Advisory Opinions - Supreme Court Rules Against NCAA

Episode Date: June 22, 2021

Student athletes have reason to celebrate after Monday’s big Supreme Court NCAA decision. In today’s episode, David and Sarah discuss the ins and outs of National Collegiate Athletic Association v. Alston, a unanimous ruling that paves the way for college athletes to receive compensation beyond scholarships as long as it is tied to their education. Our hosts talk about how the case will set a precedent for the future, and analyze a concurrence from the court’s very own basketball coach, Justice Brett Kavanaugh. Also on the podcast, Sarah walks through two other Supreme Court rulings on security fraud and patents. Finally, David and Sarah chat about her recent Twitter spat with Case Western law professor Jonathan Adler about standing in the Obamacare case. Show Notes: -National Collegiate Athletic Association v. Alston -Goldman Sachs Group Inc. v. Arkansas Teacher Retirement System -United States v. Arthrex Inc. -Jonathan Adler’s Reason article about the Supreme Court Obamacare case Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to the Advisory Opinions Podcast. Sarah, we have Supreme Court opinions. Sarah, we have NCAA. Very, very exciting. For some reason, so Scott and I completed some of our chicken sandwich updates this weekend, and our conversation was all about the NCAA case. I must have had a sixth sense intuition that we were getting it. Very pumped.

Yeah, this case. Okay, I'm just going to go ahead and I'm just going to lay my cards on the table. Antitrust makes my head hurt. Okay, this is not, there are aspects of this case that are going to be easy to talk about. There are aspects of this case that are not going to be super easy to talk about. And I know for a fact, we have antitrust lawyers who listen to this podcast. I'm going to just go ahead and right now ask for your grace, okay? Because we're going to do our best.

I'm going to do my best. But there's some big themes we're going to talk about and some really kind of fun facts that we're going to talk about. So this case is going to be, this case is like peeling an onion of legal goodness. But just as with peeling the onion, parts of it will kind of make my head hurt so much it might bring a tear or two to my eye. This is complicated. Antitrust is complicated

stuff. So we're going to dive into that. Or let me just offer a different perspective on antitrust. It's all made up. There you go. There you go. That makes it sound better yeah all right we also have other supreme court cases we're going to talk about not nearly as exciting as ncaa um and we're going to have some additional commentary on california v texas the obamacare case and some closing thoughts about fulton versus philadelphia the religious liberty case that we talked about last week. So there is a lot. But before we get into it, Sarah, let's start with what do we have left at the Supreme Court? And is bingo telling us anything?

Then we'll dive into the NCAA. So we've got 15 cases left. They've decided 48, by the way. I mean, this is a low number of opinions this year for sure. And that brings me to why bingo is really unhelpful. Because in January, February, and March, we have so few cases that the bingo becomes nearly impossible. So January had five, February and March both had six. So even though we only have two left in February, including the huge voting rights case out of Arizona, we have too many justices left to be able to make any sort of distinction over what's happening there.

March, same problem. Two cases left, one of which is that union case, the takings case of whether California can demand companies allow union reps on the property during work hours. Yeah. Really hard to say what's going on there. We still have angry cheerleader. We still have anonymous donors. Now, April had a ton, a ton. So that's all to say we're still having some post-COVID bingo problems. You'd think then you could look at the total number written by each justice. And all we can really glean from that is that Justice Thomas actually might be done. He's already written seven opinions. We may not have more coming from him. Justice Roberts is still pretty low.

Justice Barrett is still pretty low. But so are Kagan and Gorsuch. I mean, we're all, everyone's like in three, four, and five land otherwise. So yeah, bingo, not going to like in three, four and five land otherwise. So, um, yeah, bingo, not going to be helpful this time. So it's fun. We're just, we're just driving around. We're just without directions. It'll be good. Well, well, you know how much I, I want to see angry cheerleaders liberated, right? I know. And free to speak, free to vent their anger at their cheer coach or their softball coach on Snapchat, TikTok, wherever,

the fact that Justice Thomas might be done is a good sign for angry cheerleaders because Justice Thomas has not been a huge fan of student free speech in the past. And do you know who's really low on opinions is Justice Alito. Now, could it be because he's been in the dissent a few times here? Now, could it be because he's been in the dissent a few times here? Sure. But with Brnovich still outstanding, that's the voting rights case. Angry cheerleader. I don't know. You could get some spicy Alito in the majority. I'd like to see that on occasion. I'd like to see that. Well, I think if he's in the majority, he'll be less spicy. I don't know. Man feels like the cayenne is just already in the sauce, you know? All right. Let's dive into the NCAA case.

Okay. So let's set this up with some background here. So this case was not, by the time it got to the Supreme Court, this case was not, hey, can the schools pay the players whatever the players are worth? That is not what the case was. So let's walk through a little bit of the background. So what happened is lawsuit was brought alleging a restraint of trade by the NCAA that was challenging two kinds of benefits. Education-related benefits that student-athletes could receive, limitations on education-related benefits like internships, I believe the phrase used was post-eligibility internships, graduate school, vocational school,

scholarships, other kinds of education-related benefits, and the other one was non-educated-related benefits. So that would have been opening up the market for sort of more like what you would say like pro-style salary bidding wars. So the case goes to a district court. District court holds a trial, and the district court says, you know, we're going to kind of give the NCAA its leave its authority intact on non-educated related benefits. But we're going to we're saying that what that that the NCAA has violated antitrust law and its limitations on education-related benefits. Okay, so non-education-related benefits, we're not going to really mess with the NCAA. Education-related benefits, the NCAA has violated the Sherman Act. It has violated antitrust law. NCAA appeals to the Ninth Circuit. appeals and and to the ninth circuit um and then ninth circuit affirms affirms the district court and then the ncaa appeals to the uh supreme court of the united states now this is what's

