Advisory Opinions - Getting Things Back In Order

Episode Date: January 4, 2024

David and Sarah are back from a hearty break and catch up on cases from last year and various legal topics, including judicial salaries and the death of Justice Sandra Day O’Connor. Stay tuned for: —David and Sarah’s low confidence in the outcome of the Jarkesy case; —No love lost for the Sacklers; —A good attempt at avoiding the income tax; —Maine skipping due process; and —A lawsuit that could eviscerate the realtor business. Learn more about your ad choices. Visit megaphone.fm/adchoices

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Welcome to a new year of advisory opinions. Happy 2024, David French. Happy 2024, Sarah Isker. So I thought we'd just sort of go around the horn. As the year ended, we knew we were running out of time. We were leaving things behind. There has been some news in the two weeks since we've talked, but not a ton. So actually, I think we can kind of do some housekeeping here. I'm sure plenty of people as they started their new year, also did housekeeping

at their house like we did. It was a big part of our new year celebration is getting things back in order. So that's what I thought we would do for the podcast a little bit. So I'm going to start where you don't want to start. Can we do that? Like exactly where you don't want to start. Let's do it. Yes. I want to start with those three Supreme Court arguments that we didn't get to that we said we're just going to really mostly focus on when the decisions actually come out. But let's spend just a few minutes on the oral arguments here at the top.

Okay. We're not going to do a ton of time on this. on the oral arguments here at the top, okay? We're not going to do a ton of time on this. So SEC v. Jarkusee. And I made fun of the chief because he pronounced it Jarkusee and was corrected by one of the advocates, which was a fun little moment. I don't know if I recommend that for your oral advocacy, unless you're Lisa Blatt. Don't do a lot of things. But it did help us because now we know how to pronounce the case. So this is a guy who basically gets crosswise with the SEC, the Securities and Exchange Commission. And if that happens, the SEC, and I'm going to use this sort of broadly and please all you SEC lawyers out there, do not write to me about the specifics of how this actually works. But basically the SEC has prosecutors and they bring you before an SEC judge

who's called an administrative law judge, an ALJ. That judge is hired by the SEC. And so the prosecutor and the judge work for the same side. And that's what this case is about, is, is that allowed? Why is it allowed? And interestingly, the Supreme Court accepted three questions presented. And remember, the Supreme Court decides questions, not cases. They take three questions. Only one comes up at oral argument. So I'm going to read you the three questions. Whether statutory provisions that empower the Securities and Exchange Commission to initiate and adjudicate administrative enforcement proceedings seeking civil penalties violate the Seventh Amendment. We'll read the Seventh Amendment. That's your jury trial, right? Two, whether statutory provisions that authorize the SEC

to choose to enforce the securities laws through an agency adjudication instead of filing a district court action violates the non-delegation doctrine. So that would be the first one's an SEC problem. The second one's a Congress problem. Third, whether Congress violated Article 2, that's the executive branch power, by granting for-cause removal protection to administrative law judges and agencies whose heads enjoy for-cause removal protection. So actually, I mean, really, all of these are, did Congress mess this up? So one, did Congress mess up because allowing the SEC to basically hear their own cases internally violates that Seventh Amendment guarantee of a jury trial? Two, whether congress screwed up because they're not allowed to give this power to an administrative agency at all and three whether

congress screwed up because the judges within the sec can't be you know aren't political appointees in the same way that they can just be fired by the president for funsies and the people who hire the administrative law judges and can fire them for cause are also not removable by the president for funsies david as will be the theme here i left all three of these oral arguments but this one in particular i went in feeling very confident that the SEC was going to lose, that this was going to violate the Seventh Amendment. And I came out going, huh? Yeah, my confidence meter is low on a few of these cases. And I also think that we might be entering a time period in which our confidence meter should be generally somewhat low in assessing a lot, not all, not all cases. So for example, Rahimi, after the oral argument, my confidence meter is pretty high that Rahimi

is losing. Again, that's the second amendment domestic violence restraining order case. But if there's something that we learned from last term, it's that the alignments may not be working out exactly the way everyone expected. And so, yeah, Sarah, I went into this pretty confident that the SEC is going to lose. I'm still confident, maybe not pretty confident. I'm still mildly confident that the SEC is going to lose, but I'm not as confident as I was before the oral argument. Yeah. So it really seemed 3-3-3-ish in the oral argument in terms of what they were interested in. Again, kind of hard to see where they were going to come out, although it was,

I guess this makes it very 3-3-3. It was pretty clear that Kagan, Sotomayor, and Jackson thought that this was all okay. There was maybe some discussion as to why it's okay, and they might not agree on why it's okay. Alito, Thomas, and Gorsuch, this is definitely not okay. They seemed in pretty big agreement on why it's not okay. Kavanaugh seemed like it probably wasn't okay, but I definitely wasn't totally clear on why.

And again, this is just based on the oral argument and the chief and Barrett also, maybe it's okay, I don't know. The Seventh Amendment, by the way, says, in suits at common law, where the value in controversy shall exceed $20, the right of trial by jury shall be preserved and no fact tried by a jury shall be

otherwise re-examined in any court of the united states than according to the rules of the common law so we got into the sort of like circular bit here uh it says a suit right in suits at common law and so one of the arguments that was being made through her questions by Justice Jackson was, well, if it's in front of an administrative agency, it's by definition not a suit. But then the problem is, so Congress can assign anything to an administrative agency? Like, what teeth does the Seven Amendment have if Congress can just, like, use a magic words test and everything not in front of Article 3 isn't a lawsuit but you've got you know this problem of what administrative agencies do and this is where that common law word became

really important so a common law there's you know fraud and i don't know murder that's not civil but like those are all common law things right but here what if the sec um you SEC is granting you a license and then decides that you violate the terms on which you were granted that license and wants to remove your license? Well, who else can do that other than the SEC? And what if it's, well, instead of removing your license, revoking your license, you're going to pay a fine, but you get to keep your license. But it's all within the licensing scheme, for instance. you can see why administrative agencies would need their own quasi-court system if they're going to be granting rights to operate within a system created by that administrative agency the problem is if you feel like really knee-jerk like yeah obviously the

