The Pomp Podcast - #267: Preston Byrne on Constitutional Rights During the Quarantine

Episode Date: April 12, 2020

Preston Byrne is a partner at Anderson Kill, where his practice focuses on early-stage technology companies with complex cross-border legal issues, including industrial cryptography, cryptocurrency and interactive computer services businesses. In this conversation, Anthony and Preston discussLibertarian politics, the US Constitution, various recent government actions and whether they violate the constitution or not, and what citizens need to pay attention to in order to ensure the government doesn't infringe on their civil liberties or personal freedoms. =============================== BlockFi allows you to keep your crypto, put it up as collateral, and receive a USD loan funded directly to your bank account. Visit try.blockfi.com/get-50/?ref=pomp50 to get started with BlockFi today and earn up to $50 in BTC when you create an interest account and make a deposit of $250 or more. =============================== Blockset by BRD is your hosted blockchain infrastructure. Blockset enables enterprises and developers around the globe to deliver high-quality blockchain-based applications in a fraction of the time, at a fraction of the cost. Using the services provided by Blockset, businesses can build professional custody solutions, accurate and near real-time portfolio management solutions, auditing platforms, commercial block explorers, and much more: blockset.com =============================== TaxBit is a refund-maximizing, cryptocurrency tax software you can depend on. Visit taxbit.com/invite/pomp and receive 10% off your tax plan today by signing up for a free trial. ===============================

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Let's kick this thing off. Preston Byrne is a partner at Anderson Kill, where his practice focuses on early-stage technology companies with complex cross-border legal issues, including industrial cryptography, cryptocurrency, and interactive computer services businesses. In this conversation, we discussed libertarian politics, the US Constitution, various recent government actions and whether they violate the Constitution or not, and what citizens need to pay attention to in order to ensure the government doesn't infringe on their civil liberties or personal

freedoms. I really enjoyed this conversation with Preston, and I think you guys will as well. Before we get into the episode, though, I want to quickly talk about our three sponsors. The first is BlockFi. As many of you already know, I'm a big fan of the company. I'm an investor and a user. Today, they offer three products. The first is giving US dollar loans against your crypto as collateral. The second is an interest bearing account for your crypto deposits. And the third is allowing you to buy or trade cryptocurrencies. As if these products weren't enough, BlockFi also recently told users that they'll be launching a credit card in 2020 that pays their rewards in Bitcoin rather than cash back or loyalty points. Bitcoin rewards credit

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catch it the first time, taxbit.com slash invite slash Pomp. Go get your damn taxes paid. All right, let's get into this episode with Preston. I think you guys will love this one. Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only. All right, guys. Bang, bang. I have the one and only Preston here. Thanks for jumping on and

doing this. Yeah, no problem. Glad to be here. You have spent most of your career as a lawyer, so you actually can give legal advice to clients, but also tend to be somebody who I think is a constitutional proponent, right? In that you believe that the Constitution is important and you believe that the amendments there are worth paying attention to. Maybe give us a little bit of your background and kind of what you're doing today and then we could jump into some of the nuances of what's happening right now in the world. Sure. So I started my career as a securitization lawyer. So that's doing stuff for banks back in the financial crisis, basically repackaging mortgages and things like that. And that was over in London, England. After that,

I started a blockchain tech company and got really into sort of libertarian politics. This kind of happened at the same time, because if you work for a big corporate law firm in the middle of a major city, they don't exactly like having their junior associates running around spouting off libertarian opinions and criticizing the government so that was a fortuitous uh fortuitous development then um then after that i so i ran that it was called monax it was a blockchain uh enterprise blockchain company then after that went back to law school here in the states got re-qualified as a lawyer here in the states uh opened my own law firm which focused on startups tech companies ip issues just general corporate stuff for small companies and just last

month, actually, on March 1st, I moved down to Washington, D.C. to be a partner with Stephen Pally and Bob Cornish over at Anderson Kill, which is a big litigation shop. And we're building a sort of tech-focused corporate practice there. And of course, to then two weeks later, I had to leave because of COVID. So I ran right back up to Connecticut. And here I am. And so looking forward to getting back to it whenever the country opens back up. For sure. So where I want to start, I think is maybe talk a little bit of just about like, what is libertarian politics? I don't think I've ever heard that term. Explain that a little bit. Sure. So, I mean, you know, libertarianism, right? Generally, so for your listeners, libertarianism is, you know, all the Ron Paul

memes, that's libertarianism, for those of you who live on the internet. But generally speaking, libertarianism is a political ideology, which holds that individuals and individual agency are really the most important thing for a happy and successful life, and our political arrangements in government and law and elsewhere should reflect that and basically minimize the amount of interference that third parties or the state has with individual life. So as a practical matter, what you'll see generally are low taxes is a policy that libertarians would tend to espouse, or no taxes, mass decriminalization of drugs and things like that, because it's an element of personal choice. Decriminalization of weed is a very libertarian policy to hold. And then there

are others which are a little more contentious, but in the purest libertarian sense, they would be very open borders, very free markets, very no regulations. So they would say, listen, go build your factories overseas. There's also a nationalist stream which runs through some aspects of libertarianism, which tends to say, well, listen, we actually need to look out for workers and be a little more strategic about how we arrange our supply lines. I tend to be more of that than the total absolutist libertarian. But it's a big church, it's a big tent, and there's room for all kinds of people on it. Got it. And so how does that play into today's world when you've got a health crisis going on with COVID-19? You then also have an economic crisis that's kind of the

