Advisory Opinions - Twitter Sues Elon Musk to Force Acquisition

Episode Date: July 14, 2022

David and Sarah cover a full spectrum of cases and interesting news today. First up: Will a judge order Elon Musk to buy Twitter? Our hosts address the Texas res judicata case (pronunciation courtesy of a Latin expert); Boycott, Divest, Sanction (BDS) laws; and an abortion travel case. They also answer a question from listeners about the Second Amendment and militia precedent.   Show Notes: -Twitter v. Musk complaint -Skiriotes v. Florida -Fisher v. University of Texas at Austin Learn more about your ad choices. Visit megaphone.fm/adchoices

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You ready? I was born ready. Welcome to the Advisory Opinions Podcast. I'm David French with Sarah Isker. And I'm a little bit nervous walking into this podcast, Sarah, because we've got such good stuff to talk about that I kind of feel pressure to deliver here. I feel pressure to these cases to live up to the great lineup that we have. live up to the great lineup that we have. Yeah, yeah, we have a great lineup today. We're going to talk about, and we're going to start by talking about Elon Musk, Twitter, and the lawsuit now filed to compel Elon Musk to purchase Twitter, which is fascinating on many levels. We're going

to talk about the Second Amendment again, but this time we've heard your cry that we're going to talk about the militia clause of the Second Amendment and what bearing does it have on the operative clause, the right of the people to keep and bear arms. So we're going to talk about that. We're going to talk about an abortion travel case. We're going to talk about a BDS case, boycott, divest, and travel case. We're going to talk about a BDS case, boycott, divest, and sanction case. And also, we're going to, and we'll wind up, if we have time, with a little bit of rest judicata. This is a perfect advisory opinions lineup. Sarah. Can we pitch the perfect game? Let's find out. Let's start with Twitter. The basic outline here is that Elon Musk is pulled out of the deal. Twitter has filed a lawsuit in Delaware State Court seeking to compel Elon Musk to purchase

Twitter. In other words, it is trying to force Elon Musk to buy Twitter. And I'm just going to start by saying my hat's off to a list of names, William Savitt, Bradley Wilson, Sarah Eddy, Ryan McLeod, Anita Reddy, Peter Walsh, Kevin Shannon, Christopher Kelly, Matthew Golden, and Brad Sorrells. My goodness, did you draft a compelling and interesting complaint to read? This is, before we get into the legal merits of it and sort of the factual base and the factual allegations, I just found this complaint, and I rarely say this about legal documents. I certainly rarely say this about complaints, but just a joy to read. These guys knew that this was going to be not just a legal document, but a public document, one that a whole lot of non-lawyers would read who are interested in this.

And they just told a story, Sarah. I mean, it was, and they told a compelling story here. I was really, truly impressed by just the craftsmanship of the thing. It, in my opinion, is much easier in some respects to write a compelling appellate brief. Just the format itself lends itself, if you're willing to put in the time and effort, to good writing, to good storytelling. The sections are really broken up nicely for you to persuade. Rarely do you see that in complaints because it's almost set up for poor writing and poor storytelling because it's kind of choppy. And so when you see a great complaint, it is absolutely to the credit of the attorneys who wrote it. Not surprisingly,

this is Wachtell Lipton. We haven't talked a lot about Wachtell on this podcast, in part because they're not really known for their appellate stuff. But I mean, Wachtell, Cravath is the death star. Wachtell is like number two death star. This is an incredibly famous, prestigious firm. So nobody is surprised to see Wachtell on this or that it's therefore one of the best complaints I've ever read. And then local counsel in Delaware and Wilson Sonsini, which is sort of known as of experts here, Delaware experts, legal expert, and tech expert as well, made for a really nice set of chefs in the kitchen. I totally agreed with you. I read it and was like, wow, this should be in law schools of how you actually draft a complaint well. Yeah, absolutely.

So let's just sort of talk about the story that they tell. Now, let's just be very clear. This is their story. This is not Elon Musk's story. This is Twitter's story. So Elon Musk is going to have his chance to tell his story. But let's just tell what Twitter's story is. And Twitter's story is really pretty simple. And it's that, look, Elon Musk made a deal to buy Twitter. The deal was financed in part by loans, for example, against his Tesla stock. against his Tesla stock. In fact, his Tesla stock was really important, critically important to the deal. As the market began to take severe hits, the Tesla stock slid considerably. So all of a sudden, the deal became much less favorable on a financial basis to Elon Musk. It becomes a bad deal. basis to Elon Musk. It becomes a bad deal. So then as it becomes a bad deal, Musk begins trying to sort of find ways to get out of the deal. And the main thing that he really focuses in on is the problem of spam accounts. And what the complaint does pretty effectively is they say, whoa, whoa, wait a minute. Allegedly, Musk got into Twitter to deal with spam accounts. And then now is saying it's spam accounts that are making him get out of the deal with Twitter.