administrative agency shouldn't have judges for instance and shouldn't be able to adjudicate anything. How are these licensing schemes going to work? Do you have to bring all of those in Article III courts? The SEC sues you to revoke your license. That's going to be a whole lot of litigation now that's moving into Article III courts, like a lot. But you've also got totally different schemes like immigration those judges are within the department of justice um also selected by the department of justice not separately and if all those immigration cases suddenly flood into article three courts basically the court system will cease to exist in any meaningful sense it will be so overrun. And for those thinking, ah, but what about bankruptcy? Well, first of all, you already know I think that's unconstitutional. But at least

in bankruptcy courts, the judges aren't being picked by the prosecutors, so to speak. Bankruptcy judges are selected by panels of Article III judges or members of the community or whatever. There's like a bankruptcy group that comes together to pick a bankruptcy judge. It's very different than I think at the SEC where the SEC themselves picks the judges in which they try their own cases in front of. Yeah, I think I am in the Gorsuch camp, which I would define as essentially saying, look, okay, I would define as essentially saying, look, okay, if the matter at issue in the administrative court is common law-ish or common law-y, then, sorry, it's got to be the jury trial. Now, if it is not common law-ish or common law-y, I don't think those are the precise legal terms, then you've got much more grounds to be in front of the administrative

judge. But as he was talking about in this case, well, the elements that were being tried in front of the judge, the administrative law judge, were extremely similar to the elements of common law fraud. And so therefore, what we're dealing with is something that's within that scope of the Seventh Amendment. And i think that that's a distinction that makes a lot of sense to me sarah is this a is this an action akin to a common law action or not and if it is akin to a common law action well we have a venue for that it's jury trials i know so of course i love everything you just said yes sign me up for that but you know how hard that's going to be we're just You're just kicking the ball down the road to now having a whole series of like, well, what if it's, again, fraud, but specifically related to the licensing scheme that was created? So it's not like common law fraud. Now this is SEC fraud. And we're just going to keep litigating all these things. And again, we'll spend more time on this when the opinion comes out. But the law as it is right now that allows us to go on is the distinction between public

rights and private rights. Well, that hasn't worked because no one knows what a public right is versus a private right. Is there such a thing as a public right? Anytime that someone's trying to take your money or property, as Justice Thomas would say, seems pretty private to me. Um, even if they're trying to quote vindicate, you know, a right, what owned by the government, like all of these are owned by the government. That's why the government brings the case against you in an article three court. So again, I love that in theory. I just don't know in practice how it works. Okay. Moving on Purdue Pharma, another case where I have no idea how it's going

to come out. What's interesting, though, is I wonder how much listening to the oral argument in these cases makes you less likely to predict the outcome, whereas if you didn't listen to the oral argument, you will be more likely to predict the outcome. So in SEC v. Jerkasy, if you didn't listen to the oral argument and you just sort of know first principles of who the justices are, what they think about the world, the SEC loses, right? Who cares how or why specifically, but definitely this doesn't feel okay with the Seventh Amendment. Here in Purdue Pharma, this is the bankruptcy judge case, or rather bankruptcy code case. And the question is whether when Purdue Pharma went into bankruptcy and we're going to reorganize all their debt, right? They owe more than they

have revenue and that's why you declare bankruptcy, right? The Sackler family can get a release from all of its liability too, if it's agreed to by the bankruptcy judge and by a lot of the creditors who are owed that money. So the actual question presented, whether the bankruptcy code authorizes a court to approve as part of a plan of reorganization under Chapter 11, a release that extinguishes claims held by non-debtors against non-debtor third parties without the claimant's consent. So this was a big consent issue. Again, once I listened to the oral argument, I was like, okay, I don't actually know how this is going to end up. But heading into it, I thought, yeah, they're going to uphold this because this is the only way bankruptcy can really work. And if you say the bankruptcy, the bankruptcy code doesn't allow this, the bankruptcy courts don't have the ability to do this. I don't know. A lot of bankruptcy law isn't going to work anymore. this i don't know a lot of bankruptcy law isn't going to work anymore if every single person has to consent to these releases and really if they have to consent to these releases there's a whole

lot of other things that maybe they have to be able to consent to also what's interesting about this case notably is that the vast vast majority of people involved do consent because they don't think they're going to get anything from the Sacklers otherwise. The people who brought this case, if you're curious, is the Department of Justice, the ones who actually stand to get nothing from this. In some sense, they don't. I mean, I use the word stand very intentionally. What is their standing? Which came up at the oral argument as well. What is their standing? Right. I mean, they actually don't. Yeah. The U.S. Treasury doesn't get money or anything else based on the outcome of this case. Now, I think they do have standing because that's what the U.S. trustee does.

They sort of have universal standing. So I don't think it'll be a literal standing issue. But there's a problem when like everyone who actually has skin in the game says, yes, this is what we want. actually has skin in the game says, yes, this is what we want. But the U.S. trustee, who basically doesn't like the political valence around this, says, no, we want to be able to go after, we want people to be able to go after the Sackler family, even though, you know, it would, basically the first people in the courthouse door would get all the money and then no one else would get any money and the plan wouldn't get any money. It's a huge mess. If you don't have this sort of release, the Sacklers again are putting in six billion.

