June 17, 2025 • 36 mins
Former federal prosecutor Robert Mintz, a partner at McCarter & English, discusses the judge dismissing a juror in the Sean Combs trial. David Voreacos, a Bloomberg legal reporter, discusses Harvard’s case against the Trump administration. Emily Siegel, Bloomberg Law senior reporter, discusses a mysterious ad attacking litigation finance. June Grasso hosts.
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Speaker 1 (00:02):
This is Bloomberg Law with June Grossel from Bloomberg Radio.
Speaker 2 (00:08):
Juror drama at the Sean Diddy Combes trial even before
deliberations begin, the judge dismissed jural number six yesterday, despite
the defense's concerns that putting in a white alternate for
the black juror would make the jury less diverse and
another juror maybe in jeopardy for speaking about the case.
(00:29):
Joining me is former federal prosecutor Robert Mintz, a partner
maccarter in English, Bob tell us what happened with jural
number six.
Speaker 3 (00:37):
Even before we got to the close of the trial
and deliberations in front of the jury. One of the jurors,
Jurer number six, was removed from the panel by the
judge after it was determined that the juror had been
less than candid about where he resided during the jury
selection process. He apparently indicated that he lived in the Bronx,
(01:00):
which is part of the Southern District of New York,
but later information surfaced that he actually lived with his
girlfriend in New Jersey, which is not within the Southern
District of New York and not even within the district
where the trial is taking place, and the court will
say that you cannot be sitting on the jury unless
you reside within the district. So that was ground to
(01:22):
remove the juror, and the judge found that there was
nothing that could be done to repair the juror's credibility since,
according to the judge, he had apparently been less than
candid about where he was living.
Speaker 2 (01:35):
The trial is in its sixth week. Do the attorneys
have a feel for which jurors may be leaning in
their direction.
Speaker 3 (01:44):
Throughout the trial? It's typical for the defense and the
prosecution to be forming opinions about which jurors they think
may be favoring their case. Of course, nobody really knows
what's going on, because the jurors aren't saying anything but
based upon their body laning, which perhaps based upon the
eye contact that they're making with witnesses, eye contact they
(02:05):
may be making with a defendant, just the way they
conduct themselves in the jury box. During the trial, it's
inevitable that both the prostitution and the defense formed some
belief as to which jurors may be favoring them as
a trial unfold. In this case, when the judge decided
that Jurors number six had to be removed. There was
(02:26):
an objection by the Combs defense team, saying that it
would create a mistrial. This was only one of two
black men that was on the panel, and in this case,
what you had was the removal of a black, middle
aged man who was now replaced by the ultramate who
happened to be an older white man. The defense argued
that that was unfair, that it created a racial imbalance
(02:49):
in the jury, but the judge ruled that race is
not something that he can consider in terms of removal
of a juror. Is something that is beyond the scope
of what is relevant for consideration as to whether this
juror can continue to sit on the jury panel, And
they therefore remove Juris number six over the objections of
(03:11):
the defense, the.
Speaker 2 (03:12):
Judge saying that he can't consider race. Do judges when
they're seeding a jury consider the racial diversity of the panel.
Speaker 3 (03:22):
Well, what the case laws says is that you cannot
discriminate against jurors based upon their race. So, for example,
throughout what's called bladder which is a process by which
both the defense and the prosecution select jurors, attorneys are
allowed to ask various questions about potential jurors in order
(03:44):
to determine whether or not they would like them to
sit on the jury panel. They ask questions to try
to learn about their background, whether they're being truthful, whether
they think that they might be biased, and more importantly,
from the defense side, they look at their life experience
to decide whether or not it's somebody who they think
could connect with a defendant who would be sympathetic to
(04:06):
the situation that the defendants found themselves in and ultimately
find the defense credible. When you're the prosecution, on the
other hand, you're looking for jurors who are more law
and order, people who follow the rules, people who believe
in the rule of law, and people who are going
to go into the trial with a mindset that favors
the prosecution in the sense that they tend to believe
(04:28):
law enforcement testimony unless there's a reason not to. The
only time that race comes up during the blas Deer
process is if there's an allegation by the defense that
in some way the prosecution is trying to stack the
deck by removing minorities or by removing people through the
prosecution fields should not be on the jury for reasons
(04:52):
that are discriminatory. In that case, the judge can actually
question the witness and question the prosecutors or the defense
about their reasons for trying to remove ajuror. Then, if
a judge finds those reasons to be impermissible, the judge
can force the prosecution to accept ajuror that they would
otherwise try to reject.
Speaker 2 (05:12):
Obviously, there are alternates in case something like this does happen,
but dismissing a juror is not something a judge does lightly.
Speaker 3 (05:21):
It's not an ideal situation from the standpoint of the
judge to have to replace a juror mid trial, because
it does raise questions about not only the conduct of
the individual juror, but sometimes it also raises a question
about whether other jurors may have been infected by improper
conduct by the juror who's replaced. For example, if the
(05:42):
allegation is that a juror was communicating with somebody outside
of the jury about the case, or was receiving information
about the trial other than what's being presented in the courtroom,
that raises a serious concern that results in the removal
of not only that or, but sometimes Judges then have
to question the entire jury panel to make sure that
(06:05):
any evidence that was not presented the trial that may
have come from the outside did not infect other jurors
that has not tanked the entire jury.
Speaker 2 (06:13):
All of a sudden, seeing that a juror has been
dismissed after sitting there for weeks and weeks, does that
have an effect or could it have an effect on
the other jurors?
Speaker 3 (06:23):
Well, yeah, that's a great question, because the jurors obviously
will be aware that there's a person who's been sitting
there next to them for six weeks now, who's been
sitting in the jury box, who's been spending time with
them outside of the courtroom, and suddenly that person is
not there, and the judge is not going to explain
the actual reason for that juror's dismissal. Judges will typically
(06:46):
tell other jurors that there are various reasons during the
course of a trial that a juror might be replaced
by an alternate, and that juror number six in this
case is being replaced by an alternate without giving them
reasons as to why that curor has been removed. But
human nature being what it is there's no question that
jurors will talk among themselves as to why that juror
(07:09):
has been removed, and it's just a distraction and an
injection of information into the jury room that judges would
like to avoid. So they really try not to remove
jurors during the course of a trial, but in some
cases it's inevitable, and in this case, there was this
lack of candor that the judge found that this juror
(07:30):
may not really be a resident of the Southern District
of New York. And if the juror was not removed,
if the juror was allowed to remain on the panel,
that's something that I'm sure the judge was concerned would
be an issue on appeal. And so the judge really
has to protect the record, he has to protect the
trial so that ultimately, however it turns out, it will
(07:51):
stand up on appeal.
Speaker 2 (07:53):
So now you have a forty one year old black
man being replaced by a fifty seven year old white man,
leaving just one black man on the jury. Is the
chain here an issue for appeal?
Speaker 3 (08:06):
Well, I think we could expect the defense, if they
get a conviction here, to raise it on appeal. Certainly,
but it's difficult for the defense to argue when a
black cur is replaced by a whiteer only on the
basis of race, because what that does is it presupposes
that a black cur would necessarily favor the defense simply
(08:29):
because the defendant also happens to be black. That's not
going to be enough to get a trial overturned. There
has to be something more to it in order for
them to really argue that they were unfairly prejudiced by
the removal of that cur.
