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Welcome to FEDSOC Forums, a Federalist Society podcast. I'm Elizabeth Lattery,
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vice president of Practice Groups. Be sure to subscribe wherever
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you get your podcasts so you won't miss an episode. Now,
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please enjoy today's conversation.
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Good afternoon, everyone, and welcome to FEDSOC Forums. My name
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is Dan Zuba, and I recently graduated from the University
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of Akron School of Law. I also serve as the
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student liaison to the Federalist Society's Federalism and Separation of
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Powers Practice Group. As a reminder, all opinions expressed are
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those of our speakers and now of the Federal Society,
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as the Federal Society takes no positions. Today's program is
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titled from the Courthouse Steps FCC VAT and T. We're
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very pleased to welcome an excellent group of panelists. Thomas
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Berry is the director of the CATO Institutes Robert A.
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Levy Center for Constitutional Studies and editor in chief of
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the CATO Supreme Court Review. Before joining CATO, he was
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an attorney at the Pacific Legal Foundation and clerk for
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Judge E. Grady Jolly of the US Court of Appeals
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for the Fifth Circuit Josh Robbins is an attorney in
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Pacific Legal Foundations Separation of Powers Group. Prior to joining
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Pacific Legal Foundation, Josh was an associate at a large
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law firm where he litigated cases in federal and state courts.
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He clerked for the Honorable Jerry E. Smith of the
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United States Court of Appeals for the Fifth Circuit in Houston.
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One note for our audience before we begin. If you
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have any questions throughout the webinar that pertain to the
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topic at hand, please submit them through Zoom's Q and
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a feature located at the bottom of your screen, not
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the chat, so that we'll be able to access them
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later in the program. With that note, I will turn
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things over to our speakers to begin the conversation. Thank
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you so much for joining us today, Thomas, why don't
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you kick us off all right?
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Fantastic? Well, thanks so much, Dan, and thanks to the
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Federal Society for inviting me. It's always an honor to
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participate in these types of events. So today we're talking,
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as you said, about the FCC versus AT and T decision,
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which is a decision about the Seventh Amendment and whether
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this particular FCC procedure for both finding liability and then
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collecting money from people who violate or allegedly violate FCC
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rules and regulations, whether that comports with the Seventh Amendment. So,
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as a brief refresher, Seventh Amendment says, in suits a
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common law, where the value in controversy shall exceed twenty dollars,
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the right of trial by jury.
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Shall be preserved.
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And the big major case that's the background all of
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this that all of our watcher viewers need to keep
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in mind is, of course the Jarcacy case from a
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couple of years ago that was about the SEC the
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Securities and Exchange Commission, but it was really a landmark
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case where the Supreme Court's analysis said, in a typical
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agency adjudication, where they are imposing punitive monetary fines on you,
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where they are taking money not just for the purpose
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of restitution, but to set an example and to disc
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weigh other people from doing the same, where they are
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where they are going through a civil process to punish
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you in some way, that is a suited common law.
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They went through the history, they went through founding era precedents,
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founding era analogies, and they basically said, yes, a jury
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trial attaches to that. So the Court, in the Darcacy
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decision two years ago invalidated what had been the SEC's
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process at the time, which was to find you liable
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not in federal court with an Article three judge and
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with a jury of your peers, but in an agency adjudication,
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either with an administrative law judge or with the commission
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itself the SEC. And then you could appeal from that
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on questions of law to a court of appeals. But
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you never got a jury, you never got to novo
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factual review. So with that being the background, this was
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a challenge to the FCC's process. The underlying subject matter
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is about privacy rules. So Section two two two of
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forty seven USC says that telecommission telecommunications carriers have a
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duty to protect the confidentiality of proprietary information of their customers.
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As everybody knows, when you download.
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Apps or sign up for cell phone service, you have
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to click yes to all sorts of signing away your
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rights and your privacies, and one of those is about
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location data. To what extent can they keep your location data,
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what can they use it for, what.
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Can they not use it for?
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So various telecom companies use this company called Securists as
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a third party location data collector, and Securists had terms
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of service, they had things, They had reasons when they
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could validly give your location data over and reasons when
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they could not. And they said they would only give
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your location data over to law enforcement if they showed
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up with a warrant, if they had certain minimum standards.
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But at New York Times Expose around twenty eighteen twenty
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nineteen said, in fact, there is an example where a
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Securists did not protect privacy protect location data as they
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should have. They actually turned it over to a sheriff
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who did not have a warrant, violating the terms of service.
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So once that came out, the FCC said, these telecom
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carriers were on notice that their customer's location data was
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not being protected adequately. The FCC alleged that the telecom
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carriers did not act quickly enough, and so they brought
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an action against them.
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They said, you violated the law.
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We're going to come after you and try to find
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you liable under section two two two.
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So they did against.
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Several telecom carriers, all the big ones AT and T
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and Verizon or the two at issue here. Hit they
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had an adjudication in house in the agency, and this
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is before the jarcacy decision.
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And they said, we have found you liable.
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And it's worth reading the text of what they sent
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them because it looks pretty scary when you get one
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of these. It doesn't look like the type of thing
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where you have many options. So after an in house adjudication,
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again without a jury, AT and T, for example, got
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a piece of paper that said, quote in all caps
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in bold it is ordered and then back to lowercase.
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That pursuanto blah blah blah us code AT and T
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inc back to all caps in all bold is liable
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for a monetary forfeiture back to lowercase in the amount
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of about fifty seven million dollars for willfully and repeatedly
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violating Section two two two of the Act.
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So doesn't sound like there's a lot of wiggle room
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there now.
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Once that happens, Once you get an order like that
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from the agency, from the FCC, you basically have two options.
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You can appeal directly to an appellate court. You don't
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get a jury in that circumstance. And the understanding at
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the time was you even have to pay to have
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the right to appeal. There's some dispute now whether that
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was true or not, but that was their understanding. So
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you can either appeal to an appellate court immediately never
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get your jury right, or you can just wait and
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do nothing. And if you do that, then in theory,
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the Department of Justice is authorized to come collect. They
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can file a suit against you in a federal district
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court with venue pretty much everywhere anywhere you do business,
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and any point between when you get this letter and
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five years in the future. That's the statute of limitations.
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And then if they bring that, then you get your
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denovo trial. So in practice, it seemed that no telecom
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company had ever waited to done that second option.
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They always appealed right away.
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That's what both of these companies at issue here did,
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AT and T and Verizon at and T to the
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Fifth Circuit verison to the Second Circuit in both of them. Originally,
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the FCC resists the argument that the Seventh Amendment applies
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at all, but eventually they acquiesce. By the time it
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gets up to the Supreme Court, they've acquiesced on the
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Seventh Amendment as a basic point that it does apply,
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that this is a common law penalty action. So the
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issue now, the Fifth Circuit rules against the FCC, holds
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that you violated the Seventh Amendment, but the Second Circuit
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accepts the backup argument.
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Of the FCC.
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They say, yes, you need a jury trial at some point,
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but it's sufficient that you can, in theory do that
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second option. If you wait and let DOJ sue you,
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then you get your jury trial and that's sufficient. So
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that's the issue as it goes up to the Supreme Court.
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Is this weight let DOJ potentially sue you within five years?
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Is that sufficient to get view the jury trial that
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you need under the seventh Amendment. It goes up to
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the Supreme Court. There's oral argument which I attended. It
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seems to go actually fairly well for the government. But
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a lot of it is simply getting deep into the
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weeds of well, what is the actual force if anything
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of this order that you get it sure looks scary.
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Does it give you a stigma, does it potentially carry
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do the facts found? Could it potentially have interest occurring
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against you? Could it be used in future penalties as
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sort of proof that you're.
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A repeat offender.
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Those were the types of things that issue and at
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and t's lawyer basically repeatedly said, Look, the only way
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that this could possibly be permissible without a jury is
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if it's not even a paper tiger, but literally just
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a piece of paper. So that's at the stage for
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the opinion which we got last week, and I'll hand it.
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Over to Josh.
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Thanks Tommy, and thanks to the Federal Society for inviting
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me to participate.
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Yeah.
