Advisory Opinions - Return of the TRO

Episode Date: January 28, 2021

A federal judge on Tuesday granted Texas Attorney General Ken Paxton’s request for a nationwide temporary restraining order blocking the Biden administration’s halt of a 100-day pause in deportati...ons of noncitizens for 14 days. It’s safe to say our podcast hosts have some thoughts! Stick around to hear David and Sarah chat about an indictment against pro-Trump Twitter troll Ricky Vaughn in response to his voter disinformation campaign, a wonky First Amendment case, and what’s behind this week’s GameStop rally. Show Notes: -Giboney v. Empire Storage & Ice Co. and Expressions Hair Design v. Schneiderman. -Take our podcast survey Learn more about your ad choices. Visit megaphone.fm/adchoices

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Starting point is 00:01:08 I was born ready. Welcome to the Advisory Opinions Podcast. I'm David French with Sarah Isker. And as usual, we never lack for legal subjects to talk about. We have the first nationwide injunction against the Biden administration that was handed down. Well, technically first nationwide temporary restraining order handed down against the Biden administration, blocking its halt of a 100-day pause in deportations. We're going to talk about that. We're also going to talk about a voter, a conspiracy to violate civil rights indictment handed down by the Department of Justice against a Twitter troll involving a scheme to get people to vote too wrongly, to trick them into believing that they can vote by phone in the 2016 election.
Starting point is 00:02:21 And it raises some really interesting issues. We're also going to talk about a, and I don't even know what this is, Sarah. I'm just in suspense. You know, it's great when I bring you one of my weird historical cases. Yes, yes. I'm only going to call it a weirdo First Amendment case. I don't know what it is. Sarah's going to surprise me. And then we're going to wind up with not a technical stock market discussion of GameStop, although there will be some elements that will be involved in talking. I mean, we'll have to talk about the mechanics of what's going on a bit, but not really a technical stock market discussion of GameStop, but a more philosophical, cultural discussion
Starting point is 00:03:06 of GameStop and what's happening that's just essentially taken over almost all of online discourse, political discourse, economic, with the TRO. Listeners will recall that on Monday, we talked about a lawsuit filed by the state of Texas against the Biden administration's 100-day pause on all removals of aliens. Now, there were a couple of issues there involved in the case. removals of aliens. Now, there were a couple of issues there involved in the case. One was, was the court going to find binding on the Biden administration, an agreement that was entered into between Texas and the Trump administration's Department of Homeland Security that attempted to essentially bind the hands of the Biden administration by putting certain obligations and requirements on the Department of Homeland Security before it could do any substantial change in deportation policy. So this was an agreement entered into between the Trump
Starting point is 00:04:16 administration and the Biden administration and the Trump administration in Texas. Trump and OK, Trump administration in Texas. Why? OK, Trump administration in Texas. Okay, Trump administration in Texas. Why? Okay, Trump administration in Texas. That reminds me of, didn't I in the last podcast say something like hitting the Titanic instead of hitting the iceberg? Yeah. Sarah, I'm a grandfather now. What can I say?
Starting point is 00:04:42 And so anyway, an agreement between the Trump administration and Texas, could it bind the Biden administration? And then there was also just a statutory interpretation issue. Was the Biden administration's 100-day pause consistent with the statute? The former issue, the agreement, is much more legally interesting in many ways than the latter issue, the specific statutory language, because the former issue, the agreement, if such an agreement could be held binding, would have some pretty profound implications, not just for the Trump administration moving into the Biden administration, but for future administrations, how often can you
Starting point is 00:05:26 enter into agreements without promulgating a regulation, issue an executive order, even entering into a settlement agreement or a consent degree? You just enter into an agreement that binds another administration. We thought that was an interesting issue, but we also thought the statutory issue was interesting. And well, yesterday, no, Wednesday, Tuesday, the 26th, the day after our podcast, the court issued an order. It did not rule on the agreement. It did not rule on the agreement, but it found that Texas had a probability of success on the merits on its statutory argument that the 100-day pause on all removals of aliens violated the statute. Sarah, your initial thoughts. So this is a TRO for 14 days, which means there'll be another
Starting point is 00:06:23 hearing. We'll have another opinion on the permanent injunction, which at this point, the legal standard for a TRO versus an injunction is nearly identical, identical. I think that you can assume that they will also get the injunction at this point. Now, all of this will go up to the Fifth Circuit. I think there's a decent chance it will go up to the Supreme Court. That will be well after this hundred days has come and gone. But my big takeaway was live by the APA, die by the APA. So the state of California, for instance, filed 100 lawsuits against the Trump administration, almost all of which use the Administrative Procedures Act as a hook. And they were successful a ton of the time. So not surprising that Texas wanted to rely on the memo. I think they really want to get a legal
Starting point is 00:07:17 opinion on this memo. I think they will lose on that. But not to worry worry because they included their APA hook at the end of their final counts. And what the APA says is, one, an agency can't go against the clear, unambiguous text of the statute. And in this case, 8 U.S.C. 1231 says, quote, when an alien is ordered removed, the attorney general shall remove the alien from the United States within a period of 90 days. The Biden administration argued that this didn't mean what it looked like it meant. Right. That argument might go over better in the Ninth Circuit. It was not going to go over well with Judge Drew Tipton. This is a textualist guy, if ever there was one. And I mean, you can see in his opinion, he's sort of
Starting point is 00:08:10 like, for serious? You brought that argument. Okay, that's not going to happen. Now, they had some other arguments about whether, in fact, this was reviewable at all. There's some other language that, for instance, whether Texas can sue about it, whether it's within the Biden administration's discretion, things like that. He treated those a little more seriously, but came down the same way, saying that, no, the language is actually not discretionary. The word shall is must. And that has been interpreted that way in many other statutes and this one. And that has been interpreted that way in many other statutes and this one. And therefore, this can't be something like the APA suggests that is committed to the agency's discretion because of that shall language. Now, the second part that they want on, and remember, they only need to win on one of these parts.
Starting point is 00:09:04 So going to that permanent injunction, for instance, you only got to win on one. Going to the Fifth Circuit, going to the Supreme Court, you can lose on everything but one. Of course, when we talk about nationwide injunctions, you can lose in every court but one, on every count but one. So that's a fun part of nationwide injunctions that we have talked about that the Supreme Court is going to address before this case ever gets there. Right. Sort of where nationwide adjunctions sit writ large. But the second count that they won on was this arbitrary and capricious standard that, oh, David, that is one of the most popular tunes in the APA soundtrack. So this is the idea that like, okay, sure, the statutory language might be ambiguous.