I think they agreed to U.S. trustee is saying, yeah, but if we don't have this release, maybe they put in seven billion and then everyone would consent. But no, someone will always hold out. So how does this work? Is it a 90? Is it a percentage consental? Yeah, this was a very interesting case. And I think as you're noting, the party here that was objecting didn't have any skin in the game and the people had skin in the game, even though many of them loathed the Sacklers. They had no love lost for the Sacklers, weren't trying to

protect them in any way, shape or form. We're desperate for this to be approved because they're saying, no, this is the only way we're getting all of the resources that we are actually getting is by having this arrangement. Boy, from a public policy standpoint, this is a hard one, Sarah, because absolutely it is the case that there's a a rational person could say this is the way to maximize the compensation pool for the creditors yeah it's from a public policy standpoint it's a hard case and guess what the statute is just kind of broad and vague oh it definitely has that like and otherwise language yeah. This term appropriate, you know, anytime you've got these catch-all provisions in a term like appropriate, yeah, there's no way to avoid having sort of judicial policymaking when you're including phrases that are just that big and broad. I mean, there's just no way to avoid it. So that'll also, I think it could, depending

on how it comes out, be a real sleeper case for one of the most important cases of the term. All right. Last up is the Moore case. David, this is the 16th Amendment case. What has to count as income? Okay. So the 16th Amendment says, the Congress shall have power to lay and collect taxes on incomes from whatever source derived without apportionment among the several states without regard to any census or enumeration. So this is your income tax. Now, the Moores in this case, sort of fun, right? I mean, it's like the most sympathetic facts you could possibly have. They invest in an overseas corporation that does good work in other countries. And that corporation has profit, but all of the profit just goes back into the

corporate form and the corporate owners don't actually take any money. But the corporation does get a profit. So the question is, the Moores had profit that they never got themselves because it just went back into the business. But can they be taxed on it? It's unrealized income. I don't know, David. This one, I also, I have some questions of how they'll decide it. But at the oral argument, it did seem like the answer is, yes, you can be taxed. This is income. Because if this isn't income, no one's going to ever pay their taxes again. income, even though I have an awful lot of sympathy for the idea that if I've not actually gotten anything, that it may not be income at all. How much is an unrealized gain actually a gain is an interesting kind of question, but I'm with you, Sarah. This is going to be income. It kind of has to be because otherwise it's too easy to not pay taxes, truly. Because as long as you're not personally seeing the money,

you don't control the money in your personal self, but maybe you have outsized control over the corporate form or whatever else. And that corporation now buys some houses that you get to live in. I don't know. This case actually seemed much smaller than I thought it was heading into it and a little bit more obvious after the oral argument. Although, shout out to Andrew Grossman, who argued on behalf of the

Moors, former Jones clerk, doing his best out there. Now, I agree with you. Of these three cases, this one is I have the least confusion about i would fall out of my chair in shock if this is not taxed if this is not considered income if the court doesn't hold that the definition of income is actually somewhat malleable and up to the political branches to really define i'm this one there were many breathless headlines about this case about it potentially undermining the entire U.S. federal tax system. And I suppose the word potentially there would be doing an awful lot of work because I don't think it's all that potential. But yeah, breathless headlines notwithstanding, I don't think this is that close of a call.

Yeah, and to be clear, when I say this case is about less than I thought it was, look, you could have, I think what the headlines were all about was this larger idea about what is unrealized income and all of that. They're not going to decide it on that. They're going to decide that this was realized income. It's just that these people decided to keep it in the business itself. So the question of what is unrealized income lives for another day, may not come up again for a long time, like truly unrealized income. But when they basically had the ability to control those funds,

then it was realized, right? Like it's pretty simple. Even if it's for good reason, even if they didn't like profit from it in a traditional sense it's sorry milestones aren't for looking back they remind us to keep moving forward to turn what we've done into what we can do turning everyday necessities into electrifying possibilities. Turning a new vehicle into the new standard. Introducing the first ever Mazda CX-70. Our largest two-row SUV. Available as a mild hybrid and line six turbo or as a plug-in hybrid.

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like bored watching TV at the end of the night. I'll hop on the app and put up the photos from the day. It's really easy. Right now, Aura has a great deal for Mother's Day. Listeners can save on the perfect gift by visiting auraframes.com to get $30 off, plus free shipping on their best-selling frame. That's a-u-r-a-frames.com. Use code ADVISORY at checkout to save. Terms and conditions apply. Next up, let's go around the horn. Maine. So the Maine Secretary of State decided that Donald Trump was not going to appear on the ballot in that state as well. We're still waiting for the U.S. Supreme Court to say something about the Colorado case. The brief has been filed asking them to do something. And that deadline is coming up today, the day that this podcast will come out. I expect to hear something pretty soon. Unfortunately, we already taped this podcast and it hasn't happened yet. Yeah. So we'll see about that. I also don't expect, it's very likely the Supreme Court will just say like,

yes, we're taking the case and this continues to be stayed or something like that. We may not hear something substantive right away. But the reason I bring up the Maine thing, David, Maine, the state, not Maine, the street, let's say, is to me, Maine just made Donald Trump's case much stronger at the U.S. Supreme Court. By allowing just the Secretary of State in Maine to get to enforce the 14th Amendment on her own, okay. Like, I talked about the due process problems in the Colorado situation. There was a hearing in Colorado. There were witnesses. There was actually quite a bit of process comparatively.

The due process complaints from the dissent, I think, are well taken, but there was some process in Colorado. Here, there was none. The Secretary of State got to determine whether Donald Trump engaged in an insurrection. I do not know, sitting here right now, what evidentiary standard the Secretary of State used. Donald Trump has now sued, his team rather has sued, to prevent Maine from an actual court to actually look at this, which, you know, is the only way this has to go. So due process will now start. But the idea that, like, a random

person, frankly, gets to determine the 14th Amendment, I think, adds to the argument that the 14th Amendment is not self-executing because Congress, or rather, the amendment itself does not include any standard that can be used by the people who have to determine whether someone appears on the ballot and that congress did create a standard in the criminal law against insurrection the punishment for which is being disqualified from holding federal office so like this was executed by congress there is a standard it's beyond a reasonable doubt you gotta meet that standard according to congress and i think i mean I just think that case is getting stronger thanks to Maine. I don't agree with that. I do. I see your point. I think it's relatively easy to say about Maine. Well, whatever the standard is or whatever processes do, it's more than none.