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So the Supreme Court in its opinion last week ended
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up siding with the Second Circuit, and it basically said
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that this forfeiture order from the FCC under the statute
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was just a piece of paper, and it analogized it
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to other kinds of case initiating documents like an indictment
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or a right to sue letter, because according to the Court,
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under the statute, the order did not definitively resolve the
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party's legal obligations and the commission's factual findings were not conclusive. So,
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just to hit some of the high points from the
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Court's opinion, the Court reiterated that the jury trial rights
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are broadly available in any case settling legal rights, regardless
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of the form, but that the Seventh Amendment does not
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guarantee a jury trial at the beginning of any of
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these processes, just at some point during the process, before
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the final determinations are made, the jury has to make
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the ultimate determination of issues of fact, and it cited
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to older precedents, one from an agency fact determination that
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a court reviewed Denovo and another from a district court
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appointing an auditor that it had signed off on that
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had Denovo jury trial review as a basis for this
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and here with respect to the FCC order, the court
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said that three features of it meant that it wasn't
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legally binding before this after the fact Denovo jury trial
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that the DOJ can initiate. The FCC couldn't execute on
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the forfeiture order to collect the fines, there was no
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penalty for non payment of the fines, and the FCC
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couldn't hold against the carriers the fact that the forfeiture
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order had been issued unless the carriers paid or this
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later court enforced court process enforced the order. And on
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the fact finding question, since the statute, the court said
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offered a trial de novo and I was understood to
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let the court determine anew both issues of law and fact.
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The carriers would get a fresh jury trial on everything
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including the facts having to do with the case. The
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court then went through the petitioner's arguments and rejected them.
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As Tommy said, there's some daunting, scary language in the
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order in the statute indicating.
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That this might be legally binding. But the Court.
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Swept this acide and said that it couldn't be considered
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legally binding because there was no enforcement mechanism regardless of
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what these orders said. And for that reason, the Court
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also said that this FCC order was not comparable to
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Jarcassy and the SEC scheme because the SEC's penalties in
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Jarcacy that the Court said violated the Seventh Amendment were
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immediately enforceable through proceedings like furnishment.
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And then, as I said at the top, the.
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Court analogized these letters to these orders to write to
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sue letter and said that that was not not something
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that had any legal effect because it didn't come to
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a final determination of the carrier's legal obligations. And A
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pushed to one side the carrier's arguments that they were
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suffering practical harms from having been found to have violated
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the statutes and the regulations here.
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Because of such practical.
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Harms, the Court says come at any preliminary stage of
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a proceedings, such as if you were criminally indicted and
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got bad press because of that, The carriers also had
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a backup argument that this structure violated the unconstitutional conditions doctrine.
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So this is a doctrine the Court has recognized in
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a variety of contexts that the constitutional rights, the extras
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of constitutional rights, or privileges or benefits can't be conditioned
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on someone having to waive one of their their constitutional
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rights in the process. Here, the carriers argued that the
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costs of having to wait for doj to maybe in
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five years bring a collection action for them to get
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a jury trial basically coerced them into pursuing the Court
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of Appeals review process in which a jury trial wasn't available.
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But the Court rejected this argument because, as it had
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found in the previous section, the Seventh Amendment right did
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not even attach to these orders because they, according to
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the Court's interpretation, were non binding. They couldn't be used
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against the carrier. The fact determinations had no preclusive effect
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after the fact, and the Court again rejected this reputational
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harm argument, but the carriers put forward this time it
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compared the reputational. This time, it compared the risks and
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the coercive effects to its prior cases signing off on
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situations in which the exercise of the sixth Amendment or
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trial right in the criminal context could result in higher
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penalties vic plea bargaining on the court side. If that
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was okay, which it had said in the past, then
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whatever coersive effect might exist here was certainly not enough.
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So I'll toss it back to Tommy to talk through
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Justice Thomas's descent.
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All right, Well, I'll be brief, because it's a brief descent.
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Even Justice Thomas does not disagree with the majority's view
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or the majority's new reading of this statute that there's
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no preclusive effect, there's no stigma, there's no teeth whatsoever
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to these orders from the FCC. Just as Thomas's point
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is really just one of fairness, he makes the case
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that that was not at all clear before this decision.
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So he said that rewinding the clock back to when
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they got these letters, when AT and T and Verizon, etc.
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Got these letters, this is before jarcacy. This is when
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the FCC had not yet conceded that the Seventh Amendment applied,
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and this is when, in Justice Thomas's view, the statute
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was far from clear that you in fact would get
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denovo factual review if you waited the five years. So
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Justice Thomas says, the only fair thing to do is
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rewind the clock and give the carriers the choice all
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over again. Let them give them their money back, and
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let them decide if they want to to take this
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alternate route, because that's not a choice they have now
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given the Court's decision. The Court's view is essentially, you
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could have gotten your jury, but you chose not to,
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and we're not going to let you go back and
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make that decision over again. So I think Justice Thomas
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has a fair point in my view, which is that
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maybe now in the future companies will view this as
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a paper tiger, and that's all well and good that
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they've taken all the teeth out of this and made
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clear for the future that there's no stigma. That doesn't
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really resolve the companies the harm suffered by the companies
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in the past who would have felt very nervous about
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making that choice. So, Josh, what do you make of
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this decision?
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Yeah, I think you know, as a basically unanimate on
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the law and outstanding Justice Thomas's practical point. And you know,
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I think if you accept the Justice's view of this
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as some kind of non binding case initiating letter, it's
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it's probably right that I think that makes sense for
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how the Seventh Amendment operates. I think in a practical sense, uh,
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it's going to be a tough decision on you know,
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any on Americans and companies to implement, because, as Tommy
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pointed out, you get these notices that have all this
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language that that seems legally binding, and this decision, you know,
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sort of invites companies and Americans to flout these orders
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and you know, wait for for d J to come
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after them, and that that's you know, even that that
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that's right under.
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The Seventh Amendment.
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That's a bit of an awkward set of incentives. But
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I think there are two silver linings to this, just briefly. One,
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the Court you know, does does say very firmly that
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there has to be some kind of de novo factual
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review at some point in the process under the Seventh
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Amendment in jocracy, And I think we'll see in the
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future this Seventh Amendment analysis is going to be tied
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really closely to whether or not. There is Article three
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jurisdiction over cases, and the Court seems inclined to clamp
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down on that.
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And this suggests to me that.
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The substantial substantial review standard for evidentiary.
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Review in the appellate review model might.
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Be under threat in cases going forward that are equitable
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rather than common law, and the Court might think that
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judges have to make those fact decisions anew in those
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cases as well. And the Court also implicitly applies the
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Unconstitutional Conditions doctrine to the Seventh Amendment here. It didn't
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outright say that the Unconstitutional Conditions Doctrine didn't apply, It
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actually analyzed it. And so I think that's going to
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be It's going to be important in challenges to the
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constitutionality of FINRA and the cases like I'm litigating against
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the Horse Racing Integrity and Safety Authority, where you have
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private entities that have some sort of nominal registration requirement
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that the government argues as a waiver of your Seventh
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Amendment rights. But the unconstitutional Conditions Doctrine can, even more
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clearly than it did before, come in and combat that
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weave argument.
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Yeah.
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No, I think that's a great point to flag and
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something that might not be apparent from the face of
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the opinion at first. To me, my frustration with this
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is the same as my frustration more broadly with so
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called constitutional avoidance decisions, which I think this fits very
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comfortably in and in fact, Justice Katanji Brown Jackson had
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I thought a very good dissent in one from a
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couple of years ago about the statute making it a
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crime to encourage violations of immigration law, which the Supreme
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Court narrowed essentially to get it within constitutional bounds.
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And as just as.
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Jackson pointed out, the government kind of gets to have
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it both ways. They apply statutes maximally to scare people
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right up until the point where it's challenged is unconstitutional,
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and then they change their tune when they're on the
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back foot, interpret it minimally and get it just narrow
355
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enough to survive and continue. But that doesn't reverse the
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fact that they enforced it maximally for however many years,
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and course people to in this case unanimously pay as
358
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soon as they got these letters rather than risking non payment.
