opinion, uh, but it is his own opinion. But the problem is, is that in dissent included John Roberts. So you'd have to win back Thomas and also win over Roberts or you'd be left with.

1:02:21 Thomas: Well, we're boned.

1:02:22 Andrew: Yeah, it's again, this is why I say was why I described the Fifth Circuit as a stalking horse for the Supreme Court to go into areas where even the Supreme Court is like, wow, that's that's pretty ballsy, taking a seven to two Clarence Thomas opinion and saying that's too liberal. So yeah oh

1:02:39 Thomas: The Fifth Circuit is the Alex Jones to the Supreme Courts' Tucker Carlson. They just get to throw a bunch of spaghetti at the wall, see what sticks, and then the Supreme court can take you to leave it. It's unbelievable. This is a lot of spaghetti. This is just the beginning of the spaghetti, I imagine. Based on what's going on with the Supreme Court lately, I'm sure they feel more empowered than ever to just test, again, where the boundaries are.

1:02:45 Andrew: I like it yeah I think that's right

1:03:06 Clip: Oh, no associate of this firm has ever failed the bar exam. No kidding.

1:03:13 Thomas: And now it's time for T3BE, in which I attempt to answer a question by analyzing it perfectly and then getting the answer wrong anyway.

1:03:20 Andrew: It's The perfect match for the state of our law right now. So, Thomas, a 16 year old boy was operating a motorboat. While operating the motorboat, the boy got distracted by text messages from his friend. Wow, what a, what a progressive, uh, you know, modern, hip, uh, aware question this is. And the boy inadvertently struck a woman sitting in a canoe in his path. The boy did not know the woman was there. The woman suffered serious injuries and sued the boy for battery. Will the woman succeed?

1:03:53 Andrew: A. Yes, if the trier of fact finds that a boy of his age, intelligence, and experience would have been able to avoid the collision. B. Yes because the boy intended to drive the boat, which caused her harm. C. No because the boy did did not intend to strike the woman. Or D, no, because the boy did not make direct physical contact with the woman?

1:03:50 Thomas: Battery. Oh, wow, that's interesting. Okay. Some issue spotting going on. We've talked about the sort of the standards for holding kids accountable, for minors accountable. The question doesn't say it's a black kid, so it's not just like, E, they're trying him as an adult. That would be the answer I would go for in that case. But no, we'll believe it's...

1:04:33 Andrew: E, the police have shown up with a SWAT team and multiple, yeah, right. All

1:04:35 Thomas: Yeah, exactly. The interesting thing was the battery. Right when it said battery, I was like, Like, is hitting someone with a motorboat battery? And then D is definitely the tempting answer along that, because it says, D, no, because the boy did not make direct physical contact with the woman. But I don't know. I mean, yeah, is there like a better tort, tortious, bocious interference? I think that's still, like, if I come up to somebody and hit them with a hammer, I assume I don't get out of battery because it wasn't direct physical contact. So I think battery's fine. I don't know. But anyway, let's see. So it's 16-year-old, distracted by texts, hit a woman in a canoe. Boy did not know the woman was there. Not sure if that really matters.

1:05:23 Thomas: Suffered serious injuries and sued the boy for battery. Oh, that might matter. Like, with battery, do you need intent? Like, maybe this would be some other tort or something. I I don't know. Let's see. A, yes, if the trier fact finds that a boy of his age at intelligence experience would have been able to avoid the collision. I think that's the right answer if the issue is the boy being 16. If that'sthe main issue here and everything else checks out, I thinkthat's the standard. I think you use what a reasonable person of that age would be able to do. And definitely, you know, you're 16, you can legally drive. So yeah. Yeah. B, yes, because the boy intended to drive the boat, which caused her harm. Interesting. So what is that saying? So that's saying like you're responsible for the reasonable consequences of your intended actions, I think, maybe, possibly.

1:06:17 Thomas: It might be along those lines. I don't know if battery needs that. Is battery the kind of thing where the question is, is I'm intending to ram the shopping cart in you, but I don't know you were there. I don't know. I'm trying. I don't' know if that applies. See, no, because the boy did not intend to strike the woman. So that would be like if battery is an intent tort. You might need to sue for negligence or something, you know? Like maybe this doesn' seem like battery. If I'm driving a car and I'm distracted and I hit somebody, I don'T know that I get sued for battery. I probably get sued like negligence for something, think some other, I think, battery. Is that right? So that could be C or D, no, because the boy did not make direct physical contact with the woman. I can see an argument for every answer, actually.

1:07:03 Thomas: They used to give me one stupid one that I could eliminate or maybe, you know, maybe I'm missing it, but it feels like this isn't, feels like there isn't an easy elimination here, but maybe I am missing it. I cannot get around the fact that I just do not think you sue for battery in this this case. Like, I think battery is probably a more specific tort that's about physically attacking someone and not running someone over when you're not paying attention. I think that's what it is. So I'm going with C because there's no intent to strike the woman. I think C is better than D because of the hammer scenario or the, you know, if I take a stick and hit someone with it, I feel like I could be sued for battery. And it doesn't matter that I I didn't actually touch you, like grounds lava style, didn't actually, I'm not touching you.

1:07:49 Thomas: I'm not touching you, I don't think that's it. So that's why I'm going with C. I think B, yes, because the boy intended to drive the boat, which caused her harm. I think that is more about if she had sued for negligence or something like that, which is what I think she should have sued for. And then I think my backup answer will be A, just in case the actual, that's what it's going for, like if I just missed the issue here. So I'm doing C, final answer, backup answer A.

1:08:11 Andrew: Right, and if you want to play along with Thomas, you know how to do that. Just share out this episode on social media. Include the hashtag T3BE. Include your guess, your reasons. Therefore, we will pick a winner and shower that winner with never-ending fame and fortune. Fame and fortune not guaranteed.

1:08:23 Clip: And thank you, Let's go!

1:08:25 Thomas: And now it's time to thank our new patrons at patreon.com/law and join the goodies, the ad-free episodes, the early episodes, the Law'd Awful Movies coming at you real soon. And by the way, the right to suggest intro quotes in the intro thread that will be up as you hear this for episode 601. Can't wait. And so, Andrew, why don't you start us off?

1:08:41 Andrew: Important one. All right. Thank you to IT Coyote, to ElChorizoTX. I love ElChorizo. To Joke Name, Katelyn Eslinger, Noodlefluff, John N, and Rosie Puplett. Take it away, Thomas.

1:08:59 Thomas: And thank you to Teresa Mac, G L, Laura Ross, MutatedWisdom, Alison Golm, Dyan Dinstel, and the Breviloquent Caveman. Nice. Love it. S-A-T word, I think, or something.

1:09:13 Andrew: Breviloquent. I love it.

1:09:15 Thomas: It's perfectly cromulent word. And that's our show. Thanks so much for listening. Down with the Fifth Circuit and the Supreme Court. Oh boy. We'll see you next time.

1:09:16 Andrew: Yeah, indeed.

1:09:26 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.

1:09:59 Clip: www.openargs.com. Be sure to join the Facebook group at facebook.com slash groups slash 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.