interesting in the supreme court of the united states the plaintiffs the the athletes drop their appeal of the district court's ruling on non-education related benefits. So the court is not determining at the Supreme Court level, the court is not determining whether the NCAA can still maintain its limits on non-education related benefits. Okay. So that was not at issue. It was not at issue whether Alabama, for example, can offer, you know, son of Tua one day, a three-year $45 million contract, right? So this was about the education, the limitations on the education-related benefits. Okay. So it was not going to be about, can these schools pay whatever they want to pay? So then the district court, the Supreme Court ruled in favor of the athletes. It upheld the district court's injunction and said it is consistent with established antitrust principles. So that had

a few parts. One, it's absolutely proper to subject the NCAA restriction to antitrust scrutiny under a rule of reason analysis. So this is a very fact-based assessment of market power, market structure to try to figure out what's the actual effect on competition. Okay, so that's part one. It says that the NCAA said that the court should have been extremely deferential, extremely deferential. The Supreme Court rejected that, completely rejected that. Supreme Court rejected that prior precedent, limited its ability to weigh in on student-athlete competition, rejected that. Essentially, just the court opinion just sort of peels back every single argument put forth by the NCAA. And basically, Sarah, at the risk of oversimplifying it, here's the way the whole thing broke out. The NCAA was sort of forced to admit that it was restraining, it was operating in restraint of trade and operating in restraint of trade in the labor market. In other words, the market of athletes.

status and amateur reputation of college sports, which is its competitive distinction and its market niche that makes it different from pro sports. So in other words, it's saying, yeah, we have a lot of rules that are in restraint of the labor market, but we've got a lot of reasons for that. And those reasons make our product something fundamentally different from the NFL, for that. And those reasons make our product something fundamentally different from like the NFL, for example. And I think, Sarah, I have a theory. Yes. And my theory is essentially the recitation of the facts. A recitation of the facts kind of dooms the NCAA here. Because what's interesting about this recitation of the facts is what it shows, it shows two things going on at once.

One is incredible escalating interest in and demand for college sports combined with an enormous amount of economic benefit flowing to member schools, combined with an awful lot of what looks like professionalism within this amateur sport, especially as applied to coaches, assistant coaches, and athletic directors, combined with a huge number of changes to the way that athletes are regulated and limitations placed on their activities, all against a backdrop of ever-escalating demand.

So it seems like what the salient issue is when you read this recitation of facts is not what are the compensation rules, but rather, is this college sports? And that there's an escalating demand for college sports that's not related to any particular kind of compensation or regulation that is attached to college sports, if that makes sense. And just real quick before I hand the ball over to you, it's really interesting how when Justice Gorsuch, who wrote the majority opinion, begins, he talks like, he begins with this. From the start, American colleges and universities have had a complicated relationship

with sports and money. In 1852, students from Harvard and Yale participated in what many regard as the nation's first intercollegiate competition, a boat race at Lake Winnipesaukee in New Hampshire. By the way, is that where What About Bob was? Yes, it was. I'm sailing! Death therapy, Lake Winnipesaukee. But anyway, this was no pickup match a railroad executive sponsored

the event to promote train travel to the picturesque lake he offered the competitors an all-expenses vacation with lavish prizes along with unlimited alcohol the event was filled resort with life and excitement and one one student athlete described the junket as an experience as unique and irreproducible as the Rhodian Colossus. Students spoke in a different manner back then, Sarah. Then it goes on to describe all of the different ways in which for years, colleges have been funneling money to players, players have been mercenary in their approach to college athletics. And what seems to be consistent in this account is that what has really helped college sports isn't the restraint on compensation so much as the regular, the regularization of the rules of the game itself.

That so long as you're, you have the rules of the game uniform itself, that there's a lot of variation in the compensation and the game just kept getting more popular. It's one of those circumstances where Sarah, when you read a fact statement, you know how this thing is coming out is is the way I took it. Your thoughts? Two takeaways. Two things happen, rather, after this case now. One, actually not a ton changes in college

athletics right now, based on this opinion. We're going to see a little bit of money moving around, some education-related benefits. But frankly, education-related benefits were always a pretty small portion of the potential pie here. So under number one, not a whole lot's about to change. But a second thing's about to change. And here the question for you david how many days will it take for the next lawsuit to be filed a full less than a full day no no it'll it'll take more time than that it'll take more time than that i think by the time school starts in the fall yeah we will have the next case if there's not already one in the pipeline that i'm just not aware of. And we're about to get a thousand emails telling me which cases in the pipeline already. So this is a unanimous opinion with a concurrence from Justice Kavanaugh. And by the

way, if you didn't see that concurrence from Justice Kavanaugh coming, you have not been listening to oral argument. This guy mentions he's a basketball coach every chance it could possibly be relevant from an angry cheerleader to this NCAA case. So I, of course- This is his wheelhouse. This is his wheelhouse. I, of course, scrolled down immediately and only to the Justice Kavanaugh concurrence.