Speaker 2 (08:43):
It's unusual enough to have one juror dismissed mid trial,
but now there's a possibility that a second juror might
be dismissed. The facts are a little sketchy, but it
appears that there are concerns that Jury number seven might
have spoken improperly about the case.
Speaker 3 (09:02):
When a juror is torn in, they are given very
strict rules that they are not to discuss the case
outside of the courtroom. They're not to look at social media,
they're not to read the news. They're not to talk
about the case during their commute into the trial or
on their way home. They're not to talk about the
case with their spouse and the judge will instruct yours
(09:24):
not to talk about the case with their fellow jurors
until deliberations begin. They basically live inside a bubble and
do not talk about what's going on in the courtroom,
so they are under very strict rules, and sometimes in
a high profile case this as this, judges will even
go so far as the sequestered jurors, which means jurors
(09:45):
do not get to live at home, they live in
a hotel. They have no contact with the outside world.
They can't watch TV, they can't read the newspaper. They
are really cut off from all outside sources, so that
their entire focus is only what is going on in
the courtroom.
Speaker 2 (10:00):
At the end of the.
Speaker 3 (10:00):
Day, jurors have to make their decision about the guilt
of the defendant or whether or not the prosecution met
its burden of proof based solely upon the evidence that's
presented in the courtroom and not based upon any outside
the information here. There is some allegation at this point
that the judge is looking into whether or not a
juror may have communicated with somebody outside of the courtroom,
(10:24):
and it's a violation of their oath to provide any
information about what's going on in the trial to anybody
outside the trial. It's also a violation for that curor
to receive any information about what's going on in the
trial from sources outside of the courtroom. So this is
a serious allegation that the judge is going to have
to spend some time getting to the bottom of the case.
(10:46):
Cannot go on if there's the possibility that there is
a tainted juror, because that could not only result in
the removal of that juror, but the judge may well
have to question other jurors to determine whether or not
any information outside of the jury room and from outside
the courtroom may have painted that jury, whether information that
(11:06):
was not presented in the courtroom may have been discussed
by jurors. This is going to be a bit of
a side show. It's something that judges do not like
to have to engage in because it's a distraction that
will slow the case down and it may ultimately, in
the worst case scenario, result in a mistrial, which means
they would have to try the case all over again.
(11:27):
So we'll have to see how this plays out. But
the mere fact that there's a suggestion that a juror
may have been communicating with somebody outside of the courtroom
is a very troubling development for the prosecution.
Speaker 2 (11:39):
Bob, do you believe that jurors really don't talk to
anyone about the case, even when the case takes months,
They don't go home and say something to their husband
or wife.
Speaker 3 (11:53):
Well, that is clearly what they are instructed to do,
now whether they do it in actual practice, Most of
the time, the prosecution, the defense, and the judge don't
really know. There's a reason why the judge is always
reluctant to peer behind the curtain and find out exactly
what's going on in the jury room, because once you
(12:13):
start asking juror's questions about what's going on, you don't
exactly know what you are going to find. So unless
there is some real clear cut evidence that a jury
is doing something improper, that a juror is communicating with
somebody outside of the courtroom, or that a juror has
received information from outside of the trial that they shouldn't
be receiving, judges are reluctant to go down the road
(12:37):
to start questioning jurors during the course of a trial.
But sometimes, like in this case, the judge simply has
no choice. The judge can't ignore an allegation that this
jury is possibly tainted, that one juror may have improperly
communicated with somebody outside of the courtroom, and so he
has no choice but to begin this process. Thing that
(13:00):
troubles judges and troubles prosecutors is once you go down
this road, you really don't know what you're gonna find
when the judge starts to question yours. So that's why
something judges are reluctant to do, and they only do
it as in this circumstance where the judge really has
no other choice.
Speaker 2 (13:18):
So the judge here is dealing with a very high
profile case. Obviously there are news reports about every witness,
et cetera. And this morning the judge was livid and
he asked both the prosecution and the defense about an
online article that appeared to include details from a sealed proceeding.
(13:41):
He said, the court imposed a gag order on the government,
the defend, and all attorneys for the defense, and anyone
involved was made accountable. What happened here may result in
civil or criminal contempt chargers for all involved.
Speaker 3 (13:54):
Well, you don't usually find defense lawyers or prosecutors talking
about steal procede with somebody outside of the courtroom. Lawyers
generally know that that would be a serious violation that
the judge would take serious action against them, perhaps holding
them in contempt or even a criminal violation for violating
the stealing order and talking about a proceeding that was
(14:17):
under steal with the media or somebody outside of the courtroom.
But it can happen, and in a case like this
where the media scrutiny has been so intense, where there's
really been a complete saturation of coverage of every day
of this trial, of every witness, of people talking about
them on cable news, in the print, on the radio,
(14:38):
the news of this trial has really become almost a
circus in the sense of the level of coverage here.
And so there's a lot of information out there, and
the judge needs to make sure that he maintains control
of that courtroom, and that means not only controlling what
information may get in front of the jury, but also
controlling the lawyers and making sure that the attorneys are
(15:01):
playing their proper role arguing their case in the courtroom
and not communicating with any outside sources improperly. I'm certainly
not communicating about proceedings that were held under seal.
Speaker 2 (15:12):
Thanks so much, Bob. That's Robert Mints of Macarter and
English coming up next, Harvard versus Trump again. I'm June Grosso.
When you're listening to Bloomberg. Harvard is the main target
of President Donald Trump's efforts to force universities to crack
down on anti semitism, remove perceived political bias, and eliminate diversity,
(15:34):
equity and inclusion programs. The university is already suing over
the Trump administration's freezing of more than two point six
billion dollars in federal research funding. The latest legal fight
concerns the administration's refusal to give foreign students visas to
attend Harvard. Boston federal Judge Allison Burrows has already issued
(15:55):
a temporary order on Trump's proclamation, and at a hearing yesterday,
she extended that order until June twenty third, while she
weighs Harvard's request for a preliminary injunction. Joining me is
Bloomberg legal reporter David Voriakis, who was at that hearing
in Boston. David tell us about Trump's June fourth proclamation.
Speaker 4 (16:16):
The Trump administration said that the United States was going
to bar visas for foreign nationals seeking to enter the
United States to study or do research at Harvard, and
that the administration also had the ability to review current
students and researchers already in the United States to see
(16:39):
if they should be removed as well. And Harvard sued immediately,
and Judge Allison Burrows in Boston quickly entered a temporary
restraining order, essentially maintaining the status quo and making sure
that the Trump administration could not enforce the order.
Speaker 2 (17:00):
So is the administration doing anything like this to any
other university.
Speaker 4 (17:06):
The administration is investigating a number of other universities and
has indicated that it will suspend funding to other universities.
But the extent of the broad based assault on Harvard
has no match at any other university in the United States.
Speaker 2 (17:26):
So you were at the hearing yesterday. What was the
main issue at the hearing?
Speaker 4 (17:31):
The issue is whether Judge Burrows should issue a preliminary
injunction which would extend her temporary restraining order and cutting
through the legal language. Should she continue to block the
Trump administration from enforcing this proclamation while the litigation plays
(17:52):
out It would not be a final order, but it
would give Harvard some breathing room so that it could plan.