And the other interesting thing about this was it was a nice little window into how deals get made. Some of the lingo surrounding deals, a hell or high water clause, for example. But what was interesting is there are a couple of provisions here that were key. One was a provision requiring specific performance. In other words, the deal itself said that Twitter could have the right to compel Musk to go ahead and buy Twitter. And also that it had a very narrow definition of what's called a material adverse event, a material adverse event that would allow Musk to get out of the deal. words, is there something bad that could happen to the company that could cause it to be not worth buying for Elon Musk and would legally allow Musk to get out of the deal? And I'm sorry, I said

material adverse event. It should be called a company material adverse effect. And essentially, this was drafted in such a way that a lot of the things that actually happen, such as changes in the stock market or changes in the social media industry, writ large, do not constitute a company material adverse effect. And so this, again, this is Twitter's story. Twitter got Musk to agree to a very kind of one-sided seller-friendly contract that Musk began to undermine as soon as the deal went bad. And what's kind of funny here, Sarah, is the way they just add these little touches and flourishes. And my favorite is this exchange that they highlight where there's someone on Twitter who is writing

about spam. And here's what the Twitter executive says on Twitter. Fighting spam is incredibly dynamic. The adversaries, their goals, tactics evolve constantly, often in response to our work. You can't build a set of rules to detect spam today and hope they will still work tomorrow. They will not. We suspend over half a million spam accounts every day, usually before any of you even see them on Twitter. We also lock millions of accounts each week that we suspect may be spam if they can't pass human verification challenges. And then it says, Musk responded with another disparaging tweet. And here was the tweet, just a poo emoji. And then it says, Musk responded with another disparaging tweet.

And here was the tweet, just a poo emoji. And this is in the complaint. It's beautiful. It is. It is. Sarah, what were your thoughts on sort of the factual allegations? So obviously, we had a few days where we knew this was coming before we actually got to read the complaint based on must letter pulling out. And I thought that there was no way that you would convince me that Delaware Chancery Court would ever order specific performance. Specific performance,

let's just go into a little bit on equitable remedies. So generally in a contract dispute, you get money. And we've talked a little bit about this before that sometimes you can have something called an efficient breach where the person would rather pay you money than do the thing. So for instance, airlines canceling your flight. If gas prices go up enough and you bought your ticket long enough ago, it is actually in the airline's interest to cancel your flight and refund your money. That's an efficient breach. You lose because it's going to cost you more than the flight, if that makes sense, to make up for what happened. But the airline wins. It's an efficient breach for the airline. And that can be very frustrating. And so

courts very rarely look at equitable remedies. And in this case, one would be specific performance. That's where you actually just have to do the thing the contract was for, and you don't get to pay monetary damages out of the contract. That's what this entire conversation is going to be about for the next, actually, it won't take that long, but a few months here, about Twitter. Will a judge order Elon Musk to buy Twitter? Now, plenty of people have pointed out this is weird that Twitter would want to be bought by an insane person.

And set that aside for a second. It is very, very rare to ever meet the standard for specific performance because if one party doesn't want to perform under the contract, usually money can fix that. And so judges are pretty loathe to do that. I'm not saying there aren't exceptions. Of course there are, but it was going to take a lot to convince me that you would meet this sort of uniqueness standard for specific performance, enter this complaint. And I was like, well, if there were ever an example, this might be it. And there's a few reasons for that. One, Twitter says repeatedly, we knew Musk was mercurial, crazy, fill in the blank words,

which is why we drafted the contract as it is. We didn't want this. We didn't approach him. He bought up our shares in secret, didn't disclose it like he was supposed to, threatened that he was going to make a hostile, tender offer to buy the company. And so they said, yeah. By the way, another great moment in their complaint is when they're talking about how like, so we needed to protect ourselves ourselves this was all going sort of off the wall um the board's concerns about a hostile tender offer proved well grounded must begin making all too obvious public references to a hostile tender offer and they include two tweets elon musk with music emoji, love me tender, Elon Musk blank is the night. Yeah, that's not subtle.

Got it. So there's a few things going on here that would make me think that specific performance isn't out of the question the way that I kind of thought it was three days ago. One, I think Twitter makes a great case that this contract specifically was intended to lead to specific performance. If he breached for no particular reason, they do a pretty good job of showing in this case that the spam information argument is in bad faith that he knew about the spam issue and that the information that he says he's not getting now or that was misleading in their SEC filings, for instance,

is super vague, not at all. He couldn't possibly say that they lied in their SEC filing when they said 5% were spam, where they're literally saying the SEC filing. And we don't have a great rate to get this number. We're not using any industry standard to get the number. It is our best guess at this point, and that's all it is. And so that part is kind of fascinating to me. They say, must exit strategy is a model of hypocrisy. One of the chief reasons cited for wanting to buy Twitter was to, and this is a quote, rid it of the crypto spam he viewed as, quote,

a major blight on the user experience. He needed to take the company private because, according to him, purging spam would otherwise become commercially impractical. In his press release announcing the deal, Musk raised a clarion call to, quote, defeat the spam bots. When the market declined and the fixed price deal became less attractive, he shifted the narrative, suddenly demanding verification that spam was not a serious problem on Twitter's platform and claiming a burning need to conduct diligence he had expressly foresworn. They note sort of the bad faith of everything he's doing now. So I think here you have a very unique buyer, a very unique offer, a very unique contract that was where the buyer got into a seller-friendly contract. He described it as seller-friendly.

He's the one who didn't want any of the due diligence, any of the financial contingencies, none of it, which is what you would need to then get a specific performance judgment. I think they may get it. Yeah. I mean, there's so much in here about it they make it look like uh that elon musk was a guy who willingly bought a casino and then tried to get out of the deal

by saying there's gambling in this establishment i can't believe they didn't put that in there david that would have been a really good ending. They should have consulted with you. That's the only thing that could have made this play better. Exactly. That would have been the cherry on top. But, you know, April 21, Elon Musk tweets, if our Twitter bid succeeds, we will

defeat the spam bots or die trying. Pretty dramatic. And then, you know, a few days later it's like wait there's spam here i need to get out of this deal yeah it's really very compelling and here's my thought sarah my thought is that again if this narrative is substantially correct that what's happened is that it's just become very financially unfavorable for Elon Musk in this market environment. His Tesla stock keeps decreasing in value.