And I rolled around in it like an elephant at its dust bath. I mean, just luxuriating in the Justice Kavanaugh concurrence. So I just got, I mean, who better to do Justice Kavanaugh than Justice Kavanaugh? So I'm just going to read some portions here. I add this concurring opinion to underscore the NCAA's remaining compensation rules also raise serious questions under the antitrust laws. This whole thing is like, hey, I know we're not allowed to reach this, and I know it, and I agree with it,

but like, here's a taste of what's coming, NCAA. All right. The NCAA nonetheless asserts that its compensation rules are pro-competitive because those rules help define the product of college sports. Specifically, the NCAA says that colleges may decline to pay student athletes because the defining feature of college sports, according to the NCAA, is that the student athletes are not paid. In my view, that argument is circular and unpersuasive. The NCAA couches its arguments for not paying student-athletes in innocuous labels,

but the labels cannot disguise the reality. The NCAA's business model would be flatly illegal in almost any other industry in America. And here's the fun part, David. All of the restaurants in a region cannot come together to cut cooks' wages on the theory that customers prefer to eat food from low-paid cooks. Law firms cannot conspire to cabin lawyers' salaries in the name of providing legal services out of a love of the law. Hospitals cannot agree to cap nurses' income in order to create a pure form of helping the sick. in order to create a pure form of helping the sick. News organizations cannot join forces to curtail pay to reporters to preserve a tradition of public-minded journalism. Movie studios cannot

collude to slash benefits to camera crews to kindle a spirit of amateurism in Hollywood. And by the way, all of those emphasis words that I was using are actually in the NCAA's brief and their oral argument. Some of those I thought were less persuasive than others, but actually setting aside the sort of glib sarcasm that's a little bit interspersed there, I think that the news organization example is pretty persuasive. You could see a world in which a whole bunch of news entities came together and said, well, we're going to pay our reporters less because consumers want the pure form of journalism, the tradition of public-minded reporting. And then obviously that would be illegal. I sort of think the same thing about the nurses,

although that one's a little silly, but I don't know. You could again see a world in which they were like, no, our nurses want to help the sick. We don't even pay them to do it. That's why you want to come to our hospital. You could see an ad like that being kind of persuasive and illegal. Justice Kavanaugh continues, price-fixing labor is price-fixing labor. And price-fixing labor is ordinarily a textbook antitrust problem because it extinguishes

the free market in which individuals can otherwise obtain fair compensation for their work. Or to put it in more doctrinal terms, a monopsony cannot launder its price fixing of labor by calling it product definition. And that's really what this whole case is about. Now, David's obviously absolutely correct that this was about a very small portion, the education-related benefits. But the argument that the NCAA applied to both, they said that the court shouldn't get to define their product for them, both. They said that the court shouldn't get to define their product for them and that the definition of their product was amateurism. And that if you take away that definition, now they're just some willy-nilly sport out there and it's a whole different product.

Like if you only sell green M&Ms, the court can't come in and say, well, but when you look at all M&Ms, that's not the issue. And Justice Kavanaugh's point is, yeah, okay, the court can't redefine your product for you. But when you define your product as something illegal, then we're not redefining your product for you. We're simply saying you can't define your product that way. And that's why the next case here will entirely undo the NCAA. It might not even get to the Supreme Court, honestly, because the majority opinion so clearly applies to all of the non-education-related benefits. That being said, I will note, nobody joined Justice Kavanaugh's concurrence, which some people will read to mean, oh, he's

just standing alone out there. No one else thinks this. I think there are two types of concurrences. There's more than two types, but let's deal with two right now. There's the concurrence where you're just sort of out there waving your little proud banner by yourself. And then there's the concurrence where everyone else agrees. It's just that this case doesn't reach that.

And they just don't feel the need to join your concurrence because it's just that this case doesn't reach that and like they just don't feel the need to join your concurrence because it's kind of obvious that's what this concurrence is in my opinion um and you know just to end my little rant two chains several years ago came out with a song called ncaa ncaa yeah we the young and dangerous yeah we balling hard yeah i just want some paper yeah well guess what i love it y'all about to get some paper and by the way please don't go listen to that song with your kids in the car or really maybe don't go listen to that song even with just you in the car to say that there are adult lyrics is an understatement. Well, and there's another issue unfolding in the background, and that is name, image,

and likeness. So there's the world of regulation that says, not only can schools not pay you for your athletic endeavors, or then we're also going to limit your academic benefits for your athletic endeavors, which that was all wrapped up in this case. Then there's this whole other issue of, can we regulate whether or not someone else pays you because of your name, your image, or your likeness? And we're moving into a world where that is going to be much less regulated. And that's bubbling up from state law itself. So yeah, Sarah, that paper is coming, and that paper is, by the way, justified. There's a paragraph in Gorsuch's opinion that I think is just absolutely key.

So it talks about the NCAA's pro-competitive justifications for its restraints. So the NCAA is coming into this thing, into this case with some real disadvantages compared to a lot of litigants in antitrust cases in which they kind of have to admit that they are in a monopoly position. They're restraining trade in the labor market. So they're kind of in this position where they got to put their eggs in this pro-competitive justification basket. And I love this sentence, I mean, this paragraph, because the first part of it made me laugh out loud. The district court next considered the NCAA's pro-competitive

justifications for its restraints. The NCAA suggested that its restrictions help increase output in college sports and maintain a competitive balance among teams. Oh, hilarious. Does anyone watch college football? I mean, and let's be honest, this case was about college football and college basketball mainly. Does anyone watch college football? Has anyone seen the college football playoff?

It's the same teams. It's coming from the same universe of teams virtually every year. The lack of a competitive balance is one of the problems with NCAA football right now. Maintain a competitive balance among teams. Puh-lease. But then it goes on. The district court rejected those justifications and the NCAA does not pursue them here.