Starting point is 00:09:44 Maybe this is even within your discretion. But when you do an action without rulemaking and comment and go through the formal regulatory process, you have to explain yourself six ways to Sunday and then a couple more. Because basically, and this was, I think, a huge frustration in the Trump administration, but also the Obama administration and the Bush administration. If a judge can think of anything you didn't think of, then it's arbitrary and capricious and it's all thrown out. And that's very frustrating because the judge will treat it like, obviously, you should have thought of this when in fact, you're like, well, I just didn't think of it. this when in fact you're like, well, I just didn't think of it. So in this case, the judge notes that the agency failed to consider potential policies more limited in scope and time,
Starting point is 00:10:34 but it also failed to provide any concrete reasonable justification for a hundred day pause. It says, the memo in this case says that they needed the pause to assess immigration policies because of the, quote, unique circumstances present with respect to immigration, including, quote, significant operational challenges at the southwest border as we are confronting the most serious global public health crisis in a century. It cites the need for a comprehensive review of enforcement policies, the need for interim civil enforcement guidelines, limited resources that would necessitate a pause in executing removal orders, and that the pause is necessary to provide sufficient staff and resources to enhance border security and conduct immigration and asylum
Starting point is 00:11:20 processing at the southwest border fairly and efficiently and comply with COVID-19 protocols to protect the health and safety of DHL's DHS personnel and those members of the public with whom DHS personnel interact. It also says the DHS must ensure that the agency's removal resources are directed to the department's highest enforcement priorities. That sounds pretty comprehensive to anyone who's reading it, but the judge finds DHS, however, never explains how the pause and removals helps accomplish these goals. It remains unknown why a hundred day pause is needed given the allegedly quote unique circumstances to which the January 20 memo alludes. Indeed, you know you're in trouble when the judge indeeds you. Indeed, despite such unique circumstances, DHS did not state or explain why
Starting point is 00:12:13 100 days specifically is needed to accomplish these goals. The silence of the memorandum on these questions indicates that the terms provided for in the memorandum were not a result of, quote, reasoned decision-making, which is the opposite of, quote, arbitrary and capricious decision-making. Thus, I mean, this is my frustration with this standard, that the standard is you cannot meet this standard. Of course, 100 days is somewhat arbitrary. If you can never pick 100 days and not 101 days without explaining the difference between 100 days and 101 days, then the arbitrary and capricious standard is strict scrutiny. It's fatal in fact. That's right. I think saying 100 days because we need to review our policy priorities and ensure resources are going to the highest enforcement priorities and stuff, it is implied and we need about 100 days to do that. We don't know if we need 80 days or 85 days, but we know we can do
Starting point is 00:13:19 it in less than 100 days. I think that the first count that the judge finds on is much, much more persuasive than this arbitrary and capricious, but this arbitrary and capricious standard was wielded like a sword for the last four years and arguably 12 years. Yeah. So two things about this. One, I completely agree on the statutory claim. And when the language says when an alien is ordered removed, the attorney general shall remove the alien from the United States within a period of 90 days. There isn't a discretion to say, in my view, that for 100 days, we're not going to comply with this statute with its mandatory language. There's a real problem there. I think that's a very
Starting point is 00:14:05 strong case that Texas has brought. On the arbitrary and capricious point, Sarah, I don't want to toot our own horn too much, but I'm going to toot it. Toot, toot. Because we called this. We called this loudly and repeatedly. And we said, in particular, I believe, I'd have to go back and listen, but when we were discussing the Supreme Court's DACA decision, where Justice Roberts was, you know, the impression that I got in the DACA decision was, you know, Roberts was just sort of over the Trump administration. Roberts was just sort of over the Trump administration. And we saw this not just in the Supreme Court. We saw this not just in courts of appeal. We saw it in district courts. Essentially, arbitrary and capricious was changed from, it's not arbitrary if there are good reasons for it or defensible reasons for it, the agency decision. It's arbitrary unless I agree with the reasoning of the agency or that it's arbitrary unless the agency addressed every
Starting point is 00:15:15 possible argument surrounding the agency decision. And so, I mean, I think you're right, Sarah. It's almost as if arbitrary and capricious has become strict scrutiny. Now, you know, I think there's a better way of dealing with all of this agency action, which in my view is dealing with the Chevron and our standards of deference. In other words... That's not, oh, you are. That's not David and I our standards of deference. In other words, that's not O-U-R. That's not David and I's standard of deference. That's our A-U-E-R standard of deference. Did I say that right? Yes, I think so. I know it starts with an A. I know there's a U in there. There's definitely an R at the end. What happens in between that U and R? I wouldn't bet like a whole lot on it. Well, I think that our listeners will give us the correct spelling with all the vigor of the correct.
Starting point is 00:16:12 Our listeners, not our listeners. Correct. So how much deference is the judiciary required to give to agency officials as a general background matter is a subject of intense debate in constitutional law that we'll set aside for the moment. But as of right now, it's interesting. It's almost as if, Sarah, the arbitrary and capricious standard has been bulked up so much that it's sort of backdoor overruling Chevron. Yeah. The other thing though, to note that also may happen, it happened with the travel ban. It happened with DACA and less publicly with a whole lot of other things in between is you get several bites at the apple in an agency action or an executive order. So with the travel ban, for instance, they call them travel ban 1.0, 2.0, and 3.0. Every time a judge said something
Starting point is 00:17:05 was arbitrary or capricious, they just rewrote it to fit whatever that judge's specific issue was. And then that judge sort of had their hands tied because you can't then come back and say, well, I forgot to mention in the first one, but also this, this, and this. And so I could see a world in which, at least on the second part, they could issue a second executive order on deportation where they specifically address why 100 days is needed. The only issue between this and the travel ban is that there is no specific need for 100 days that they're going to be able to come up with. So even if they say, we have determined through X, Y, and Z that we need 100 days,
Starting point is 00:17:51 the judge could just say, I still find that X, Y, and Z to be arbitrary. I think that gets a little... I think that if they were to redo it, the judge would probably drop that arbitrary and capricious count and just uphold it on the 1231 language being unambiguous count. It'll be interesting to see if they rewrite it though, because there's also this pride aspect. Lawyers drafted this and those same lawyers would be the ones rewriting it and having to acknowledge that they didn't tie it up in a nice pretty bow. and having to acknowledge that they didn't tie it up in a nice pretty bow.
Starting point is 00:18:29 And it is the instinct, I think, of most lawyers in this case to say, that's a bad judge, it's not a bad order. Right. And, you know, one of the things, just to sort of back up a little bit, I saw a lot of outrage when this order was issued. And I did not see a whole lot of people who were outraged grappling with this fact that the statute says when an alien is order removed, the attorney general shall remove the alien
Starting point is 00:18:54 from the United States within a period of 90 days. Didn't see a lot of grappling with the statute. And it's just deja vu all over again, Sarah. What people look at time and time again is, do I like the policy? And if I like the policy, a judicial action against the policy is judicial outcome-driven judicial activism, almost by definition. by definition. Or even if I don't care about the policy one way or another, if I don't like the litigant, for example, in this case, Ken Paxton, who is the Attorney General of Texas, who's under federal criminal investigation for corruption, well, then he can't win. He's a bad guy. He can't win. In the meantime, there's just a statute sitting out here, a law that says what it says. And, you know, look, either the law applies or it doesn't apply. Either it means
Starting point is 00:19:51 shall remove or it doesn't mean shall remove. And, you know, and so an enormous amount of our discourse around these things is incredibly clouded by, do I like the policy? If I like the policy, then the law has to conform to the policy. Or if I dislike the litigant, then the litigant can't win. And this seems to be an enormous amount of our discourse around legal issues. In the meantime, I'm sitting here looking at the statute saying, huh, well, how's a hundred day pause meet the 90 day requirement? You know, I'm just a simple country lawyer, Sarah. How does a 100-day pause meet the 90-day requirement? There was also one other interesting discussion.