So therefore, this deal becomes substantially more expensive for him with every decrease in value of Tesla stock. That what they're essentially doing is saying, hey, look, you've got this seller-friendly, you're going to have to cough up $44 billion to buy us. There is going to be a court that is going to order that, or at least there's now a credible threat that a court will order that. And my guess is they'll negotiate a kill fee. Either Musk will realize, wait, I might be made to do this, and he'll go ahead and consummate the transaction. Or I can easily see them negotiating a kill fee

where Musk ends up sending Twitter a billion plus dollars. It'll be more than a billion. A billion would be the sort of contractual, that's the efficient breach, if you will. It is in, Musk wants to pay a billion dollars. So I think the negotiated kill fee would be significantly higher than a billion dollars at this point, especially because I think this is a strong complaint.

I think, I'm not sure that Twitter is over 50% in my view that they'll get the specific performance judgment, but the fact that Twitter is over 50% in my view that they'll get the specific performance judgment, but the fact that they're over 20% to get a specific performance judgment should be worth several billion dollars at this point. Yeah. Oh, I agree. I agree. Now, I can't wait to see. Now, Musk's answer is going to be not so illuminating because for those who don't know what an answer to a complaint looks like, the complaint will lay out a story and the answer and it lays out a story. And we'll link the complaint in the show notes that if you're curious, you can click on it and read it.

But it has numbered paragraphs. This is one of the things that makes a complaint difficult to write in any compelling way. It's got a specific structure, an introduction that identify the parties, tell basically the story, end with the causes of action and the claim, the plea for relief. And it's all numbered paragraphs. It's not exactly conducive. There are reasons why when you read a book, it's not numbered paragraphs. It's not conducive to good reading. But an answer is even worse. An answer will just sometimes say, one, deny. Two, deny. Three, we have insufficient information to confirm or deny and therefore deny. So the answer will essentially just be a blanket denial in all likelihood. And then if there's a motion to dismiss, we'll get more of the story. But even that doesn't really do it because a motion to dismiss is

based on the law, not the facts. A motion to dismiss has to accept the facts as pled in the complaint as true. So it sometimes takes a while to actually get the defendant's real story out. Although I suspect Elon Musk will not wait for legal documents to get his side out. I've also heard from Delaware Chancery Court practitioners that we should expect this to move quickly. The Delaware Chancery Court ain't your normal district court or something that this state court knows what they're doing. It's why they're Delaware Chancery Court. There's a whole system in Delaware. It's why you incorporate in Delaware. It's why you're going to file a suit in Delaware. So we should expect alacrity.

Yeah. And another thing that I heard that was interesting is Delaware, because Delaware has centered so much of its legal identity around corporate law and sort of the predictability of Delaware and stability of Delaware corporate law, Delaware judges don't necessarily like it when people crap on Delaware corporate law. So that might not be to Musk's advantage, but we'll see. I like this tweet from Derek Thompson from The Atlantic. He says, Big picture, the Twitter suit really is one of the strangest documents I've ever read. The company is powerfully demonstrating the profound unseriousness of one person

and trying to force a person to buy them against his will. And it's the same person. Yeah, it's true. I mean, but that's always going to be the case in a specific performance suit. You're saying this person sucks. They're trying to breach our contract. So make them do the thing. We want to stay in business with this asshole. He's our asshole now. Or he's really our source of $44 billion. Yeah.

Yeah. Now, can I just say something? Can I do a billionaire digression here for a moment, Sarah? Okay. Okay. Just a short billionaire digression here for a moment, Sarah? Okay. Okay. Just a short billionaire digression. So when Musk and look, Elon Musk has done some pretty remarkable things. Let's just get that out there. Tesla automobiles are remarkable pieces of engineering. And you know, I love me some SpaceX, Sarah. Like, you know, I love what SpaceX is doing. The Starship orbital launch is

coming up soon. So I say this without disparaging the actual very real accomplishments, Elon Musk's actual very real accomplishments. He's done some very substantial and important things and is going to continue to do some very substantial and important things. But can I say this? I am weary of the billionaire guru phenomenon. That this idea that somebody who is very successful in one area or very successful, perhaps even visionary in one area, is now become one of our gurus. It drives me up the wall. And it's kind of always been there. I'm old enough to remember Jack Welchism and Lee Iacocca-ism and all of that stuff. But I feel like it really kicked up in the tech era. So David, I'm laughing because in my previous career as a campaign operative, I worked in every department,

political, legal, comms, the mailroom, all of it, except one. I never worked in finance, which is fundraising and politics. We call it finance for some reason. And so when I then was Carly's campaign manager going through all of that, I would end up having to meet with donors. And unfortunately, I think Carly would tell you, I lacked the disposition because I thought exactly that. what if you made a billion dollars doing X thing? We're doing Y thing, a thing that I'm an expert in and you are presuming to lecture me on how this should work. And I'm supposed to listen to you and coddle you because you're really good at this totally other irrelevant to my world thing. And Carly was like, yes, Sarah, that's how you get people to give you their money I was like I can't do it she was like then please don't come to these meetings anymore yeah so I was kicked out of finance meetings pretty early on in the campaign unless it was someone that I had a personal

connection to or someone I respected yeah and and look there I do not want to disparage billionaires as a class. All right. There are people who combine extraordinary wealth and extraordinary expertise in certain areas, also with a remarkable amount of humility. And I've met people who are quite down to earth. And so- There are plenty of Dornas that I actually respected and I got to go to those meetings. Absolutely. Absolutely. Now, what I'm talking about is this phenomenon where and you see it, especially with the rise of the tech world. I made three billion dollars designing this fascinating line of code.