Wise, wise. But then you get to the next sentence and it shows really how weak their case is. The NCAA's only remaining defense was that its rules preserve amateurism, which in turn widens consumer choice by providing a unique product, amateur college sports as distinct from professional sports. See, here's where I think the NCAA is just completely wrong. The distinction, the uniqueness of the product is not the amateur part of it. It's the college

part of it. It's the loyalty to the school or the loyalty to the school that implies sort of a loyalty to the state, even if you didn't attend the school. So I love University of Kentucky football and basketball. I didn't go to UK, but it's sort of like my state patriotism is loving UK sports. It has never crossed my mind that, you know what, I'm going to love UK less if its players are paid, which some people will immediately smart-alecky say, well, haven't they been paid the whole time, David? We're mostly ethical, I'd say, UK, Sarah. So a question that comes out of this case is, what if, you know, this is an antitrust violation? So actually, in theory, and I'll tell you why that's not going to work in a second. But in theory, David, each of the schools could

decide not to pay their players. That's not antitrust violation. You may have some other problems, but that ain't one of them. In this case, it is the schools working with one another to make that agreement not to pay their players. It is the NCAA. It is the Big Ten Conference. It is the SEC, etc. So basically, poof, you get rid of that. And then Alabama's like, yeah, but we're still not paying our players because they want to come here so badly. We don't need to pay them anything. That may well be. You could have Alabama and Cle clemson lsu and texas whatever not pay their players but then you know scrappy little northwestern out there is just pouring paper on them uh this is why of course in the end you see where this goes right all the players get paid because

then enough good players go to the schools where they're getting a gazillion dollars. And the market actually works then and comes up with how much it costs to go to Northwestern instead of Alabama for the difference in the football opportunity. And eventually Northwestern will exceed that. Players will instead go to Northwestern instead of Alabama, and then Alabama will have to start paying their players, and the equilibrium will spread out. And to David, your point, what will happen is it will change how valuable it is to have gone to Alabama. Right. And point of order, though, in that otherwise completely excellent statement, Recent past performance indicates that Texas, more than Northwestern,

is probably going to have to start to pay its players. Just to be clear, how many times, Sarah, have I seen on Twitter at some point in September, Texas football is back, followed rather quickly by people quote tweeting texas football is back with say a texas football score that um states otherwise i'm still living in the colt mccoy days the major apple white days that's that's where i live yeah no i understand it i

understand but yeah you know i'm gonna have to revise my statement earlier because Norm, it is absolutely true that antitrust law can make your head hurt as you start to peel away all of these distinctions that are made in a lot of these close cases. And what is the rule of reason? What is an undue restraint? A lot of these terms are quite subjective. And the court kind of went out of its way to say this isn't sort of one of those super easy cases, but everything that they said made it seem like one of those easy cases.

That the pro-competitive justifications put forward by the NCAA were so easily shot down, so easily shot down. I mean, a recitation of the facts shoots them down. The fact that the NCAA kept abandoning some of its defenses shot it down. This was a situation where it became so obvious the more you read it that the distinguishing value of college sports is the college part, not the amateur part. And can you even call it amateur sports really when your coach is making $11 million? When one of your assistants is making $1.5 million? Maybe if it's like the accountant dad next door spending some good old volunteer time with the youngins at the football, at the gridiron. That's amateur.

But when you have what you've got at Alabama, does anything about that experience say amateur to any living sentient person? No. No. And by the way, it doesn't make me like college sports any less because you know what I like? I like to watch good football. And by making it more, by having better training facilities,

by having more highly paid coaches, by having more coaches, by having more benefits for the players, it keeps them in school longer. You know what you're going to have more. You know what's going to be better, a better thing to watch and to enjoy college football. I will be curious about the unintended consequences of this. As these schools have to pay their players more, a lot of that money that's going to

facilities or frankly going to subsidize some of the other not football and basketball sports are going to be rearranged as well. And look, this is the law. You just can't continue to not pay these guys. But there will be unintended consequences from this. Yeah, for sure. And I think it's worth acknowledging that it's just that... What's the word?

Not objectify when you use someone for something. Exploit. Yes. Yes. You can't continue to exploit these players. That's just, that's what the law is. And so whether there are unintended consequences that we don't like on other college sports, you know, that's unfortunate.

Can we deal with one quick thing that I know some listeners are screaming at their phones right now? Yes, but then we've got to go to who bears the burden on class certification, David. I think listeners will forgive the delay in the class certification discussion for this. I don't know. I thought part 2B was really something. I don't even, I can't even remember what that was. But some listeners are saying, look, this is ridiculous. These guys are going to be pros and make an enormous amount of money. This is something that there's all of this energy poured into as a justice issue when you're talking about future

pros, future millionaires? No, not really. A very large majority of even elite-level college football and basketball players do not go to the NFL and the NBA. Many of them, the most money they'll ever be able to make from their name, image, and likeness, or in many ways, the most money they'll be able to make until they're much image, and likeness, or in many ways, the most money they'll be able to make until they're much older in their career, maybe more fully developed as a lawyer or whatever they're going to be, is right now. Let's say you're the point guard for Wichita State and you're not going to go to the NBA. There might be a local car dealer that wants you in a commercial. There might be a local fast food chain that wants you in a commercial.

And you can't do that right now. You can't do that for no good reason, even though any other student who is famous for any other reason could be in that same commercial. And so I think that what we're missing is that there's an awful lot of players that they're not pro material, but right now they do have real earning power that matters. And it's just completely stripped away from them. It's completely denied them. But it's not denied their coach.

It's not denied their assistant coach. It's not denied their athletic director. It's not denied their school. It's not denied to any of those people, but it's denied to them. And I think that's why this is an important, there are justice issues inherent in this case. Yeah. And imagine take out basketball and football. And I talked about the unintended consequences on lesser sports, lesser meaning bringing in less money to the school. bringing in less money to the school.