fallout of the response to the health crisis. How are most libertarians kind of viewing what's going on and kind of what do they think is good and what do they wish maybe it's not happening? there's a great meme uh you may have seen it money printer go burr uh and what happens is there's a guy there are two stick figures two npc wojacks and one of them is losing his mind and and actually it's not a wojak it's just the npc and so he's losing his mind and he's wearing a bow tie which is black and yellow which are the traditional libertarian or anarcho-capitalist colors and he's freaking out he's like oh my god the fed's printing money and then the next frame over there's a guy sitting there and he goes haha money printer go brr and it's just printing

money off like crazy so libertarians are basically all losing our minds because this is uh we're in peak state um this is the state at the absolute uh apex of its power in an emergency where it has the maximum uh freedom of action and this is even in the united states in dire emergencies so we're talking about asteroid impact, nuclear war, pandemic plague, in those instances, the state has enormous powers, you know, rebellion, insurrection. The state has enormous powers to step into ordinary life and pass edicts, which would not be legal or constitutional and would be readily challengeable under multiple circumstances. Got it. And so I guess let's start with some of those constitutional aspects, right? We're seeing things that I think most people are just jumping

up and down and saying, wait a minute, timeout, how is this legal? So everything from the prevention of freedom of assembly, so literally you can't have more than 10 people or five people all in one location. Things like the state of Rhode Island saying we are going to use the police and military to patrol transportation centers in order to identify people who come from other cities or states. And then even things like in Kentucky, we've seen a judge order somebody who refuse to stay in quarantine to wear a gps enabled uh ankle bracelet these all seem you know at best uh sensitive uh topics at worst complete violations of the constitution how do you kind of think through them um and like what are the frameworks you use to to evaluate these situations sure so

sorry my computer fan is running and i'm not sure why so i'm gonna turn the heat off I'm going to just do that here. So what? So how do we look at this? So we have constitutional rights in the United States. Everyone's familiar with what those rights are. Those rights include they can't deprive you of life, liberty, or property without due process of law, i.e. a court hearing. The Congress can't make any rules or any governmental agency for that matter can't make rules which tell you what you are and aren't allowed to think, what you are and aren't allowed to say um you know what uh what opinions you can and can't express that kind of stuff so that's the first amendment um however in certain circumstances the courts will authorize a

otherwise and presumptively unconstitutional uh arrangement or rule if a it is necessary for a to further a compelling government interest we'll go into what that means in a second and b it is no wider or no broader than is necessary to accomplish that interest and that's known as strict scrutiny review so what happens is if the if the state creates a rule and let us suppose just for sake of argument new york says governor cuomo is really having a bad day and he writes an executive order and the executive order says i i hereby ban all of the things andrew cuomo and he goes and issues that order um it's a quarantine right but just because there's a quarantine on doesn't mean he has the power to ban everything. It means that he has the power to address a

compelling government interest, right? And he can't go any further than is necessary to address that interest. So what that means is, if we have a society-wide catastrophe, such as a pandemic, the scope of that can be very broad indeed. But once the emergency recedes, ideally, those rules are going to start to become unconstitutional, and hopefully they'll be revoked before they have to be challenged. What are the odds that they actually get revoked? Pretty good, I think. So most of the orders that we've seen are so economically damaging that I don't actually... So as a libertarian, there are a lot of people who are freaking out in libertarian circles about the use of government power. There was one instance the other day

where I was in the deterrence dispensed Keybase channel, and one guy was like, don't know. They're declaring martial law. And I said, no, we're not declaring martial law. What happens is, yes, the National Guard is being brought in to set up hospitals, but the military has not been given administration of law enforcement. The civilian courts are still open. The civilian police are still operating. We're still under civilian rules answering to civilian political officers. No, no, no, no. It's martial law. It's this, it's that. Which of course it isn't. This is totally normal civilian order. It's very extreme civilian order, but it is civilian order. Now, the economic damage that this quarantine is doing is so substantial

that I have to imagine that the states will want to roll it back the minute they possibly can for political expediency, if nothing else. So I don't think a lot of that is going to last. What might last are some supervision problems around healthcare and maybe at the borders. There might be increased surveillance there. And of course, the US has an extensive surveillance regime, domestic and international. Domestically, we have a lot of protections built into law to prevent that stuff from being leaked to the government and then used against you in a criminal proceeding or part of a criminal investigation. So there are instances, of course, I don't know if you've heard of the term parallel construction, but parallel construction

is a term which refers to the practice of intelligence officials giving information to law enforcement, which kind of hints, which allows them to find something which they can then build a valid chain of evidence from in order to secure a conviction. Normally, if you're gathering evidence or criminal prosecution, the rule is if it's fruit of the poisonous tree, you can't introduce it against the defendant. So if, for example, you have an illegal, let's say you break into somebody, you're a cop, right? And you think a guy has a bunch of, I don't know, you think a guy is like abusing his, I don't know, let's try to find a good one. Abusing his cat, right? And so what you decide to do is you see the cat on the front lawn and you decide you're going to break