Right. And here when it comes to, so you can just sort of say about Maine, it's more than none, right? But when it comes to that with Colorado, I think there is an interesting sort of due process argument that I've been chewing on in my mind, which when people think of due process, those words just sort of fly out when somebody, it is not the same thing as saying I'm entitled to a formal proceeding whenever I'm not permitted to do something that I want to do. There actually has to be a legally recognized liberty interest in play. So due process applies to you cannot be deprived of life, liberty, or property without due process of law. And so when you have these due process cases, you always begin with, is there a liberty interest that grants me a right to due process? And that very first question is very, very important because the strength of that liberty

interest not only tells you whether you're due any process, it also can tell you a lot about what kind of processes due. So I've got a massive liberty interest in not being in prison. Prison, other than capital punishment, is the worst deprivation of liberty. So there's a lot of process that is due before you're going to be able to be sent to prison. Well, some liberty interests are a lot less strong. And in those circumstances, sometimes the process that's due is not even a pre-deprivation process.

In other words, before you've had your liberty interest taken away, sometimes you're not even due any process before that happens. You might have some process sometimes you're not even due any process before that happens. You might have some process that you're due after it happens, for example. And so the question I have here is, I think the due process argument is going to not be, and I think for Maine, it's quite relevant. For Colorado, it's a lot less relevant because the Liberty interest here is pretty weak. And I don't think that the process that's going to be due here, especially since there's no requirement for a conviction in the amendment itself, is going to be pretty limited process, but some process. pretty limited process, but some process. It's just that this sort of idea that he's going to be entitled to proof beyond a reasonable doubt, the same kind of criminal-type proceedings,

I just don't see it in the underlying liberty interest, Sarah. What if Congress had said it more explicitly, David, in this criminal insurrection law. This is the enforcement mechanism for the 14th Amendment, Section 3, comma. One who engaged in insurrection under the 14th Amendment, Section 3, must meet these elements. Would that matter to you? It would matter, but it couldn't be so draconian that it fundamentally contradicts the amendment itself. So if the amendment itself is not requiring a conviction for treason or sedition or whatever,

but then Congress imposes a requirement of a conviction for treason, sedition, or whatever, that would be, to me, contradicting the actual amendment itself, which does not require a conviction. Well, it doesn't say one way or the other. All it says is you have to have engaged in insurrection. And then in section five, it says Congress has the power to enforce this. So Congress then says, we're going to enforce this. And the elements that have to be met include beyond a reasonable doubt, a conviction to say that one engaged in insurrection. But you think that that would actually be so contradictory to... It narrows the scope of the amendment dramatically.

And so isn't that what Congress, what Section 5 says, Congress shall have the power to enforce this. Not to undermine this, enforce. So in other words, if your enforcement mechanism is removing the potency of the amendment itself, that's an issue. So if you create the enforcement, if you make it so narrow that it's contradicting, that it is undermining the actual text of the amendment, I think that would be too restrictive. Fascinating. I totally disagree with that. Because the reality was, again, look at the historical context. This was enacted to block, what, about 150,000 Confederate soldiers. This idea that there would have to be a criminal-style proceeding convicting each one of those. Whoa, whoa, whoa.

to be a criminal style proceeding, convicting each one of those? Whoa, whoa, whoa, not a hundred. Wait, how would it block 150,000 Confederate soldiers had served, had already taken an oath as a state or federal? So you have 150,000 on the back end who've engaged in an insurrection or rebellion, an unknown number of those on the front end who had served in some capacity. Yeah, yeah. So it's not 150,000. It's actually a very manageable end who had served in some capacity. Yeah, yeah. So it's not 150,000. It's actually a very manageable number who had taken an oath to support and uphold the U.S. Constitution and then served in the Confederate military.

You have of this of this pool of people, there's an unspecified number who are Confederate soldiers who took an oath. And so therefore, if somebody presents and they say, yeah, I was a member, I'm Major David French, 7th Tennessee Cavalry. I can serve unless Congress says, unless I'm put through a criminal proceeding convicting me for the activity of engaging in rebellion. Even though I was a member of the Confederate military.

Oh, I agree, but it'd be a pretty quick case. Yeah, it'd be a pretty quick case, but the idea that it's just, so in 1868, you have- But why can't Congress say you have to be able to prove beyond a reasonable doubt that he served in the Confederate Army? What if that was actually in question? It doesn't, isn't, can't, rather, not that it, that Congress must in question? Not that Congress must,

although I think that they must, but in my scenario to you, isn't it well within Congress's right to say, if that is in question, whether you served in the Confederate Army, then you have to prove that beyond a reasonable doubt if you want to prevent someone from holding office? I would think it is inconsistent with the amendment to create a requirement equivalent to a criminal conviction when the amendment does not require a criminal conviction. All right. All right. Next up, though, along the same theme, we have an 11th Amendment case. Sorry. Whoa. 11th Amendment. Sorry. 11th Circuit. 11th Circuit case holding that Mark Meadows could not remove his indictment in that Georgia January 6th case that Trump is also indicted under.

Mark Meadows tried to remove his to federal court. We talked about this at the time and he's not the only one who was trying to remove to federal court. Judge Pryor writing for his 11th Circuit panel. Judge Pryor is one of the most conservative judges in the country.

It is worth noting. Judge Pryor saying, gnaw dog to the removal idea. In a super textualist decision. Yeah. And I got to say, David, I was fairly persuaded by Judge Pryor's opinion, but it wasn't so obvious that it couldn't have come out the other way. And that makes it even more interesting, I think, to have Judge Pryor writing it. So section A of the removal statute provides that any officer of the United States can remove for or relating to any act under color of such office. Okay. So that says any officer,

not any former officer. Got it. Any officer. He's going to interpret that as meaning any current officer. But check out section B. It grants a right of removal to a person who is, or at the time of the alleged action accrued, was a civil officer of the United States. So, right, I mean, he's going to make a really persuasive case here that, like, look, you're trying to remove under A, it says any officer. B, the thing right next to it that Congress wrote at the exact same time is about former officers, you know, who is or at the time of the alleged action was a civil officer of the United States. Therefore, we can read even more so into A that it doesn't include former officers.