359
00:19:28.759 --> 00:19:31.000
At and T's brief at one point said that the
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government treats these companies as if they're the so called
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holmesy and bad man. People might remember the Oliver Wendell
362
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Holmes theory from law school that the law should treat
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people as if they were a bad man who just
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thinks about what are the actual concrete penalties I received
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00:19:46.400 --> 00:19:49.839
from breaking the law, not about some abstract stigma. It
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even reminds me a little bit of the Obamacare decision
367
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to be honest, where the Supreme Court reread a penalty
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as attacks in such a way that there's no stigma
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to not getting to not buying health insurance, with the
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Justice Roberts even saying he thought it was implausible that
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a statute would make outlaws of millions of people, which
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was the prediction for how many would not buy insurance. Similarly,
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here at and T's brief said, how plausible is it
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that you would write a statute that expects companies to
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be scoff laws and ignore these letters. Well, now that's
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basically the Supreme Court is just reassured, No, we're going
377
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to narrow this and read this in a way that
378
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don't worry, You're not a scoff law. You're just being
379
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the rational actor ignoring this, and there's no stigma whatsoever.
380
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But that doesn't go back and fix it.
381
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Then The last point I'll make is that what you
382
00:20:37.039 --> 00:20:42.359
mentioned the analogy to course of plea bargaining and plea agreements, Well,
383
00:20:42.759 --> 00:20:44.839
I think the Supreme Court takes one step too many
384
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when they say, of course that's fine, so this must
385
00:20:47.079 --> 00:20:50.359
be fine. We and Cato have been criticizing coersive plea
386
00:20:50.400 --> 00:20:52.559
bargaining for quite a while, and I think this is
387
00:20:52.599 --> 00:20:56.319
another example where the bad precedent of assuming course of
388
00:20:56.359 --> 00:21:00.880
plea bargaining is fine leads to other assumptions.
389
00:21:01.079 --> 00:21:02.279
So we hope.
390
00:21:02.079 --> 00:21:05.640
Eventually the Supreme Court will reconsider whether that fundamental premise
391
00:21:05.720 --> 00:21:06.880
is correct in the first place.
392
00:21:10.160 --> 00:21:12.359
Well, guys, I want to just hop in for a
393
00:21:12.400 --> 00:21:15.640
second and just remind our audience if you have any questions,
394
00:21:15.680 --> 00:21:18.599
please type them into Zoom's Q and A feature at
395
00:21:18.640 --> 00:21:22.000
the bottom of your screen. I think we're ready to
396
00:21:22.000 --> 00:21:23.680
move to Q and A, so I'll just start with
397
00:21:23.680 --> 00:21:27.000
the first question. Are there any other agencies that have
398
00:21:27.079 --> 00:21:31.039
a similar system to this where they send a letter
399
00:21:31.200 --> 00:21:35.000
saying you owe and you don't have to pay until
400
00:21:35.000 --> 00:21:36.039
the DJ sues you.
401
00:21:37.559 --> 00:21:39.039
Yeah, there are, and I think that's one of the
402
00:21:39.079 --> 00:21:42.599
most practically useful things for people to know and be
403
00:21:42.640 --> 00:21:46.559
aware of coming out of this opinion. So the telecom
404
00:21:46.559 --> 00:21:49.160
companies had said, well, wait, if this argument is right,
405
00:21:49.440 --> 00:21:52.839
you know, why was jargacy right? But as Josh mentioned, jrcacy,
406
00:21:52.920 --> 00:21:56.119
the SEC scheme that was different, that was not like
407
00:21:56.160 --> 00:21:59.559
this because you could apparently the government could start garnishing
408
00:21:59.599 --> 00:22:03.480
money through taxes or other means without any further without
409
00:22:03.480 --> 00:22:06.559
this kind of lawsuit. But if people are interested, it's
410
00:22:06.599 --> 00:22:09.880
on page thirty three of the government's brief in this
411
00:22:10.039 --> 00:22:14.559
case they list out the other procedures that are at
412
00:22:14.640 --> 00:22:17.359
least in the government's view like this one here, So
413
00:22:17.599 --> 00:22:20.720
unlike the SEC one in jarcacy, they say, there are
414
00:22:20.799 --> 00:22:25.400
five agencies with eleven other enforcement statutes that like this one,
415
00:22:26.000 --> 00:22:28.319
you're found liable, but then you don't actually have to
416
00:22:28.359 --> 00:22:32.119
pay until the government sues you. So the five agencies
417
00:22:32.160 --> 00:22:35.440
are there, some from Department of Energy, Department of AHHS,
418
00:22:35.799 --> 00:22:39.319
Custom Service, Fish and Wildlife Service, and FURK the Federal
419
00:22:39.400 --> 00:22:40.880
Energy Regulatory Commission.
420
00:22:41.160 --> 00:22:43.119
So kind of a random grab bag.
421
00:22:43.240 --> 00:22:45.240
But if people are entrusted, they can look at page
422
00:22:45.279 --> 00:22:48.319
thirty three of the government's brief. Presumably the reasoning of
423
00:22:48.359 --> 00:22:51.680
this opinion here means that all eleven of those statutes
424
00:22:51.720 --> 00:22:54.599
that the government lists are also okay, so people should
425
00:22:54.599 --> 00:22:57.480
be aware. I think that the logic of this extends
426
00:22:57.519 --> 00:22:59.480
now to those as well. If you get this kind
427
00:22:59.519 --> 00:23:01.720
of scary life letter, but you don't have to pay
428
00:23:01.799 --> 00:23:04.599
until an enforcement suit has brought you now know there's
429
00:23:04.640 --> 00:23:06.960
no stigma to not paying and waiting to get your
430
00:23:07.000 --> 00:23:07.599
jury trial.
431
00:23:09.680 --> 00:23:13.279
Thank you. Here's another question. Will the Seventh Amendment argument
432
00:23:13.359 --> 00:23:19.039
apply to the states.
433
00:23:18.519 --> 00:23:24.480
It will take a different case to do that.
434
00:23:24.480 --> 00:23:28.200
That gets into the question of incorporation doctrine and whether
435
00:23:28.279 --> 00:23:31.519
or not the Fourteenth Amendment, when it was enacted after
436
00:23:31.559 --> 00:23:34.279
the Civil War, actually extended the Bill of Rights to
437
00:23:34.319 --> 00:23:36.880
the States. So that's happened for a lot of different rights.
438
00:23:36.880 --> 00:23:38.759
So the most recent right that was incorporated was the.
439
00:23:38.680 --> 00:23:41.599
Second Amendment right. But the Seventh Amendment is.
440
00:23:41.599 --> 00:23:44.599
Actually not one that has been incorporated against the states yet. Well,
441
00:23:44.680 --> 00:23:47.480
many states have jury trial rights, the Seventh Amendment itself
442
00:23:47.519 --> 00:23:51.759
doesn't apply. So there's a lot of ongoing litigation about that,
443
00:23:52.000 --> 00:23:54.519
including my colleagues at PLF.
444
00:23:54.599 --> 00:23:55.759
So we'll have to see.
445
00:24:00.319 --> 00:24:02.680
Josh, can you just speak to some of the broader
446
00:24:03.039 --> 00:24:05.000
policy implications of this ruling.
447
00:24:07.079 --> 00:24:08.559
Yeah, I think going forward.
448
00:24:09.599 --> 00:24:15.400
It cheering off what Tommy said about the constitutional avoidance arguments.
449
00:24:15.519 --> 00:24:16.039
I think.
450
00:24:17.920 --> 00:24:23.039
For cases going before the Court on these structural constitutional questions,
451
00:24:23.079 --> 00:24:27.440
I think this sort of reinforces that the Court is
452
00:24:27.519 --> 00:24:33.200
going to really make an effort to interpret the statute
453
00:24:33.240 --> 00:24:37.440
in a way that avoids a constitutional problem. You know,
454
00:24:37.519 --> 00:24:42.599
this kind of aligns with the FCC versus Consumers Research opinion.
455
00:24:42.240 --> 00:24:44.519
We saw last year where the.
456
00:24:46.200 --> 00:24:49.759
Court decided that they're the Universal Service Fund. Also at
457
00:24:49.759 --> 00:24:53.920
the FCC did not violate the non delegation doctrine, but
458
00:24:54.119 --> 00:24:57.920
in doing so, it tightened up some of its precedents.
459
00:24:57.440 --> 00:25:01.160
About what the how non delegation.
460
00:25:00.759 --> 00:25:03.240
Doctrine works and what a statute must do, and then
461
00:25:03.400 --> 00:25:08.559
gave teeth to the way the Universal Service Fund Statute
462
00:25:08.640 --> 00:25:12.400
was written in a way again like here that might
463
00:25:12.480 --> 00:25:15.359
not have been immediately obvious to everyone who was actually
464
00:25:15.359 --> 00:25:18.039
operating under the statute before the Supreme Court went about
465
00:25:18.079 --> 00:25:18.519
it this way.