into the house and search the entire house top to bottom, including his underwear drawers. And in the underwear drawer, you find a gram of cocaine. In that hypothetical, if you're investigating the abuse of a cat, and you know where the cat is, looking in an underwear drawer, which is this big, and finding a gram of cocaine is way, way, way in excess of what was necessary in order to conduct that search. If you do it without a warrant, or if you did it with a warrant, it would probably be specified in the warrant, you're going here to go look for evidence of abuse of the cat. Finding the cat alive and well is probably a good indicator that at least it's not happening at that moment. But then going and digging into other things that are unauthorized,

you would then be unable to go and introduce that baggie of cocaine, or you could introduce it, but what the defendant would then do is say, listen, the police exceeded their authorizations here. There are similar rules in place for digital searches and digital seizures, where judicial authorization, pre-authorization is required before data is handed over to the government. I think it'll be interesting to see whether health data is exempted from that and if so, how. So for example, we're seeing Google now saying, listen, we're tracking people's phones and we're giving the government information, very generalized information about where people are. The government cannot, constitutionally cannot, obtain individualized

location data from google on any person without a search warrant uh which which specifies the person is issued on probable cause uh and is time limited uh in terms of duration so i don't think there's a big so a lot of libertarians will freak out about something like that that's a concern for sure but i think it's more of a concern that we hand over data to google anyway which they can then go and willy-nilly do with as they please uh because there are procedural and protect protections in place that are Fourth Amendment style to prevent Google from giving that to the state. Got it. So something like the Google tracking tool, which I think a lot of people feel at least uncomfortable about. Basically, as long as it is aggregate and anonymized,

then it's probably okay. But if for some reason they started to say, here is exactly where Preston has been and handed that to the government, that's where the issues could be introduced. Well, I mean, so you're creating the record as you go, right? So a telephone, these records exist they're being held excuse me they're being held on google servers and other servers um you know and other companies servers around the world right now those companies can do whatever really whatever they want with that data i don't think they can you know release it to the general public they cannot give it to the government but it is there so if the government decided it wanted to initiate some kind of investigation and track where your movements are

even though it can't go out and get that data willy-nilly it needs to have a reason to see it that record does exist and also that record just you know one thing that we we say in data security uh land is that the best way to prevent a data security breach is just to not hold the records never generate the records otherwise once you've generated it basically it's a honeypot and so it's a it's a big target for some hacker or state actor or someone else to try to obtain so as we're generating all this information about ourselves um and that information is being fed into these big companies it's creating these vast repositories of data which the government can readily access they need a reason to do it and they need a reasonable or you know particularized suspicion

or a reasonable is it a reasonable suspicion a probable cause excuse me any probable cause to believe that a crime has occurred um which is a higher standard than reasonable you know reasonable suspicion if guilt if absolute like undoubtable you know undoubtedly guilty is you know saw the guy do it is 100%, then the probable cause is probably somewhere around 40% or 50% probability. Whereas reasonable suspicion, I'd say in terms of just the general feel, you can't quantify it, but that's how that works. So anyway, that's kind of my view on that. We're creating these vast pools of data. The government's likely to want to get a hold of it. They will need to pass new legislation to do it. So we're going to have to take a very close look at what legislation is

introduced in order to ensure that they don't overstep the boundaries. Got it. And then how do we think about this when it comes to like individually the effect on me or you and say them ordering us to wear a mask, for example? Like where is the constitutional boundaries there? And is it something that people should be worried about yet? Or are we still pretty much operating in an okay territory? So we're in new territory, right? Because we're new territory. I don't think the federal government could order someone to wear a mask, just to start. The states, on the other hand, have a very broad police power. So a lot of sovereign powers when the U.S. was formed were reserved to the states under the 10th Amendment. And one of those is

the police power. So you'll note that as these quarantines rolled out across the country, where countries like China just convened the Politburo, and the Politburo gave an order, and then the whole country followed the order. In the U.S., it's been a very decentralized response. There are pluses and negatives to that. On the plus side, the states that were hit early and that acted early appear to have blunted their infection rates. Washington, California, D.C., for example. D.C. was closed like a week and a half before everybody else was. I think New York closed on the 21st of March. But by March 11th, all of the federal agencies had sent their workers home. All of the Supreme Court had closed. Congress had closed. The parks had closed. Everything had closed. So I think maybe that's because D.C. had a pretty good idea what was coming and New York didn't. But that's TBD. So those jurisdictions within the federation, which closed down early, are coming out of it a little earlier, generally speaking, and with less damage. And they know their jurisdictions well. They know their territories. They know what works and what doesn't work. And so we've seen actually a really efficient response. So New York, for example, the Javits Center was converted into a field hospital, and then they brought in the USNS Comfort or Mercy, one of the big hospital ships.

I think they've had 110 patients, and today or tomorrow is when their surge peak is supposed to happen. So they managed, using their local knowledge and local command and control, to be very effective in containing the outbreak and eliminating it. So hopefully, eliminating it if everything goes according to plan. But it was local, fundamentally. And the states have a lot of power locally when they want to act in an emergency. When the emergency subsides, though, that power goes away. Yeah. And I guess then this also goes into them limiting the freedom of assembly, right? So, hey, you literally can't come together, etc. That seems like it's all coming from the state, not so much from the federal government as well. Yeah, so the states and federal government with regard to freedom of assembly are bound by the same rules, right? They have the same constraints.