Starting point is 00:20:33 It's become less interesting over the last few years, but it's still out there, which is this idea of whether Texas, for instance, has standing on these cases. This question came up in DAPA, it came up in DACA, it will continue to come up in DACA as that case, we're expecting a ruling in that any day now
Starting point is 00:20:49 from Judge Haynes, also in Texas. Now, it's interesting because we have to address this at two different stages of this case. There's the Article 3, can this court even hear the case standing question? And that is whether Texas has suffered an injury. And in this case, Texas claims
Starting point is 00:21:08 that they have suffered fiscal harm because they will lose millions of dollars in health care and educational costs that they will have to expend on illegal aliens that otherwise would have needed to be removed. Separately, there's the prong within the TRO standard and the permanent injunction standard of whether Texas will suffer an irreparable injury without getting the TRO or the injunction. And it's the exact same evidence and the exact same claim. We, Texas, will have to pay
Starting point is 00:21:41 millions of dollars in health care and educational costs. So when you see this discussed, or if you go and read the opinion, do not be confused. These are actually two totally different standards. Texas is just using the same claim for both. The one that's actually interesting is the standing one, the Article 3, can Texas even get into court on this? Because for a long time, courts were sort of disfavoring this fiscal harm argument that states had, especially sort of attenuated fiscal harm. It was a little bit similar to whether taxpayers had standing, David,
Starting point is 00:22:16 this idea that as a taxpayer, some pennies of my money are going to X thing that I think is unconstitutional or unlawful. And the courts have just said, no, that is not enough of an injury to give you Article 3 standing where a court can hear that case. But kind of this Texas argument is the same as taxpayer standing. It's just not pennies of your money. It's more because it's a state, but we don't distinguish between the amount Bill Gates gives in taxes versus I give in taxes. So I'm not sure why the amount
Starting point is 00:22:52 should matter. And there's also congressional standing, like members of Congress usually, though not always. Members of Congress usually can't sue over laws just because they're members of Congress. So the courts basically have created this whole like, look, we just don't, we are not going to create standing for everyone to walk into court. In general, they were sort of disfavoring states doing things like that. But on this immigration issue, Texas has found this hook that at least on the DAPA issue that did go to the Supreme Court, that was their hook. They were allowed to go with it. It'll be interesting to see if anyone, whether in the near term or further term, wants to revisit that because it is what paves the way for so many of these state versus executive agency action cases. Oh, yeah, absolutely.
Starting point is 00:23:47 You know, going back to DAPA, you had this issue come up, came up over and over again. Travel ban, standing was a real issue. You know, how would, for example, Hawaii have standing to assert an Iranian's right to enter into the United States? That was an interesting standing argument. And so they were sometimes asserting standing. You'd have universities trying to assert standing that they were going to be harmed because they couldn't bring in, say, a scholar.
Starting point is 00:24:15 I mean, a lot of really novel standing arguments were brought and they, by and large, standing was granted. And so it seems to be an increasing... So there's two things happening at one time that I think are constraining executive action simultaneously. And two, basically taking the arbitrary Capricious standard of the APA and injecting it full of like HGH, like Barry Bonds-ing it. This is, by the way, I think a result of Congress abdicating its role. Yes. So as the administrative state just grows and grows and grows and grows and Congress shrinks and shrinks and shrinks and shrinks. Footnote, by the way, Madison Cawthorn, the freshman congressman who has been getting some attention, there was a email that recently leaked where he basically said he's not hiring legislative staff.
Starting point is 00:25:14 He's going to use his staff budget. Each congressman just gets a lump sum of money. They don't tell you who you have to hire or what those people have to do. Most congressional offices hire constituent services, a whole bunch of people to help you with, you know, my neighbor put a raccoon in my drainpipe. Then policy, help me draft a law or help me understand a law that's moving through. And they will, on the House side, usually hire one press secretary or comms director with like an intern sort of filling in as the press assistant or the lovely person who answers the front office door and phone serving as the press assistant.
Starting point is 00:25:52 Madison Cawthorn has said that he's going to hire all comms staff. Forget your neighbor and that raccoon in your drainpipe. Forget the legislative staff. I'm doing comms, which tells you exactly where the incentives lie in Congress right now. Back to my main point. So as Congress shrinks, as executive and administrative agencies get more and more power to basically make laws, the courts have then allowed more challenges to those because they're not going through the legislative process, the sort of representative accountable process that the Constitution envisioned. And there's been a whole lot
Starting point is 00:26:26 of making up law as a result because the Constitution doesn't have a lot to say about laws that are passed that don't go through Congress. So it's all this APA stuff, agency action, judicial doctrines,
Starting point is 00:26:41 which I think both sides find very frustrating. And the only solution, truly, is Congress doing its job. But failing that, we're now going to have standing, beefed up, and steroid-driven, arbitrary and capricious. Yeah. So it's a four-step process. Here's the four-step process to take a a presidential administration and just sort of like strip it of its desired power. Step one, forum shop. This is very important.
Starting point is 00:27:14 Find the right place to file your lawsuit. In other words, look, this is what happened. This is how the Northern District of California got really busy between 2016 and 2020. There's just a giant pile of forum shopping going on. So forum shop with increased standing, apply steroided, arbitrary, and capricious, and get the nationwide injunction. David, this reminds me- Boom, boom, boom, boom.
Starting point is 00:27:43 Your four steps reminds me of clear and present danger. Jack Ryan, that's the old Washington two-step. Sorry, Mr. President, I don't dance. It has been a long time since I read that book or watched that movie. Such a good movie. Harrison Ford, some of his finest work. The book was gripping.
Starting point is 00:28:07 Like this, that was, and there was this era of Tom Clancy where Clancy, I just could not wait for the next book to drop. But I think, so Hunt for Red October just sort of stands alone and just like incredible. Although having Alec Baldwin instead of Harrison Ford, actually, that's unfortunate that they went with Alec Baldwin first. I think Harrison Ford would have been a better fit for the pantheon of the hunt for Red October,
Starting point is 00:28:37 clear and present danger. And what's the third one? Oh, Some of All Fears. Nope, not that one. No other harrison ford one oh uh patriot yes patriot games patriot games was so good but i'm talking the books i know i know um so hunt for red october and then the forgotten clancy book is red storm rising which is this sort of standalone world war three scenario that is so well done. It's sort of kind of outside of the JREU, the Jack Ryan Extended Universe.
