Special Edition: Neal Katyal on Challenging Trump's Global Tariffs

On this special edition of the show, Barry sits down with Neal Katyal, Milbank LLP partner and former acting Solicitor General of the US. Barry speaks with Katyal just days after his team won its challenge to President Donald Trump's sweeping global tariffs. They discuss the process of challenging President Trump's authority to impose steep tariffs on imports from other countries and what next steps could look like as the case makes its way through the US legal system. Plus, they talk about Katyal's career working on appellate and complex litigation, including arguing over 50 cases before the US Supreme Court.

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Episode Transcript

Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio News. This is Masters in
Business with Barry Ritholt on Bloomberg Radio.

Speaker 2 (00:16):
I know I say it every week, but this week
I have an extra extra special guest. Neil Kadial is
the former Solicitor General of the United States, where he
focused on appellate and complex litigation on behalf of the
Department of Justice. He has argued more than fifty cases

(00:37):
before the Supreme Court. He is the recipient of the
highest civilian award by the US Department of Justice, the
Edmund Randolph Award, which he received in twenty eleven. The
Chief Justice of the United States Supreme Court appointed him
to the Advisory Committee on Federal Appellate Rules. He has
won every accolade that an attorney can win, Litigator of

(01:01):
the Year, Top one hundred Lawyers, five hundred leaving Lawyers
in DC, the most financially innovative lawyer, on and on
the list goes. He just has a CV that is
really not to be believed. I reached out to Neil
because he was representing the Plainiffs in the big tariff

(01:23):
case Vos Selections versus Donald Trump, President, which he took
over after the Plainiffs won at the International Court of
Trade in DC. He argued the case in front of
a full on bank hearing all eleven judges in the
DC Court of Appeals. We recorded this on Wednesday, August

(01:50):
twenty seventh, a few days before Labor Day weekend. We
finished the recording and lo and behold. Two days later,
the decision comes down. He wins a resounding victory, seven
to four. The court very much bought into his arguments
that the tariffs and any sort of taxes, duties, levies

(02:12):
requires authorization from Congress. It is not within the purview
of the executive branch of the President. So once we
got that decision, I reached out to Neil again, and
on Sunday, over the holiday weekends, I hopped off the beach.
We got on the phone call for a half hour
and recorded what he thought of the results, what he

(02:32):
thought about the opinion, where the case is likely to
go from here, how things look in terms of the
odds that the Supreme Court are going to hear this.
I thought the entire conversation was absolutely fascinating, not just
because hey, this is news right now, and because he
won the case two days later. He's just such a thoughtful,

(02:55):
intelligent lawyer who really takes his role as an officer
of the court and helping to define the jurisprunes of
American law very very seriously. Just such a bright, thoughtful
guy who just wants us to respect the Constitution. I

(03:16):
thought the conversation was fascinating. I think you will also.
We'll start out with our PostScript the conversation after we
found out that Katiel's clients won at the appellate level,
and then we'll go to the entire our conversation we
had while we still didn't know what the outcome of
the case was, with no further ado, my discussion with

(03:39):
Appellet attorney Neil Kadial. First off, Neil, congratulations, you just
won a major repellate case in Vos Selections versus Donald Trump.
So congrats, Thank you so much.

Speaker 3 (03:56):
Yeah, I think I saw you and we had our
interview the day before the decision came down. The way
the Court of Appeals works like the US Supreme Court,
they never tell you in advance when a decision's coming down.
And indeed it was a little I think past five
o'clock on Friday, right before Labor Day, and I was
about to leave the office, and then I heard my
email ding and I look at it and I'm like, well,

(04:17):
I might as well see what this is. I assumed
it was just some you know, minor thing, and they're like, whoa,
it's the decision. And you know, Barry, they let me
know the decision at the very same time. They let
the world know, because otherwise, if they let me know
in advance, you know, that's private information. This is the
kind of information that does move markets. And so they

(04:39):
let the entire world know, including me, at the very
same time.