466
00:25:19.319 --> 00:25:22.400
So I think I think this indicates.
467
00:25:21.880 --> 00:25:24.839
That you're granting this case and next term they're going
468
00:25:24.880 --> 00:25:29.440
to consider a case called Sundalley Orchards about agency adjudication
469
00:25:29.519 --> 00:25:31.680
as well, that the Court's interested in these issues and
470
00:25:31.759 --> 00:25:34.960
these I think these structures are definitely going to be
471
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closely scrutinized by the court, but the court is going
472
00:25:39.519 --> 00:25:43.200
to do everything it can to interpret the statute in
473
00:25:43.240 --> 00:25:45.079
a way that is as narrow.
474
00:25:44.880 --> 00:25:47.440
As possible to avoid reaching a constitutional question.
475
00:25:49.119 --> 00:25:51.480
Yeah, I totally agree with that. I do think there's
476
00:25:51.519 --> 00:25:53.119
a potential also going forward.
477
00:25:53.519 --> 00:25:58.160
The companies didn't raise other questions about, now that we know, okay,
478
00:25:58.200 --> 00:26:00.640
you get de novo in this trial, is there any
479
00:26:00.640 --> 00:26:03.160
other option besides weighing the full five years? Could there
480
00:26:03.160 --> 00:26:06.519
be an option to bring into claratory judgment suit, Could
481
00:26:06.519 --> 00:26:08.559
you bring some kind of due process claim that five
482
00:26:08.640 --> 00:26:10.000
years is just too long to wait?
483
00:26:10.039 --> 00:26:10.559
In limbo?
484
00:26:10.720 --> 00:26:13.240
I mean, the analogy is to like an indictment, but
485
00:26:13.319 --> 00:26:17.519
you know, in the criminal context, it would be violation
486
00:26:17.599 --> 00:26:19.839
of due process and speedy trial to be indicted and
487
00:26:19.839 --> 00:26:23.640
then say we'll maybe enforce it within the next five years,
488
00:26:23.680 --> 00:26:24.480
but who knows when.
489
00:26:24.960 --> 00:26:26.599
So not totally certain.
490
00:26:26.920 --> 00:26:28.920
But I still think people should treat those as open
491
00:26:29.000 --> 00:26:31.720
questions because they just weren't weren't raised in this case.
492
00:26:31.759 --> 00:26:34.200
This is just the more basic question of is this
493
00:26:34.279 --> 00:26:36.640
type of structure where the ball goes into the government's
494
00:26:36.640 --> 00:26:43.839
court basically constitutional as long as it really is denevo.
495
00:26:43.880 --> 00:26:44.559
How about this.
496
00:26:44.720 --> 00:26:48.119
Are there cases attempting to use state law to apply
497
00:26:49.079 --> 00:26:52.359
the right to a jury trial to professional licensure cases?
498
00:26:54.160 --> 00:26:57.880
Hm, there actually is.
499
00:26:58.200 --> 00:27:00.440
I know one of my colleagues here at PEEL has
500
00:27:01.480 --> 00:27:05.880
just argued a case before the Nevada Supreme Court called Hagen,
501
00:27:06.960 --> 00:27:13.559
which involves the Nevada Board of Architecture and an architecture
502
00:27:13.680 --> 00:27:17.839
licensing scheme with an out of state architect being pursued
503
00:27:17.920 --> 00:27:22.119
by the Nevada Board of Architecture for unauthorized practice. So
504
00:27:22.160 --> 00:27:25.400
in that case there are Nevada civildery trial claims and
505
00:27:25.440 --> 00:27:28.000
then a Seventh Amendment claim.
506
00:27:27.799 --> 00:27:29.599
As well in the background.
507
00:27:29.640 --> 00:27:32.640
That's one of those potential cases that might raise the
508
00:27:32.680 --> 00:27:34.480
incorporation issue that I talked about before.
509
00:27:37.839 --> 00:27:40.200
One wrinkle also raise by this opinion, just briefly, is
510
00:27:40.200 --> 00:27:42.880
they actually bring up the twenty dollars clause, which I
511
00:27:42.960 --> 00:27:45.880
dot can't remember another Seventh Amendment case that ever raised that,
512
00:27:45.920 --> 00:27:49.039
where the Supreme Court basically says, yes, you raise these
513
00:27:49.279 --> 00:27:52.920
sort of non monetary potential harms of being held in limbo,
514
00:27:53.400 --> 00:27:55.759
but it says twenty dollars right in there. You've got
515
00:27:55.759 --> 00:27:58.519
to be able to put a more concrete dollar amount
516
00:27:58.559 --> 00:28:01.519
to it. I don't know whether this will make it
517
00:28:01.559 --> 00:28:06.160
somewhat harder for people in cases about abstract but still
518
00:28:06.440 --> 00:28:09.079
real harms, whether that's stigma right there and a living
519
00:28:09.079 --> 00:28:11.440
et cetera. It feels like you have to put a
520
00:28:11.440 --> 00:28:14.000
lot of work when you're thinking about these into putting
521
00:28:14.000 --> 00:28:15.920
a dollar amount that's more concrete on this.
522
00:28:17.319 --> 00:28:19.880
Yeah, the one the one thing that might help there
523
00:28:19.960 --> 00:28:23.079
is that a lot of these agency admuication schemes often
524
00:28:23.200 --> 00:28:28.160
pair financial penalties with some kind of suspension or industry.
525
00:28:27.720 --> 00:28:30.960
Bar order, and luckily, under pretty well.
526
00:28:30.880 --> 00:28:34.440
Established Supreme Court precedent and a case called Dairy Queen,
527
00:28:34.960 --> 00:28:39.000
you still get a jury trial on the on the
528
00:28:39.079 --> 00:28:42.640
facts that relate to that monetary penalty, even if there's
529
00:28:42.680 --> 00:28:45.400
something that's equitable as well. So that may not apply
530
00:28:45.759 --> 00:28:48.960
in every situation. As we're discussing here, the carriers were
531
00:28:49.039 --> 00:28:51.319
kind of boiled down to reputational harm by the court's
532
00:28:51.920 --> 00:28:56.160
interpretation practice or interpretation of a statute. But that at
533
00:28:56.240 --> 00:28:59.200
least leaves the door open for people to bring these
534
00:28:59.200 --> 00:29:01.200
claims and variety of places.
535
00:29:03.359 --> 00:29:06.440
Well, guys, this has been such an interesting conversation, and
536
00:29:06.480 --> 00:29:09.039
thank you to our audience for asking such great questions.
537
00:29:09.480 --> 00:29:10.240
I wanted to thank.
538
00:29:10.119 --> 00:29:13.119
Our panelists for sharing their expertise and opinions on this
539
00:29:13.319 --> 00:29:16.920
very important issue. If our audience is interested in learning
540
00:29:16.960 --> 00:29:20.480
more about all the Federal Societies programming, please visit their
541
00:29:20.480 --> 00:29:24.559
website at fedsoc dot org. And with that, we are adjourned.
542
00:29:25.400 --> 00:29:29.200
Thanks for listening to FEDSOC Forums, a Federalist Society podcast.
543
00:29:29.559 --> 00:29:32.119
Be sure to subscribe wherever you get your podcasts so
544
00:29:32.160 --> 00:29:35.119
you won't miss an episode. To learn more, visit our
545
00:29:35.119 --> 00:29:37.000
website fedsoc dot org
1
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Welcome to FEDSOC Forums, a Federalist Society podcast. I'm Elizabeth Lattery,
2
00:00:06.360 --> 00:00:09.880
vice president of Practice Groups. Be sure to subscribe wherever
3
00:00:09.919 --> 00:00:13.439
you get your podcasts so you won't miss an episode. Now,
4
00:00:13.439 --> 00:00:15.279
please enjoy today's conversation.