Generally speaking, so again, this is a fundamental right, so it's not going to be – you're not going to be able to restrain it unless you meet this strict scrutiny standard of review. Furthermore, we have something – so basically we have something with free speech and assembly and those types of political rights, expressive political rights. the kinds of restrictions which are allowable will generally be referred to as time place and manner restriction so for example they'll say you know you can protest and say whatever you want but you know you can't do it between you know 2 a.m and 4 a.m outside of an old folks home right or and you also have to when you're restricting free speech rights in particular you have to leave open multiple alternative avenues for that expression to take place and you can't discriminate or be content-based on who you're closing and why. So if, for example,

let's look at churches, that's been a really contentious one. So churches have been ordered closed as gathering spaces as part of these orders. If you said only Rastafarian churches remain open or only synagogues must close, if you did that, then that's not going to fly because the state isn't allowed to make those kinds of decisions and discriminate on that basis. But the rules of general application, which satisfy strict scrutiny and don't discriminate, are the kind of rules which are going to fly. And when it comes to speech and expression and assembly and other things, we again, we run those same tests and we ask ourselves, necessary for a compelling government interest and narrowly tailored to address that interest, and we ask, are there other avenues? And the answer is yes, there are. So the government here is not really, it's, yes, it is infringing on freedom of speech. It is infringing on freedom of assembly. It is infringing on your ability to practice religion the way you want. But it's not without precedent that these things happen. So, for example, I can't remember the name of the case off the top of my head, but there was a federal case back in the day where a Native American group out west sued the government saying we should be allowed to take peyote, which is illegal, as part of our religious ceremonies. And this law that you passed that bans it is unconstitutional.

And they said, well, listen, no, it's not unconstitutional because it's a general application. It's not targeting you. And so you're just going to have to live with it. contrast that with hialeah versus i think it's sarasota uh what is it now no what is it sorry hialeah once we have a case okay versus what's the name of the case i can't remember anyway hialeah is the case and is a is a is a rastafarian church that uh practiced animal sacrifice and so what happened was the city passed a health ordinance uh which prohibited the uh which prohibited the sort of slaughtering of live animals, which was targeted, but the only place

that that was targeted, that was that one church. So that wound up not satisfying constitutional scrutiny. So when we look at these ordinances that we're all living under now, we have to ask ourselves, all right, if there's an unconstitutional infringement on our freedom, we know what it's going to look like. It's going to target specific groups, it's going to target specific minorities, and it's going to last longer than it needs to, and it's going to cover more circumstances than it needs to. If they said, for example, an unconstitutional edict in a quarantine situation would be, you are prohibited from worshiping at home. You are prohibiting from worshiping God, period. That's an unconstitutional edict under quarantine. When the quarantine subsides,

after all this is over, all of a sudden the other orders might become unconstitutional, because they're presumptively unconstitutional anyway, but only the emergency renders them constitutional. Got it. And I guess one of the cases or incidents that to me seems incredibly complex, and I'm not a lawyer, so I don't understand the complexity, is the man in Brooklyn who had the FBI basically raided his house, I think his warehouse. And there was a couple of things that I took away from it. So one is they questioned him about hoarding medical supplies and uh and price gouging um they claim that he lied to them so kind of there's this uh lying to federal officials component to it uh there's a second claim that uh the actual hoarding of the

medical supplies was uh was not right uh and the third one was he coughed in their direction when they approached him and they basically charged him with like attempted assault or something and to me it's not attempted assault that is assault assault okay so like to me what you end up getting is, you get this weird world where it sounds like there's a lot of interpretation, right? You know, at what point is it, hey, you coughed towards me or on me versus you coughed around me, and you get some of that stuff. So I don't understand how legally that gets defined. But then also too, is there's one argument that you see online that says, hey, the FBI just went and took the private property of an individual. There's another argument that says, hey, asshole,

stop hoarding, you know, a bunch of medical supplies that people need. And they went, they basically confiscated it and then redistributed it to hospitals. So I guess, you know, fully under the umbrella of like, this is super complex. And I'm assuming at some point, a court of law makes decisions. Like, how do you just think through that type of scenario? So there are three problems that that fella had. And we'll start with the easiest one. Never talk to the FBI. I have a lot of respect for the FBI. They're extremely professional. They deal with some of the most difficult problems you could possibly imagine and really, really very, very difficult subject matter. But you shouldn't talk to them without the assistance of counsel. It is entirely possible

to have a lawyer in a conversation with the FBI and be very fully cooperative with the FBI and have an interaction which ends well for both sides. But it's really important that you have the lawyer there. The reason it's important is because, for example, General Mike Flynn, He was interviewed by the FBI as part of the Russia hoax, a Russia investigation, if you don't think it was a hoax. And he misremembered something, right? And if you tell a fib to the FBI, guess what? That's a crime.

If you tell a fib to a federal officer, that's a crime. So you should have a lawyer in the loop whenever you're having those discussions, not because cooperating is a bad idea, especially in a national emergency, but because cooperating is, these guys do this for a living and you don't. and so you can manage this by by being having a professional in the loop and making sure that that conversation is being managed appropriately the second issue is the coughing and that you know coughing that's coughing in someone's direction is a threat of sorts it's also an assault you know when in the context of a disease it'll be a question of fact for a trier of fact

to decide so a judge or a jury to really determine whether whether that was in fact what he did And then the third element is the seizure of the medical supplies. And so the Constitution envisages that seizures will happen. But it says that people will not be deprived of their property without just compensation, right? So they're entitled to be compensated for the property which is taken from them. So if international – I'm sure there's a – I'm not familiar with the federal seizure regulations. But generally speaking, the federal government has the power to regulate interstate commerce, one. to interstate commerce is a very broad designation which applies to pretty much anything that's

crossed the state line so unless the guy grew cotton in his backyard men turned around and forged you know weaved that cotton himself into masks with plastic that i don't know he made out of his toenails and then sold it you know in cardboard box from the tree he has in his garden that he processed himself it's very likely that these masks that he purchased from somewhere else were done either over the internet and therefore as part of interstate commerce so first they have the right to intervene in interstate commerce, which means deal with things like mass supplies. Second, they have the ability to seize property, but you have to be compensated. It's a taking. The constitution makes very specific provisions for condemnation and takings.