If the proclamation went into effect, it could not accept
foreign students or researchers for the upcoming semester, and that
could have a potentially devastating effect on its student population,
(18:16):
its finances, and its research program.
Speaker 2 (18:19):
I was surprised at how many students at Harvard are
from other countries.
Speaker 4 (18:25):
It's twenty seven percent of the population, which is at
a high proportion, but not as high as some other universities.
But it also would have a significant financial impact on
the university.
Speaker 2 (18:38):
So is the government's claim that Harvard is a national
security risk? What is the government's claim here?
Speaker 4 (18:44):
The government's made several different claims over the last couple
of months. One is that Harvard has inadequately addressed the
problem of anti semitism on campus. Harvard acknowledges that there
have been problems on camp and that it's taken steps
to address them in the area of anti semitism. The
(19:05):
Trump administration has also said that there's not sufficient viewpoint diversity,
that it's too much of a woke university to liberal leaning,
and that it needs to increase its ideological viewpoint. Across
the spectrum, the Trump administration has also said that Harvard
(19:25):
has done too much research and taken too much money
from the Chinese government in the hundreds of millions of dollars.
And then the final area is that the Trump administration
has demanded records from Harvard about how it's disciplined students
who've gotten into criminal or other administrative problems at the school.
(19:51):
The administration says that Harvard's only turned over records on
three students, which is clearly inadequate, and that the failure
to adequately disclose records on student discipline poses a national
security threat.
Speaker 2 (20:09):
Just say there is a lack of diversity. How does
lack of diversity affect national security? How does you know
anti semitism affect national security? I just don't understand the
connection between what they're arguing is wrong with Harvard.
Speaker 4 (20:23):
As I understand it. What the Trump administration is arguing
is not that all failings a Harvard pose national security risks.
The national security risk that they are citing is that
they're not turning over information on foreign students, which means
that the United States cannot vet those students who are
(20:43):
coming into the country or who are already in the country.
Speaker 2 (20:48):
And what is Harvard's response.
Speaker 4 (20:51):
Harvard's response is that this is all impermissible retaliation for
Harvard exercising its First Amendment rights to hire the teachers
that it wants, admit the students that it wants, and
teach the curriculum that it wants, and that it refused
(21:11):
the administration's demands in mid April to make a number
of changes. And because of that refusal, the administration has
engaged in an unceasing campaign of retaliation with a number
of punitive steps. And it says that the law is
on its side when it comes to the First Amendment,
that it protects academic freedom, and it says that its
(21:35):
First Amendment privileges Trump if you will the United States
claim that the administration has unfettered ability to control visas
and national security.
Speaker 2 (21:50):
Was the judge tougher on one side than the other?
Were her questions leaning in one direction or another? I
know she did say I can't imagine that anything you've
described a place only to Harvard, right.
Speaker 4 (22:01):
It was a little hard to reach Judge Burrow's but
given her track record in which she's sort of consistently
ruled in Harvard's favor. I would bet that she's likely
to grant a preliminary injunction here, But she clearly is
troubled by this question of whether the Trump administration is
in fact following the law in exercising its discretion to
(22:27):
exclude a class of people who are entering the United
States to study at Harvard. She asked a number of
probing questions of the Harvard lawyer, suggesting that maybe it's
a bit of a close call in her mind, but
it was hard to tell for sure.
Speaker 2 (22:44):
Tell us about what the requirements are for getting a
preliminary injunction.
Speaker 4 (22:49):
There are four legal factors, but the ones that really
matter are the likelihood of success in the litigation as
it progresses, and whether the action causes irreparable harm to
the party that's suing. And Harvard says that the harm
here is overwhelming and devastating, and that they are likely
(23:13):
to succeed in showing that the Trump administration is retaliating
in violation of its First Amendment free speech rights.
Speaker 2 (23:23):
What else has the Trump administration done to Harvard?
Speaker 4 (23:27):
Primarily, it's frozen about two point six billion dollars in
research grants, which is the subject of a separate lawsuit
that Harvard filed and that is also before Judge Burrows.
It's also been subject to different government investigations, and Trump
has said that he's considering pulling the tax exempt status
(23:50):
of Harvard, which means the school would have to essentially
pay a lot more money to operate.
Speaker 2 (23:58):
It's not legal for him to direct the IRS to
pull the tax exempt status of a university of anybody.
Speaker 4 (24:04):
Well, they're trying to change the law that would make
it legal. I'm not sure that it's legislation, but I
think that they are posing new regulations through the Treasury
Department right now. The procedure is that it has to
go through IRS, and there's a whole long due process
procedure that any organization that is threatened with losing its
(24:27):
tax exempt status has an opportunity to have a hearing,
they can appeal, and it goes on for some time.
As I understand it, Treasury Secretary Besson would have that
exclusive authority to determine whether an institution can maintain its
tax exempt status. I don't know how that's going to
(24:49):
play out, but that's my understanding of where it's headed.
Speaker 2 (24:53):
These all in front of Judge Burrows because one is
in front of her, so they're signing the other ones
to her too.
Speaker 4 (24:59):
I assume that the Clerk's office consider these to be
related cases, and so typically civil litigation will move as
a group if cases are related before a single judge.
Speaker 2 (25:12):
Do you have any idea when she'll have an opinion
on the preliminary injunction.
Speaker 4 (25:16):
She indicated that she would rule by June twenty third,
which is next Monday. There was a temporary restraining order
that was in place until the end of the week.
The government agreed to allow her to extend that until Monday,
June twenty third, and then she said that she's likely
to rule by then.
Speaker 2 (25:37):
Do you know anything about the attorneys that are representing Harvard.
Speaker 4 (25:40):
There are a number of attorneys in the litigation, and
the one that argued on Monday was from Generin Block,
so there were a number of Generan Block lawyers there.
They're also represented by Quinn Emmanuel lawyers, and people from
the Harvard Council's office were there, but the Justice Department
(26:01):
had a single lawyer.
Speaker 2 (26:03):
Well. As you know, the government team is often dwarfed
by the defense teams in high profile cases like this,
and interestingly, Harvard is being represented by jennerin Block, which
was one of the law firms targeted by Trump, one
of the law firms that fought back and a federal
judge struck down that executive order at the end of
(26:27):
last month. Thanks so much, David. That's David voriankis Bloomberg
Legal reporter. During the June first episode of The Totally
Football Show with James Richardson, a podcast produced by The
New York Times, listeners in the Washington, DC area heard
a mysterious ad.
Speaker 1 (26:48):
Did you know that foreign investors are quietly funding lawsuits
and American courts through a practice called third party litigation funding?
Shadowy Overseas funders are paying to sue American companies in
our courts, and they don't pay a time in US
taxes if there is an award or settlement. They profit
tax free from our legal system, while US companies are
(27:09):
tied up in court and American families pay the price
to the tune of five thousand dollars a year.
Speaker 2 (27:17):
The sixty second spot highlights an emerging strategy trying to
turn consumers against the plaintiff's bar and litigation finance. Joining
me is Bloomberg Law senior reporter Emily Siegel, who's written
about this. Emily tell us about this ad and where
it came from.