Starting point is 00:29:13 It's so, so well done and really, really good. Fascinating book. But yeah, okay. Anyway. Anyway. But I liked Alec Baldwin, Jack Ryan, Hunt for Red October. I did. I mean, it Baldwin, Jack Ryan, Hunt for Red October.
Starting point is 00:29:25 I did. I mean, it's not, again, Hunt for Red October is one of my favorite movies. Yeah. But because it wasn't Harrison Ford, it's then separated from Patriot Games and Clear and Present Danger. And that's what's a bummer to me. It's not that Alec Baldwin isn't good if that were just a standalone movie. But it's not a standalone movie. It's really part of a trilogy.
Starting point is 00:29:44 Yeah. By the way, I re-watched Hunt for Red October just a few weeks ago, and it really holds up. Oh, it's just fabulous. I watched it all the time. It's just so good. And because they used actual sub footage so much, it holds up so well because you're not stuck with that late 1980s or early 90s special effects. If you're actually filming a sub, it's still a sub, right? Yeah. I mean, thank goodness that we had some time where there was enough money in movies before the technology took over where someone drops out of that helicopter by that submarine,
Starting point is 00:30:24 for sure. I don't think it was Alec Baldwin, but someone did it. Yeah, yeah. That was an incredible scene. Just incredible. Listen closely as a master painter carefully brushes Benjamin Moore Regal Select down the seam of the wall. It's like poetry in motion. Benjamin Moore, see the love.
Starting point is 00:30:51 All right, should we go to some voting, voter fraud? Yes. So this is going to be, there was a very, very interesting indictment filed yesterday. This was, I'm just going to read from the DOJ, going to original sources here, Sarah, as is our advisory opinions custom. And by the way, you know what makes me so angry? When you have a sophisticated news organization like, like say in New York Times or Washington Post.
Starting point is 00:31:27 The New York Times is the worst offender of what you were about to say. The New York Times 100% does not link to original source material. It is the worst thing about the New York Times. And I say that understanding the New York Times has many a flaw, but I actually do believe that the worst
Starting point is 00:31:45 part about it, they do not give a lot of credit to other reporters. If someone else, um, you know, got the story first or whatever, they will not cite to that. They will not link to original source material. It's very much like the universe only exists within the New York Times pages. Judges don't exist. Arrest warrants don't exist. Other newspapers don't exist. Very, very frustrating. CNN, on the other hand, is actually usually very good about linking to the court cases. They will put it up on their own website.
Starting point is 00:32:14 Politico also usually pretty good. So when I see one of these cases come up, listeners, this is just like my own little hot tip of how I do this. It may come through my feed or whatever as a New York Times story. I will then Google to find the CNN Politico version because I know that they'll have a link. And also to punish the New York Times for their bad, bad behavior. Unconscionable.
Starting point is 00:32:39 I mean, the Washington Post will sometimes violate, but usually, especially some of the sort of the more expert sort of kind of blogging side of the Washington Post, the analyst side, they're almost always going to have that primary source link. But anyway, we've digressed again from Jack Ryan to scolding the New York Times. Okay, here's just the beginning. In or about September 20, in or about and between September 2016 and November 2016. 2016, folks. I just want to highlight,
Starting point is 00:33:07 this was not 2020. This was 2016. Now, the interesting thing is, this seems like a case that was just kind of laying around. But anyway, so both dates being approximate and inclusive, the defendants known as,
Starting point is 00:33:19 the defendant known as Ricky Vaughn, his name is Douglas Mackey in real life, but he was Ricky Vaughn online, together with others, conspired to injure, oppress, threaten, and intimidate persons in the free exercise
Starting point is 00:33:30 and enjoyment of a right and privilege secured to them by the Constitution and laws of the United States. The right to vote, to wit, the right to vote in violation of 18 U.S.C. Section 241. Now, that's a code section
Starting point is 00:33:43 that should be familiar to both advisory opinions listeners and to French press readers. Now, how did they do this? Okay, I'm just going to read one paragraph of this, and then it goes into a lot more detail, but that's going to trigger our conversation. As the election approached, Mackey, in conjunction with others, known and unknown, spread disinformation about the manner by which citizens could and should cast their votes during an election, conduct that constituted criminal infringement of the right to vote. over social media that claimed, among other things, that supporters of a presidential candidate from one of the two main political parties could and should vote for the candidate by posting a specific hashtag on Twitter or Facebook or by texting the candidate's first
Starting point is 00:34:38 name to a specific telephone text code. In other words, you text the candidate's name to the code. Mackey and his co-conspirators conspired to design and distribute these messages with the intent that supporters of the candidate would believe the fraudulent information contained therein, attempt to cast their votes via social media or text message, and as a result, fail to cast their votes in a legal manner. Now, I'm going to read to you, Sarah, the actual language of the code section, and then I'm going to toss it to you for thoughts about this because this is interesting to me. And here's the relevant language. If two or more persons conspire
Starting point is 00:35:21 to injure, oppress, threaten, or intimidate any person in any state, territory, commonwealth, possession, or district in the free exercise or enjoyment of any right or privilege secured to him by the Constitution or laws of the United States, or by cause of his having exercised same, shall be fined and imprisoned not more than 10 years. So, posting internet content designed to fool people into casting a fake vote, violating a U.S. conspiracy statute. Hmm. What do you think?
Starting point is 00:35:59 I think that this is going to have some problems on appeal. But let's back up a second. Who brought these charges? So the acting U.S. attorney for the Eastern District of New York. So SDNY is the Southern District of New York. That's the famous one. That's the one from Billions and all sorts of other TV shows that you watched. The Sovereign District. I was going to say SDNY, the joke is it stands for the Sovere sovereign district of New York because they normally tell Maine Justice, which is what the Department of Justice in D.C. is called. They tell Maine Justice to go pound sand and do whatever they want. And there's not a whole lot that Maine Justice ever really can figure out to do to rein them in when Maine Justice says no.