And so if I had been in his situation, the preferable thing to do is, listen, the FBI is showing up. They want your medical equipment. Shut up. Call your attorney. Have the attorney me talk to the special agent in charge and say, all right, listen, you take the equipment. We're going to expect to be compensated. We'll send you the bill, and then we can negotiate over how much we should be compensated. And after this is all done, maybe we go to court and have some litigation over it. The solution is not to turn around and start screaming and saying, my constitutional rights, because your constitutional rights, this is an emergency. Your rights, the government is at the absolute apex of its power as long as this emergency continues, which means that your rights

sometimes have to get put on the back burner. But they can't just take your stuff and not compensate you, right? At some point, you're going to get compensated for it. It might not be today, it might not be tomorrow, it might be in six months, it might be in a year, but you will be compensated under those circumstances. Yeah, it's really interesting. I want to push a little bit further on like the coughing thing. So like, you know, I think an extremist view would be, well, why don't they just outlaw coughing in public, right? You know, something that's just seems absurd, but in today's day and age, where literally people are scared if they see someone to cough in public, like how far does the either state or national powers go for them to basically

try to change behavior when it comes to medical crisis like this? And it involves specifically coughing could spread a virus. It'll be interesting. I don't know about the mask stuff is really untested and untried. It'll be interesting to see if states start fining people for it and then whether they convene the state legislatures to go past these laws. You know, usually in the U.S., actually, we have anti-mask laws. So in Virginia, for example, wearing a mask without good cause is a felony. So you go to jail for a long time if you do that. And those are enacted, actually, to counteract the, what are they called, the Klan running

around, you know, in their bedsheets, you know, in the middle of the night with things that are on fire. So that, of course, is not a very nice thing. And now, of course, they're reversing that position and saying, well, now you must wear masks for public health reasons. So masks have been considered within the realm of states' abilities to legislate and dictate human conduct before in terms of prohibiting them. So I think it's not too far-fetched to imagine that they may require people to wear them if they're in crowded spaces or something like that, at least as a temporary emergency measure. For sure. And then I guess this brings us to businesses, right? Because a lot of what we've talked about so far is on the individual level.

But at the business level, how does the Constitution or other laws apply in terms of, like, government-mandated shutdowns and kind of a lot of what we're seeing that's driving that economic slowdown? A lot of it is coming mandated from either state or federal government. Like, what applies there? Yeah, businesses are not – businesses don't really enjoy the same extent of political rights as individuals. They do enjoy some political rights. So for example, Citizens United businesses have the ability to make donations to PACs in more or less unlimited amounts. However, because they operate in a regulated space, it's not really the same as suggesting that, you know, so for example, if you had a, let's say you had some really dangerous business like a garbage dump, and someone, you had a licensing authority and all the rest of it, and they had the ability to come in and inspect. fact, they don't need a search warrant to come in and inspect your premises because you're operating in this highly regulated space. So as far as the Fourth Amendment is concerned, they can come in,

look around, kind of tell you what to do, institute codes, tell you what to do, and manage and govern your conduct a little more tightly than they could for a private individual who just happens to have a big tract of land and a pile of junk in his backyard, right? Or a pile of junk in his basement. So for example, they wouldn't be able to come into his house. So rights apply differently to different types of persons, so to speak, rather than people. So corporate persons or businesses operate in a more regulated space. I don't really see too much of a political problem, as long as there is a non-discrimination in terms of what the business owners or the businesses themselves espouse from a political standpoint. Here, we're looking at blanket orders that apply

to everybody, irrespective of who is at the helm of a particular business. If we started to see discrimination of any kind, right, so racial, sexual, political, doesn't matter, then we start to move into territory where the government's orders would have to be re-examined. But at the moment, they're just blanket orders, and they're done for public health reasons at a time when the state is at the apex of its power. So it has to go away for economic reasons. I think the states want to do but i don't see a legal problem really got it and then i guess um is there anything we talk about the state power that they can do like closing their borders right so could new york state say hey if you're from another state you can't come here or if you're another business

in another state you can't uh do commerce with someone from our state like is there anything that they can do at the border level on the on individual states well there's legally probably not. Practically, probably. I heard a story of some friends of friends from New York who decided they were going to get away from all of this in West Virginia. And they were stopped and turned around at the West Virginia border by a West Virginia state trooper, apparently. And Rhode Island, for example, I think that's a better example because they were pretty clear. Initially, Rhode Island said, we don't want... So the People's Republic of Rhode Island is right next door to Connecticut. It's about 30 miles from where I am right now. It's a lovely little state. It's got