Imagine there's a local tennis facility. Then the tennis star at the University of Texas can do ads saying, I practice here. I love Coach Whoever. Your kid should come practice here. That would be incredibly valuable to both the player and the tennis facility. Can't do it right now.

And so some of those unintended consequences may actually help the lesser sports more. Yeah, good point. Good point. So anyway, Supreme Court nailed it. Supreme Court nailed it. Kavanaugh's concurrence was fantastic. Yeah, I mean, that was the best.

And now, Sarah. All right. Class now, Sarah. All right. Class certification, go. I have handled the sexy cases today. Are you ready for some sex appeal? So this is a case called Goldman Sachs versus Arkansas Teachers Retirement System. It is about securities fraud class action. Don't worry, guys,

we're not going to run through anything about securities fraud or even class action. This was about who bears the burden when it comes to class certification. That's whether you can bring a class action. And just to back up for one quick second, class action is where you don't have named plaintiffs, to put it in like really, really simple and too simple terms. But basically, you create a class of like individuals and attorneys represent that class. And you never really name everyone in that class, for instance. And so you have to certify a class and how you define who's in that class. It's a big, complicated mess, not that dissimilar to antitrust and that I think it is largely made up. So yeah, this was on what Goldman Sachs needed to do to defeat class certification. I mean, spoiler alert, defendants bear the burden of persuasion

to prove a lack of price impact by a preponderance of the evidence at class certification. Nothing in federal rule of evidence 301 constrains the court's authority to change customary burdens of persuasion under a federal statute. Aren't you all so glad you know that today? Your world has changed. But here's why this case is interesting to the extent that it is. Justice Barrett delivered the opinion of the court and here's who joined her. Roberts, Breyer, Kagan, Kavanaugh. Now wait a second, David. Kagan Kavanaugh. Now, wait a second, David. That sounds like a really interesting group of people. It sounds pretty similar to our three, three, our liberal three and our middle three, but we're missing one. Sotomayor, we'll get to her in a second. Thomas Alito and Gorsuch joined as in a couple parts here. and Sotomayor joined in a couple

parts as well. But Sotomayor did a concurring in part and a dissenting in part on sort of the one end of the spectrum, and Gorsuch, Thomas, and Alito did a concurring in part and dissenting in part on the other end of the spectrum. So what this case is really interesting about is it is your next piece of evidence on that 333 court with Sotomayor being the most liberal of the liberal three and Gorsuch, Thomas, and Alito hanging out, buddies in the schoolyard by the vending machine, eating their gushers and their Mountain Dew. David, you're stunned with the genius of how impactful this decision was on your life. I, you know, I'm still processing it really.

I'm, you know, I'm thinking we need a five-part advisory opinion dedicated only to this. Maybe? Yeah, maybe. Maybe, okay. During the August recess, Let's do it. The next case that came up is called Arthrex, United States v. Arthrex. I kept seeing it as Anthrax, which probably is not what this company wanted. This is a patent case. Don't worry,

we're not going to talk about patents because this case actually was really interesting. I was watching it kind of come up to see if there would be an interesting outcome here. This is about who is an inferior officer in the executive branch. So we have all heard about judges needing the advice and consent of the Senate. about judges needing the advice and consent of the Senate. And you may have noticed that a bunch of other executive branch people need the advice and consent of the Senate. All the cabinet members, for instance,

the deputy secretaries. But then it gets kind of messy. What about the under secretaries? And I'll use the Department of Justice as an example. The head of legislative affairs has to be Senate-confirmed. The head of public affairs does not. We both report to the deputy attorney general. In some organizations, these positions are actually merged, where that's the head of legislative and public affairs. So why are these two positions treated differently at the Department of Justice? There's not a principled reason. It's just kind of the way it is. There's

a limit on the number of Senate-confirmed positions, and so some are and some aren't. So what does the Constitution say about this? So superior officers, advice and consent of the Senate, but here's what it says about inferior officers. Congress may by law vest the appointment of such inferior officers as they think proper in the heads of departments. Now, separate from just what the constitution says, there's been two sort of parts to that, legally speaking. One, they have to report to someone. There has to be a supervisor. And two, that that supervisor sort of has authority to oversee them. So this case is about the 250 administrative patent judges who sit at the bottom of an organizational chart nestled under at least two levels of authority.

Patents, by the way, David, as you, I'm sure, are aware, they go back to the founding. This is some 1790s stuff on patents. So it's not like we're dealing with section 230 problems where you're like, how do you apply originalism to section 230? No, no, when it comes to patents, it's all originalism. So the question is, did these administrative patent judges violate the Constitution? Because while yes, they are under the director of the Patent Office and then he's under the director of the Secretary of Commerce, sorry, not director of the Secretary of Commerce,

just the Secretary of Commerce, their opinions are broadly shielded from review. Basically, you appeal directly to the Court of Appeals for the Federal Circuit. Fun fact, David, not all the courts of appeals are numbered. There is one through 11, but then you have the D.C. Circuit and the Federal Circuit. This is the Federal Circuit. They're a specialty court of appeals. And when you go to the Federal Circuit, it's de novo. You just like basically start over. They get to do all their own fact finding.

The director at that point, the director of the patent office kind of can like raise his hand and be like, just kidding. I totally don't like this or rehear the decision, whatever else. Okay. So long story short, the majority held that, yep, these violate the constitution. They are not inferior enough. these violate the Constitution. They are not inferior enough. Now, interestingly, they don't actually say whether it's that they are principal officers

who didn't follow the Appointments Clause with the advice and consent of the Senate, or if they really are inferior officers, but they don't have enough supervision.