And now I shall tell you how to solve race relations in the United States. It's that kind of, and it really almost reached sort of peak weirdness around the crypto craze, which is now in the process of crashing. But some of these crypto entrepreneurs were sort of seen as almost mystical visionaries of outlining a stateless society uh you know a coalition of independent city states the coming sort of quasi-libertarian crypto paradise and you're just thinking yeah i'm not so sure about all of that david we have too much to do on this podcast. We have to go. Okay, sorry. I'm sorry. Sorry. End rant. Here come the carrots making their way upfield, followed by the whole wheat bread,

over to the two dozen eggs. Sir, do you do this every time? Sorry, I've been a little excited ever since I got this BMO Toronto FC cashback MasterCard. Oh, and the broccoli boots it over the line. What a goal! How would you like to pay, sir? Credit, please. Make every purchase a win with the BMO Toronto FC Cashback Mastercard

with up to 5% cashback on your purchases in your first three months. Terms and conditions apply. Let's talk malicious. So, we got a lot of requests for this because we talked about the Bruin case at length and the right to keep and bear arms. But many people noted correctly, I might add, that we didn't and the Bruin opinion didn't really even address the argument that the militia clause fundamentally changes the meaning of the rest of the Second Amendment. And therefore, the keep and bear arms is only for the purpose of serving in a militia. And they were like, what, they just ignored that? To which our answer was, no, no. It's that that was fully addressed

and sort of disposed of as an argument in 2008 in the Heller case. But David, we weren't doing AO back in 2008. And so I think it is worth a little, a visit. It's not a revisit, but a visit to the Heller case. So starting with the clause of the second amendment, a well-regulated militia, comma, being necessary to the security of a free state, comma, the right of the people to keep and bear arms, comma, shall not be infringed. So that's what we're, that's the whole second Amendment. I want to read you some of what Justice Scalia wrote in that Heller opinion and the majority opinion in that case, and then have a little David French reacts discussion. Outstanding. Now, reading Scalia. The Second Amendment is naturally divided into two parts. It's

prefatory clause and it's operative clause. The former does not limit the latter grammatically, but rather announces a purpose. The amendment could be rephrased, because a well-regulated militia is necessary to the security of a free state, the right of the people to keep and bear arms shall not be infringed. So I'm just going to put a little marker there of that's the first assumption, that that could be substituted, the because language. I think it follows, but just want to note, first assumption. Logic demands that there be a link between the stated purpose and the command. The Second Amendment would be nonsensical if it read, a well-regulated militia being necessary to the security of a free state, the right of the people to petition for redress of grievances shall not be infringed. That requirement of logical

connection may cause a prefatory clause to resolve an ambiguity in the operative clause. He gives what I think is an important example here. The separation of church and state being an important objective, the teachings of canons shall have no place in our jurisprudence. Using that as sort of a stand-in for the Second Amendment. The preface makes clear that the operative clause refers not to canons of interpretation, but to clergymen. But apart from the clarifying function, a prefatory clause does not limit or expand the scope of the operative clause. Okay? Flag, that's assumption number two. Can, I mean, he doesn't say never, but it implies never. A prefatory clause can never

limit or expand the scope of an operative clause just because those examples didn't. That assumption, I think, is one that doesn't necessarily follow as much. Therefore, we will begin our textual analysis with the operative clause. We will return to the prefatory clause. So he goes through the operative clause first. That's where the Heller individual right to keep arms comes from. Then he returns. Does that fit with an operative clause that creates an individual right to keep and bear arms? It fits perfectly once we know the history.

The history shows that the way tyrants had eliminated a militia consisting of all the able-bodied men was not by banning the militia, but simply by taking away the people's arms, enabling a select militia or standing army to suppress political opponents. This is what had occurred in England that prompted the codification of the right to have arms in the English Bill of Rights. He goes through some pretty compelling history on this. During the 1788 ratification debate, the fear that the federal government would disarm the people in order to impose rule through a

standing army or select militia was pervasive in anti-federalist rhetoric, and he has pervasive citations for that. It was understood across the political spectrum that the right helped to secure the ideal of a citizen militia, which might be necessary to oppose oppressive military force if the Constitution broke down. It is therefore entirely sensible that the Second Amendment's Prefatory Clause announced the purpose for which the right was codified, to prevent the elimination of a militia. The Prefatory Clause does not suggest that preserving the militia was the only reason America's valued the ancient right. And he cites Pennsylvania's Declaration of Rights of 1776 for this. It says that the people have a right to bear arms for the defense of themselves and the state. Vermont adopted an identical provision,

but some states didn't. And of course, you can say like, so what? That's not what the second amendment says. So with that, David, that explanation from Scalia that I think really it's smart and lucid and it is certainly what the Supreme court has accepted about the militia clause. What about it? Do you find persuasive? What about it do you think is still missing? What about it do you find persuasive? What about it do you think is still missing? So I think the first part of what you went through, I found not nearly as persuasive. This sort of idea that the prefatory clause and the operative prefatory clause cannot

and does not limit an operative clause. I mean, that's bold. I mean, that's big. I found that not as persuasive as the dive into the history and especially the difference between what you would call the militia, which is all able-bodied, at that point, all able-bodied men, and the select militia or the standing army. Now, what is a select militia? So a select militia would be a subset of the population that is defined by the state, a subset of the able-bodied population that is defined and controlled by the state. And the history here is pretty clear that the goal was to prevent the creation of a select militia at the expense of the right to bear arms of all able-bodied adults. is doing is sort of creating a right to create the National Guard or the Army Reserve or any other sort of state-controlled part-time militia, because that is the select militia. In other words,