Starting point is 00:36:40 And SDNY, like a petulant teenager, says, you can't ground me. I'm going anyway. So this is the Eastern District of New York. It is like the petulant teenager's 13-year-old little brother, just learning its petulance, if you will. But the current acting U.S. attorney for Eastern District of New York is Seth Ducharme. The reason I want to go into a little bit about this is because, as you noted, David, this is action from 2016. We are now four years and four months or so since this happened. And one might imagine that the failure to indict this behavior was politically motivated. Seth is a career prosecutor. He has been at EDNY since 2008. But before that, I mean,
Starting point is 00:37:36 this guy's been in government service. He was a deputy U.S. marshal in Brooklyn, a law clerk, yada, yada. I mean, he's in it to win it here. But he was a counselor to Attorney General Barr. So he still maintains his civil service status, by the way, when he did this. It's a detail. So he is brought while still a civil servant to do this job. So counselor to Attorney General Barr, then still on detail, he was the principal associate deputy attorney general that is referred to as PADAG. It's P-A-D-A-G is the acronym, but it's not PADAG. It's PAYDAG because we have to distinguish that from ADAG and some other words of DOJ. Anyway, paydag is basically the number three most powerful person at the Department of Justice, the attorney general, the deputy attorney general, and then
Starting point is 00:38:30 this principal associate deputy attorney general. So this guy had some of the highest political jobs in the Department of Justice that you can have, did it while he was still a civil servant prosecutor and is now the acting attorney general. Which is all to say, David, I don't think the delay had anything to do with politics or even a concern about pissing off Donald Trump by showing that one of his supporters committed voter fraud and actually tricked a bunch of Clinton supporters into fake voting. I think it was coming up with this very novel, somewhat concerning if you're concerned about federal criminal law overreach and stretching onto new interesting areas to apply this statute to online Twitter behavior. Now, that being said, this idea that it's not against the law to trick people into voting by phone and taking away their civil right
Starting point is 00:39:37 to vote, that will upset a lot of people too, that that's just not illegal behavior because what those people were just too stupid. Um, but there's not a law that fits on that right now. And so they've used this law, the conspiracy to oppress or intimidate someone from exercising a constitutional right. Hmm. Yeah. So this, this is interesting. So two quick thoughts on this, or maybe not super quick. One, federal conspiracy statutes are broadly written, y'all. They are broadly written. The interesting language to me isn't even necessarily oppress or intimidate. Injure. Injure. Oppress. Threaten. This is broad stuff. then is it provided meaning not so much by the text of the statute but by just an absolute avalanche of case law and so it is the in and it has been the case that section 241 has been held to apply to the right to vote since all the way back in 1884, a case called Ex Parte Yarborough, 110 U.S. 651. And so you have a lot of case law around conspiracies to alter counts, to stuff ballot boxes, to prevent counting, to destroy voter registration applications. Now, what do you notice about all of these things? These are all things that are happening in the real world. So here's just sort
Starting point is 00:41:30 of a list of applications of Section 241. You're violating it if you're stuffing ballot boxes with forged ballots, if you're preventing the official count of a ballot in a primary election, if you're destroying a voter registration application, if you're destroying ballots, if you're casting absentee ballots in the names of elderly or handicapped people, if you're illegally registering voters, if you're trying to intimidate a voter and exercise their right to vote, if you're impersonating a voter, if you're failing to count votes or you're changing the way votes are counted. So essentially, you put all of these things together and I take an action that is designed to prevent someone from voting or to alter votes, this Section 241 is kind of going to apply.
Starting point is 00:42:19 But the big difference, David, all those examples that you just read, Big difference, David. All those examples that you just read, those, the voters were not participants. Correct. There was no trick or fraud involved that involved the voters making a choice in that sense. Now, we have plenty of this that talks about fraud, and there's no question this is fraud
Starting point is 00:42:45 like you know just because you get tricked doesn't mean it's okay you didn't volunteer to be tricked you know and it's also interesting here's just an interesting little constitutional factoid it is not the case that lies have no constitutional protection that's an interesting little factoid that has come up in the concept in the context of litigation surrounding political advertising believe it or not and stolen valor um right and stolen valor yeah so the question here is now here here would be the question and this is this is what i would be fascinated to know if there's any case like this. When we're talking about novel online speech questions, I often try to think of an offline, is there an offline analog?
Starting point is 00:43:34 Like there are interesting offline... Sure, I mean, David, you and I haven't talked about this, but to me, this actually... I'm glad that this is the test case because I think that this is, this has some really scary future implications, but this case actually has a really easy offline analog that I think a lot of future cases will not. But this is, you create, you know, a lemonade stand and you scratch over lemonade and write voting booth. Yep. And you say, oh, and it's like right next
Starting point is 00:44:03 to the main voting area. And you're like, well, that has a line, but mine doesn't have a line and you can vote right here. And the person's like, well, but like that, that looks more official. And you're like, no, no, no, this is actually just as official. We just set it up to try to cut down on the line. And the person's like, oh, okay. And they go in and they cast a fake ballot and your fake lemonade stand. Uh, and yeah, obviously that's not okay. Yeah. I didn't have the lemonade stand in my hypo, but my hypo was going to be basically identical to your hypo. It was going to be, there's a guy standing in front of the
Starting point is 00:44:37 polling place and every person who fits sort of the profile of, you know, because some of the facts in here were African-American voters. They were targeting somebody who fits the profile that they would assume would be a person of the opposing party and say, oh, we have an overflow line and directs them to an alternative voting location that's set up to look like one or doesn't even look like one that much because who's ever voted by text message? Hence my lemonade stand. Yeah, that's a great hypo. That's a fantastic hypo. And if you, so if I had to, if I had to, if you had to guess, if there was the lemonade stand voting booth, would you guess that in the on offline world, a court would hold that
Starting point is 00:45:20 section 241 applies? Or would a court say, no, that's just so obviously wrong that that's just sort of like caveat emptor, you know, buyer beware if you're going to go to the lemonade stand voting booth? I think they're going to hold that it applies. And I think they're going to compare it as the closest current analog to absentee ballot fraud, to taking someone's absentee ballot from them and saying, let me fill this out for you or sign here, I'll vote it later type thing. So I think that a court will hold this up.
Starting point is 00:45:56 I think the problem will be, this is like the crack in the door to online world and all the things people say around voting online. And maybe it's not a bad thing, David, for people to have a little bit of concern that tricking people and basically wanting to take away their right to vote could have real life consequences.
Starting point is 00:46:22 Well, and I think one of the things that makes this case more likely to have legal bite is that according to the DOJ, at least 4,900 people use that telephone number. Yeah, this wasn't harmless. Yeah, this wasn't harmless. 4,900 numbers. And, you know, that, so then it's, this is not a victimless crime. This was not then just mere trolling. So yet fourth, and now we don't know how many of those people of the 4,900 may have realized their mistake and gone and voted anyway. But yeah, this was not a victimless crime. And it connects with something that we in the green room said we'd talk about, but then when I put together the list of things we're going to talk about, I didn't put it in the list. litigation that is being filed right now well wave dominion has filed two giant lawsuits one against rudy and one against sydney powell dominion voting and for 1.3 billion dollars each uh and you know i i'm somebody who's long been leery of excessive use of defamation litigation because it can have a real chilling effect you there is such a thing as vexatious defamation litigation. But at the same time,
Starting point is 00:47:49 actual defamation is not protected by the First Amendment. And what we're beginning to see is some real legal accountability for actual grotesque lies that have had a terrible effect on the American body politic and a very specific effect on the injured party here, the company dominion. Here you have another grotesque lie that had a very specific effect on 4,000, at least 4,900 people. And here you're getting some legal accountability locking down.