Speaker 5 (27:36):
A colleague was listening to that podcast and sent me
a recording of the ad, and it was an advertisement
that was basically anti litigation funding. They called them shadowy
overseas funders and indicated that they don't pay any US
taxes if there's an award or settlement, And there is
no disclosure on the ad, which is required by the
(27:58):
Federal Election Commission, and so we don't actually know who
was behind it.
Speaker 2 (28:03):
I mean, how much do foreign investors invest in litigation financing?
Speaker 4 (28:10):
Do we know?
Speaker 5 (28:11):
We don't really know. I think that there are some
funders that have sovereign wealth funds involved in as their investors,
but we don't really know the extent of how much
that's actually happening. So kind of unclear how often there
are foreign investors involved. And also if you speak to
any funders, the investors don't really play any role in
(28:33):
case selection or how the case proceeds, or looking at documents.
So even if there are foreign investors, at least from
the funders I've spoken to, they'd say that there's no
real involvement from any of the investors.
Speaker 2 (28:46):
So what is the purpose of this ad on a podcast?
Speaker 5 (28:50):
It seems to be pushing for a particular piece of
legislation by Senator Tom Tillis which would add a forty
one percent tax on litigation finance profits. It doesn't name
that bill, but it does say that there is a
solution and it would be taxing the industry, and it
also urged the listeners to contact lawmakers and Republicans on
(29:15):
Capitol Hill who could make the measure go forward.
Speaker 2 (29:18):
Tell us a little about that bill.
Speaker 5 (29:20):
Sure, So basically it would add at least a forty
one percent tax. There are other provisions in the bill
that indicate it could even be higher than that, and
you know, a lot of the funders in the States
are really unhappy with it. It was recently, as of
last night, included in the text of the tax package,
the Big Beautiful Bill, and it was just updated a
(29:43):
new version of the tax and healthcare provisions and it
was added in there. So I think there's a lot
of people in the industry, the litigation finance industry, who
are concerned that this can end up going through.
Speaker 2 (29:54):
So this would force foreign investors to pay taxes.
Speaker 5 (29:59):
It would force all investors, all litigation funders, whether they're
foreign or not, to pay this tax, and that includes
hedge funds and includes private equity firms that are also
doing litigation finance. They would be taxed at this separate rate.
Speaker 2 (30:13):
There have been efforts at reform for decades. How is
this different from what we've seen before.
Speaker 5 (30:21):
This version of the attack to litigation finance is new,
but there have been I think at least three or
four other congressional bills that have been introduced over the
past couple of years. None of them have been successful,
and they mostly focus on disclosure, which would mean that
parties would have to file with the court whether they
are receiving litigation funding. And so this is a totally
(30:45):
different type of attack on the industry, and I think
this one has funders more concerned because it has more
of a chance going somewhere if it's part of the
tax package.
Speaker 2 (30:56):
So with these ads, they're trying to turn consumer against
the plaintiff's bar and litigation finance. I mean, is this
an effort to turn the public against these large class
action towards suits.
Speaker 5 (31:12):
A lot of these funders are doing mass towards in
class action lawsuits, but a lot of them are just
doing you know, corporate business to business sort of litigation.
You know, one large business tough is another. So I
don't know if the public has enough knowledge about this
entire industry. It's it's new compared to other industries, and
(31:34):
I think there's not a great sense of what it
is they actually do. And there's a lot of coinflation
between litigation finance and plaintiffs who receive some sort of
loan against their settlement for paying rent for their medical bills,
which are completely different types of industries. So I don't
know that there's a lot of information out there, and
(31:55):
a lot of these like the podcast ad, and there
are other ads that are I've about in the story
that are sort of an attempt to educate the public
on what litigation finances, but it comes from a certain perspective.
Speaker 2 (32:08):
What are the costs. I know that the Chamber of
Commerce has done an analysis of how much the toward
system actually costs.
Speaker 5 (32:16):
Yeah, they say it could cost in each ceuse fold
around I think four thy two hundred dollars, And then
it is basically saying that litigation finance contributes to the
rise in lawsuits it's hard to discern how they're getting
that information if we're not really aware of how often
(32:37):
litigation finance is used. So that's their calculations, and that
the calculations from the US Chamber of Commerce are often
used in these advertisements.
Speaker 2 (32:47):
Are there companies that are actively lobbying on this?
Speaker 5 (32:52):
Yeah, I think, you know, there are a bunch of
different companies. I think Intel has lobbied on this. They're
the recipient of a lot of patent lawsuits. Uber has
funded one of the groups that is putting out advertisements,
and they're also the recipient of a lot of lawsuits.
So there are some big corporations. The insurance industry also,
(33:14):
you know, has put out letters and support of bills
like Fattilla's bill, and because they are usually again on
the other side of cases that are being funded.
Speaker 2 (33:23):
Now there's a new group called Protecting American Consumers Together
or PACKED. What's their goal?
Speaker 5 (33:33):
They seem to be sort of generally looking at tort
reform and pushing for tort reform while also pushing for
regulation of the litigation finance industry, and they do that
through advertisements and education materials that they put out there.
They say they were not behind this podcast ad. They
do have some funding from Uber and they launched in
(33:55):
January and they already had some success. Was a bill
of tort reform package in Georgia that passed earlier this year,
and it also included a litigation finance regulation provision.
Speaker 2 (34:07):
Does another group make America affordable again? What's its push?
Speaker 5 (34:12):
They have not, at least outwardly put anything out against
litigation finance, but they're pushing for something called loser pays,
which would mean that the person or the entity that
files the lawsuit would have to pay the other side's
legal bills if they lose. It seems to be the
majority of their ads or focused on loser pays.
Speaker 2 (34:31):
And is that something that President Trump has commented on.
Speaker 5 (34:34):
I think that he has commented on it a little bit.
There was a press conference in January during the California
wildfires where someone asks him about it, and he seemed
to like the idea. He said it would cut down costs,
So it is something that he's expressed in interest in.
He has directed the Justice Department to demand bonds from
court challengers when judges temporarily halt his policies, but I
(34:59):
don't think he's actually put out anything explicitly about loser
pace and.
Speaker 2 (35:03):
Our litigation funders doing anything to fight back.
Speaker 5 (35:07):
Well, they have a group called the International Legal Finance
Association which does a lot of their lobbying, and they
have hired a new Republican lobbyist named Pete Kirkham according
to a recent disclosure, So they are actively lobbying against
this bill and that's pretty much their goal. I attended
a conference a couple of weeks ago where other funders
(35:29):
were urging people to join the group as members so
that they could pay us to help fight against this
sort of legislation.
Speaker 2 (35:37):
And as far as the ad itself is, it still playing.
Speaker 5 (35:42):
So I reached out to The Athletic, which was where
we first discovered the ad. They're owned by The New
York Times, and they said that they had requested from
their vendor to have the ad taken down. The vendors
a company called a Cast and they do a lot
of podcasts. So I reached out to them and they
said they've put issue to takedown notice and that the
(36:02):
ad would not play on any of their platforms anymore.
It just has something that it was an error. They
would not say who paid for the ad.
Speaker 2 (36:11):
So the mystery continues. Thanks so much, Emily. That's Emily Siegel,
Bloomberg Law Senior Reporter. And that's it for this edition
of The Bloomberg Law Show. Remember you can always get
the latest legal news on our Bloomberg Law Podcast. You
can find them on Apple Podcasts, Spotify, and at www
dot Bloomberg dot com, slash podcast Slash Law, and remember
(36:34):
to tune into The Bloomberg Law Show every weeknight at
ten pm Wall Street Time. I'm June Grosso and you're
listening to Bloomberg
This is Bloomberg Law with June Grossel from Bloomberg Radio.