great sailing, great restaurants, whatever else, very cute, very quintessentially New England. And they decided they didn't want New Yorkers coming up and spreading the virus in their state. So they said anyone from New York with New York plates is going to be pulled over, stopped on their way into Rhode Island, and then they're going to be ordered to self-quarantine for 14 days. They then changed that order. And they said, actually, anybody from out of the state who's traveling into the state, and it's coming here from out of the state, is going to be required to self-quarantine for 14 days. Now, the reason they changed it, I suspect, is because we have something called the Privileges and Immunities Clause of the Constitution, which says basically

that one state can't discriminate against the citizens of another state. So you can't say in Rhode Island, we're passing a law which says that Rhode Islanders are allowed to smoke weed, but anyone from New York in possession of weed is going to jail. That's not how this works. If you're going to extend certain privileges to your own citizens, it has to be for everybody. You have to uniformly apply the laws. And also the Equal Protection Clause of the 14th Amendment would apply to that. So Rhode Island, my suspicion is they did the thing against New Yorkers. Someone went, dude, the 14th Amendment says you can't do that. They're like, oh, shoot. They decided to amend it. But when they amended it, they turned around and said, well, now it applies to everybody

no matter where they're from, even if they're from Rhode Island. If they're coming in from out of state and they must self-quarantine for 14 days. And so that would be likely to withstand constitutional, not likely, it would be more likely to withstand constitutional scrutiny. The other problem is that crossing state borders is fundamentally a federal issue. So in Delaware, for example, I know that they shut down the state roads and they were closing state roads and telling people from out of state, you can't drive around on our state roads, but they weren't doing it on the interstates, which are maintained by the federal government. So everybody's always asked, well, what would happen? And in Contagion, right, that movie with Matt

Damon. So in that movie, they closed down the interstates, they closed down all the state borders. They didn't do that this time. They didn't do that in the real. And we have to ask ourselves why. I suspect it's because the plague wasn't deadly enough. I think probably it would have happened if it had been 25% CFR, then maybe even those constitutional provisions would have award suspending. But also the federal system and the state system, you know, the states can't turn around and start discriminating against federal traffic. In Connecticut, we have that issue with tolling. And so they want to introduce tolls on our roads. And they want to toll out-of-state drivers only, but not in-state drivers. Of course, you can't do that because that's an unfair

burdening of interstate commerce. It's discriminating against citizens of other states, all kinds of constitutional issues with it. And so people have been going back and forth on whether tolls should be implemented or instituted here in Connecticut. The same thing applies when you're looking at border controls. If a governor of a state could conceivably order a stay-at-home order and say, listen, everybody in Connecticut must not leave their homes except for essential travel, which would have the effect of not permitting people to go travel to other states if it were non-essential because they wouldn't be allowed on that state's roads. But it can't be something which discriminates against other citizens. Florida has discriminated. They said

any flights from Connecticut or New York must self-quarantine. I think actually they banned flights from Connecticut and New York. And then anyone who managed to get in through, I mean, who wouldn't want people from Connecticut in their state? We are just the most wonderful, nice, you know, we've got a really high per capita GDP. We wear seersucker and Nantucket red and boat shoes. I don't get it. But somehow these other states decided they didn't want us around. it's it's mind-blowing that uh that they didn't want our presence to want to be graced by our presence in their states but like i see where they were coming from because connecticut is actually now more of a hot spot i think than new york in certain respects because fairfield county which

is adjacent to new york got swamped with new yorkers leaving new york and so as a consequence they're a little bit earlier in the curve than the rest of uh the northeast including new york city and new jersey so you know i get it i see why people are doing it i doubt there will be litigation arising from it because basically it's moot and no one's going to care that they couldn't travel through Rhode Island. So it's not really worth their time and money to bring the case. Maybe we'll get one, but I suspect the case would be dismissed for mootness. Yeah. And I guess, can they do something where they say, we'll allow food deliveries or some sort of supply chain type transportation, but we won't allow what I'll consider like retail or

residential travel, I guess, like you as an individual are applied different rules than, let's say, a corporation trying to actually get supplies, whether they're medical or non-medical? Yeah. So when you read these orders, most of the orders carve out, when they refer to non-essential travel, they're really referring to people who live in the state. So in terms of trucking and things like that, trucking is not affected, food deliveries are not affected. And that's primarily because it's not the state's, it's not really within the state's power to do it because that's a federal issue. The Commerce Clause says that Congress has the power to regulate that and not the states. So if the states did say, listen, we're closing our borders and no

trucking is allowed in, I suspect they'd get a tap on the shoulder from President Trump or at least one of the Department of Justice's attorneys saying, all right, well, we can get an injunction and prevent you from doing that in like two seconds flat. So maybe you want to reconsider that policy. So I don't think we're going to see anything like that unless really the federal government would have to be on board with that in order for that to happen uh and even so you would see emergency lawsuits almost immediately if that level of lockdown were instituted got it um and then for business owners themselves whether they're technology companies your founders venture capital uh back type companies or small businesses what are the things that they should be thinking

through right now from a legal perspective and both from a uh reporting uh but also operating their business and all of the federal funds that are flowing, et cetera. Like how are you talking to clients about that right now? Yeah. You know, most, most clients were a little, most people were a little shell shocked in the first two weeks of this. Right. So except for the people who've been prepping like crazy, I have one, I have one client who's also prepping. He's like, whatever, don't care. He's going to keep building my business. So I have some of those clients. I like those clients very much. Other businesses, depending on where they are kind of in their funding cycle, you'll see businesses that are currently in the middle of raising if now is not a great

for obvious reasons now is not a great time to raise um so businesses that are raising are obviously looking they're staring down the barrel of a gun uh and so they've had to make some pretty some of them event that i know of have had to make some very aggressive moves in terms of staff cuts and other things and pay cuts and you you name it and applying for sba assistance and all the rest of it in order to push out their runway to a point where they're comfortable that they'll be able to raise around during the intervening period. Businesses that are revenue neutral are obviously in fairly good shape. Businesses that have storefronts and other things are obviously in not particularly good shape. So that's especially if they're not digitally enabled.