the National Guard is not all able-bodied citizens. It is the subset of able-bodied armed citizens that is controlled by the state. And that was exactly what was intended to be, that the Second Amendment was intended to prevent the creation of a select militia at the expense of the ability of able-bodied citizens to be armed. And I think that that federalist, anti-federalist argument and debate is very instructive on those bases. And so the word militia versus select militia, that's a very, very important distinction. And I also think it's interesting how various, although certainly not all, state constitutions are even more clear in the way in which they talk about the right to bear arms directly dealing with the right of self-defense, for example. So I do want to just put a pin in that, that in many states, you're going to have a right to bear arms in your state

constitution that's going to be broader than the right to bear arms codified in the federal constitution. But I did think that that distinction between militia, all able-bodied citizens, and select militia, the subset of able-bodied citizens controlled by the state, was very interesting and very instructive. And, you know, to me, that was far more persuasive than sort of the general language around prefatory clause and operative clause. And can a prefatory clause ever really limit an operative clause? I think a prefatory clause can limit an operative clause, but it's much more compelling to know the difference between militia and select militia. That's the important distinction. And when we talk about National Guard and when people talk about, well, we don't need a Second Amendment because we've got the National Guard, that's the select militia that the anti-federalists were worried about, which led to the creation of the Bill of Rights, inclusion of this in the Bill of Rights to begin with. So that's sort of my take on it.

That was what was persuasive to me. To me, absolutely. The history of why the Second Amendment was there and how they prevented political rebellion that the colonists were upset about, that's the most persuasive sentence and the whole opinion to me on this front is Scalia saying it wasn't banning militias. That's not how they did it. They disarmed people. So it doesn't matter why people are allowed. The purpose may be so that

people can form a militia, but the right is the individual right to keep and bear arms. That's what was persuasive to me about the militia conversation. That being said, I thought Bruin could have had a paragraph or two just readdressing that for this exact reason, that it's been actually like 14 years. And it would be nice to remind a whole generation of people that maybe don't want to go back and read Heller, but that's why advisory opinions exist. All right. Next up, there's been a lot of discussion about the idea that a state could make it illegal for someone to travel out of state to get an abortion. And certainly different states are talking about that. Justice Kavanaugh made very clear that he thought that was nonsense in the Dobbs opinion, in his concurrence. And he said,

you know, basically some of these laws would run into different constitutional rights. For instance, a law banning someone from traveling to another state to seek an abortion would run into the constitutional right to travel. But the more I started thinking about that, I was like, well, but they're not preventing the person from traveling as other right to travel cases have been. They're preventing the person from doing something that would be illegal in that state because they are still a resident of that state and receiving the benefits of being a resident of that state. And so I started thinking about this more. Can a state, because of your residency, ever control your conduct outside of the state? We know at the federal level they can

to some extent. There's child trafficking laws. You can be prosecuted for violating American law for sex trafficking acts that happen in Thailand, for instance, but that's different than a state. Anyway, there's this very interesting case, David, called Skiriotes v. State of Florida. It's a 1941 Supreme Court case, a 1941 Supreme Court case, and I'll bet money you never heard of it. I'm not betting you because you'd win. Okay.

It's a weird case, and it doesn't matter in any respect, except one that I think you may recognize. Appellant Lamberice Skiriotes, I absolutely also bet that's not how you pronounce that, was convicted in the county court of Pinellas, Florida, that's near Tampa, in March 1938, of diving equipment in taking of sponges from the Gulf of Mexico off the coast of Florida in violation of a state statute. It's fascinating because this is a case about the state of Florida making it illegal to get these sponges, but it's not Florida's territorial water that he got them from.

And the Supreme Court upholds that and says, yep, Florida can regulate the actions of one of their residents. Now, in some ways, this is closer to the Bangkok example. It's not that they were doing something in a different state that was legal in that state, but not legal in the state of their residency. I think a more apt example would be Texas makes it illegal for a Texas resident to smoke pot in Colorado where it's legal. Or visit a brothel in Nevada or something like that. Yeah. Or something that would to me even be maybe more likely to be legal. You don't get to claim the residency rebate on your whatever taxes if you violate this law when you're visiting another state and we can prove it or something like that. So as in it's tied to the benefit of being a resident of the state and abiding by those states laws,

which is all to say, David, you know, the Dobbs fallout will be plenty. We will see more of it, but I'm, I wanted to tell you about this case cause I was like, whoa,

this is a deep, a deep find in the Supreme court's, you know, case law. Thanks Westlaw. Yeah. That's a good poll as the kids Court's, you know, case law. Thanks, Westlaw. Yeah. That's a good poll, as the kids say. Yeah. Well, you can guess it didn't come from me sitting on Westlaw, but there's some very smart legal eagles out there who have some Westlaw access.

You know, one of the things, so there's a couple of things. One is, okay, can a state say, prohibit me if I go to Colorado from purchasing marijuana and consuming it in Colorado, if I live in Tennessee, can Tennessee criminalize my activity in Colorado or Nevada or whatever? There's that sort of abstract legal question. Then there's the other really concrete question of enforceability. So there is a real issue here that I think people don't think through fully when we're talking about a lot of these abortion laws, which is around enforceability. What kind of regime do you have to create to make a law like this enforceable, meaningfully enforceable? And that is, I think, something that a lot of folks don't truly appreciate. You can pass a law, you can put it on the books, and you can say you cannot go out of state to get an abortion or to do X or Y or Z, how are you going to know? How are you going to know? And this is the kind of thing that that's, I think when you start to think through, this is when you start to get into issues like some of the flaws in the drug war or some of the flaws in prohibition, the creation of the regime of enforcement becomes so dramatic and so all