Speaker 2 (04:43):
So let's put this into a little timeline. We had
our recording Wednesday, August twenty seventh. The decision dropped around
five o'clock on Friday, August twenty ninth. Today is Sunday,
August thirty. First, everybody else is on the beach. I

(05:05):
know you're leaving for Europe in a couple of days,
but I wanted to just touch base with you and
try and figure out where this goes from here. So
let's start out with the decision. I thought the majority
decision seven to four your way. I thought it was
a pretty powerful refutation of the executive's ability to just

(05:29):
impose tariffs I don't want to say on a whim,
but lacking the specific following of the AIBA rules and
what an emergency actually is, can you address that a
little bit?

Speaker 3 (05:42):
Yeah, I think that the seven judges and the majority
were saying exactly what we've said all along, which is,
maybe these terrifts are a good idea, maybe they're a
bad idea, but they can't be imposed by the president's
pen alone. You got to go to Congress and get
that author as a that that's our constitutional system. And
what the seven judges said is that's exactly right. That

(06:05):
the Congress has never given the president such a sweeping
power to just do it on his own, and if
they did, they said it'd be unconstitutional. But they said
that isn't what's going on here. And the president has
an easy fix if he wants to. He could go
to Congress and seek approval for the tariffs that he wants.
That's what he did the first time around, as we

(06:26):
talked about last week. You know, that's something that failed
in Congress, and so maybe that's why he doesn't want
to do it. Obviously, these tariffs are highly unpopular, but nonetheless,
you know, the Congress is controlled by his party, and
you know that's the place to start. Don't run to
the federal courts to do what you can't do in Congress.

Speaker 2 (06:44):
So I want to talk about the dissent in a bid,
but let's just talk about what the appellate court did,
which I was somewhat confused by, and maybe you can
clarify this. They remand it back to the International Court
of Trade in d State, which is a US court
for findings about who this applies to. Like, it seems

(07:07):
sort of odd to say, well, and only might apply
to the litigants. What are we going to have seven
million cases on this tariffs? It would seem that either
it's constitutional or unconstitutional and that applies to everybody. Or
am I being naive?

Speaker 3 (07:22):
I think that's basically right Berry that I think ultimately
the question is are these tariffs legal or illegal? If,
as the Court of Appeals said, they're illegal, then the
vast vast majority of Trump's tariffs are unconstitutional, illegal, can't
be imposed, and people who've have them imposed, you know,
may have remedies and recourses. What the court also did, though,

(07:44):
and you're referring to a fairly technical part of the decision,
is it sent it case back to the lower court
to evaluate the scope of the remedies. And that's because
the US Supreme Court, just very recently, in the birthright
citizenship case, has announced some new ways of thinking about
relief on parties, in particular in class actions and things
like that. And so I think the court Federal Circuit

(08:06):
did the prudent thing here by just saying with respect
to that, i'd like we'd like the lower court to
evaluate it. I think that's pretty much a sideshow at
this point. My strong hunch is that the federal government
has a strong interest in resolving this question. After all,
this is a really you know, initiative of President Trump's.
It's been declared unconstitutional. So I think they're going to

(08:27):
go to the Supreme Court. I mean, again, I wish
that weren't the case. I wish they'd go to Congress,
which is the way that our constitution commands things. But
you know, according to the President's tweets and the like,
they want to go to the Supreme Court.

Speaker 2 (08:41):
So what is the process like for this to go
up to Scotus first, the remand back to the district
court not relevant, that's just a very specific remedy question.
Assuming the petition for sociari is filed by the government,

(09:03):
what are the options? What might the Supreme Court do?

Speaker 3 (09:06):
Yeah, so I think you're right to say that the
lower court proceedings on relief are relevant here. Indeed, the
Federal Circuit said that lower court has no role at
least until October fourteenth, because they wanted to give the
government time to file what's called a petition for cucuare,
which is a formal request to the US Supreme Court
to hear the case. The government is saying that in

(09:31):
these tweets by President the President and others, that they
will file that petition for cuchuari, ask the Supreme Court
to hear the case, and then it's obviously up to
the Supreme Court to decide. Statistically, when the government asks
them to hear a case, particularly one that has important consequences,
the court does hear the case. So the court very

(09:52):
well may set the case for oral argument, and then
there'll be the argument from the two sides as to
whether or not this lower court decision that we want
declaring President Trump's Taristan constitutional, whether that will be upheld
by the US Supreme Court.