Starting point is 00:48:23 And there's a point at which these guardrails against outright fraud and defamation kind of have to start locking in place or we're not going to have a way past all the misinformation that is saturating the American public right now. I think that's right. I also, when we talk about voter fraud, and I talked about all the
Starting point is 00:48:45 ways that you could commit voter fraud and all the ways that I had found that you really could not commit widespread voter fraud. I'll just also note that, you know, the way that I said was going to be the most effective way to commit voter fraud was to go through neighborhoods that you knew were high propensity precincts for your opponent, go collect all those absentee ballots, say that you knew were high propensity precincts for your opponent, go collect all those absentee ballots, say that you were ballot harvesting in a jurisdiction where that was legal, take them and throw them in the trash. That's basically what this scheme was. And so I just want to underline the fact that we still do not have a voter fraud scheme that has changed ballots or increased the number of ballots successfully. And this, on top of what happened in 2018, another Republican campaign that was very similar
Starting point is 00:49:32 to my example, where they went and picked up a bunch of absentee ballots. We don't know that they threw them away, but we can guess that they did. You know, it's interesting, David, it's the right complaining about voter fraud the most, but when it comes to these indictments, the two biggest indictments of the last four years have now been Republicans committing voter suppression and voter fraud. I mean, this is voter fraud, but I think it's closer to what we would call voter suppression. It's intended to drive down your opponent's vote. Yeah. So anyway, it's depressing. I could easily imagine with the way in which memes and images can go viral very quickly,
Starting point is 00:50:20 if you have a situation where, let's say the weather has gotten bad on the night before, and there's a bad weather forecast, or you've got the pandemic raging, and you would send out a pulse emergency voting change due to crisis weather prediction. You vote this other way. Or vote on Wednesday. You can imagine thousands. Vote on Wednesday, exactly. Crisis, emergency change. And, you know, look, lots and lots and lots of people, they don't, I mean, they know,
Starting point is 00:50:55 they don't know the law. They don't know the law. Yeah. You know, at some point you would look at it and say, who would fall for this telephone voting scam? Well, 4,900 people is a lot of people. I mean, it's not a lot in the context of, you know, the more than 100 million people who voted. But you concentrate that in a jurisdiction.
Starting point is 00:51:17 I mean, remember, there was an entire presidential election decided by less than 1,000 votes not that long ago. Yeah. It also is just upsetting. You know, it's funny that when you're giving examples of how to suppress the vote and you said, you know, emergency report, I sort of was running in my head. Yeah. It would be really egregious. For instance, if someone said, you know, emergency, this election is rigged. Don't go vote. They're not going to count your vote in the Senate runoff elections. Can you imagine if that had come from the other political party? Whichever direction, if the fact that Republicans did it to their own voters is really the only thing I think that's
Starting point is 00:52:06 keeping that from getting charged criminally. Although, frankly, David, it fits pretty squarely within this statute if you wanted to extend it to its next logical jump. Yeah, right, right. That's the next hurdle right there. Yep. Yeah. So, all right. I've got a first amendment case for you david yes so this comes from the mailbox a very nice person wrote me and said uh my topic is whether quote the regulation of price is a regulation of speech under the first amendment and he says i am reading gibney v empire storage and ice gives me the full citation. It is correctly blue-booked, I will note. This is a case from 1949 that I had never heard of, David. And of course,
Starting point is 00:52:51 I'm reading this case and I'm like, what? And so I marched downstairs to my Supreme Court litigator husband's office. And I'm like, hey, Scott, do you know Gibney v. Empire Storage and Ice? And Scott's like, no. And I'm like, let me tell you what it says. And I told him and he's like, what? So, David, since you are also a First Amendment litigation lover, I wanted to tell you about this crazy First Amendment case that like I didn't even know was out there. And then, of course, actually, I do want to know was out there. And then of course, uh, actually I do want to go on a little cul-de-sac. David, you're aware of what shepherdizing is? Yes. So when I was in law school, the internet, uh, very much existed.
Starting point is 00:53:35 It's not at its current speed, obviously, but you know, LexisNexis and Westlaw were all online. And so when you looked up a case like Giboney and you wanted to cite it or you were reviewing someone's law review article, if you were on a journal, you had to go through each of their citations and shepherdize those citations. And that meant ensuring that that case was still good law, that it hadn't been questioned or overturned, God forbid. And, you know, so that means you need to go find every case where that case, in this case, Giboney, is mentioned. And then, like, let's say I find one where Giboney is overturned. Then I need to shepherdize that case and make sure that that case wasn't overturned, bringing us back to Gibney. It was a long and
Starting point is 00:54:25 tedious process. But David, I was using the internet and I actually was up trying to go to bed last night wondering how you shepherdized cases on your journal without the internet. Sarah, let me tell you, because it wasn't just working on a journal. It was I entered the practice of law before, you know, we had Lexis and Nexus. But especially it was not. It was nothing. It was nothing as robust as what you had. And in fact, it was very costly to use.
Starting point is 00:55:04 So right. Like every search costs a dollar. I mean, there's like crazy stuff. as what you had. And in fact, it was very costly to use. So you had to- Right, like every search costs a dollar. I mean, there's like crazy stuff. Exactly. So we were prohibited from using it unless we'd gotten specific permission from the client in the particular case. So we used the books.
Starting point is 00:55:19 Yeah, but I don't understand. Like you had to, I don't, what? How? How would you go through and read every case that the Supreme Court had ever done to look for Gibney? Well, the books had lists of the cases. Then you had the reporters. And then you also had,
Starting point is 00:55:34 so you had the Supreme Court reporters where you would go and you, you would have giant mounds of law books. I would be in the law library. Every law firm had a- What are these law books of what you speak? Yeah. You'd walk in, you would pull out, you'd shepherdize, and then you'd have to look at the pocket part because the pocket... Do you know what the pocket part is? No.
Starting point is 00:55:57 My goodness. Oh, Sarah. Okay. So you'd have this big book. The law library was really just for looks. Yes, I did go pull books out of the stacks to look at some specifics that maybe weren't available online. And searches were still very expensive by that point. But no, we were not primarily relying on books. Well, this was one of the big advantages of being in a big firm.