5
00:00:17.839 --> 00:00:21.839
Good afternoon, everyone, and welcome to FEDSOC Forums. My name
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00:00:21.879 --> 00:00:24.760
is Dan Zuba, and I recently graduated from the University
7
00:00:24.760 --> 00:00:27.559
of Akron School of Law. I also serve as the
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00:00:27.600 --> 00:00:31.280
student liaison to the Federalist Society's Federalism and Separation of
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00:00:31.320 --> 00:00:35.320
Powers Practice Group. As a reminder, all opinions expressed are
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those of our speakers and now of the Federal Society,
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as the Federal Society takes no positions. Today's program is
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titled from the Courthouse Steps FCC VAT and T. We're
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very pleased to welcome an excellent group of panelists. Thomas
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Berry is the director of the CATO Institutes Robert A.
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00:00:54.320 --> 00:00:57.759
Levy Center for Constitutional Studies and editor in chief of
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00:00:57.799 --> 00:01:01.159
the CATO Supreme Court Review. Before joining CATO, he was
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an attorney at the Pacific Legal Foundation and clerk for
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Judge E. Grady Jolly of the US Court of Appeals
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for the Fifth Circuit Josh Robbins is an attorney in
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00:01:10.359 --> 00:01:14.319
Pacific Legal Foundations Separation of Powers Group. Prior to joining
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00:01:14.359 --> 00:01:17.959
Pacific Legal Foundation, Josh was an associate at a large
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law firm where he litigated cases in federal and state courts.
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He clerked for the Honorable Jerry E. Smith of the
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United States Court of Appeals for the Fifth Circuit in Houston.
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One note for our audience before we begin. If you
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have any questions throughout the webinar that pertain to the
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00:01:33.519 --> 00:01:36.879
topic at hand, please submit them through Zoom's Q and
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a feature located at the bottom of your screen, not
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00:01:40.120 --> 00:01:42.879
the chat, so that we'll be able to access them
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00:01:42.920 --> 00:01:45.760
later in the program. With that note, I will turn
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00:01:45.799 --> 00:01:48.680
things over to our speakers to begin the conversation. Thank
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00:01:48.719 --> 00:01:51.159
you so much for joining us today, Thomas, why don't
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you kick us off all right?
34
00:01:53.760 --> 00:01:55.840
Fantastic? Well, thanks so much, Dan, and thanks to the
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Federal Society for inviting me. It's always an honor to
36
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participate in these types of events. So today we're talking,
37
00:02:01.359 --> 00:02:04.719
as you said, about the FCC versus AT and T decision,
38
00:02:05.040 --> 00:02:08.039
which is a decision about the Seventh Amendment and whether
39
00:02:08.479 --> 00:02:13.439
this particular FCC procedure for both finding liability and then
40
00:02:13.520 --> 00:02:19.039
collecting money from people who violate or allegedly violate FCC
41
00:02:19.120 --> 00:02:22.400
rules and regulations, whether that comports with the Seventh Amendment. So,
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00:02:22.439 --> 00:02:25.280
as a brief refresher, Seventh Amendment says, in suits a
43
00:02:25.400 --> 00:02:28.879
common law, where the value in controversy shall exceed twenty dollars,
44
00:02:29.159 --> 00:02:30.800
the right of trial by jury.
45
00:02:30.599 --> 00:02:31.639
Shall be preserved.
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00:02:32.039 --> 00:02:34.719
And the big major case that's the background all of
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00:02:34.719 --> 00:02:37.560
this that all of our watcher viewers need to keep
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00:02:37.560 --> 00:02:39.560
in mind is, of course the Jarcacy case from a
49
00:02:39.560 --> 00:02:42.000
couple of years ago that was about the SEC the
50
00:02:42.039 --> 00:02:44.960
Securities and Exchange Commission, but it was really a landmark
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case where the Supreme Court's analysis said, in a typical
52
00:02:48.840 --> 00:02:54.439
agency adjudication, where they are imposing punitive monetary fines on you,
53
00:02:54.759 --> 00:02:57.039
where they are taking money not just for the purpose
54
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of restitution, but to set an example and to disc
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weigh other people from doing the same, where they are
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where they are going through a civil process to punish
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you in some way, that is a suited common law.
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They went through the history, they went through founding era precedents,
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founding era analogies, and they basically said, yes, a jury
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trial attaches to that. So the Court, in the Darcacy
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decision two years ago invalidated what had been the SEC's
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process at the time, which was to find you liable
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not in federal court with an Article three judge and
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with a jury of your peers, but in an agency adjudication,
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either with an administrative law judge or with the commission
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itself the SEC. And then you could appeal from that
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on questions of law to a court of appeals. But
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you never got a jury, you never got to novo
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factual review. So with that being the background, this was
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a challenge to the FCC's process. The underlying subject matter
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is about privacy rules. So Section two two two of
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forty seven USC says that telecommission telecommunications carriers have a
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duty to protect the confidentiality of proprietary information of their customers.
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As everybody knows, when you download.
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Apps or sign up for cell phone service, you have
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to click yes to all sorts of signing away your
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rights and your privacies, and one of those is about
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location data. To what extent can they keep your location data,
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what can they use it for, what.
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Can they not use it for?
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So various telecom companies use this company called Securists as
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a third party location data collector, and Securists had terms
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of service, they had things, They had reasons when they
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could validly give your location data over and reasons when
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they could not. And they said they would only give
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your location data over to law enforcement if they showed
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up with a warrant, if they had certain minimum standards.
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But at New York Times Expose around twenty eighteen twenty
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nineteen said, in fact, there is an example where a
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Securists did not protect privacy protect location data as they
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should have. They actually turned it over to a sheriff
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who did not have a warrant, violating the terms of service.
93
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So once that came out, the FCC said, these telecom
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00:05:07.759 --> 00:05:11.560
carriers were on notice that their customer's location data was
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not being protected adequately. The FCC alleged that the telecom
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carriers did not act quickly enough, and so they brought
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an action against them.
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They said, you violated the law.
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We're going to come after you and try to find
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you liable under section two two two.
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00:05:26.319 --> 00:05:27.519
So they did against.
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Several telecom carriers, all the big ones AT and T
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and Verizon or the two at issue here. Hit they
104
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had an adjudication in house in the agency, and this
105
00:05:36.360 --> 00:05:38.360
is before the jarcacy decision.
106
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And they said, we have found you liable.
107
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And it's worth reading the text of what they sent
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them because it looks pretty scary when you get one
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of these. It doesn't look like the type of thing
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where you have many options. So after an in house adjudication,
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again without a jury, AT and T, for example, got
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a piece of paper that said, quote in all caps
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00:05:59.399 --> 00:06:03.079
in bold it is ordered and then back to lowercase.
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That pursuanto blah blah blah us code AT and T
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00:06:07.759 --> 00:06:10.639
inc back to all caps in all bold is liable
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for a monetary forfeiture back to lowercase in the amount
117
00:06:13.920 --> 00:06:16.959
of about fifty seven million dollars for willfully and repeatedly
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00:06:17.040 --> 00:06:19.000
violating Section two two two of the Act.
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So doesn't sound like there's a lot of wiggle room
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there now.
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Once that happens, Once you get an order like that
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from the agency, from the FCC, you basically have two options.
123
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You can appeal directly to an appellate court. You don't
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get a jury in that circumstance. And the understanding at
125
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the time was you even have to pay to have
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the right to appeal. There's some dispute now whether that
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was true or not, but that was their understanding. So
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you can either appeal to an appellate court immediately never
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get your jury right, or you can just wait and
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do nothing. And if you do that, then in theory,
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the Department of Justice is authorized to come collect. They
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can file a suit against you in a federal district
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court with venue pretty much everywhere anywhere you do business,
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and any point between when you get this letter and
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five years in the future. That's the statute of limitations.
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And then if they bring that, then you get your
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denovo trial. So in practice, it seemed that no telecom
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company had ever waited to done that second option.
139
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They always appealed right away.
140
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That's what both of these companies at issue here did,
141
00:07:25.040 --> 00:07:27.279
AT and T and Verizon at and T to the
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Fifth Circuit verison to the Second Circuit in both of them. Originally,
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the FCC resists the argument that the Seventh Amendment applies
144
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at all, but eventually they acquiesce. By the time it
145
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gets up to the Supreme Court, they've acquiesced on the
146
00:07:42.279 --> 00:07:45.079
Seventh Amendment as a basic point that it does apply,
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that this is a common law penalty action. So the
148
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issue now, the Fifth Circuit rules against the FCC, holds
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that you violated the Seventh Amendment, but the Second Circuit
150
00:07:55.759 --> 00:07:57.600
accepts the backup argument.