Speaker 2 (10:07):
So I was kind of intrigued by the descent, which
I'm not a practicing attorney anymore, so I'm not up
to date in what is the latest thinking in terms
of art. But it sort of seemed like one of
the descents suggested that it's an emergency. If the president

(10:30):
declares in an emergency, kind of makes that word meaningless.
How did you read the significance of the descent and
what might it mean to the hearing if this ultimately
goes to the Supreme Court.

Speaker 3 (10:44):
I think that's exactly right on what you're saying, which is,
if the descent were right, it basically reads the word
emergency out of the statute. It gives carte blanche deference
to the president, and the Supreme Court in an earlier
case back in nineteen eleven, said you can't do that
with the word emergency, And here, I think Verry, the
other really important point is that the law that the

(11:05):
President is citing AIPA doesn't just talk about emergency. It
requires it to be unusual and extraordinary. And the president's
own executive order when he imposed these tariffs, said that
the trade deficits were persistent and gone on for fifty years,
and the opposite of the unusual and extraordinary. And look,

(11:25):
of course you want the president, in a genuine, true
emergency that's unusual and extraordinary, to have extra powers, because
if Congress can't meet to repel some threat or something
like that, you want the president to have some gap
billing power. This is the opposite of that. I mean,
Congress is in session, they're passing bill after bill and
the like, and of course they're controlled by the same

(11:47):
political party as the president. So the idea that Congress
can't act is you know, to use the technical legal
term poppycock.

Speaker 2 (11:55):
Coming up, we continue our conversation with a pellet litigator.
Neil Tu. I'm Barry Ridults. You're listening to Masters in
Business on Bloomberg Radio. Let's broaden this out a little bit.
I think this is an important case because I'm a
market participant and tariffs are attacks. They're a headwind to

(12:18):
consumer spending and other economic activities. But stepping back and
looking at this from a constitutional standard, how much of
this is focusing on how much authority the executive branch
of the US government has. Is this an attempt to

(12:39):
rebalance the three parts of government by this particular president,
or is this just no we want our tariffs, and
we want to stop all these bad things that the
tariffs will cure.

Speaker 3 (12:53):
Yeah, I view this decision not as a rebalancing of
our constitutional separation of powers up but rather a return
to our founder's original concept was, which was Congress makes
the laws, the president enforces them, the courts decide whether
those laws are legal or not. And here what happened
is you had a president who colored well outside of

(13:15):
the lines, and you know, asserted an extraordinary power that
no president in American history has ever asserted on his own.
And I think the court is doing here what the
courts have done time immemorial in other cases, whether it
was the seizure of the steel mills by President Truman
in nineteen fifty two, whether it was President Bush's law

(13:38):
free zone at Guantanamo after the horrific nine to eleven attacks,
whether it was you know, President Biden's student loan initiative programs.
In all of these cases, you've had presidents that try
and ascertain muscular powers and the court pushes back on them.
And this is I think a pretty extreme illustration of

(13:59):
a president and whose asserting powers that he has no
business asserting.

Speaker 2 (14:04):
So at the appellate level. It was seven to four
of the dissent was written by justice appointed by President Obama.
It's kind of a little bit surprising to me when
you look at the lay of the Supreme Court. I
know a lot of people tend to look at that
as Democrats versus Republicans. But the appallate attorneys, I know,

(14:28):
and the people who are constitutional lawyers tend to look
at it as originalists versus more modern interpreters. How are
you looking at this case when it gets now, assuming
it goes up to the Supreme Court, how are you
looking at the context of this case?