And what Justice Roberts says to that is, yeah, you're right. We didn't say it because it doesn't matter. We're not telling you how to do your job. We're just saying that you didn't do it. That's right. So you have justices Breyer, Sotomayor, and Kagan writing their own separate concurrence and dissent. And then you have Justice Thomas with Breyer, Sotomayor, and Kagan with their own concurrence and dissent. And Justice Thomas, man,

with Breyer, Sotomayor, and Kagan. You just don't see that very often. And maybe when you combine patents and 1790 and the Constitution and principal officers and inferior officers maybe that's how you do it maybe that's where you get that you know there has finally been an increased amount of attention being paid to something that we've been saying for a long time which is this court ain't quite as six three you think, and that there have been all kinds of interesting

alignments in this court over the past term, two terms really. Well, it's only been 6-3 this term, but this term there have been all kinds of very, very interesting alignments. Now, it may well be the case that next term you're going to start to see more 6-3-ish-ness, possibly. I'm somewhat skeptical, but possibly. But man, this term, you have seen some all over the place. I would say there was very little money bet that Fulton was going to be unanimous in result. There was no smart money on that one. No smart money on that one.

And so these interesting alignments, they just keep happening. And it's going to be fascinating to see term by term how this all shakes out. Yeah. And this opinion in particular could have some, it could have had some interesting, you know, effects downstream because there's a whole bunch of questions on a, are we actually doing Senate confirmation for too many of these positions? Like for instance, the legislative affairs position at the department of justice, why is that Senate confirmed? actually doing Senate confirmation for too many of these positions? Like, for instance, the legislative affairs position at the Department of Justice. Why is that Senate confirmed?

And when Senate confirmation is becoming such an increasingly broken process, and during the Trump administration, you saw what some called an abuse of that, where he just put in a bunch of actings and he didn't seek Senate confirmation. You know, you don't have to have Senate confirmation for a bunch of these undersecretaries. You certainly do, I think, for the cabinet officials and the deputies because of the supervisory aspect to it. If no one's supervising you, then Senate confirmation to me makes some sense. So A, I think it will start a conversation about that. B, are there other inferior officers out there who should get a second looking at,

who don't have Senate confirmation and who need it? Now, interestingly, the result of this is, by the way, not that those patent judges are going to get Senate confirmed, but rather the director just has more of that supervisory role. Don't forget, David, though, my little pet thing, are bankruptcy judges constitutional? Now, mind you, they're Article 1, so it's a little different than the patent judges. But maybe this will spark a bit of an internal conversation, both congressionally and within the executive branch, about what are and what should be inferior versus principal officers.

Too much to hope. Sarah, your dad is constitutional. No, unconstitutional dad. No, constitutional. I stand with your dad. On the day after Father's Day, I stand with your dad. with your dad on the day after father's day i stand with your dad your dad is constitutional well there will be uh more digestion on uh this anthrax case which i'm still gonna call it the anthrax case i it's exactly how i read it exactly how i read it 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 an 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. Even better, with unlimited storage and an easy to use app,

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Should we move on to a little, the rarest of rare things, a bit of a Twitter fight that you had? No, it was not a Twitter fight. That's not fair. And it was also, it was in DMs, David. Oh, it was in DMs. Okay. Yeah. So ha, which I don't have Twitter fights. Well, is not a DM, isn't that on Twitter? It is on Twitter. Okay. But nevertheless, first, Professor Jonathan Adler, Case Western Law School,

great guy, highly recommend just in general as a human. First of all, I got something wrong when I talked about the Obamacare case. Remember when I was talking about Alito's dissent and I talked about the list of cases in which the court had been very lenient in standing and then all of a sudden they got kind of hard on standing and I mentioned the the election challenge case it was not the election challenge case it was the discriminating states discriminating against each other case. That was the other original jurisdiction case brought by Texas. So just a straight screw up, apologies, correction now issued. But Professor Adler also disagreed about the court's burden on standing. And if you remember, I said that standing sort of exists

or doesn't exist without the parties, right? Like a court, a party can't, a defendant can't waive a standing argument. If the court doesn't have standing, it doesn't have standing. And so I was making the point, well, yeah, so then also on the other side, can you really forfeit a standing argument when you do have standing? Either the court has standing or it doesn't. And his point is, it's black letter that the person bringing the lawsuit into federal court has the burden to show that they have standing. There is a presumption against standing. has the burden to show that they have standing. There is a presumption against standing. That is absolutely true, by the way. And David, I'm sure you have your right in Miller out right now, as we all do at all times, sleep next to it or under our pillows, even better.

Page 104 to 107. If these facts are challenged, the burden is on the party claiming jurisdiction to prove that the court has jurisdiction over the subject matter. This showing must be made by a preponderance of the evidence. So this is Professor Adler's point, that when I was saying that the court needed to dig the case, not just find that there wasn't standing because they hadn't made that very specific standing argument below, that that's not right, that the burden always was with Texas. Now, I don't actually quite agree with him despite everything that I just read, but let me read a little bit more what he says. So he is quoting a case called Lujan that's recent. The party invoking federal jurisdiction bears the burden of establishing these elements since they are not mere pleading requirements, but rather an indispensable part of

the plaintiff's case, each element must be supported in the same way as any other matter on which the plaintiff bears the burden of proof, i.e. with the manner and degree of evidence required at the successive stages of the litigation. But aha, says I, he thinks that stands for his proposition. I think it stands for mine. The elements of establishing standing, I agree. Absolutely, Texas had to provide those, and they did. They listed out all of the financial problems that they were incurring as a result of this statute as a whole. What we're talking about is whether in addition to the elements of standing, they had to plead