Starting point is 00:56:21 So you'd have your big law library, you'd have all of the reporters, and you would be able to shepherdize,. So you'd have your big law library, you'd have all of the reporters, and you would be able to shepherdize. And then you'd have a law librarian who is responsible for keeping all of these subscriptions up to date and putting the proper pocket part into the books. And so what a pocket part was, was it was the most recent, it was like a very, a paper version of the most recent case updates that would be slid into the back of the book. Before the next book comes out. Before the next book comes out. So this was sort of a filler and there was kind of this grace because there could be a case decided in say within 30 days of when you're doing everything
Starting point is 00:57:01 that you would have no idea about. And then the other thing that happened when Lexis really and Westlaw really came online is you found all the unpublished cases. Yeah. Yeah, I mean, because unpublished meant something when it was actually unpublished. Unpublished now
Starting point is 00:57:19 just means it's not as good a weight for precedential purposes. But before it literally meant you couldn't find it. Yeah. And by the way, a lot of crap happened in unpublished cases. I think less so now. I think as a law clerk who was potentially drafting unpublished opinions, something I knew would be unpublished, you still knew that people were going to be able to read it. And so I think knowing that made a difference. Whereas 20, 30 years before, if you thought unpublished meant just sort of for your own, like, get this off my desk purposes, maybe less so. Okay. Well, that's all to say I shepherdized Giboney. And I was so certain that it had been overturned or at least, you know, cabined. Not really. It has been cited quite recently, David. And I know you're dying. Tell us about
Starting point is 00:58:15 Gibney. I know you're dying to know what this case is actually about. So back in 1949, we're in like the heat of union activity and really the peak of union power as well. We're sort of post, can they unionize? Now it's like everything is unionized and unions are doing really, really well. There is an ice distribution company. They make ice and then they distribute the ice. This is back before people had ice cube makers, I assume, and the whatnot. Oh, by the way, interesting history of ice in the United States going back to the mid-19th century. Highly recommend if you want to just like Wikipedia, there's some books about it. I'm very into ice history. So right away,
Starting point is 00:59:01 this case grabbed me. So you have to have truck drivers to distribute this ice. And then it goes to these other facilities. Anyway, the unions were upset that the empire was giving its ice to non-union places. And so they created a picket line. And the picket line was basically to tell the truck drivers, if you cross this picket line and the picket line uh was basically to tell the truck drivers if you cross this picket line you'll be kicked out of your union and to convince empire not to give their ice to non-union shops there was a statute in missouri that said that it was illegal to enter into an agreement to basically restrain trade this would have been sort of an antitrust problem if they had entered into this agreement with the union not to give ICE based on this other company's membership unionization, etc.
Starting point is 00:59:55 So Empire had kind of a tough decision to make. They could lose all their truck drivers and have this picket going on in front, or they could enter into an illegal agreement and break the law and get charged with breaking the law, potentially. And so they sued. And the argument was whether you had a First Amendment right to picket, obviously. This didn't seem like a particularly close call to me. You're out there picketing your First Amendment rights.
Starting point is 01:00:26 I don't understand how there's even a question about this. The Supreme Court did not agree with me, David. Boy, did they not agree with me. They, in fact, said, I'm going to quote here, it has never been deemed an abridgment of freedom of speech or press to make a course of conduct illegal merely because the conduct was in part initiated, evidenced, or carried out by means of language either spoken, written, or printed. speech incidental to conduct is not protected just because you screamed something while murdering someone, right? You're not like, oh, no, that murder was protected by the First Amendment because I said something while murdering the person. But I mean, this goes further than that.
Starting point is 01:01:19 I would say that it's not that the speech was incidental to the conduct. I would say the speech is the conduct. Now, the thing they wanted to happen because of the speech might have been illegal. But I don't see a whole lot of difference between a whole lot of rallies and events, perhaps, that have happened this month, David, where people are advocating for illegal activity on behalf of a third party. They want the third party to break the law. And so they're screaming and yelling, I want the third party to break the law. That's still protected speech. So in going through all the Gibney fun that happens after, So in going through all the Gibney fun that happens after, Gibney isn't technically cabin to its facts.
Starting point is 01:02:13 However, it only is cited for the proposition that speech incidental to conduct is not protected. So it's never again that I found ever used in the conduct, in the context of an actual rally, assembly, you know, sort of these core First Amendment activities. The reader, however, was asking, as it turns out, about rent control. And he said, why wouldn't this apply to rent control? Because obviously your speech is telling people how much the cost is and whether a rent control law that makes charging too much for rent for a particular premise illegal violates the First Amendment. Now, what's great about that is that that question
Starting point is 01:02:53 is largely unrelated to Gibney. But in shepherdizing Gibney, I found a case that was basically spot on in its dicta, at and that is a case called expressions hair salon versus schneiderman now this case is about you know how like some state laws say that you can't charge more uh to use a credit card or whatever in this case it was about what you could say about charging more to use a credit card. And anyway, in the case, they make very clear that, for instance, if there's a law requiring New York delis to charge $10 for their sandwiches, that simply regulates the amount that the store can collect. That you have to write $10 on the menu is not speech in that case. And it's certainly not protected speech.
Starting point is 01:03:48 Those written or oral communications would be speech in the law by determining the amount charged would indirectly dictate the content of that speech. But the law's effect on speech would be only incidental to its primary effect on conduct and quote, and here's Giboney,
Starting point is 01:04:03 it has never been deemed an abridgment of freedom of speech or press to make a course of conduct illegal merely because the conduct was in part initiated evidence or carried out by means of language, either spoken, written, or printed. And thus ends what I think is a very interesting little, uh, nope, nope, nope. You are not protected by the first amendment, uh, line of cases that all start with Giboney. Yep. It's interesting. And I would bet almost any sum of money that Giboney would not come out that way in 2021. There is no way. But you would have some other case, like for instance, this Delhi example. There certainly would need to be a line of cases
Starting point is 01:04:46 about speech incidental to conduct. But this, I mean, First Amendment protections, how far they have come, David, which you have said on this podcast many, many, many times, just in the last 10 years, let alone the last 70 years. But Gibney to me slapped me in the face of like, wow, this is exactly what David has always said, that the First Amendment protections have just like really come a long way since you couldn't pick it. Oh, my goodness. Yeah, I don't even know. Imagine applying Gibney to cancel culture. A little crazy because they said, I mean, just to be clear, in this case, it was the picketing itself that violated this Missouri law on restraint of trade, you know, and entering into an agreement because they were advocating for this company not to trade with non-union companies.
Starting point is 01:05:41 That's not incidental. Yeah, Yeah. And we'll take a quick break to hear from our sponsor today. Aura ready to win mother's day and cement your reputation as the best gift giver in the family. Give the moms in your life and aura digital picture frame preloaded with decades of family photos. She'll love looking back on your childhood memories and seeing what you're up to today.
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Starting point is 01:06:49 Okay. So there's a narrative of GameStop. And for those who have not followed, what essentially happened is GameStop is, for those who don't know, these are retail outlets that have, in the past, thrived around buying, selling, trading video games.