So they're struggling really to deal with like taking orders over the phone and things like that. So for example, in my town, we have a local butcher and that's where we go do most of our shopping. And so they're taking orders over the phone. They could have a web app, which would do all this really well. They're just not keyed up for it. And so it just doesn't exist. So maybe in the future it will. And then generally speaking, businesses that are well-funded, just kind of, they're sitting back, they're waiting, they're maybe holding off on some discretionary legal spending. So we've seen some things where, as an attorney, of course, someone comes in and they're like, well, I want to go sue that guy. And they're like, cool,

awesome. Like, let's go. Like, let's get started. I'm happy to start running that clock and going an app in the sky for you. And sometimes you see people coming in with really strong claims. And this can even be with business interruption insurance. And they'll say, listen, we know that we have this insurance policy and we know that we want to make this claim, but right now is not the time to throw down a retainer and struck counsel and begin moving forward on it. So we've seen a lot of companies that even if they're in a decent cashflow position, they don't know the uncertainty is preventing them from actually initiating those actions. When things become a little more certain, I'm very much expecting that those will turn into very concrete pieces of litigation or dealmaking or whatever else needs to be done.

And there's going to be a bit of a backlog to address it. So that's kind of the range. If you're venture-funded and you're running out of runway, everyone's slamming on the brakes, firing all their people, and preparing for the worst. If you're venture-funded and you've got plenty of runway, then you're in pretty good shape and people are just kind of sitting back, riding it out, and positioning. and particularly software companies this is a huge opportunity for software companies to start disrupting paper-based or continue i should say disrupting paper-based businesses there are a whole bunch of different video conferencing uh software that's coming out so we're on zoom right now uh zoom has taken a lot of heat from the u.s government from google from the state of new york

uh personally gab.com is launching one next week called on gab um which is just totally totally sui generis new offering where you don't even need a gab account and i've taken a look at it I've taken it for a test drive. It's pretty cool. So I'm looking forward to that and some other things. And yeah, I mean, it's going to be really interesting to see where things go. But I don't think it looks like this is going to wrap up at least for certain parts of the country in three or four weeks where we're going to start reopening again gradually and

slowly and companies will have a better idea of where they sit in the landscape. Yeah. Are there any things that change in the way that kind of legally that the companies operate, state taxes and anything that you see there that's like a pothole that people just need to be aware of? Or is it pretty much a lot of it is more, we won't know for three or four weeks until kind of the dust settles? I think that it'll be interesting to see what happens with rent abatements ordered by states. I think that those are probably constitutionally questionable because they are takings. So the landlords can't simply have their rent taken away without just

compensation. There are common law contractual mechanisms that people are going to start to invoke, particularly if these rents and long-term contracts drag on that they can't avail themselves of. So I expect there's going to be a lot of fighting over that. There's probably a lot of rent being withheld. There's probably a lot of evictions that have been suspended. And so there's going to be a very big backlog of work in order to clear all of that. So that, I think, is going to be the big one, is kind of starting to reconcile all the payments that haven't been made. When America finally comes out of this, all that reconciliation is going to start happening. The other thing I think that prudent businesses will do, although not all businesses, when

I ran a small law firm, I always made sure I had three to six months of runway in the bank, right? So I considered it a luxury to have that. But basically, my first billing cycle as an independent lawyer, I was like, cool, I'm not taking a draw this month. I'm not taking a draw that month. I want to make sure that I have enough OpEx that if the phone doesn't ring for 180 days, I can go into the office, sit there, twiddle my thumbs, shitpost on Twitter.

And, and I can go home and sleep at night. Right. So that to do that, you had to be really, really frugal at the beginning of the practice. And also I couldn't do things like I wasn't running my practice out of a WeWork in Manhattan. I deliberately made the choice to qualify in Connecticut instead of New York because I would get admitted more quickly and the real estate was cheaper. And so basically I could set up this little sort of practice in the middle of nowhere for not a lot of money and then service tech clients essentially remote from the middle of the woods, which is pretty cool. So that kind of arrangement where you have maybe satellite offices or you start moving people into smaller towns out of New York, so you have a little more inbuilt

resiliency, I think we're going to see more of that, particularly if there's a second wave of this in the fall and the cities once again have to close down. These businesses are not going to want to be operating or vulnerable, exposed to cities. I think now we see that it's not enough to simply have offices in different cities, right? So if you have a company and you've got offices in Boston, New York, DC, Philadelphia, San Francisco, and Houston, right? All of your offices are currently closed

and all of your people are currently locked in their apartments. So they're not really able to do too much. If you have offices in Wyoming, guess what? Chances are your people can go in, they can run a printer, do whatever else, take phone calls. So I think Wyoming has closed all non-essential businesses, but if you've got a one-man office or something like that, for a while, you could go in and do those things. So it'll be interesting to see how people decide