Speaker 2 (00:08):
Juror drama at the Sean Diddy Combes trial even before
deliberations begin, the judge dismissed jural number six yesterday, despite
the defense's concerns that putting in a white alternate for
the black juror would make the jury less diverse and
another juror maybe in jeopardy for speaking about the case.
(00:29):
Joining me is former federal prosecutor Robert Mintz, a partner
maccarter in English, Bob tell us what happened with jural
number six.
Speaker 3 (00:37):
Even before we got to the close of the trial
and deliberations in front of the jury. One of the jurors,
Jurer number six, was removed from the panel by the
judge after it was determined that the juror had been
less than candid about where he resided during the jury
selection process. He apparently indicated that he lived in the Bronx,
(01:00):
which is part of the Southern District of New York,
but later information surfaced that he actually lived with his
girlfriend in New Jersey, which is not within the Southern
District of New York and not even within the district
where the trial is taking place, and the court will
say that you cannot be sitting on the jury unless
you reside within the district. So that was ground to
(01:22):
remove the juror, and the judge found that there was
nothing that could be done to repair the juror's credibility since,
according to the judge, he had apparently been less than
candid about where he was living.
Speaker 2 (01:35):
The trial is in its sixth week. Do the attorneys
have a feel for which jurors may be leaning in
their direction.
Speaker 3 (01:44):
Throughout the trial? It's typical for the defense and the
prosecution to be forming opinions about which jurors they think
may be favoring their case. Of course, nobody really knows
what's going on, because the jurors aren't saying anything but
based upon their body laning, which perhaps based upon the
eye contact that they're making with witnesses, eye contact they
(02:05):
may be making with a defendant, just the way they
conduct themselves in the jury box. During the trial, it's
inevitable that both the prostitution and the defense formed some
belief as to which jurors may be favoring them as
a trial unfold. In this case, when the judge decided
that Jurors number six had to be removed. There was
(02:26):
an objection by the Combs defense team, saying that it
would create a mistrial. This was only one of two
black men that was on the panel, and in this case,
what you had was the removal of a black, middle
aged man who was now replaced by the ultramate who
happened to be an older white man. The defense argued
that that was unfair, that it created a racial imbalance
(02:49):
in the jury, but the judge ruled that race is
not something that he can consider in terms of removal
of a juror. Is something that is beyond the scope
of what is relevant for consideration as to whether this
juror can continue to sit on the jury panel, And
they therefore remove Juris number six over the objections of
(03:11):
the defense, the.
Speaker 2 (03:12):
Judge saying that he can't consider race. Do judges when
they're seeding a jury consider the racial diversity of the panel.
Speaker 3 (03:22):
Well, what the case laws says is that you cannot
discriminate against jurors based upon their race. So, for example,
throughout what's called bladder which is a process by which
both the defense and the prosecution select jurors, attorneys are
allowed to ask various questions about potential jurors in order
(03:44):
to determine whether or not they would like them to
sit on the jury panel. They ask questions to try
to learn about their background, whether they're being truthful, whether
they think that they might be biased, and more importantly,
from the defense side, they look at their life experience
to decide whether or not it's somebody who they think
could connect with a defendant who would be sympathetic to
(04:06):
the situation that the defendants found themselves in and ultimately
find the defense credible. When you're the prosecution, on the
other hand, you're looking for jurors who are more law
and order, people who follow the rules, people who believe
in the rule of law, and people who are going
to go into the trial with a mindset that favors
the prosecution in the sense that they tend to believe
(04:28):
law enforcement testimony unless there's a reason not to. The
only time that race comes up during the blas Deer
process is if there's an allegation by the defense that
in some way the prosecution is trying to stack the
deck by removing minorities or by removing people through the
prosecution fields should not be on the jury for reasons
(04:52):
that are discriminatory. In that case, the judge can actually
question the witness and question the prosecutors or the defense
about their reasons for trying to remove ajuror. Then, if
a judge finds those reasons to be impermissible, the judge
can force the prosecution to accept ajuror that they would
otherwise try to reject.
Speaker 2 (05:12):
Obviously, there are alternates in case something like this does happen,
but dismissing a juror is not something a judge does lightly.
Speaker 3 (05:21):
It's not an ideal situation from the standpoint of the
judge to have to replace a juror mid trial, because
it does raise questions about not only the conduct of
the individual juror, but sometimes it also raises a question
about whether other jurors may have been infected by improper
conduct by the juror who's replaced. For example, if the
(05:42):
allegation is that a juror was communicating with somebody outside
of the jury about the case, or was receiving information
about the trial other than what's being presented in the courtroom,
that raises a serious concern that results in the removal
of not only that or, but sometimes Judges then have
to question the entire jury panel to make sure that
(06:05):
any evidence that was not presented the trial that may
have come from the outside did not infect other jurors
that has not tanked the entire jury.
Speaker 2 (06:13):
All of a sudden, seeing that a juror has been
dismissed after sitting there for weeks and weeks, does that
have an effect or could it have an effect on
the other jurors?
Speaker 3 (06:23):
Well, yeah, that's a great question, because the jurors obviously
will be aware that there's a person who's been sitting
there next to them for six weeks now, who's been
sitting in the jury box, who's been spending time with
them outside of the courtroom, and suddenly that person is
not there, and the judge is not going to explain
the actual reason for that juror's dismissal. Judges will typically
(06:46):
tell other jurors that there are various reasons during the
course of a trial that a juror might be replaced
by an alternate, and that juror number six in this
case is being replaced by an alternate without giving them
reasons as to why that curor has been removed. But
human nature being what it is there's no question that
jurors will talk among themselves as to why that juror
(07:09):
has been removed, and it's just a distraction and an
injection of information into the jury room that judges would
like to avoid. So they really try not to remove
jurors during the course of a trial, but in some
cases it's inevitable, and in this case, there was this
lack of candor that the judge found that this juror
(07:30):
may not really be a resident of the Southern District
of New York. And if the juror was not removed,
if the juror was allowed to remain on the panel,
that's something that I'm sure the judge was concerned would
be an issue on appeal. And so the judge really
has to protect the record, he has to protect the
trial so that ultimately, however it turns out, it will
(07:51):
stand up on appeal.
Speaker 2 (07:53):
So now you have a forty one year old black
man being replaced by a fifty seven year old white man,
leaving just one black man on the jury. Is the
chain here an issue for appeal?
Speaker 3 (08:06):
Well, I think we could expect the defense, if they
get a conviction here, to raise it on appeal. Certainly,
but it's difficult for the defense to argue when a
black cur is replaced by a whiteer only on the
basis of race, because what that does is it presupposes
that a black cur would necessarily favor the defense simply
(08:29):
because the defendant also happens to be black. That's not
going to be enough to get a trial overturned. There
has to be something more to it in order for
them to really argue that they were unfairly prejudiced by
the removal of that cur.
Speaker 2 (08:43):
It's unusual enough to have one juror dismissed mid trial,
but now there's a possibility that a second juror might
be dismissed. The facts are a little sketchy, but it
appears that there are concerns that Jury number seven might
have spoken improperly about the case.