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00:07:57.279 --> 00:07:58.040
Of the FCC.
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00:07:58.319 --> 00:08:00.759
They say, yes, you need a jury trial at some point,
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00:08:01.040 --> 00:08:03.680
but it's sufficient that you can, in theory do that
154
00:08:03.800 --> 00:08:08.319
second option. If you wait and let DOJ sue you,
155
00:08:07.879 --> 00:08:12.279
then you get your jury trial and that's sufficient. So
156
00:08:12.399 --> 00:08:14.639
that's the issue as it goes up to the Supreme Court.
157
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Is this weight let DOJ potentially sue you within five years?
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00:08:19.000 --> 00:08:21.279
Is that sufficient to get view the jury trial that
159
00:08:21.319 --> 00:08:23.800
you need under the seventh Amendment. It goes up to
160
00:08:23.839 --> 00:08:26.920
the Supreme Court. There's oral argument which I attended. It
161
00:08:27.000 --> 00:08:30.720
seems to go actually fairly well for the government. But
162
00:08:30.800 --> 00:08:33.000
a lot of it is simply getting deep into the
163
00:08:33.000 --> 00:08:35.600
weeds of well, what is the actual force if anything
164
00:08:35.639 --> 00:08:37.759
of this order that you get it sure looks scary.
165
00:08:38.000 --> 00:08:40.840
Does it give you a stigma, does it potentially carry
166
00:08:42.360 --> 00:08:45.919
do the facts found? Could it potentially have interest occurring
167
00:08:46.000 --> 00:08:49.919
against you? Could it be used in future penalties as
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00:08:49.960 --> 00:08:51.080
sort of proof that you're.
169
00:08:50.919 --> 00:08:51.919
A repeat offender.
170
00:08:52.320 --> 00:08:54.320
Those were the types of things that issue and at
171
00:08:54.399 --> 00:08:57.600
and t's lawyer basically repeatedly said, Look, the only way
172
00:08:57.639 --> 00:09:00.559
that this could possibly be permissible without a jury is
173
00:09:00.600 --> 00:09:03.000
if it's not even a paper tiger, but literally just
174
00:09:03.039 --> 00:09:05.559
a piece of paper. So that's at the stage for
175
00:09:05.720 --> 00:09:07.960
the opinion which we got last week, and I'll hand it.
176
00:09:07.879 --> 00:09:10.639
Over to Josh.
177
00:09:10.759 --> 00:09:13.720
Thanks Tommy, and thanks to the Federal Society for inviting
178
00:09:13.720 --> 00:09:14.519
me to participate.
179
00:09:15.240 --> 00:09:15.480
Yeah.
180
00:09:15.519 --> 00:09:19.399
So the Supreme Court in its opinion last week ended
181
00:09:19.480 --> 00:09:23.919
up siding with the Second Circuit, and it basically said
182
00:09:23.960 --> 00:09:28.919
that this forfeiture order from the FCC under the statute
183
00:09:28.960 --> 00:09:31.679
was just a piece of paper, and it analogized it
184
00:09:31.720 --> 00:09:35.480
to other kinds of case initiating documents like an indictment
185
00:09:35.519 --> 00:09:38.080
or a right to sue letter, because according to the Court,
186
00:09:38.360 --> 00:09:41.480
under the statute, the order did not definitively resolve the
187
00:09:41.519 --> 00:09:47.360
party's legal obligations and the commission's factual findings were not conclusive. So,
188
00:09:47.480 --> 00:09:49.480
just to hit some of the high points from the
189
00:09:49.559 --> 00:09:53.480
Court's opinion, the Court reiterated that the jury trial rights
190
00:09:53.480 --> 00:09:57.200
are broadly available in any case settling legal rights, regardless
191
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of the form, but that the Seventh Amendment does not
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guarantee a jury trial at the beginning of any of
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these processes, just at some point during the process, before
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the final determinations are made, the jury has to make
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the ultimate determination of issues of fact, and it cited
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to older precedents, one from an agency fact determination that
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a court reviewed Denovo and another from a district court
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appointing an auditor that it had signed off on that
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had Denovo jury trial review as a basis for this
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and here with respect to the FCC order, the court
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said that three features of it meant that it wasn't
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legally binding before this after the fact Denovo jury trial
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that the DOJ can initiate. The FCC couldn't execute on
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the forfeiture order to collect the fines, there was no
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penalty for non payment of the fines, and the FCC
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couldn't hold against the carriers the fact that the forfeiture
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order had been issued unless the carriers paid or this
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later court enforced court process enforced the order. And on
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the fact finding question, since the statute, the court said
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offered a trial de novo and I was understood to
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let the court determine anew both issues of law and fact.
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The carriers would get a fresh jury trial on everything
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including the facts having to do with the case. The
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court then went through the petitioner's arguments and rejected them.
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As Tommy said, there's some daunting, scary language in the
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order in the statute indicating.
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That this might be legally binding. But the Court.
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Swept this acide and said that it couldn't be considered
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legally binding because there was no enforcement mechanism regardless of
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what these orders said. And for that reason, the Court
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also said that this FCC order was not comparable to
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Jarcassy and the SEC scheme because the SEC's penalties in
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Jarcacy that the Court said violated the Seventh Amendment were
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immediately enforceable through proceedings like furnishment.
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And then, as I said at the top, the.
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Court analogized these letters to these orders to write to
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sue letter and said that that was not not something
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that had any legal effect because it didn't come to
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a final determination of the carrier's legal obligations. And A
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pushed to one side the carrier's arguments that they were
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suffering practical harms from having been found to have violated
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the statutes and the regulations here.
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Because of such practical.
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Harms, the Court says come at any preliminary stage of
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a proceedings, such as if you were criminally indicted and
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got bad press because of that, The carriers also had
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a backup argument that this structure violated the unconstitutional conditions doctrine.
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So this is a doctrine the Court has recognized in
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a variety of contexts that the constitutional rights, the extras
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of constitutional rights, or privileges or benefits can't be conditioned
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on someone having to waive one of their their constitutional
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rights in the process. Here, the carriers argued that the
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costs of having to wait for doj to maybe in
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five years bring a collection action for them to get
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a jury trial basically coerced them into pursuing the Court
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of Appeals review process in which a jury trial wasn't available.
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But the Court rejected this argument because, as it had
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found in the previous section, the Seventh Amendment right did
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not even attach to these orders because they, according to
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the Court's interpretation, were non binding. They couldn't be used
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against the carrier. The fact determinations had no preclusive effect
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after the fact, and the Court again rejected this reputational
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harm argument, but the carriers put forward this time it
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compared the reputational. This time, it compared the risks and
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the coercive effects to its prior cases signing off on
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situations in which the exercise of the sixth Amendment or
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trial right in the criminal context could result in higher
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penalties vic plea bargaining on the court side. If that
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was okay, which it had said in the past, then
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whatever coersive effect might exist here was certainly not enough.
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So I'll toss it back to Tommy to talk through
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Justice Thomas's descent.
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All right, Well, I'll be brief, because it's a brief descent.
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Even Justice Thomas does not disagree with the majority's view
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or the majority's new reading of this statute that there's
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no preclusive effect, there's no stigma, there's no teeth whatsoever
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to these orders from the FCC. Just as Thomas's point
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is really just one of fairness, he makes the case
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that that was not at all clear before this decision.
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So he said that rewinding the clock back to when
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they got these letters, when AT and T and Verizon, etc.
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Got these letters, this is before jarcacy. This is when
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the FCC had not yet conceded that the Seventh Amendment applied,
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and this is when, in Justice Thomas's view, the statute
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was far from clear that you in fact would get
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denovo factual review if you waited the five years. So
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Justice Thomas says, the only fair thing to do is
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rewind the clock and give the carriers the choice all
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over again. Let them give them their money back, and
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let them decide if they want to to take this
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alternate route, because that's not a choice they have now
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given the Court's decision. The Court's view is essentially, you
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could have gotten your jury, but you chose not to,
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and we're not going to let you go back and
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make that decision over again. So I think Justice Thomas
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has a fair point in my view, which is that
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maybe now in the future companies will view this as
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a paper tiger, and that's all well and good that
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they've taken all the teeth out of this and made
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clear for the future that there's no stigma. That doesn't
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really resolve the companies the harm suffered by the companies
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in the past who would have felt very nervous about
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making that choice. So, Josh, what do you make of
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this decision?