Speaker 3 (14:45):
I love the question because you know, oftentimes people say
things like, well, the Supreme Court is appointed by Republicans,
so they only wrote republican or nonsense like that. This
is not my experience. I mean, I've been lucky to
argue fifty two K is there, and I just don't
see it in the same way as those kind of
pundits see it. And you know, I think you're right

(15:07):
to say the decision by the seven to four courts
a good illustration of that. The dissent written by a
judge who was appointed by a democratic president. Our majority opinion,
the senior most judge, and the majority is Judge Lourie,
who was appointed by President Bush, but says that these
terrorists are unconstitutional. So I don't think it's the right
way to think about it. I think that there are

(15:29):
people who take constitutional limits more seriously and others who
want to defer and avoid getting the courts in the
middle of something. And so maybe that's one axis that
sometimes could be used to predict outcomes. But here I think,
no matter which way you look at it, the president
doesn't have this power. You know, we might wish he

(15:50):
had this power. It might be a good idea for
him to have this power. But our founders were as
clear as day in Article one, Section eight they said specifically,
the hour over duties is one given to the Congress,
not to the president.

Speaker 2 (16:05):
So there are a couple of key issues. This is
going to turn on the Constitutionality article on section eight,
the i EPO laws, and what is an emergency? Any
other factors that might drive this that we should be
aware of.

Speaker 3 (16:22):
Yeah, I think there's a couple. One is that the
Supreme Court in recent years has announced something called the
Major Questions Doctrine, and the idea of that doctrine is
to say, if Congress is giving the president some sort
of power, they don't hide it in vague terms. They
say it really expressly and clearly. You know Justice Scalia's
phrases that Congress doesn't hide elephants and mouseholes. And at

(16:46):
the oral argument, I took that to even further. I said,
you know, this isn't just an elephant in a mousehole,
it's a galaxy in a key hole. It's an extraordinary
set of powers given to the president that claimed by
the president. And you know, this doctrine Major Questions doctrine
has been used very by the US Supreme Court repeatedly
to strike down President Biden's initiatives, whether it's over greenhouse gases,

(17:10):
or whether it's over student loans, or whether it was
over COVID eviction moratoriums and things like that. And I
think that you know what the majority said in this
opinion that we won just a couple of days ago,
is hey, what's sauce for the goose? The sauce for
the gander. This applies to other presidential initiatives and including
of course this one here, and that it would be

(17:32):
a violation of the Major Questions doctrine for Congress who
have not even used the word tariff for duty or
anything like that in APA, and then to have a
president come along and say, ha, I can now do
whatever I want.

Speaker 2 (17:46):
So let's expand this a bit. How creative was it
of the administration to try and get tariffs imposed on RYEPA?
Is this something that's just wildly outside of what AEPA
originally was designed about.

Speaker 3 (18:07):
One hundred percent. Nobody, and I've read the legislative history
behind AEPA so very carefully, nobody thought that this was
about the tariff power. And so yes, they get a
a plus plus for creativity the Trump administration and coming
up with an argument that not only no one in
Congress thought, no president for fifty years has thought. Now,

(18:30):
creativity only gets you so far, because you have to
be at least somewhat faithful and accurate to the original
text and meaning of the law. And that's where I
think unfortunately they get n f and they fall down
on the job.

Speaker 2 (18:43):
So I have a pretty solid recollection of sitting in
constitutional law classes and occasionally seeing a decision that was
just perplexing. Although when you're looking at something that's a
century old, a dread Scott or a separate but equal

(19:05):
type of decision. Obviously, you're bringing a modern perspective. It's
very hard to see outside of that. I had the
same You and I spoke before we had the decision
come down. I was kind of perplexed that this was
even like a debate. It seems pretty obvious. None of
the normal rules for enacting tariffs, none of the procedures, policies,

(19:30):
or allocation of powers amongst branches of government was followed.
So what do you imagine the government's argument is going
to be at the Supreme Court level.