encompassing that the enforcement regime itself becomes sort of an independent source of problem separate and apart from the underlying issue it's designed to deal with. And I think that a lot of folks are not fully thinking this through. They're thinking in these state legislatures, well, we can just ban something. We can just ban it. Well, you can pass a lot of laws, but if you're going to have them meaningfully enforced, you always have to be thinking when you pass a law, how is this meaningfully enforced in a manner that is consistent with the constitution and sort of also consistent with individuals' expectations of a free society? And that's where

a lot of these travel restrictions are just, as a practical matter, extraordinarily difficult to craft and enforce in any way that's consistent with our understanding about what it means to be a citizen in this country. And so I think they're going to run into a legal issue and a practical issue with some of these laws. And we'll see that play out. Speaking of the unintended consequence of anti-sponge trafficking state laws. So the worst segue. Eighth Circuit opinion came down, David Wright, and sort of the heat of the Supreme Court hand down. But we saved it. We wanted to talk about it. This was from June 22nd. This was upholding a Arkansas state law that required state contractors to pledge that they won't boycott Israel.

Sort of everyone knows these as BDS laws. What is it? Boycott? Divest sanction. Boycott, divest, sanction. Thank you. BDS sometimes can mean other things, but not on this podcast. That's my other podcast. Oh my gosh. mean other things, but not on this podcast. That's my other podcast. So this was fascinating because these laws, there's tons of these laws in the country. Lots of states have versions of these laws. They've been challenged before. And every court up till now has said that they violate

the First Amendment. The states have changed their laws, mooted them out. Some of them are still pending. But the Sixth Circuit is the first one to say this does not violate the First Amendment. You may be wondering how. So there's two cases that this is really going to turn on. And the question is, which one is this closer to, as is so often the case in the law? These are really famous cases, David, and both of them are weird in some respects. And they fall under my bad facts make bad law or two good facts can make bad law, sort of like the Pruneyard case that we talked about, where it's like these nice little high school students that just want to have their petition signed in the mall. And why is the big bad mall guy who actually doesn't even care? He brings the lawsuit sort of to check on his rights. But he, as it turned out,

didn't even care if they did this. He just wanted to be able to exclude people. And so the Supreme Court was like, no, you have to let them into the mall. It's a public place. And now we have all these questions of like, okay, but what about Twitter? What about Facebook? Yeah. Okay. So here are the two cases. NAACP versus Claiborne Hardware, 1982, and Rumsfeld v. Fair, which is a 2006 case. So Claiborne is about an NAACP boycott of white-owned businesses in Mississippi. They were trying to secure certain demands for desegregation and racial justice. So the white-owned stores sued to recover their lost

earnings, and the Supreme Court held that a state's right to regulate economic activity could not justify a complete prohibition against a nonviolent, politically motivated boycott. So they basically said this was expressive. It was protected. And so, yeah, you can do the NAACP boycott. Fast forward to 2006 and fair, the Supreme Court held that law schools couldn't refuse to allow military recruiters on campus in protest of the military's don't ask, don't tell policy. They held that the refusal alone was, quote, not inherently expressive since a neutral observer would have no way of knowing why the recruiters were not permitted absent, you know, some explanatory speech that would be protected by the First Amendment. So the question here is, which is which, right? Is it closer to the NAACP expressive conduct, or is it closer to fair?

David, plenty of people have said that that fair decision is a total outlier in First Amendment jurisprudence. It makes for really bad, messy law of how to distinguish fair anytime you're talking about potentially expressive conduct. That being said, it is true that if it's purely economic activity we're talking about, that probably isn't expressive or else we wouldn't be able to have any anti-discrimination laws, public accommodation laws. So I'm curious, your initial reaction, no doubt, was you've got to be kidding me. Of course, this is expressive conduct. But as you actually dug into it, what did you think? Yeah. I mean, I felt like this fell much more under Claiborne Hardware than FAIR, but I've always felt like, well, not always. The more I've thought about FAIR, the more I thought it was, as you said, it's an outlier and a weird decision. Specifically, there's one quote, because to be precise, what was happening was, the question was, could the federal government withhold funding from colleges and universities that restrict the access of military recruiters to students? Okay. So that's a different question

from can the federal government compel access to military recruiters to students, access of military recruiters to students. But the Supreme Court treated that as exactly the same, and it's not exactly the same. And Roberts wrote, because the First Amendment would not prevent Congress from directly imposing the Solomon Amendment's access requirement. Really? Really? He then says the statute does not place an unconstitutional condition on the receipt of federal funds. So I thought that that was an odd part of fair, but I've long felt that this fit within Claiborne hardware, the BDS analysis, much more within Claiborne hardware.

Even factually, it does. Legally, it does in terms of the economic versus political nature, the expressive nature of the boycott. And I mean, just factually, it's a boycott over a political policy you don't like. Right, exactly. So I've long thought that these state laws prohibiting that, you know, or providing, you know, conditional access to, for example, being a state contractor on the grounds that they don't engage in the BDS boycott. To me, it's long, to me, felt much more like a Claiborne hardware type case. But here's the interesting thing, Sarah.