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Yeah, I think you know, as a basically unanimate on
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the law and outstanding Justice Thomas's practical point. And you know,
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I think if you accept the Justice's view of this
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as some kind of non binding case initiating letter, it's
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it's probably right that I think that makes sense for
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how the Seventh Amendment operates. I think in a practical sense, uh,
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it's going to be a tough decision on you know,
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any on Americans and companies to implement, because, as Tommy
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pointed out, you get these notices that have all this
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language that that seems legally binding, and this decision, you know,
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sort of invites companies and Americans to flout these orders
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and you know, wait for for d J to come
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after them, and that that's you know, even that that
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that's right under.
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The Seventh Amendment.
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That's a bit of an awkward set of incentives. But
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I think there are two silver linings to this, just briefly. One,
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the Court you know, does does say very firmly that
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there has to be some kind of de novo factual
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review at some point in the process under the Seventh
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Amendment in jocracy, And I think we'll see in the
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future this Seventh Amendment analysis is going to be tied
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really closely to whether or not. There is Article three
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jurisdiction over cases, and the Court seems inclined to clamp
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down on that.
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And this suggests to me that.
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The substantial substantial review standard for evidentiary.
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Review in the appellate review model might.
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Be under threat in cases going forward that are equitable
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rather than common law, and the Court might think that
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judges have to make those fact decisions anew in those
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cases as well. And the Court also implicitly applies the
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Unconstitutional Conditions doctrine to the Seventh Amendment here. It didn't
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outright say that the Unconstitutional Conditions Doctrine didn't apply, It
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actually analyzed it. And so I think that's going to
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be It's going to be important in challenges to the
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constitutionality of FINRA and the cases like I'm litigating against
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the Horse Racing Integrity and Safety Authority, where you have
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private entities that have some sort of nominal registration requirement
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that the government argues as a waiver of your Seventh
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Amendment rights. But the unconstitutional Conditions Doctrine can, even more
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clearly than it did before, come in and combat that
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weave argument.
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Yeah.
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No, I think that's a great point to flag and
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something that might not be apparent from the face of
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the opinion at first. To me, my frustration with this
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is the same as my frustration more broadly with so
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called constitutional avoidance decisions, which I think this fits very
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comfortably in and in fact, Justice Katanji Brown Jackson had
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I thought a very good dissent in one from a
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couple of years ago about the statute making it a
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crime to encourage violations of immigration law, which the Supreme
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Court narrowed essentially to get it within constitutional bounds.
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And as just as.
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Jackson pointed out, the government kind of gets to have
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it both ways. They apply statutes maximally to scare people
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right up until the point where it's challenged is unconstitutional,
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and then they change their tune when they're on the
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back foot, interpret it minimally and get it just narrow
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enough to survive and continue. But that doesn't reverse the
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fact that they enforced it maximally for however many years,
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and course people to in this case unanimously pay as
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soon as they got these letters rather than risking non payment.
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At and T's brief at one point said that the
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government treats these companies as if they're the so called
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holmesy and bad man. People might remember the Oliver Wendell
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Holmes theory from law school that the law should treat
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people as if they were a bad man who just
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thinks about what are the actual concrete penalties I received
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from breaking the law, not about some abstract stigma. It
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even reminds me a little bit of the Obamacare decision
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to be honest, where the Supreme Court reread a penalty
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as attacks in such a way that there's no stigma
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to not getting to not buying health insurance, with the
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Justice Roberts even saying he thought it was implausible that
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a statute would make outlaws of millions of people, which
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was the prediction for how many would not buy insurance. Similarly,
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here at and T's brief said, how plausible is it
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that you would write a statute that expects companies to
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be scoff laws and ignore these letters. Well, now that's
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basically the Supreme Court is just reassured, No, we're going
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to narrow this and read this in a way that
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don't worry, You're not a scoff law. You're just being
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the rational actor ignoring this, and there's no stigma whatsoever.
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But that doesn't go back and fix it.
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Then The last point I'll make is that what you
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mentioned the analogy to course of plea bargaining and plea agreements, Well,
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I think the Supreme Court takes one step too many
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when they say, of course that's fine, so this must
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be fine. We and Cato have been criticizing coersive plea
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bargaining for quite a while, and I think this is
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another example where the bad precedent of assuming course of
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plea bargaining is fine leads to other assumptions.
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So we hope.
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Eventually the Supreme Court will reconsider whether that fundamental premise
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is correct in the first place.
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Well, guys, I want to just hop in for a
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second and just remind our audience if you have any questions,
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please type them into Zoom's Q and A feature at
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the bottom of your screen. I think we're ready to
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move to Q and A, so I'll just start with
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the first question. Are there any other agencies that have
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a similar system to this where they send a letter
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saying you owe and you don't have to pay until
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the DJ sues you.
401
00:21:37.559 --> 00:21:39.039
Yeah, there are, and I think that's one of the
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most practically useful things for people to know and be
403
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aware of coming out of this opinion. So the telecom
404
00:21:46.559 --> 00:21:49.160
companies had said, well, wait, if this argument is right,
405
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you know, why was jargacy right? But as Josh mentioned, jrcacy,
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the SEC scheme that was different, that was not like
407
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this because you could apparently the government could start garnishing
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money through taxes or other means without any further without
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this kind of lawsuit. But if people are interested, it's
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on page thirty three of the government's brief in this
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case they list out the other procedures that are at
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least in the government's view like this one here, So
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unlike the SEC one in jarcacy, they say, there are
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five agencies with eleven other enforcement statutes that like this one,
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you're found liable, but then you don't actually have to
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pay until the government sues you. So the five agencies
417
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are there, some from Department of Energy, Department of AHHS,
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Custom Service, Fish and Wildlife Service, and FURK the Federal
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Energy Regulatory Commission.
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So kind of a random grab bag.
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But if people are entrusted, they can look at page
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thirty three of the government's brief. Presumably the reasoning of
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this opinion here means that all eleven of those statutes
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that the government lists are also okay, so people should
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be aware. I think that the logic of this extends
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now to those as well. If you get this kind
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of scary life letter, but you don't have to pay
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until an enforcement suit has brought you now know there's
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no stigma to not paying and waiting to get your
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jury trial.
431
00:23:09.680 --> 00:23:13.279
Thank you. Here's another question. Will the Seventh Amendment argument
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apply to the states.
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It will take a different case to do that.
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That gets into the question of incorporation doctrine and whether
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or not the Fourteenth Amendment, when it was enacted after
436
00:23:31.559 --> 00:23:34.279
the Civil War, actually extended the Bill of Rights to
437
00:23:34.319 --> 00:23:36.880
the States. So that's happened for a lot of different rights.
438
00:23:36.880 --> 00:23:38.759
So the most recent right that was incorporated was the.
439
00:23:38.680 --> 00:23:41.599
Second Amendment right. But the Seventh Amendment is.
440
00:23:41.599 --> 00:23:44.599
Actually not one that has been incorporated against the states yet. Well,
441
00:23:44.680 --> 00:23:47.480
many states have jury trial rights, the Seventh Amendment itself
442
00:23:47.519 --> 00:23:51.759
doesn't apply. So there's a lot of ongoing litigation about that,
443
00:23:52.000 --> 00:23:54.519
including my colleagues at PLF.
444
00:23:54.599 --> 00:23:55.759
So we'll have to see.
445
00:24:00.319 --> 00:24:02.680
Josh, can you just speak to some of the broader
446
00:24:03.039 --> 00:24:05.000
policy implications of this ruling.
447
00:24:07.079 --> 00:24:08.559
Yeah, I think going forward.
448
00:24:09.599 --> 00:24:15.400
It cheering off what Tommy said about the constitutional avoidance arguments.
449
00:24:15.519 --> 00:24:16.039
I think.
450
00:24:17.920 --> 00:24:23.039
For cases going before the Court on these structural constitutional questions,
451
00:24:23.079 --> 00:24:27.440
I think this sort of reinforces that the Court is
452
00:24:27.519 --> 00:24:33.200
going to really make an effort to interpret the statute
453
00:24:33.240 --> 00:24:37.440
in a way that avoids a constitutional problem. You know,
454
00:24:37.519 --> 00:24:42.599
this kind of aligns with the FCC versus Consumers Research opinion.