Speaker 3 (09:02):
When a juror is torn in, they are given very
strict rules that they are not to discuss the case
outside of the courtroom. They're not to look at social media,
they're not to read the news. They're not to talk
about the case during their commute into the trial or
on their way home. They're not to talk about the
case with their spouse and the judge will instruct yours
(09:24):
not to talk about the case with their fellow jurors
until deliberations begin. They basically live inside a bubble and
do not talk about what's going on in the courtroom,
so they are under very strict rules, and sometimes in
a high profile case this as this, judges will even
go so far as the sequestered jurors, which means jurors
(09:45):
do not get to live at home, they live in
a hotel. They have no contact with the outside world.
They can't watch TV, they can't read the newspaper. They
are really cut off from all outside sources, so that
their entire focus is only what is going on in
the courtroom.
Speaker 2 (10:00):
At the end of the.
Speaker 3 (10:00):
Day, jurors have to make their decision about the guilt
of the defendant or whether or not the prosecution met
its burden of proof based solely upon the evidence that's
presented in the courtroom and not based upon any outside
the information here. There is some allegation at this point
that the judge is looking into whether or not a
juror may have communicated with somebody outside of the courtroom,
(10:24):
and it's a violation of their oath to provide any
information about what's going on in the trial to anybody
outside the trial. It's also a violation for that curor
to receive any information about what's going on in the
trial from sources outside of the courtroom. So this is
a serious allegation that the judge is going to have
to spend some time getting to the bottom of the case.
(10:46):
Cannot go on if there's the possibility that there is
a tainted juror, because that could not only result in
the removal of that juror, but the judge may well
have to question other jurors to determine whether or not
any information outside of the jury room and from outside
the courtroom may have painted that jury, whether information that
(11:06):
was not presented in the courtroom may have been discussed
by jurors. This is going to be a bit of
a side show. It's something that judges do not like
to have to engage in because it's a distraction that
will slow the case down and it may ultimately, in
the worst case scenario, result in a mistrial, which means
they would have to try the case all over again.
(11:27):
So we'll have to see how this plays out. But
the mere fact that there's a suggestion that a juror
may have been communicating with somebody outside of the courtroom
is a very troubling development for the prosecution.
Speaker 2 (11:39):
Bob, do you believe that jurors really don't talk to
anyone about the case, even when the case takes months,
They don't go home and say something to their husband
or wife.
Speaker 3 (11:53):
Well, that is clearly what they are instructed to do,
now whether they do it in actual practice, Most of
the time, the prosecution, the defense, and the judge don't
really know. There's a reason why the judge is always
reluctant to peer behind the curtain and find out exactly
what's going on in the jury room, because once you
(12:13):
start asking juror's questions about what's going on, you don't
exactly know what you are going to find. So unless
there is some real clear cut evidence that a jury
is doing something improper, that a juror is communicating with
somebody outside of the courtroom, or that a juror has
received information from outside of the trial that they shouldn't
be receiving, judges are reluctant to go down the road
(12:37):
to start questioning jurors during the course of a trial.
But sometimes, like in this case, the judge simply has
no choice. The judge can't ignore an allegation that this
jury is possibly tainted, that one juror may have improperly
communicated with somebody outside of the courtroom, and so he
has no choice but to begin this process. Thing that
(13:00):
troubles judges and troubles prosecutors is once you go down
this road, you really don't know what you're gonna find
when the judge starts to question yours. So that's why
something judges are reluctant to do, and they only do
it as in this circumstance where the judge really has
no other choice.
Speaker 2 (13:18):
So the judge here is dealing with a very high
profile case. Obviously there are news reports about every witness,
et cetera. And this morning the judge was livid and
he asked both the prosecution and the defense about an
online article that appeared to include details from a sealed proceeding.
(13:41):
He said, the court imposed a gag order on the government,
the defend, and all attorneys for the defense, and anyone
involved was made accountable. What happened here may result in
civil or criminal contempt chargers for all involved.
Speaker 3 (13:54):
Well, you don't usually find defense lawyers or prosecutors talking
about steal procede with somebody outside of the courtroom. Lawyers
generally know that that would be a serious violation that
the judge would take serious action against them, perhaps holding
them in contempt or even a criminal violation for violating
the stealing order and talking about a proceeding that was
(14:17):
under steal with the media or somebody outside of the courtroom.
But it can happen, and in a case like this
where the media scrutiny has been so intense, where there's
really been a complete saturation of coverage of every day
of this trial, of every witness, of people talking about
them on cable news, in the print, on the radio,
(14:38):
the news of this trial has really become almost a
circus in the sense of the level of coverage here.
And so there's a lot of information out there, and
the judge needs to make sure that he maintains control
of that courtroom, and that means not only controlling what
information may get in front of the jury, but also
controlling the lawyers and making sure that the attorneys are
(15:01):
playing their proper role arguing their case in the courtroom
and not communicating with any outside sources improperly. I'm certainly
not communicating about proceedings that were held under seal.
Speaker 2 (15:12):
Thanks so much, Bob. That's Robert Mints of Macarter and
English coming up next, Harvard versus Trump again. I'm June Grosso.
When you're listening to Bloomberg. Harvard is the main target
of President Donald Trump's efforts to force universities to crack
down on anti semitism, remove perceived political bias, and eliminate diversity,
(15:34):
equity and inclusion programs. The university is already suing over
the Trump administration's freezing of more than two point six
billion dollars in federal research funding. The latest legal fight
concerns the administration's refusal to give foreign students visas to
attend Harvard. Boston federal Judge Allison Burrows has already issued
(15:55):
a temporary order on Trump's proclamation, and at a hearing yesterday,
she extended that order until June twenty third, while she
weighs Harvard's request for a preliminary injunction. Joining me is
Bloomberg legal reporter David Voriakis, who was at that hearing
in Boston. David tell us about Trump's June fourth proclamation.
Speaker 4 (16:16):
The Trump administration said that the United States was going
to bar visas for foreign nationals seeking to enter the
United States to study or do research at Harvard, and
that the administration also had the ability to review current
students and researchers already in the United States to see
(16:39):
if they should be removed as well. And Harvard sued immediately,
and Judge Allison Burrows in Boston quickly entered a temporary
restraining order, essentially maintaining the status quo and making sure
that the Trump administration could not enforce the order.
Speaker 2 (17:00):
So is the administration doing anything like this to any
other university.
Speaker 4 (17:06):
The administration is investigating a number of other universities and
has indicated that it will suspend funding to other universities.
But the extent of the broad based assault on Harvard
has no match at any other university in the United States.
Speaker 2 (17:26):
So you were at the hearing yesterday. What was the
main issue at the hearing?
Speaker 4 (17:31):
The issue is whether Judge Burrows should issue a preliminary
injunction which would extend her temporary restraining order and cutting
through the legal language. Should she continue to block the
Trump administration from enforcing this proclamation while the litigation plays
(17:52):
out It would not be a final order, but it
would give Harvard some breathing room so that it could plan.
If the proclamation went into effect, it could not accept
foreign students or researchers for the upcoming semester, and that
could have a potentially devastating effect on its student population,
(18:16):
its finances, and its research program.