Speaker 3 (19:43):
It's very I think the secret about Supreme Court and
presidential power advocacy is that, I mean, no matter how
creative and ridiculous the argument is, if the president voices it,
it's a court case and it's going to be taken
seriously by everyone, because it's after all, the press. And
that's why, you know, when I was the president's top lawyer,

(20:03):
courtroom lawyer, I was very careful to only make the
arguments that I thought had very strong basis behind them,
because you don't want to diminish that credibility that the
government has with the US Supreme Court. Here, I do
think that the arguments are quite a stretch for the

(20:24):
administration to be making. And I think, you know, that's
what you saw reflected in the seven to four opinion.
So what do I think that the Solicitor General is
going to say to the Supreme Court. I think he's
going to say what he's been saying all along. The
President says he needs this power. It'd be dangerous to
unwind all of these deals and present it as a

(20:45):
fade to complete. And I just think that's the wrong
way to think about constitutional law, to allow a president
to do what he wants in the interim and then say, oh,
it would be too dangerous to unwind it. You know,
I think it's better to get the constitutional rules right
the first time.

Speaker 2 (21:04):
So some of the arguments I've seen from the administration
is not only are the tariffs complicated, and then we've
spent all this time and effort negotiating them, which this
would negate, but it would be a negative for the
global economy. You will cause economic distress around the world
if you throw these tariffs out. Seems like seems like

(21:26):
a little bit of a history onic claim.

Speaker 3 (21:29):
Well, I have two things to say about that, And
you know, and you know, we can defer to the
president about whether the claim is right or wrong, whether
it's histrionic or the like. Let's just say it's right.
Two things. One, If that's right, it walks right into
the constitutional problem, which is the major questions doctrine. Right
if the administration is saying, oh, the economy is going
to collapse without these things, that's exactly the kind of

(21:52):
major question that you think Congress has to decide, not
the president. Number one and number two, If it isn't histrionic,
if it's really right that the economy is going to collapse,
then it's the easiest thing in the world for the
President to go to Congress and seek authorization. I mean,
I don't know the Congress wants the US economy to
collapse in there, of course, members of his own political

(22:13):
party that are running Congress, so there's not even a
politics barrier or anything like that.

Speaker 2 (22:20):
So what are we missing? It seems like this doesn't
survive on a constitutional basis. AIBA doesn't authorize it. If
it's a major decision, take it to Congress. What else
is going on other than I want these tariffs and
I don't care how they get and acted what am
I missing here?

Speaker 3 (22:41):
I'm not sure you're missing anything very I think you've
got a president who's taken an incredibly muscular view of
his authority and has done all of this stuff to
the international economy and is now saying, oh too late,
tone wind it. I'm already done. And you know that
isn't the way constitutional law works.

Speaker 2 (23:00):
Let's just play this out so by the time people
hear this, I don't think we'll find out if the
Supreme Court is going to grant soshiiari immediately, but relatively
soon if they're interested, sometime in the next few weeks.
Is that is that a fair timeline.

Speaker 3 (23:17):
It's possible. It requires the government to file a cchuared petition,
and you know, in other big cases, you know, like
Guantanamo or healthcare or the like, there are those cecuary
petitions filed by the government almost immediately. So we will
see what the government does here. But certainly it's possible
that they file soon, in which case the Supreme Court

(23:39):
could give us guidance as to whether they're going to
hear the case in a matter of a couple of weeks.

Speaker 2 (23:44):
So let's say that happens and the case is heard
end of September. How soon do we get a decision?

Speaker 3 (23:51):
Yeah, I do think they'd hear the case in the
end of September, because there's time for briefing, for writing
the legal papers, and also for friends of the court
to weigh in and write their own legal papers. So
I think realistically we'd be talking about a court hearing
and probably earliest November December, and you know, maybe as
late as February or March something like that. So it's

(24:12):
going to take a little while, and it should take
a little while. Bary. These are really important momentous questions,
and you know, not just momentus for right now, but
momentous for American history and the role of the president,
because what the court says here will govern you know,
maybe just the case at hand, but it may govern
other things as well. And so I think the court

(24:33):
is going to want to proceed with some caution and
have time for adequate briefing from the parties. That's my gun.

Speaker 2 (24:40):
So what are the state of tariffs presently? The plaintiffs
in the original case had said, Hey, there's only so
long we could stay in business with these tariffs, and
we want a decision as rapidly as possible since they
were found illegal by the appeals court. Do you have tariffs?

(25:00):
Do we not have tariffs? What is going on?