455
00:24:42.240 --> 00:24:44.519
We saw last year where the.
456
00:24:46.200 --> 00:24:49.759
Court decided that they're the Universal Service Fund. Also at
457
00:24:49.759 --> 00:24:53.920
the FCC did not violate the non delegation doctrine, but
458
00:24:54.119 --> 00:24:57.920
in doing so, it tightened up some of its precedents.
459
00:24:57.440 --> 00:25:01.160
About what the how non delegation.
460
00:25:00.759 --> 00:25:03.240
Doctrine works and what a statute must do, and then
461
00:25:03.400 --> 00:25:08.559
gave teeth to the way the Universal Service Fund Statute
462
00:25:08.640 --> 00:25:12.400
was written in a way again like here that might
463
00:25:12.480 --> 00:25:15.359
not have been immediately obvious to everyone who was actually
464
00:25:15.359 --> 00:25:18.039
operating under the statute before the Supreme Court went about
465
00:25:18.079 --> 00:25:18.519
it this way.
466
00:25:19.319 --> 00:25:22.400
So I think I think this indicates.
467
00:25:21.880 --> 00:25:24.839
That you're granting this case and next term they're going
468
00:25:24.880 --> 00:25:29.440
to consider a case called Sundalley Orchards about agency adjudication
469
00:25:29.519 --> 00:25:31.680
as well, that the Court's interested in these issues and
470
00:25:31.759 --> 00:25:34.960
these I think these structures are definitely going to be
471
00:25:35.000 --> 00:25:39.440
closely scrutinized by the court, but the court is going
472
00:25:39.519 --> 00:25:43.200
to do everything it can to interpret the statute in
473
00:25:43.240 --> 00:25:45.079
a way that is as narrow.
474
00:25:44.880 --> 00:25:47.440
As possible to avoid reaching a constitutional question.
475
00:25:49.119 --> 00:25:51.480
Yeah, I totally agree with that. I do think there's
476
00:25:51.519 --> 00:25:53.119
a potential also going forward.
477
00:25:53.519 --> 00:25:58.160
The companies didn't raise other questions about, now that we know, okay,
478
00:25:58.200 --> 00:26:00.640
you get de novo in this trial, is there any
479
00:26:00.640 --> 00:26:03.160
other option besides weighing the full five years? Could there
480
00:26:03.160 --> 00:26:06.519
be an option to bring into claratory judgment suit, Could
481
00:26:06.519 --> 00:26:08.559
you bring some kind of due process claim that five
482
00:26:08.640 --> 00:26:10.000
years is just too long to wait?
483
00:26:10.039 --> 00:26:10.559
In limbo?
484
00:26:10.720 --> 00:26:13.240
I mean, the analogy is to like an indictment, but
485
00:26:13.319 --> 00:26:17.519
you know, in the criminal context, it would be violation
486
00:26:17.599 --> 00:26:19.839
of due process and speedy trial to be indicted and
487
00:26:19.839 --> 00:26:23.640
then say we'll maybe enforce it within the next five years,
488
00:26:23.680 --> 00:26:24.480
but who knows when.
489
00:26:24.960 --> 00:26:26.599
So not totally certain.
490
00:26:26.920 --> 00:26:28.920
But I still think people should treat those as open
491
00:26:29.000 --> 00:26:31.720
questions because they just weren't weren't raised in this case.
492
00:26:31.759 --> 00:26:34.200
This is just the more basic question of is this
493
00:26:34.279 --> 00:26:36.640
type of structure where the ball goes into the government's
494
00:26:36.640 --> 00:26:43.839
court basically constitutional as long as it really is denevo.
495
00:26:43.880 --> 00:26:44.559
How about this.
496
00:26:44.720 --> 00:26:48.119
Are there cases attempting to use state law to apply
497
00:26:49.079 --> 00:26:52.359
the right to a jury trial to professional licensure cases?
498
00:26:54.160 --> 00:26:57.880
Hm, there actually is.
499
00:26:58.200 --> 00:27:00.440
I know one of my colleagues here at PEEL has
500
00:27:01.480 --> 00:27:05.880
just argued a case before the Nevada Supreme Court called Hagen,
501
00:27:06.960 --> 00:27:13.559
which involves the Nevada Board of Architecture and an architecture
502
00:27:13.680 --> 00:27:17.839
licensing scheme with an out of state architect being pursued
503
00:27:17.920 --> 00:27:22.119
by the Nevada Board of Architecture for unauthorized practice. So
504
00:27:22.160 --> 00:27:25.400
in that case there are Nevada civildery trial claims and
505
00:27:25.440 --> 00:27:28.000
then a Seventh Amendment claim.
506
00:27:27.799 --> 00:27:29.599
As well in the background.
507
00:27:29.640 --> 00:27:32.640
That's one of those potential cases that might raise the
508
00:27:32.680 --> 00:27:34.480
incorporation issue that I talked about before.
509
00:27:37.839 --> 00:27:40.200
One wrinkle also raise by this opinion, just briefly, is
510
00:27:40.200 --> 00:27:42.880
they actually bring up the twenty dollars clause, which I
511
00:27:42.960 --> 00:27:45.880
dot can't remember another Seventh Amendment case that ever raised that,
512
00:27:45.920 --> 00:27:49.039
where the Supreme Court basically says, yes, you raise these
513
00:27:49.279 --> 00:27:52.920
sort of non monetary potential harms of being held in limbo,
514
00:27:53.400 --> 00:27:55.759
but it says twenty dollars right in there. You've got
515
00:27:55.759 --> 00:27:58.519
to be able to put a more concrete dollar amount
516
00:27:58.559 --> 00:28:01.519
to it. I don't know whether this will make it
517
00:28:01.559 --> 00:28:06.160
somewhat harder for people in cases about abstract but still
518
00:28:06.440 --> 00:28:09.079
real harms, whether that's stigma right there and a living
519
00:28:09.079 --> 00:28:11.440
et cetera. It feels like you have to put a
520
00:28:11.440 --> 00:28:14.000
lot of work when you're thinking about these into putting
521
00:28:14.000 --> 00:28:15.920
a dollar amount that's more concrete on this.
522
00:28:17.319 --> 00:28:19.880
Yeah, the one the one thing that might help there
523
00:28:19.960 --> 00:28:23.079
is that a lot of these agency admuication schemes often
524
00:28:23.200 --> 00:28:28.160
pair financial penalties with some kind of suspension or industry.
525
00:28:27.720 --> 00:28:30.960
Bar order, and luckily, under pretty well.
526
00:28:30.880 --> 00:28:34.440
Established Supreme Court precedent and a case called Dairy Queen,
527
00:28:34.960 --> 00:28:39.000
you still get a jury trial on the on the
528
00:28:39.079 --> 00:28:42.640
facts that relate to that monetary penalty, even if there's
529
00:28:42.680 --> 00:28:45.400
something that's equitable as well. So that may not apply
530
00:28:45.759 --> 00:28:48.960
in every situation. As we're discussing here, the carriers were
531
00:28:49.039 --> 00:28:51.319
kind of boiled down to reputational harm by the court's
532
00:28:51.920 --> 00:28:56.160
interpretation practice or interpretation of a statute. But that at
533
00:28:56.240 --> 00:28:59.200
least leaves the door open for people to bring these
534
00:28:59.200 --> 00:29:01.200
claims and variety of places.
535
00:29:03.359 --> 00:29:06.440
Well, guys, this has been such an interesting conversation, and
536
00:29:06.480 --> 00:29:09.039
thank you to our audience for asking such great questions.
537
00:29:09.480 --> 00:29:10.240
I wanted to thank.
538
00:29:10.119 --> 00:29:13.119
Our panelists for sharing their expertise and opinions on this
539
00:29:13.319 --> 00:29:16.920
very important issue. If our audience is interested in learning
540
00:29:16.960 --> 00:29:20.480
more about all the Federal Societies programming, please visit their
541
00:29:20.480 --> 00:29:24.559
website at fedsoc dot org. And with that, we are adjourned.
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00:29:25.400 --> 00:29:29.200
Thanks for listening to FEDSOC Forums, a Federalist Society podcast.
543
00:29:29.559 --> 00:29:32.119
Be sure to subscribe wherever you get your podcasts so
544
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