this sort of nuanced argument about non-severability, that they had established the elements needed for standing, but also that even if this one part of the law was severable, you have to be harmed by that part of the law. That to me is not one of the elements of standing. The elements were that there was a financial injury, that injury was redressable, all the things that we talked about last time, David, and the traceability. injury was redressable, all the things that we talked about last time, David, and the traceability. And they pleaded, certainly, that it was traceable to Obamacare statute as a whole. They did not argue that it was traceable to the individual mandate. So Adler's arguing that,

in fact, you do have to plead that Texas had that burden by preponderance of the evidence. And I'm arguing that, no, Lujan and the quote unquote black letter law is that you have to plead those three elements of standing, not been like this nuanced, messy part of standing. And so we had quite the discussion last night over DM. He says the court can't consider a theory of standing that wasn't pled any more than it may consider a theory of a statute's unconstitutionality that wasn't pled. If you argue standing based on A and B and those arguments fail, there is no Article 3 jurisdiction. Therefore, the case has to be dismissed.

Plaintiffs must assert facts and plead a viable theory. If the theory wasn't pled, it can't serve as a basis for jurisdiction, he says. I will note, however, that Professor Adler filed an amicus in this case, along with a few other professors, including Nicholas Bagley, who we've had on this podcast. And his argument wasn't on standing. His argument was on separability. So interestingly, David, we like sort of violently agree in terms of how he thought this case should be resolved. He just disagrees and thinks that this was also a fine way for it to be resolved. He thinks they have to plead the right theory.

I think they just have to plead sufficient elements under current standing law. And, you know, around and around we went, but I thought it was really worth sharing with listeners because A, he's a smart guy, and B, I think his argument is reasonable. I don't agree with it. And last thing, because of course this is my podcast, so I get to have the last word. In Citizens United, page 14, top of it.

Once a federal claim is properly presented, a party can make any argument in support of that claim. Parties are not limited to the precise arguments they made below. Mic drop. They put the facts in evidence. No one's disputing that. The elements of standing were there the whole time. The precise argument on inseverability? No, no. Not waivable. no no not not waivable i want everybody to just note that in real life sarah did in fact mimic dropping a mic and sort of stepped back from her desk as if there was an actual crowd there

yeah yeah for sure so i don't think the fullness of the gesture came through in the actual in in just the sound only. All right. Well, maybe two other points, though, on this case, not related to my conversation with Professor Adler. And again, highly recommend you go read his his writings and his Twitter feed. Definitely worth a follow. recommend you go read his, uh, his writings and his Twitter feed. Definitely worth a follow Josh Blackman, who we've also had on this podcast friend of the pod. He had two interesting posts on this case that I think are worth raising. Um, one, why did SCOTUS decline to consider the federal government's theory of standing in California v Texas? Uh, his version's a little different than mine, but we end up in the same place, which is, this is silly. At no point did California or the House suggest the issue was waived. Indeed, Don Verrilli suggested that it may have some merit in a colloquy with Justice Alito, yet the court simply did not want to address the federal respondent's brief.

You know, whatever. This was an outcome searching for a justification, in my opinion. You can read his whole shtick on this, Reason.com, The Bollock Conspiracy, Josh Blackman's post, What Happened? Why does that? Didn't you just describe the Obamacare trilogy in general by saying an outcome searching for justification? That's true. And that's why we get to his, I think, best point on this. Another post that he did at 1249 AM, I will note. What happens after the remand in California v. Texas? Oh, I'm sorry. Did you think this case was done? No, it's not even close to done. Remember, David, we talked about how this came up on kind of a weird procedural posture.

Well, there is still lots of case left down below and it doesn't have a standing problem. So you've got count five, as it's called, of the amended complaint. Plaintiffs are entitled to a permanent injunction against defendants from implementing, regulating, or otherwise enforcing any part of the ACA because its requirements are unlawful and not severable from the unconstitutional individual mandate. Hmm. Well, so to skip ahead of what happens here, here's Josh Blackman. Yes, the epic will go on. I really hope I don't have to write a fourth book. I recognize that the court likely wanted to get rid of this case as painlessly as possible,

but this punt on traceability was short-sighted. The court should have bit the bullet and held that the mandate was unconstitutional but severable. That hold would have settled the issue for good. The price of a 7-2 opinion was not worth it. I mean, this does just leave a mess behind for the Fifth Circuit because you know what the court wants you to do. Stop it. We don't want these cases anymore. Isn't three times enough to tell you that We don't want these cases anymore. Isn't three times enough to tell you that we don't want these cases anymore? But if the case continues, the case continues. So sticking with the trilogy format here, the epic Obamacare trilogy. So Sarah, how long has it been since you read Return of the King, the third of the Tolkien trilogy of the Lord of the Rings? You know the answer to that.

The answer is infinite. It's been infinite since I've never read it. You've never read it? Yes. I thought at the very least you'll have read Lord of the Rings. No. You were way too busy playing board games. Miss a battle on, David.

I was all King Arthur's Court and real things that happened. Oh, yes. Reading the documentaries on King Arthur's Court. Or reading the histories of King Arthur's Court. Once and Future King, Mists of Avalon. Yeah, for sure.

Oh, yeah. I'm just so glad you said that. Lest anyone think you're actually on a non- non nerd high horse. You were just a lady of shallot count as a King Arthur's Court poem. Maybe it should. You were just a different nerd. Yeah. Let's just make that clear. the listeners who have read Return of the King, who've read Lord of the Rings, know that there is a sort of a denouement to the story, which is the scouring of the Shire. So the whole story, this epic story comes to conclusion, spoiler alert, the ring is destroyed, Aragorn is crowned King of Gondor, and then the hobbits return back to the Shire shall we say they're remanded back to the shire sarah and guess what the shire's a mess the shire's a mess and so they have to fight another mini battle to actually sort of end the whole story and so that's what we're going to have Kind of doubt we'll have a fourth Supreme Court.