Speaker 3 (25:03):
So what the Federal Circuit did is it kind of
split the baby. It said that the terrorifts will be on.
The terifts will be permitted, but only for forty five
days while the government goes and government may go and
ask the US Supreme Court to hear the case, and
if they don't hear the case, then the tariffs will
be declared illegal and unconstitutional and void.

Speaker 2 (25:24):
What are the odds that the Supreme Court chooses to
not hear the case.

Speaker 3 (25:29):
I'm not going to predict what the Supreme Court is
going to do. That's just you know, that's that's there.
I have to leave that for them, and I'm just
an observer on the outside. But I did want to
say that what happened with the Federal Circuit did by
saying forty five days, is it cut the government's time
and half to file a cerciar I petition. Normally they
have ninety days to do so. And what the court

(25:51):
here said is basically, Nope, this is too important. You've
got to if you want to hear have the Supreme
Court hear the case, then you've got to do it
in the next forty five days, otherwise these tariffs will
be declared illegal.

Speaker 2 (26:03):
So there seems to be a judicial recognition of exactly
how pressing this is. The Liberation Day was April second.
The lower court case I think was filed April fourteenth,
and then there was the decision in May was heard
pretty rapidly. The on Bank case was heard in July

(26:24):
of July thirty first, I believe, right, and then a
month later we just about a month later, we get
the decision. So it seems like, you know, I traditionally
think of corporate litigation as a game of delay, delay, delay.
This really seems to be moving quite rapidly.

Speaker 3 (26:43):
It is moving rapidly, and that's common in presidential power
cases because there's so much at stake, and so, you know,
I've been hardened to work with the government attorneys, the
Trump administration attorneys on a fast time schedule. I think
that's been you know, beneficial to try and move this
case and as ultimate resolution along. But I think, you know,

(27:04):
I think the bottom line for what happened just on Friday,
for all your viewers and listeners is the Trump tariffs
were declared unconstitutional and illegal by a seven to four
vote of our nation's second highest court, the US Court
of Appeals for the Federal Circuit. And now the question
is will the Trump administration go to the Supreme Court?

(27:24):
And then, of course what will the Supreme Court do?

Speaker 2 (27:27):
And the clock is thinking they have forty five days,
which by my calculation is around October fifteenth or so.
Is that about right?

Speaker 3 (27:35):
Yeah? I think it's the fourteenth, fourteenth.

Speaker 2 (27:37):
Wow, all right, so six weeks ago we'll be watching
this really closely. Again, Neil, congratulations on your appellate victory.
If this goes up, are you going to be the
one making the argument in front of the Supreme Court?

Speaker 3 (27:52):
No, that's all to be determined. Who knows.

Speaker 2 (27:56):
So that was my conversation over the Labor Day weekend,
right after we found out that he and his clients
had won the appeal. Now let's jump to the entire
conversation that we had a week ago while the outcome
of the case was still up in the air. My
Master's in business conversation with a Palette attorney Neil Tatiall,

(28:21):
let's spend a little time just talking about your background
and career Dartmouth undergrad jd from Yelle. What was the
original career plan.

Speaker 3 (28:31):
The original plan was for me to be a professor
of history, and yeah, I had gone. I went to
Dartmouth College. As you noted, I probably was one of
the last kids admitted to Dartmouth. I was not a
particularly great high school student. And I had this professor,
Doug Haynes in history at Dartmouth who basically taught me
to write and taught me how to think. And I

(28:53):
was so grateful to him, and I felt like I
should do that with my life as go and give
back in the way that Doug had given me this
incredible gift. And so in my senior year I say
to Doug, I was like, you know, ask him to
have lunch with me, and I say, I'd really like
to be a history professor. And you know, frankly, you're
the one who inspired me and I want to do this.

(29:16):
And he thought about it and he said, honestly, Neil,
I don't think you should be a history professor because
it's really tough, and it's hard to get tenure, and
you'll have to start in some you know, small town
in the middle of nowhere. It's hard to meet a
spouse and so on. He said, look, you're at that
point I was a national champion debater, and he said,

(29:37):
my advice to you is to go to law school.
And in particular, he said, go to Yale Law School,
which is known for creating law professors, and you can
do all the same stuff you want to do. But
as a law professor, where you would get paid three times,
it's easier to get tenure, your life is a lot easier.
So I did that. I applied to Yale Law School.
I got in again, probably one of the last kids admitted.