Speaker 2 (18:19):
I was surprised at how many students at Harvard are
from other countries.
Speaker 4 (18:25):
It's twenty seven percent of the population, which is at
a high proportion, but not as high as some other universities.
But it also would have a significant financial impact on
the university.
Speaker 2 (18:38):
So is the government's claim that Harvard is a national
security risk? What is the government's claim here?
Speaker 4 (18:44):
The government's made several different claims over the last couple
of months. One is that Harvard has inadequately addressed the
problem of anti semitism on campus. Harvard acknowledges that there
have been problems on camp and that it's taken steps
to address them in the area of anti semitism. The
(19:05):
Trump administration has also said that there's not sufficient viewpoint diversity,
that it's too much of a woke university to liberal leaning,
and that it needs to increase its ideological viewpoint. Across
the spectrum, the Trump administration has also said that Harvard
(19:25):
has done too much research and taken too much money
from the Chinese government in the hundreds of millions of dollars.
And then the final area is that the Trump administration
has demanded records from Harvard about how it's disciplined students
who've gotten into criminal or other administrative problems at the school.
(19:51):
The administration says that Harvard's only turned over records on
three students, which is clearly inadequate, and that the failure
to adequately disclose records on student discipline poses a national
security threat.
Speaker 2 (20:09):
Just say there is a lack of diversity. How does
lack of diversity affect national security? How does you know
anti semitism affect national security? I just don't understand the
connection between what they're arguing is wrong with Harvard.
Speaker 4 (20:23):
As I understand it. What the Trump administration is arguing
is not that all failings a Harvard pose national security risks.
The national security risk that they are citing is that
they're not turning over information on foreign students, which means
that the United States cannot vet those students who are
(20:43):
coming into the country or who are already in the country.
Speaker 2 (20:48):
And what is Harvard's response.
Speaker 4 (20:51):
Harvard's response is that this is all impermissible retaliation for
Harvard exercising its First Amendment rights to hire the teachers
that it wants, admit the students that it wants, and
teach the curriculum that it wants, and that it refused
(21:11):
the administration's demands in mid April to make a number
of changes. And because of that refusal, the administration has
engaged in an unceasing campaign of retaliation with a number
of punitive steps. And it says that the law is
on its side when it comes to the First Amendment,
that it protects academic freedom, and it says that its
(21:35):
First Amendment privileges Trump if you will the United States
claim that the administration has unfettered ability to control visas
and national security.
Speaker 2 (21:50):
Was the judge tougher on one side than the other?
Were her questions leaning in one direction or another? I
know she did say I can't imagine that anything you've
described a place only to Harvard, right.
Speaker 4 (22:01):
It was a little hard to reach Judge Burrow's but
given her track record in which she's sort of consistently
ruled in Harvard's favor. I would bet that she's likely
to grant a preliminary injunction here, But she clearly is
troubled by this question of whether the Trump administration is
in fact following the law in exercising its discretion to
(22:27):
exclude a class of people who are entering the United
States to study at Harvard. She asked a number of
probing questions of the Harvard lawyer, suggesting that maybe it's
a bit of a close call in her mind, but
it was hard to tell for sure.
Speaker 2 (22:44):
Tell us about what the requirements are for getting a
preliminary injunction.
Speaker 4 (22:49):
There are four legal factors, but the ones that really
matter are the likelihood of success in the litigation as
it progresses, and whether the action causes irreparable harm to
the party that's suing. And Harvard says that the harm
here is overwhelming and devastating, and that they are likely
(23:13):
to succeed in showing that the Trump administration is retaliating
in violation of its First Amendment free speech rights.
Speaker 2 (23:23):
What else has the Trump administration done to Harvard?
Speaker 4 (23:27):
Primarily, it's frozen about two point six billion dollars in
research grants, which is the subject of a separate lawsuit
that Harvard filed and that is also before Judge Burrows.
It's also been subject to different government investigations, and Trump
has said that he's considering pulling the tax exempt status
(23:50):
of Harvard, which means the school would have to essentially
pay a lot more money to operate.
Speaker 2 (23:58):
It's not legal for him to direct the IRS to
pull the tax exempt status of a university of anybody.
Speaker 4 (24:04):
Well, they're trying to change the law that would make
it legal. I'm not sure that it's legislation, but I
think that they are posing new regulations through the Treasury
Department right now. The procedure is that it has to
go through IRS, and there's a whole long due process
procedure that any organization that is threatened with losing its
(24:27):
tax exempt status has an opportunity to have a hearing,
they can appeal, and it goes on for some time.
As I understand it, Treasury Secretary Besson would have that
exclusive authority to determine whether an institution can maintain its
tax exempt status. I don't know how that's going to
(24:49):
play out, but that's my understanding of where it's headed.
Speaker 2 (24:53):
These all in front of Judge Burrows because one is
in front of her, so they're signing the other ones
to her too.
Speaker 4 (24:59):
I assume that the Clerk's office consider these to be
related cases, and so typically civil litigation will move as
a group if cases are related before a single judge.
Speaker 2 (25:12):
Do you have any idea when she'll have an opinion
on the preliminary injunction.
Speaker 4 (25:16):
She indicated that she would rule by June twenty third,
which is next Monday. There was a temporary restraining order
that was in place until the end of the week.
The government agreed to allow her to extend that until Monday,
June twenty third, and then she said that she's likely
to rule by then.
Speaker 2 (25:37):
Do you know anything about the attorneys that are representing Harvard.
Speaker 4 (25:40):
There are a number of attorneys in the litigation, and
the one that argued on Monday was from Generin Block,
so there were a number of Generan Block lawyers there.
They're also represented by Quinn Emmanuel lawyers, and people from
the Harvard Council's office were there, but the Justice Department
(26:01):
had a single lawyer.
Speaker 2 (26:03):
Well. As you know, the government team is often dwarfed
by the defense teams in high profile cases like this,
and interestingly, Harvard is being represented by jennerin Block, which
was one of the law firms targeted by Trump, one
of the law firms that fought back and a federal
judge struck down that executive order at the end of
(26:27):
last month. Thanks so much, David. That's David voriankis Bloomberg
Legal reporter. During the June first episode of The Totally
Football Show with James Richardson, a podcast produced by The
New York Times, listeners in the Washington, DC area heard
a mysterious ad.
Speaker 1 (26:48):
Did you know that foreign investors are quietly funding lawsuits
and American courts through a practice called third party litigation funding?
Shadowy Overseas funders are paying to sue American companies in
our courts, and they don't pay a time in US
taxes if there is an award or settlement. They profit
tax free from our legal system, while US companies are
(27:09):
tied up in court and American families pay the price
to the tune of five thousand dollars a year.
Speaker 2 (27:17):
The sixty second spot highlights an emerging strategy trying to
turn consumers against the plaintiff's bar and litigation finance. Joining
me is Bloomberg Law senior reporter Emily Siegel, who's written
about this. Emily tell us about this ad and where
it came from.
Speaker 5 (27:36):
A colleague was listening to that podcast and sent me
a recording of the ad, and it was an advertisement
that was basically anti litigation funding. They called them shadowy
overseas funders and indicated that they don't pay any US
taxes if there's an award or settlement, And there is
no disclosure on the ad, which is required by the
(27:58):
Federal Election Commission, and so we don't actually know who
was behind it.