to allocate their resources after this, because exposure to cities is now a new category of risk. And so I think people are going to want to diversify away from that. For sure. Before we finish up, anything on the crypto front that you think is noteworthy or worth paying attention to? Yeah. I think on the crypto front, everything has been COVID. So I haven't actually been looking at crypto too closely. The big one, I think, was the Telegram. The biggest thing of the last month or two was the Telegram litigation. So what happened was Telegram, the SEC, I'm sorry, the SEC applied for a preliminary injunction

against Telegram to restrict them or to restrain them from distributing ton tokens to U.S. and global investors. Telegram then countered and said, listen, we should at least be able to distribute to overseas investors under Reg S, you know, so they can go and trade these things and do whatever and forget, put the U.S. issue to one side. The court stepped in and said, actually, no. Well, our view, the court's view, was that the entire telegram scheme, right, the coin, the marketing, the SaaS, all of it together constituted the security, right? And that's a really big kind of Catholic, small C Catholic view of how these transactions should be regulated.

So Jay Clayton and the SEC to date haven't really asked for that. They haven't really regulated on the basis that that's the case so if we've seen for example ethereum totally got a free pass and was allowed 100 through despite the fact that it was very clearly conducted as an icf and as an investment program right they just said it's proof of work we're not going to pay attention to it we're not interested by the time they got to eos and block one you're looking at something which has a little more security like it's launched in 2017 at uh at the at the big bitcoin conference in new york there's a billboard in times square they get dinged with a 24 million dollar fine the SEC doesn't really require too much further other than that. Then we get the telegram and kick,

for example, which are the two big ones that are fighting in court. And they're saying, well, you didn't enforce against all these guys. Well, we're just doing the same thing, except we sold it under SAFT and the tokens are what people, whatever. And the court said, actually, no, we're going to take a really big view of this, a very wide view of this and incorporate the entire scheme within the definition of security. And if that's the case, it basically means that there is no ico market in the united states now or ever um so you'll have to proof of work coins i think or whatever that might look like uh proof of work issuance is likely to take precedence going forward uh over proof of stake proof of stake has some other issues um you know around securities

laws how staking is treated from an investment contract perspective but basically the u.s has sent a really clear signal that if you want to roll a cryptocurrency you can if you want to mine it you can but you have to be doing something which is structured like bitcoin and not structured like like a block one eos or telegram sale that's the big news of the market sounds good for bitcoin yeah everything is good for bitcoin always absolutely uh before we finish up uh favorite book ever um the same society by eric from what is that so eric from was a psychoanalyst who um who practiced in germany back in like the 1930s and 40s and 50s and he was also a marxist philosopher uh so he was part of what's known as the frankfurt school of critical theory and so

what he did was he sought to understand um psychology and psychological issues that his patients suffered and that ordinary people suffered in the context of uh you know the the productive pressures placed on them by capitalism and so not it was designed as a critique of capitalism it was not designed to as an economic critique of capitalism he didn't try to refute any of the economic or distributed benefits of it but he was simply describing uh the effect that doing things like you know so if you ask someone what do you do right that question the answer is what we're going to not it's that's not actually what you're asking you're asking what is your profession and what pays you money is that what do you do i wake up in the morning

right i go outside i go for a run i listen to the birds uh i like to i like to clip daffodils and put them in a little pot. That's why I have a, my sister has a little poodle puppy. I like to say hello to the puppy and play fetch with them. That's what I do. But the pervasive nature of market exchange in our society means that when someone asks, what do you do? It's really, what do you do from nine to five? So he examines that in that book and basically says, listen, I think a lot of the anxieties that we have around being human are derived from the fact that we're economic animals and we don't really have a full understanding that we're economic animals. So we're not able to put distance between ourselves and the economics. And so it's not the

most libertarian book in the world, but equally, he doesn't call for, in that book, he doesn't really call for government intervention or redistribution or anything else. He's just saying, listen, we have to be aware that these are the consequences of choosing the way of life that we have chosen here in the West. And it's an interesting viewpoint. For sure. Believer in aliens? um aliens yes little green men no extraterrestrial life like as a problem as a matter of probability if you listen to someone like max tagmark um you know the math apparently i'm not a mathematician i'm an attorney but apparently the math says the universe is infinite and if that's true it means

that somewhere you know one to the 100th to the 100th meters from here uh there are exact copies of us having the exact same conversation in a Hubble volume that's identical to our own. So they would be aliens just as much as a bacterium on Mars in that respect. So I think the math says that aliens exist, but I think the math also says that we're unlikely to meet them. Yeah, I think that's a pretty fair analysis of the situation after asking so many people about this. What one question you have for me to finish up? Nothing really, just glad to finally hop on your show. This is awesome. You're the first person not to ask a question.

You should win an award for that. Well, hey, I don't ask the questions. I'm a big listener. So that's, you know, I'm a big listener. Anyway, this is awesome. Thank you very much. I really appreciate it. For sure.

Where can people find you online? I'm Preston J. Byrne, B-Y-R-N-E on Twitter. And you can find everything else from there. Awesome, man. Well, I appreciate it very much. I think people are going to enjoy this. There's a lot of questions circulating around the constitutional nature of what's going on in the world.

So I think this will help unpack some of that. Awesome. Thanks very much. Good to talk to you. I appreciate you listening and see you next time on off the chain.