You know, it's like pure textualism. These things are next to each other. Clearly, Congress knew how to include. And so while you may be able to find other statutes where any officer can include former officers, here it doesn't include former officers. David, I assume you were pretty persuaded by this. Yeah. Well, and I'm also interested.

I want to put a pin in the judge prior conversation uh i do i am persuaded by it i think the officer former officer bit of it is actually less persuasive to me than just this is not within the scope of his duties as an officer yeah but that's less fun i agree i agree because actually, so when he explains it the way I just explained it, it's really persuasive. But Meadows had such a good counter to why A and B are worded differently that they're actually just reaching totally different things. Because otherwise, of course, he thought it was persuasive. And I want to put a pin on the judge prior conversation because this is not the first time for him. This is the second time that he has intervened in these election related disputes. The first time was in the election steal period or effort itself. He issued the 11th Circuit issued a key ruling shutting down Trump objections to the Georgia vote count. And so this is another example, Sarah, and I'm going to keep raising them that where you have your very conservative FedSoc judges who've stepped in and have stopped one of the, you know, one of these MAGA Trump legal initiatives. And this is something that has happened so many times.

I finally started to see sort of mainstream commentators latching onto this and recognizing this and understanding this. There was an excellent piece, I believe, by Aaron Blake that was walking through his readers at the Washington Post about this. But I think it's very much worth highlighting. And Sarah, it's worth highlighting for a couple of reasons. One, for those people who think

that the Trump-appointed judges and the judiciary that Trump influenced is now somehow illegitimate. No, far from it, as we've said a million times on this podcast. But for these FedSoc judges, 2020 would have been a lot more interesting than it was and interesting in all the worst ways. And so here you have yet another example of, yeah, these courts, these Trump appointees,

Pryor is not one, but these Trump appointees, these Republican nominees have upheld the judicial system and have done so in a way that demonstrates an enormous amount of integrity. is not one, but these Trump appointees, these Republican nominees have upheld the judicial system and have done so in a way that demonstrates an enormous amount of integrity. So that's point one to the left. And point two is, you know who's watching that and understands this? The MAGA movement. So don't expect these same judges and similar judges and justices in a second Trump term. And I think that's a really important point for people who are tempted to support Trump. You might be thinking,

well, at least we got those really, really good judges. I can guarantee you that people in the MAGA world do not think that Trump's judges are necessarily all that good anymore. And they want a different kind of judge or a different kind of justice in round two. And this is exactly one of the cases as to what this case is exactly one reason why. Yeah. I mean, some of that conversation is right. The same contradiction of anyone who served in the Trump administration shouldn't be able to have a job

afterward and they should be tarred and feathered. And also, oh my God, why aren't good people going to go into Trump? Where are we going to have those guardrails in a second Trump administration? This is a disaster. Same thing, right? Like, oh, these federal society judges are MAGA extremists. They're the absolute worst. And oh my God, we're not going to have again i know i know it's every time it's the same thing every time sarah the this person this republican is the worst human being ever until they meet the next republican and then they say oh you know we love that previous one that previous one was just no wait i was there i remember what you said about no i mean the worst example isn't of a republican it's's about Bill Clinton. Defending Bill Clinton

on everything. Oh, gosh. On the rape allegations. Yeah. On the inappropriate sexual conduct. And then 20 years later, we're like,

well, that was a mistake. We shouldn't have done that. Oh, but you really enjoyed having the political power at the time. The cost was too high for you to do it. So now there's no cost in saying that you now think that bill clinton might have been a rapist

yeah okay yeah easy to say now easy to say yeah easy to say mitt romney wasn't a racist after all easy to say bill clinton might have been a rapist you know i judge people by the cost at the time yes it cost mitt romney something to vote to impeach Donald Trump. Yeah. That's principle. The first person ever in U.S. history to vote to impeach a member of his own party. Sorry, I'm getting caught up in the fever of the draft Mitt Romney for Harvard University president. Catch the fever.

Yeah, the fever is real. It's also not happening. All right. Speaking of judges, there was another ProPublica piece about Clarence Thomas. And David, I was curious if you wanted to summarize the piece and give your thoughts, if you have clear ones. All right. piece and give your thoughts if you have clear ones all right so what the piece is is telling a story that's pretty simple um but has some really interesting ramifications when you link

it to all of the other clarence thomas stories so the story in pro publica is essentially that relatively soon after thomas got on the bench he was having money troubles uh he wasn't making as much money as he liked here he is he's a Supreme Court justice and he's, you know what, living paycheck to paycheck or he's having some sort of money struggles. And so he wants to get Supreme Court justices pay increased. And now here's where the story gets interesting and the sourcing gets interesting and questionable. So he wants justices pay increase. The question is, does he want it increased so much? And is he having so many money troubles that he threatens to resign, that he threatens to leave the court. So that's the question. Was he wanting justices' pay to be increased? Seems to be a pretty good indication that he did want justices' pay to be increased. Did he say that he would leave the court if justices' pay didn't get increased? That's where the reporting trail is a lot thinner shall we say and so he wants pay increased he's complaining about pay he has money troubles that's the main point of the ProPublica story now later on the money troubles were ironed out he got a lot of

money for his memoir which I believe ended up being a New York Times bestseller. So the memoir earned the money, but he did get into a better financial position later on and said that he was in a better financial position later on. But Sarah, the real import of the ProPublica story in my mind is that in an unflattering way to Clarence Thomas, it sort of paints him as somebody who was living beyond his means, very concerned about money. other stories about receiving largesse from an awful lot of people. And it starts to make some coherent sense in a way that I think is damaging. And that is, did Clarence Thomas have money troubles and then in the course of his time on the bench, learned to utilize his various contacts that he has as a result of being a Supreme Court justice to ameliorate those problems