Speaker 2 (28:03):
I mean, how much do foreign investors invest in litigation financing?
Speaker 4 (28:10):
Do we know?
Speaker 5 (28:11):
We don't really know. I think that there are some
funders that have sovereign wealth funds involved in as their investors,
but we don't really know the extent of how much
that's actually happening. So kind of unclear how often there
are foreign investors involved. And also if you speak to
any funders, the investors don't really play any role in
(28:33):
case selection or how the case proceeds, or looking at documents.
So even if there are foreign investors, at least from
the funders I've spoken to, they'd say that there's no
real involvement from any of the investors.
Speaker 2 (28:46):
So what is the purpose of this ad on a podcast?
Speaker 5 (28:50):
It seems to be pushing for a particular piece of
legislation by Senator Tom Tillis which would add a forty
one percent tax on litigation finance profits. It doesn't name
that bill, but it does say that there is a
solution and it would be taxing the industry, and it
also urged the listeners to contact lawmakers and Republicans on
(29:15):
Capitol Hill who could make the measure go forward.
Speaker 2 (29:18):
Tell us a little about that bill.
Speaker 5 (29:20):
Sure, So basically it would add at least a forty
one percent tax. There are other provisions in the bill
that indicate it could even be higher than that, and
you know, a lot of the funders in the States
are really unhappy with it. It was recently, as of
last night, included in the text of the tax package,
the Big Beautiful Bill, and it was just updated a
(29:43):
new version of the tax and healthcare provisions and it
was added in there. So I think there's a lot
of people in the industry, the litigation finance industry, who
are concerned that this can end up going through.
Speaker 2 (29:54):
So this would force foreign investors to pay taxes.
Speaker 5 (29:59):
It would force all investors, all litigation funders, whether they're
foreign or not, to pay this tax, and that includes
hedge funds and includes private equity firms that are also
doing litigation finance. They would be taxed at this separate rate.
Speaker 2 (30:13):
There have been efforts at reform for decades. How is
this different from what we've seen before.
Speaker 5 (30:21):
This version of the attack to litigation finance is new,
but there have been I think at least three or
four other congressional bills that have been introduced over the
past couple of years. None of them have been successful,
and they mostly focus on disclosure, which would mean that
parties would have to file with the court whether they
are receiving litigation funding. And so this is a totally
(30:45):
different type of attack on the industry, and I think
this one has funders more concerned because it has more
of a chance going somewhere if it's part of the
tax package.
Speaker 2 (30:56):
So with these ads, they're trying to turn consumer against
the plaintiff's bar and litigation finance. I mean, is this
an effort to turn the public against these large class
action towards suits.
Speaker 5 (31:12):
A lot of these funders are doing mass towards in
class action lawsuits, but a lot of them are just
doing you know, corporate business to business sort of litigation.
You know, one large business tough is another. So I
don't know if the public has enough knowledge about this
entire industry. It's it's new compared to other industries, and
(31:34):
I think there's not a great sense of what it
is they actually do. And there's a lot of coinflation
between litigation finance and plaintiffs who receive some sort of
loan against their settlement for paying rent for their medical bills,
which are completely different types of industries. So I don't
know that there's a lot of information out there, and
(31:55):
a lot of these like the podcast ad, and there
are other ads that are I've about in the story
that are sort of an attempt to educate the public
on what litigation finances, but it comes from a certain perspective.
Speaker 2 (32:08):
What are the costs. I know that the Chamber of
Commerce has done an analysis of how much the toward
system actually costs.
Speaker 5 (32:16):
Yeah, they say it could cost in each ceuse fold
around I think four thy two hundred dollars, And then
it is basically saying that litigation finance contributes to the
rise in lawsuits it's hard to discern how they're getting
that information if we're not really aware of how often
(32:37):
litigation finance is used. So that's their calculations, and that
the calculations from the US Chamber of Commerce are often
used in these advertisements.
Speaker 2 (32:47):
Are there companies that are actively lobbying on this?
Speaker 5 (32:52):
Yeah, I think, you know, there are a bunch of
different companies. I think Intel has lobbied on this. They're
the recipient of a lot of patent lawsuits. Uber has
funded one of the groups that is putting out advertisements,
and they're also the recipient of a lot of lawsuits.
So there are some big corporations. The insurance industry also,
(33:14):
you know, has put out letters and support of bills
like Fattilla's bill, and because they are usually again on
the other side of cases that are being funded.
Speaker 2 (33:23):
Now there's a new group called Protecting American Consumers Together
or PACKED. What's their goal?
Speaker 5 (33:33):
They seem to be sort of generally looking at tort
reform and pushing for tort reform while also pushing for
regulation of the litigation finance industry, and they do that
through advertisements and education materials that they put out there.
They say they were not behind this podcast ad. They
do have some funding from Uber and they launched in
(33:55):
January and they already had some success. Was a bill
of tort reform package in Georgia that passed earlier this year,
and it also included a litigation finance regulation provision.
Speaker 2 (34:07):
Does another group make America affordable again? What's its push?
Speaker 5 (34:12):
They have not, at least outwardly put anything out against
litigation finance, but they're pushing for something called loser pays,
which would mean that the person or the entity that
files the lawsuit would have to pay the other side's
legal bills if they lose. It seems to be the
majority of their ads or focused on loser pays.
Speaker 2 (34:31):
And is that something that President Trump has commented on.
Speaker 5 (34:34):
I think that he has commented on it a little bit.
There was a press conference in January during the California
wildfires where someone asks him about it, and he seemed
to like the idea. He said it would cut down costs,
So it is something that he's expressed in interest in.
He has directed the Justice Department to demand bonds from
court challengers when judges temporarily halt his policies, but I
(34:59):
don't think he's actually put out anything explicitly about loser
pace and.
Speaker 2 (35:03):
Our litigation funders doing anything to fight back.
Speaker 5 (35:07):
Well, they have a group called the International Legal Finance
Association which does a lot of their lobbying, and they
have hired a new Republican lobbyist named Pete Kirkham according
to a recent disclosure, So they are actively lobbying against
this bill and that's pretty much their goal. I attended
a conference a couple of weeks ago where other funders
(35:29):
were urging people to join the group as members so
that they could pay us to help fight against this
sort of legislation.
Speaker 2 (35:37):
And as far as the ad itself is, it still playing.
Speaker 5 (35:42):
So I reached out to The Athletic, which was where
we first discovered the ad. They're owned by The New
York Times, and they said that they had requested from
their vendor to have the ad taken down. The vendors
a company called a Cast and they do a lot
of podcasts. So I reached out to them and they
said they've put issue to takedown notice and that the
(36:02):
ad would not play on any of their platforms anymore.
It just has something that it was an error. They
would not say who paid for the ad.
Speaker 2 (36:11):
So the mystery continues. Thanks so much, Emily. That's Emily Siegel,
Bloomberg Law Senior Reporter. And that's it for this edition
of The Bloomberg Law Show. Remember you can always get
the latest legal news on our Bloomberg Law Podcast. You
can find them on Apple Podcasts, Spotify, and at www
dot Bloomberg dot com, slash podcast Slash Law, and remember
(36:34):
to tune into The Bloomberg Law Show every weeknight at
ten pm Wall Street Time. I'm June Grosso and you're
listening to Bloomberg
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