Federal nondiscrimination law prohibits national origin discrimination. Bunches of state human rights laws prohibit national origin discrimination. So the reality is a lot of the BDS stuff is going to be prohibited anyway under federal and state non-discrimination law. I'll give you an example of a case that I was involved in involving an academic boycott of Israeli scholars. So they were saying, if you're from Israel, it doesn't matter if you're pro occupation of the West Bank or you're against. It doesn't matter if you're a member of the peace movement or not. Because you're Israeli, you cannot come to this conference, period. Well,

the conference was being held at a hotel that was bound by national origin non-discrimination provisions and public accommodation laws. So can a hotel say an Israeli, regardless of point of view, cannot come on the premises? your anti-discrimination law. And I think that those kinds of anti-discrimination laws, I don't think, I know they've been upheld. And so rather than sort of saying, well, you can't engage in a boycott writ large, just apply your non-discrimination, your anti-discrimination law. But that isn't as politically fun, David. I know. So some interesting, the ACLU has said, obviously they are going to seek cert at the Supreme Court. This is one of those moments, although there's plenty, and maybe we'll talk about this more next week with our special guest, that maybe it's time of all the Supreme Court reforms that we've ever talked about, and we've kind of poo-pooed them all. There's one that I

am now becoming increasingly in favor of, which is ending the discretionary cert grants. That maybe it shouldn't be up to the Supreme Court what cases they take. And instead of taking 60 cases a year, a number that continues to decline every term, they should have to take more. This would be a case that I don't think they should get to decline to take. So there were a couple notes in the dissent that I thought were smart and worth making. One, the act permits the state to consider as evidence the company's quote, speech and association with others to determine whether they're in violation. to determine whether they're in violation. That seems like a deal breaker. Two, the act codified legislative findings that Arkansas in passing this sought to divest state assets, quote, from companies that support or promote BDS measures. So therefore, it's like about expressive conduct, regardless of what it actually banned.

I think those are very compelling points by the dissent. Two amicus briefs worth mentioning, both from First Amendment scholars. The first set says, the decision not to buy and sell goods or services are not protected by the First Amendment. Quote, it's the foundation of the range of anti-discrimination laws, public accommodation laws, and common carrier laws throughout the nation. They say it's controlled by FAIR. The next set writes, Claiborne clearly held that the First Amendment covers political boycotts by consumers, not merely the speech associated with those boycotts. FAIR is inapposite, they write, because it is not a consumer boycott case. Political boycotts by consumers are inherently expressive. I think this will be a compelling

cert petition. We'll see if the Supreme Court, there's four justices to take it, and we'll keep an eye on it, David. 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, you can keep updating mom's frame with new photos. So it's the gift that keeps on giving.

And to be clear, every mom in my life has this frame. you can keep updating mom's frame with new photos. So it's the gift that keeps on giving. And to be clear, every mom in my life has this frame. Every mom I've ever heard of has this frame. This is my go-to gift. My parents love it. I upload photos all the time. I'm just like bored watching TV at the end of the night. I'll hop on the app and put up the photos from the day. It's really easy. Right now, Aura has a great deal for Mother's Day. Listeners can save on the perfect gift by visiting auraframes.com to get $30 off, plus free shipping on their best-selling frame. That's auraframes.com. Use code ADVISORY at checkout to save. Terms and conditions apply. All right. Let's just do a quick Stop Woke Act update before Res Judicata. So super quick, we don't normally talk about, well, we just spent the first 25 minutes talking about a trial court

case, but we don't normally talk about cases at the trial level because there's so much ground to cover before actual precedent is said and the case is over. But it is worth noting that the Florida Stop Woke Act, which is an anti-CRT law that applies way beyond secondary education to include higher education, to include private corporations, is now subject to multiple lawsuits. And one of them has lived to fight another day. It survived a motion to dismiss at the trial court level. And what was interesting about this, this is a challenge brought by university professors, is that the court very clearly basically, the court very clearly said,

look, when you're talking about university professors, you are, the university professors have their own free speech rights. They are not simply government agents for government speech, which once you make that distinction, it's basically ballgame. And now that's a distinction that a number of circuit courts have made that, that university professors in accordance with a long line of Supreme court precedent possess independent free speech and academic freedom rights, perhaps in a way that secondary school teachers do not. But I did find that interesting. We'll see what happens.

But if that reasoning holds the stop woke act is done as applied to higher education and professors in higher education, but we shall see. All right, next up, Fifth Circuit case on a legal term that's spelled R-E-S space J-U-D-I-C-A-T-A. David, how do you pronounce it? Okay, it's a trick question because we heard from a Latin scholar-A. David, how do you pronounce it? Okay, it's a trick question because we heard from a Latin scholar. I know, but how do you pronounce it like in your everyday language? Until I heard from the Latin scholar,

it was res judicata. Okay, so I think that I was saying res judicata. Res judicata. But we talked about how we were going to talk about this case a few weeks ago. And of course, we got someone from the University of North Carolina at Chapel Hill, PhD in Latin and Roman history, telling us that in fact, the correct pronunciation is more like race. And of course, as anyone who has ever learned any Latin knows, Julius Caesar, for instance, there is no J in Latin. It would be Julius Kaiser.

And so in this case, it should be race Uticata, something not a single lawyer has ever pronounced it as. Never. That pronunciation has never come out of anyone's mouth. Race, Utica, although I'm going to say Julius Kaiser from now on because that sounds cool. Yeah. So in this podcast, I love listening to on the history of the English podcast. It's so fun to hear about Indo-European and Proto-Indo-European, about how we get some of these pronunciations and words. But yeah, the Latin stuff is super fun about that. And thank you. If you have a PhD in Roman history and don't like the way we pronounce something, you should absolutely email us. email chain on the pronunciation of things like stare decisis too, where we got the ecclesiastical

version, the traditional version, the classical version. These are the sort of like, that is a huge perk of being the host of this podcast. Anyway, this is a Fifth Circuit case. And David, it was worth mentioning because the Supreme Court is hearing that Harvard race admissions case this fall. And here we have a case about University of Texas's admissions policy. called Fisher 2 that was brought by a student who was rejected under the university's 2008 admissions policy, funded by, at least in part, by this guy named Edward Bloom. Her name is Abigail Fisher. Fast forward to circa 2018, they've now formed a group, SFFA Students for Fair Admissions. Well, as would happen, Bloom and Fisher are both on the board of Students for Fair Admission, along with a few other people, and they are going to sue the University of Texas over their admissions policy, same as the Fisher case. And the lower court threw out the case saying that it was barred under res judicata.