in a way that was inappropriate. And I think the ProPublica story for me troubled me because it made sort of the whole story make sense in a way that wasn't good for him. And that is, he put out that he was struggling. He put out that he wanted more money. And what comes in? More money. Over time, he had his loan forgiven for his RV. Over time, lots of money started flowing through his wife, for example. It's just icky. for example, it's just icky. And there are parts of the story, though, Sarah, that I do agree with critics that don't close the loop on,

specifically, did he actually threaten to resign unless he got more money? But when you lock that ProPublica story in with a bunch of the other stories, yeah, I struggle with it, honestly, Sarah. And I've been a long, long, long time admirer of Clarence Thomas, and I struggle with it. I'm curious what you think about judicial pay raises. Oh, four. Yes, four. Let me break it into some categories then for you. Judicial pay raises just for Supreme Court justices? Like, what if we only raise Supreme

Court justices' pay, all nine of them, to a million dollars a year? Oh, I would be for raising judge and justice pay across the board. But... How much? A million?

No, not a million. Not a million. Why not? We're not talking about that much money. I mean, you want to talk about things we waste money on in this country. You could raise every Article III judge and justice to a million dollars a year and it would be nothing yeah a rounding error um i would say in the mid 500 600 000 a year not something that

isn't the same thing as the median say the median partner draw at a big big firm but more like in line with what your average very successful lawyer uh would receive and so and and something that that's interesting that you're pegging it to sort of a that alternative which i think is totally um a relevant peg a good peg maybe i mean the the judges and certainly the justices are now making less than any of their clerks the year after they come out of their clerkship. Yeah, exactly. The bonus for a Supreme Court clerk coming out of their clerkship is $450,000. Right. Yeah, exactly. The first year starting salary for a clerk, you know, for the circuit judges, for instance, at a top, I don't know, what is the top 25, 30 law firms are all now paying lockstep or so.

You know, you're looking at definitely around $300,000 with that clerkship bonus. So they're making more as well. I mean, look at it this way, Sarah, not just clerkship and going and some people might say well that's big law it's just a whole different economic category most vast vast vast vast majority of lawyers are not in big law fair okay got it but they're making a lot less than your median mid-level attorney in a non-profit law. And so that's what we're talking about here is we're talking about making less than people in the nonprofit private sector, not just the for-profit big law. So we're everything from, you know, if you're a senior, a senior counsel at one of the alphabet soup of conservative or liberal legal organizations,

you're making more than a Supreme Court justice in many instances. So that's one way to peg it to like what you would be making otherwise in some other legal career option. Another way to peg it, though, is to say we're going to create an ethics code that is so draconian, right? Like you can't go to lunch with your sister without paying, but in exchange, we're going to pay you enough so that you are able to socialize with the people we expect a Supreme Court justice to socialize with

and that that's how we're gonna think of it. So that's where like the million dollars comes in. For a million dollars, you should be able to pay your own way for anything you want to do. Right. I mean, I, I would not be upset at a million dollars. I just think amongst the, in a reasonable target that takes into account more sort of the totality of the legal profession would be something more along the lines of half a million or so. Because again, a lot of these guys are not actually coming out of

big law. They are not taking the $2 million pay cut or whatever that you would take coming out of big law. They're actually coming out of government service or the academy. And in that circumstance, what you're talking about would be much more in line with previous salary experiences. But yeah, I'm with Clarence Thomas 100% that these salaries should be higher. Totally agree. And Washington, D.C. is a really high cost city too. I mean, this is not an amount of money.

That amount of money goes a lot further in Des Moines than it does in D.C. That is not a huge salary for D.C. by any means. Interestingly, I thought it was, speaking of people who gave up a lot of money for their jobs, I don't know why this always is stuck in my head. Do you know what Chris Wray was making the year before he became the FBI director?

No. According to reports, right? Okay. This is not inside information. I'm using public reporting for this. 9.2 million dollars to take on a job where everyone just constantly hates him. So where was he before?

King and Spalding. 9.2. That's public service right there. That is the reporting from law.com. Anyway, we're not matching 9.2. That's never going to happen. But I don't know. So I'm interestingly,

and sorry to all of our circuit judges listening, I'm oddly willing and able to imagine a world in which we'd only raise Supreme Court justices' salaries. Interesting. I think we should raise all judicial salaries somewhat, but I'm okay if there's a discrepancy, I guess. Okay. Like, I'm okay if the justices get a million dollars because being a Supreme Court justice

is just fundamentally different in terms of the international travel, you know, representing our country abroad and things like that. If you want to say that they can't accept international airfare, then you need to pay them quite a bit in order to represent our country, et cetera, like you would a diplomat who has all sorts of money to be able to spend just on socialization, et cetera. So a million dollars for a Supreme Court justice and yeah, $400,000 for a circuit justice. That seems reasonable to me. Yeah. Which $400,000 for a circuit justice would be a substantial increase. Basically a doubling.

Yeah. So no, I would be fine with a much higher amount for justices than circuit judges, but I'd want increases for everybody. I just think, again, as you accurately noted, it's a rounding error and we can't be demagoguing this and sort of say, well, it's just, what are you complaining about? These current numbers are much higher than the median household income. Well, guys, okay, I get it. I understand that we're talking about numbers that are way higher than median household income. Totally get that, totally understand. But we also want to have some of the best people

in the country, some of the most intelligent people in the country. Frankly, we don't want someone where the $200,000 is a pay increase. Right, right, exactly. If you can't earn where the $200,000 is a pay increase. Right. Right. Exactly. If you can't earn more than $200,000 as an attorney right now, probably we don't want you as a Supreme Court justice.