(30:00):
And at the law school I had these incredible professors
who did the same thing that Doug Haynes did for
me in history, in other areas constitutional law and criminal
law and the like, and these incredible professors who taught
me again how to think and how to write, and
so I was committed to being a law professor. I

(30:21):
clerked first for Guido Calibrazy, who was the dean of
the ill Law School, who was put on the Court
of Appeals, and then for Justice Stephen Bryer. But all
through that time I knew I wanted to be a
law professor. So I applied while I was clerking to teach,
and at the age of I think twenty six years old,
I took a job teaching at Georgetown Law and that
was the plan for my life, to be a law professor,

(30:42):
and nothing but a law professor.

Speaker 2 (30:43):
Do you still do any teaching these days?

Speaker 3 (30:46):
I do, and I love it, and in many ways
it's my favorite job I've ever had. But there's a
lot else going on in the world these days, and so,
you know, it was a little bit by accident that
I fell into this litigation and thing. Yes, I was
a national champion debater, and so it was comfortable being
on my feet, but I was really, you know, dominated

(31:08):
My dominant thinking was be a law professor, write these
theoretical articles that change the way people think about the law,
and teach students. So that's what I thought I was
going to do. And then something happened, which was we
had the horrific attacks on September eleventh, and I was
bumbling around trying to figure out what to do. I
was teaching at Yale Law School that year, and and

(31:31):
you know, my students and I we decided to try
and help first responders get benefits and stuff, and you know,
we weren't particularly good at it, but it was something.
And then President Bush announced that he was going to
have these military trials at Guantanamo Bay for suspected terrorists.
And I looked at that. I had served in the
Justice Department briefly, and we had the embassy bombings of

(31:53):
al Qaeda at the time, and so I looked into
could we have military trials? And we concluded they were
obviously unconstitutioned. So I went and looked up what's President
Bush doing here? What's the source of authority for this?
And you know, it wasn't particularly compelling. In fact, it
was really weak because the President was saying he was
going to set up these trials from scratch. He's going

(32:15):
to pick the prosecutors, pick the defense attorneys. Right. All
the rules for the criminal trials defined the punishments and offenses,
including the death pennel.

Speaker 2 (32:23):
Even handed and fair. What's your objection? Yeah?

Speaker 3 (32:25):
And you know, even the last lines of the executive
orders said the courts have no business reviewing what I'm doing.
No rid of habeas corpus. So I went into my
constitutional law class and said, you guys always tease me
because I think the President should have such strong powers,
and nothing the president does is unconstitutional. Well, here's something
that's obviously unconstitutional. And in the class was a senator.

(32:46):
It was a staffer for Senator Lahy, who was then
the chair of the Senate Judiciary Committee. And so she
told him about me, and he had a hearing, and
I testified and said, look, I don't know if you
want to have these military trials or not, but the
one thing I'm sure of is that it can't be
done with the president's stroke of his pen. You need
Congress to approve it. And this is of course going

(33:07):
to be relevant as we talk about tariffs later. It's
the exact same architecture over the argument. And so that's
how I testified. Nobody listened. So then I go and
I write a lare of your article with Lawrence Tribe,
the nation's most most pre eminent constitutional.

Speaker 2 (33:22):
Law Lawrence Private Harvard.

Speaker 3 (33:24):
Yeah, exactly. And so we write this article in the
Yale Law Journal. We race it to print, saying what's
going on is unconstitutional. Nobody reads the article.

Speaker 2 (33:32):
My mom.

Speaker 3 (33:32):
Maybe my mom read it, but you know, I don't know.
So then I said to myself, you know, you got
this piece of paper, neil a law degree, you could
actually sue the president, and that's what it is exactly.
So that was the hard question because a bunch of
different interest groups had sued on Guantanamo, but they didn't

(33:53):
have standing, they had no reason. And so I had
a friend very high up at the Pentagon who got
me the email address of a Pentagon lawyer who was
representing the detainees, and I basically got a letter snuck
to Guantanamo and it wound up in the hands of
Asama bin Laden's driver, and that became my client. And

(34:15):
so I go from being a theoretical law professor to
like a real, like hard nosed litigator, all in the
span of a few months. I filed the case. Nobody
thinks we're going to win.