So worth just talking a little bit about this. Basically, for efficiency in the courts and things like that, there's something called estoppel, where you can't just keep bringing the same case over and over again, even if you've got the money and the time. The court system doesn't. If you're the same parties and you're bringing the same claims and you lost last week, you can't just refile the suit. You are barred by race judicata. So in this case, the factors to consider would be the parties are identical or in privity with one another.

The judgment in the prior action was rendered by a court of competent jurisdiction. The prior action was concluded by a final judgment on the merits and the same claim or cause of action was involved in both parties. It was interesting, David, and I think they're probably right. This was a 3-0 decision and it included on the panel Judge Carolyn King, who is not a right winger. She is one of the more left-wing judges on the Fifth Circuit. So she joined in this opinion as well. And basically they said Fisher was about the 2008 admissions policy that UT was using. They allege that UT's admissions policy has changed dramatically since then, as have their percentages of the student body makeup by ethnicity.

percentages of the student body makeup by ethnicity, and that they're challenging the 2018 and 2019 admissions criteria to the University of Texas. And it's substantially different enough that it makes a different claim or cause of action. They also found that the parties were not identical, even though Bloom and Fisher were involved in the Fisher case. That was in her individual capacity. This is now an organization that she works as the secretary, board secretary, not like, I mean, she might also be the secretary, but board secretary in this case. And that therefore it's not the same parties. Very interesting, David, because this is a close call. Like if they said that the 2010 policy was different, like how different does the policy, the admissions criteria need to be? Is 10 years enough? Is five years enough? And then of course,

there's the party's question, which I found interesting too. I think this will all get resolved by the Supreme Court in the Harvard and North Carolina case. So we may not hear a whole lot more about this. Regardless, under current law, I think they will lose this the same as they lost Fisher. The Harvard case is way more compelling, at least at this point. This is on behalf of the organization, but specifically white students who were rejected again. And they say that the percentage of white students has gone from 51% to 36%, that they're pointing to the number of black students, which is stayed between five and 6% as proof of a quota. Again, Harvard has similar facts in some respects, but way more compelling, a record that's been, of course, way more built out at this point because they got

discovery and these guys in Texas haven't. But I thought the race Utica discussion was fascinating because in a lot of these constitutional law cases, you lose. But now the Supreme Court has different people and they're going to want to bring their case again. Yeah, no, it is interesting. It is fascinating. And I'm I'm thinking that this is the most consequential case of the term, the Harvard case, Harvard slash North Carolina, most consequential case of the term. Harvard case, Harvard slash North Carolina, most consequential case of the term, because it really is going to get once again to the question of do civil rights statutes mean what they say? Because civil rights statutes prohibit discrimination on the basis of race. They don't say unless it's for good intentions. They don't have that caveat.

They flatly prohibit discrimination on the basis of race. And the Harvard fact pattern is just really compelling that Harvard flat out discriminated against Asian students on the basis of race and in some pretty gross ways. And so it's going to be extremely consequential,

and if the court rules the way I think it will, the consequences of that will radiate out far and wide across the United States. And I think ultimately for the good, ultimately for the good, because there are few things more divisive in the United States of America than explicitly

race conscious policies. And so putting a stake in the heart of those, I think is a very good thing indeed, but we'll see. David, we have an exciting podcast for Monday already lined up. Very, very excited. My biggest intellectual crush right now has agreed to come on this podcast. Oh my gosh. Oh. Akeel Amar? Yes. This guy is

the Akeel Amar. This guy is strong. Y'all wanted a liberal, legal scholar. Those three words, he's very liberal. He is a liberal legal scholar. And I mean, those three words, he's like very liberal. He is the smartest legal and scholar. He's incredibly famous and well-known. So this is going to be an incredible conversation.

I'm so excited. And I totally agree with listeners when they said they wanted someone who could talk from the left about some of these constitutional interpretation questions. I want to talk to him about ratification and why we care about the old white dudes in 1789. And yes, substantive due process, so much. There's so much. I'm so excited. Can't continue.

He has fascinating thoughts on Roe and on the Second Amendment. I was on a panel with him at the National Constitution Center event that we were both at, Sarah, earlier this year. And we kind of had a five-person Supreme Court where we walked through Bruin, New York State Rifle and Pistol, and Dobbs. And it was fascinating. His conclusions were he's absolutely a progressive, but he has some pretty heterodox thinking when it comes to Supreme Court jurisprudence. So this is going to be good.

This is going to be good. I can't wait. I think we did a good podcast today, David. Can you believe I'm saying that? You said it. I was just about to say it. I like our nerdier in the weeds podcasts. So I know some listeners are like, no, this isn't the best podcast ever. I hear you. I understand why. But for me to tick

through so many cool, interesting, different cases, that's pretty peak AO. But hey, we started with the crowd pleaser, Elon Musk and Twitter. So, you know, started with the tabloid heavy sort of case and then moved into nerdery. So it's full spectrum advisory opinion. It's true, although we didn't get to get into our

legendary producer Caleb's issues. When your roommate leaves dishes in your sink, how long do you leave them there before you simply do them yourself? Maybe we'll save that for another time. And his roommate who's probably listening now knows that he has been talked about

behind his back. But we'll save that for another time. Thank you guys for listening as always. Please rate us, please subscribe and please check out the dispatch.com and we'll be back Tuesday morning with an outstanding. We'll see you next time. Turning everyday necessities into electrifying possibilities. Turning a new vehicle into the new standard. Introducing the first ever Mazda CX-70. Our largest two-row SUV.

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