Now, no aspersions on the young attorney listeners right now who are well south of all of that. We don't want you as a Supreme Court justice. I'll tell you that. It's not casting aspersions on you to say we don't want you as a Supreme Court justice at age 29. But yeah, if you're at that window that really, because really what's happening is you're supposed to be elevating these people at what is generally recognized to be near your professional peak, you know, in your 40s, in your early 50s, where you've really mastered your profession, you're at the top of your profession. That's when people are being pulled up to be Supreme Court justice. That's when people are being pulled up to be a circuit court judge. Yeah, we want you to be excellent. We want you

to be among the best. And if you're excellent, if you're among the best, the financial rewards for you are very substantial. I'll also say that I wish there were, like, I could absolutely see an argument that like, well, no, actually, it should be a good thing that judges' children, for instance, might have to take out loans to go to college. That, you know, their parent can't just pay, you know, their education. Like, again, most Americans. Except that's not what's going to happen. Because their earning potential outside of the bench is

so much higher, they simply won't do that because they will choose to make the money to be able to send their kids to college a lot of the time. So that's why we're saying it's like, it's a choice on our part to decide who we want as judges. Because the pool of people, of potential judges, are by and large going to make rational choices. Except Chris Wray, who arguably made a pretty irrational choice. 9.2 to whatever it is now. Okay, David, we've got so much more housekeeping we could do, but let's just keep going around the horn here a little. We didn't talk about the National Association of Realtors lawsuit, and it's so interesting, and we're going to have a decision here at some point, and it's going to make its way maybe all the way to the Supreme Court. So I thought we should at least touch on it as it meanders through. pushing this off, Sarah. At the very end of October, there was a huge jury verdict,

basically aimed at this arrangement that if you're a home buyer and you listen to this podcast, it's very, very familiar to you. And that is that both sellers and buyers are paid for, both seller and buyer agents are sort of paid from the same pot. It's five or six percent split evenly between the two of the sales price is dispensed in agents commission. So if it's a million dollar home and it's six percent, you'll have 30,000, three percent that will go to the buyer's agent, 30,000, three percent that will go to the seller's agent. And essentially what this jury verdict says is this was, this is an antitrust violation. That this was, you know, in essence what we're talking about is a fixed market ultimately here. here and that buyers agents are receiving largesse to which they are in a free more free market they would not be entitled to and that buyers should be able to purchase homes without having to go

through this sort of cookie cutter commission relationship or enter into this cookie cutter commission relationship and sarah is really throwing the entire industry uh into a state of confusion because what is it going to look like because a buyer doesn't your typical buyer doesn't necessarily want to or doesn't necessarily believe say if they're buying a million dollar home that they're getting thirty thousand dollars worth of value from their agent as opposed to the seller's agent and then real estate agents on the buyer's side are are responding wait a minute you don't really understand what we do in all of the ways in which we protect your interests in ways that are not immediately visible to you. So this is actually the more fair arrangement. And oh, by the way, the only way we

can make this work and make a living for our families, etc. And what you're going to do is essentially eviscerate much of the real estate industry. You're going to destroy the livelihoods of an awful lot of realtors and at the same time,. They're going to destroy the livelihoods of an awful lot of realtors and at the same time, leave buyers more vulnerable to exploitation. So that's the basic background, Sarah. I find it fascinating. I think it has the potential to be the most important legal case of several years. If this comes out the way it looks like it's going to come out in the way I think legally it probably should come out. Also worth noting that those realtors are not sort of evenly spread

throughout the population, very heavily female run industry. A lot of moms do this, a lot of sort of part-time realtor, part-time mom work. And so it's going to really, as you said, it's going to eviscerate an industry, sure. But it's going to be one very specific part of the country demographically

that it's affecting. When we bought our house, there was absolutely this 6% rule and that it had to be divided. And I was like, we had found the house ourselves. I'm not paying someone that much money to literally sign their name to a contract because we're required to have a licensed realtor on our side. So I went online and was like, hey, I'm willing to pay you X thousand dollars to sign your name on here and we're going to keep the rest. And it was really, really hard to find someone because they're considered... What's the union term where like you're not scabs a scab right they couldn't be considered a scab by their other industry members or else um yeah they would be punished by their own uh now i eventually found someone and i will

say and like a twist at the end of the story here he ended up having to do more work than i thought he would in going back and forth on the contract. Because I thought we had agreed to all of the contract terms. I mean, we're sophisticated contracting parties. So again, I didn't think we needed a realtor. And as it turned out, basically, they tried to back out of one part of the contract on building a fence. And so we did have to go back and forth. Now, I'm not saying it took that many hours, but he had to do that work because it was required that he be the one to do it. So he did serve an important purpose. I was grateful to him

for his existence and sophistication being a licensed realtor and all of that. But even with all of that, David, I don't see how this is going to turn out any differently. I think we're about to eviscerate the realtor business. I think we are too. And I also was listening to a podcast discussion in this case that was really interesting. And a person made the point in defense of the current payment system, which does have some logic and rationality to it, even if it might violate any trust laws, it does have some logic and rationality. And one of the points that he made was the people who are going to be truly vulnerable in this new system, and this is not something that I'd fully thought through, but it made

a lot of sense, are first-time homebuyers. Because if you're going to say to the buyer's side, you have to be financially responsible for the buyer's fee, which that will often mean, wait a minute, does some of my down payment now have to be rerouted to a buyer's agent? Well, a lot of first-time homebuyers, heck, a lot of homebuyers, period, are taking every last spare cent that they have in life and putting it to that down payment. And that's materially affecting the house that they can get, the size of it and everything. But if instead you take some of that and carve it out as an upfront payment to the buyer,

you're talking about less money for your down payment. You're talking about less house than you would otherwise be able to afford and so a lot of first-time home buyers who are the least sophisticated as a general matter home buyers will be the most tempted to say no to the buyer's agent and then therefore most susceptible to exploitation from a seller's agent and i thought that was yeah i mean all of that made absolute sense it's also the case that seller's agents and sellers, frankly, have a huge incentive for the buyer to have an agent because there's going to be a lot of flim-flamming around of not understanding, asking a lot of