Starting point is 01:07:14 So when video games were much more common, console video games and PC games were much more commonly distributed by a compact disc, then you'd go to GameStop, you'd get the latest games. Sometimes you could buy games that others had already played all the way through and they'd sold back to GameStop and you could buy some games. And anyway, now if you've got an Xbox Series X like my son has, you're downloading your games by and large. So that means GameStop has come on some hard times. So what does that mean? Well, when companies come on hard times or investors expect companies to come on hard times, they will short sell. They'll short the stock, expecting, anticipating it to go down. Now, there's a lot of people who argue that short selling is an indispensable where you, the short seller, agree to buy X amount of that stock at a future date at a specified price. In this case, because you're guessing that the stock will
Starting point is 01:08:12 be low, you're agreeing to buy it at this higher price because you think you're going to make money in the delta. And so if that stock does not meet your expectations and in fact is worth more than you think it is in that future date certain, you are set to lose a lot of money and so much that you can often bankrupt your entire firm if you short a stock so much that then you cannot cover the loss. Right, exactly. And so a lot of people dislike short sellers in part because short sellers suddenly have a vested financial interest in the demise of a corporation. It needs to go down for them to make their money. And so there's a lot of people who would say, well, wait a minute. What you're essentially doing is you're not just betting. It's not just a harmless bet that a company is going to go down. Because you have a vested interest in it,
Starting point is 01:09:10 you might take actions or just the mere act of shorting a stock a ton can cause the stock to go down. So there's a lot of people... It affects the stock's value if there's a whole bunch of shorts on it. And even as that stock starts to climb, it can drag the stock down. And so it's not a self-fulfilling prophecy, but it would be like, we don't have an equivalent in sports betting, except that if the sports bettors got to get a few punches in
Starting point is 01:09:39 on the players before they take the field, we don't let that happen for good reason. We think that might be a little unfair. So Redditors primarily who are involved in sort of trading on their own, you know, a lot of them are day traders. They're people who have a little bit of money and they're just kind of playing around
Starting point is 01:09:58 in the stock market. They've been, they said, and if you want more detail on this, go to Jonah's G file from, uh, yesterday, Jonah links to some really good sources, but essentially they said, no, sir, short sellers, not on our watch. Are you going to take down GameStop? And so they began to buy this GameStop stock at scale. So all of a sudden the stock, instead of going down, down, down, starts to just rocket up. Well, then some of these short sellers who realize if this stock, the more the stock goes up, the more money they lose, they decide to cut their losses essentially by buying stock, the necessary stock that they have to do to cover their short sale. And that causes the stock to even keep going up more and more and more. And it has turned into this David and Goliath story that it seems like there's a very clear sort of black hat, which is the short sellers and a very clear white hat,
Starting point is 01:10:58 which is the Redditor, the happy merry band of Redditors, which has driven the stock way, way up. the happy merry band of Redditors, which has driven the stock way, way up. But here's the thing, though. The merry band of Redditors are actually going to end up hurting a lot of people because a lot of people are believing that, oh, wait a minute, this isn't just a way to stick it to the short seller. It's a way for me to make money by buying a stock that I think is going to keep going up because people are going to keep wanting to stick it to the short seller and they end up buying stock artificially high for a company that is in fact in bad shape. And so that stock is going to go down. And so the thing that worries me about this is, look, if you're willing to lose money to stick it to short sellers, your money, your choice, I understand the argument against short selling,
Starting point is 01:11:53 I understand the argument for, but if you're sitting there and creating impression that you have figured out a way to not just stick it to the short sellers, but to cause an awful lot of small dollar investors to make a giant pile of money. You're going to be hurting people. And you're going to be hurting, yes, you're hurting these billionaire hedge fund managers, but you're also hurting the guy who is thinking that he might have $10,000 in the bank total, puts $5,000 into GameStop stock, and then you... He loses virtually everything.
Starting point is 01:12:30 There's a few other problems. One, there are a lot of laws about stock market manipulation. The folks who are on this Reddit chain, and there's, what, 2 million of them or something? It's a big, big group of Redditors. Big, big, big. But, hope million of them or something. It's a big, big group of Redditors.
Starting point is 01:12:45 Big, big, big. But hope none of them are registered stock traders. They could have some problems depending on who all's in that chain and what those specific people have been saying, who sort of have higher obligations. Two, so I think you're right that their short-term immediate goal is to stick it to the short traders. But I do think that there is a secondary goal, which is to show the folly of the stock market as a measure of economic health. And I think a lot of people have seen that, particularly in our pandemic year, that the lines at food pantries are five miles long and the stock market is at an all-time high. And how absurd, like the true definition of absurdity this is when clearly our economy is not healthy and yet the stock market's doing really well. And I think that by showing how easy it is to manipulate a stock, that they are also trying to highlight that. Yes, it is awesome to them that they can potentially bankrupt some of these hedge
Starting point is 01:13:59 funds, but they are at this point making a larger point. I think it was their intent, but whether it was their intent or not, they're making it. It's leading the evening news on every single station in America. The problem is, David, I don't know what there is to do about it. You could ban short selling, fine.
Starting point is 01:14:20 Although, again, to your point, there's plenty of people who think it's actually a really integral part of how the system works uh maybe so you know a lot of people compare this to or at least it's easier for me when people compare it to natural ecosystems like you need the gray wolf in the ecosystem at the end of the day it prevents uh erosion along the creek bed and you know you can trace all the ways in which having the gray wolf will prevent erosion. Great. Are short sellers the gray wolf? No. Maybe they're like a toad who we
Starting point is 01:14:53 also need in the ecosystem. I'm not sure. There's those hippos that are now in Colombia because of Pablo Escobar. They are wreaking havoc on that ecosystem. Maybe the short sellers are more like the hippos. I don't know. So, okay. So that's one way you can quote unquote fix some of this, but I don't think that would fix the overall issue that the stock market is not the correct gauge of economic health of the country anymore. Right. No, I, you know, that, that is, I think that's something that was really disorienting for an awful lot of people. There was a time period during which as economic activity was plunging early in the pandemic that the stock market also
Starting point is 01:15:35 plunged, but my goodness, did it recover? And look, if we had an economist on here, they would tell us all of the reasons why that occurred. And some of the reasons are relatively easy to understand and somewhat explainable. Look, I get it. I get it. My beef, though, is with this extremely binary way in which we're looking at this entire story as a white hat, black hat scenario when the white hats are going to end up hurting an awful lot of people. And that they're looked at the white hats because they're sticking it to the black hat.
Starting point is 01:16:15 And that's our definition of good is pissing off or hurting the right people makes you good. But what's the collateral damage? That's just my one little killjoy comment about GameStop. Okay, I have one more, which is I was in a conversation about socialism versus capitalism. And someone else was like, well, I think we should talk about populism. And someone else was like, well, but those don't really fit together.
Starting point is 01:16:48 Socialism versus capitalism are how we divide up resources. Populism is who divides up those resources. And so they're very different questions. And I was like, hmm, yes, yes. And then this GameStop thing happened. And I thought, wow, when we've talked about populism, we've treated it as really this either far left wing or far right wing, you know, damn the man, like sort of just anger. The populism equals anger and like anger is a political movement and people don't really respect that a lot. as part of the capitalism versus socialism discussion and far more directly related to it
Starting point is 01:17:29 than, say, the Donald Trump political movement or even the, what was the Wall Street one called? Oh, Occupy Wall Street. Occupy Wall Street, which didn't really have any specific desires or demands either. This was an actual organized protest in populism. And that will be very interesting as people come up with other ways to quote unquote,
Starting point is 01:17:56 you know, use populism to make far more specific, interesting arguments, protests, demands, and examples, because that's what the internet now allows you to do. Well, we're going to have to end a much more interesting conversation than the time we've allotted for it because unfortunately, and rare in podcast world, I have a hard out. So I have another podcast I have to record.
Starting point is 01:18:22 You're cheating on me. I know, I know. It's not one of ours. It's just a one-time thing, Sarah. Okay, we're going to have to have a whole pod about adultery now. So please go rate us on Apple Podcasts. As so many of you have, we really appreciate it. Please subscribe on Apple Podcasts.
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