I don't know. I kind of doubt it, but time will tell. I tend to think we're going to have a scouring of the shire phase of this. Some messy final mini battles that probably pretty much end in the Court of Appeals, and that's that. But time will tell. I was hoping that you were going to be so impressed with my scouring of the Shire analogy. You know what? I'm more impressed that I'm letting on. I'm grudgingly impressed. Okay. Okay. Well, I think there will be listeners. Listeners, in the comments, at the dispatch, please tell me how awesome the scouring of the Shire analogy is,

please. I need the approbation. Okay. Last thing, because we've covered a lot. We've covered a lot. So we talked about the Obamacare case basically in real time. We talked about the Fulton case in real time. We talked about the Fulton case basically in real time. And I had a little bit of follow on, uh, a little bit of follow in thoughts about the Fulton case. Um, nothing really substantially different from what I've said before, but I think as it, as it has sunk in more, um, I originally tweeted that it was a ringing, I compared the religious liberty victories in the Supreme Court to base hits in baseball. And I originally listed the Fulton case

as like a ringing single to center field. I'm now thinking it's a double you might be able to stretch into a triple. And here's why. So I identified one of the elements that I thought was particularly significant in the decision. And that was the way in which the court sort of waved away this idea that as, since this is the foster parenting system in Philadelphia is basically a government program. The foster parenting system in Philadelphia is basically a government program. These are government contractors working as part of a government program. All of this is going to fall within this managerial capacity of the government, which is going to heighten their degree of control over the program and the deference that the court should grant the city and its conduct of its own program. And the court kind of waved that away, basically saying, no, look, the standard is still the standard, even in the context of this government-managed program. It's still going to be a

general law of neutral applicability. This was not a general law of neutral applicability because the commissioner had this ability to essentially opt anyone out of its requirements. That's not neutral. Law fails. Unanimous in the result. Barrett-Kavanaugh-Brier concurrence, the more significant I think the case is because it's really sinking in that there is now a majority of either expressed flat-out willingness to overrule Smith or, if you give me the right kind of test, willingness to overrule Smith so that it is just not going to be the case that municipalities reading Fulton will be able to sort of go back and say, how do we just sort of make our non-discrimination policy more generally applicable and we're going to be completely out of the woods in these conflicts between religious liberty and non-discrimination? That's just not going to be the case going forward. or cleanse the record of any case of specific exemptions or discretion in the application of the statutes that you're going to win. That's just not the case. Now, we don't know what the new standard will be. And I love, Sarah, how you expressed it last week, if I am remembering

correctly. But it's essentially as soon as Barrett is writing that, you know, hey, we don't know. I'm skeptical of a one-size-fits-all standard here that Breyer's like, wait, multi-factor analysis? Give me a piece of that action, which seems like Breyer's more than willing to step in and sort of contribute to a multi-factor analysis. But I think that that makes it a double and then moving towards a triple when you realize that there's now a majority of the court that has either outright rejected Smith or said, we don't like it, we just don't know what's better yet. And that puts religious liberty in a completely different category than, say, for example, abortion. Because as of right now, there's one justice, one out of nine, who has expressed unequivocal reservation about Roe and Casey, and that's Thomas. One out of nine. Now with Smith,

we have five out of nine that have expressed reservations, if not outright hostility to Smith. out of nine that have expressed reservations, if not outright hostility to Smith. And six out of nine have at least expressed some willingness to jump in with some additional kinds of analyses, or additional testing, or different kinds of tests. So I think double stretched into triple. Sarah, do you disagree? I don't think we know yet, but I'll at least give you the double. Okay. Hey, David, I've got some good news for you. Okay. The Supreme Court is handing down opinions on Wednesday and Friday this week. Wednesday and Friday? That's right. I smell an emergency pod schedule. Oh my goodness. That is fantastic. Love it.

You know what that tells me? Some justices want to get out of there and be done. It's 92 degrees in D.C. today. Not coincidence. Right. They want out. They want on vacation. They want to be done with this term. Yeah, that's fantastic. No, I smell some serious increased podcasting this week. Angry cheerleader? Oh, from your lips to God's ears. So we'll still record on Thursday morning, but we reserve the right to hand down an emergency pod on Friday should the need arise.

Correct. And I don't know why. I think it's just the sheer silliness of the fact pattern of the angry cheerleader case that makes me so irrationally attached to reading the outcome of that case. Also, it's very, very important on its own terms. But the fact that we have a Supreme Court case based on a cheerleader saying F cheer and F softball absolutely cracks me up and it never stops cracking me up. I just don't, I don't see how you can punish students for off-campus non-school speech,

regardless of whether it disrupts the classroom. That just means that they're always under the school's thumb. And I, for one, will not stand for it. From your lips to nine justices' ears, Sarah. I think it could be unanimous. We shall see. We shall see. All right. Well, that is it for a Thank You SCOTUS podcast. Outstanding stuff on the NCAA. The most scintillating class certification discussion in the entire history of podcasting. Further thoughts on Obamacare. Further thoughts

on religious liberty. Doesn't get much better than that, Sarah. That's right. Please go to Apple Podcasts while we're in this sort of high point. Rate us when we're at our peak. Five stars, please. Leave us a good review.

Subscribe on Apple Podcasts. And please check out our offerings at thedispatch.com. And we will be back Thursday and maybe Friday. Until then, have a good week.