questions or not asking questions and then arguing about the contract afterwards because they didn't really understand the contract that they just signed. So now you're in litigation over that. So the sellers absolutely should want the buyers to be represented. And maybe that means they should pay for it. Yeah, no, it's a really interesting question. But yeah, you're right. As far as impacting actual people's lives at scale, this could be the most important case in,

lives at scale this could be the most important case in i mean most important case since dobs in impacting actual people's lives at scale um not the most consequential it's not as consequent it's not life and death like dobs but um as far as impacting sheer number of people this is a big big big case. Okay, last topic that we did not get to talk about last year, and I'm really embarrassed about it, was the death of Justice Sandra Day O'Connor, the first woman ever to sit on the U.S. Supreme Court. And David, plenty

has been said about her, and we don't need to revisit all of that, but I am curious if you had any thoughts on her passing. But for me, what really struck me was the funeral and her lying in state and comparing that to other justices, whether it's Antonin Scalia or Ruth Bader Ginsburg and sort of just the public reaction to that compared to the first woman to ever sit on the U.S. Supreme Court. I think there are reasons for it that I can point to.

A, she wasn't on the court currently, and so there wasn't then going to be some fight over who replaced her. But here was the reason that I actually think is the real reason, and the reason I don't like. She wasn't on either of the ideological ends of the spectrum. And when someone who is in the middle then is gone, there's not a lot of fervency around that that you inspire when you're on the fringe,

and that's not a good thing. I'm with you, Sarah. I think that's a really good insight here into this dynamic. good insight here into this dynamic if you have if you're if you're if you inspire ideological zealotry you're going to have a tribe you're going to have outpourings of affection etc but if you're somebody who is both more ideologically and temperamentally moderate. You know who's going to like you? The people who are more ideologically and temperamentally moderate. In other words, there's just not going to be the same level of intensity around who you... And I do think, of course, a lot of this was related to the fact that both Scalia and Ginsburg died when presidents of the opposing party were in office.

And there was so much emotional intensity wrapped up in both of those deaths because of the immediate and huge political and judicial consequences. And they were current Supreme Court justices. Yeah. She had been off the bench now for 15 years. That matters, obviously. But this is the first woman to ever be on the Supreme Court. And I promise you, if you polled most Americans, A, they wouldn't be able to name who was the first woman on the Supreme Court. The plurality choice number two would be Ruth Bader Ginsburg. But I do wonder if 50 years from now, it will actually be Sandra Day O'Connor who's remembered and not Ruth Bader Ginsburg, because history books are frankly

going to list the first woman Supreme Court justice. And Ruth Bader Ginsburg, who was so famous when she was alive, I don't exactly know what you could write in a history book that's going to make a lot of sense. And when you look back at the 20th century, there are so many people who were so wildly famous in their day who we do not know the names of sitting here right now. Like never heard of them. I don't mean you're like, oh yeah, I forgot. No, you've never heard of them. And they were arguably the most famous Americans at the time. I wonder if Ruth Bader Ginsburg will, her legacy may look a little like that, in part because there's not a singular decision that she wrote that stands out.

And yes, like many of her decisions, I mean, the writing and the thinking, I just mean like VMI is not going to be something where like, and then there was VMI, it's not Brown v. Board. Right, right. That she didn't leave the bench under Obama. So her tribe actually has mixed feelings about her moving forward, and they're going to be less willing maybe to keep her memory alive. And that she wasn't the first woman on the court. I don't know. lingering ambivalence. Is that the right word? There is some degree of ambivalence or upset on the left towards Ruth Bader Ginsburg, as much as they admire her for hanging on

by staying in office too long. And I do think it's interesting. Sandra Day O'Connor stepped down a long time ago. So she's actually not only, she's sort of old school in a way that both Ginsburg and Scalia felt ahead of their times in a way, and O'Connor feels more old school. And by that, I mean Ginsburg and Scalia sort of were previewing the Supreme Court justice as gladiator model, like who is our person, who is our champion to carry forth our position in the culture wars. That's Supreme Court justice as gladiator model, and they were early in on that. Whereas O'Connor was more of the old school Supreme Court justice model of this is a respected legal mind. This is a respected jurist, not perceived or not intended to be a kind of ideological or judicial gladiator. And we're moving to the gladiator model. We're leaving behind the Sandra Day O'Connor model. And I think that also plays into this.

Last thing on her, because I just can't get over the personal side of this. Can you imagine spending that many years when you only have eight colleagues and one of those eight colleagues is not just your ex-boyfriend, but the ex-boyfriend who sent you a note when you started dating your then-husband. To be specific, Sandy, will you marry me this summer? Chief Justice William Rehnquist had written to her back in the day. Why did I not know this story? You didn't know this? No. Oh, my God. What's wrong with me? She had to serve on the court with her ex-boyfriend who had proposed to her. Oh, man. What are the chances? I mean, it's sort of like

Kavanaugh and Gorsuch being on the court together. I mean, and again, I'm sure they were just fine together in high school. But like, imagine if the dude you hated the most in like 11th grade and you're like, well, at least I'll never have to see him again. No, you're with him for the rest of your life. Well, when you said it's kind of like Kavanaugh and Gorsuch together, I was like, wait, is there an even bigger story? No, like your random high school classmate you end up on the Supreme Court with

or your ex-boyfriend. And like no matter how good of friends you are, there's just a little bit of awkwardness there. No matter what. Has to be. Has to be. Has to be. Absolutely. be. Has to be. Absolutely.

All right, listeners, thank you so much for joining us. You know, maybe next episode I'll mention an interesting person I went on a date with who's relevant to an upcoming legal story. That's your teaser. Ooh, stay tuned. And we have lots of Circuit Opinions that were of interest last month that we will start getting through and we'll be waiting for that supreme court something decision taking it something on the colorado case uh we'll see there's actually like a merits level decision

we might have to do an emergency pod but we we're standing by. We're standing by. Until then. Bye, listeners.