Speaker 2 (34:26):
How far are you from law school now?

Speaker 3 (34:28):
Yeah, I'm like six years out.

Speaker 2 (34:30):
So still relatively green.

Speaker 3 (34:32):
Yeah, very green, and never filed a lawsuit, you know.
And so and by the way, I don't have any
help except four law students who are helping me. I
tried with law firms and initially I couldn't get them,
but then ultimately Perkins Cooy, a Seattle firm, decided to
help me, and that was phenomenal. So we filed this thing.
Nobody thinks we're going to win, and we win it
in the trial court. We lose it in the Court

(34:54):
of Appeals with a guy named John Roberts on the
descit panel. Three days later, he's nominated the Supreme Court
and then to the Chief Justiceship. So I have to
ask the Supreme Court to hear this Guantanamo case. It's
the most important case their new Chief Justice has ever decided.
And I'm going to say, I'm trying to tell the
Supreme Court the Chief Justice is wrong about this. Nobody

(35:16):
thinks we're going to win. It's my first Supreme Court argument.
I'm arguing against President Bush's legendary solicitor general. It's his
thirty fifth argument. I work my tail off and we win,
and then my life changes, and then companies want to
hire me, and I meet a young senator named Barack
Obama who heard me interviewed on an interview just like
this one, and he calls me into the Senate and says,

(35:39):
you know, ask me to advise him on some things
on Guantanamo, and tells me he's thinking of running for president,
And then started working with him and then my life changes.

Speaker 2 (35:49):
Mass. Wow, that's amazing. You know. I want to talk
about a couple of the other cases that you argued.
One was More versus Harper, which former judge Michael Luddick
called the most important case for American democracy ever. Tell
us about that, kiss.

Speaker 3 (36:08):
Yeah, so that's a pretty recent one. I already it,
I think about three years ago, and it involved something
called the independent state legislature theory, which at that point
was the greatest threat to democracy. I think when when
Judge Ludig was writing those remarks, We've now had some
things which you know are arguably worse. But it was
a significant one because if you think back to the

(36:28):
twenty twenty election, one of the things that President Trump
tried to do then was to say that state legislatures
can control elections, and you can even throw out the
popular vote and just have state legislatures decide where the
electoral votes will go to which candidate. And this became

(36:49):
part of the rnc's playbook, and they invested heavily in
state legislatures to try and develop, excuse me, this theory.
So we challenge that again, this is one in which
nobody thought we could win because if the Republicans won,
they would entrench control over presidential elections for decades probably,

(37:12):
And a lot of people think, oh, this Supreme Court,
they're appointed by Republicans, they're very conservative, they're just going
to do the Republican party's bidding. And I looked at
it and I said, I don't think that's right. I mean,
this is a court that does have fidelity to the
original understanding of the Constitution. And I thought, if we
could make the argument in that way, and this is
what my scholarship is all about, the original understanding of

(37:34):
the Constitution, I said, I thought we could win. And
so that's what I developed as the strategy. And indeed
I knew that Justice Thomas, Clarence Thomas would ask the
first question at oral argument that's been happening now for
the last few years.

Speaker 2 (37:50):
Just out a habit or like, how does that well.

Speaker 3 (37:53):
He's one of the more senior justices, and during COVID,
when we had to argue cases on speaker phones and
we couldn't see each other, it went in order of seniority,
and so Justice Thomas was right at the top. After COVID,
that's tradition continued in what Justice Thomas would ask the
first question. And so I've been thinking, how do I

(38:14):
use that knowledge to my advantage? Justice Thomas going to
ask the first question. And what I did was, I
said to myself, Okay, I can develop a set play.
Justice Thomas is going to ask me a question. Doesn't
matter what the question is. I'm then going to say,
and this is what I do. Just Thomas asked me
a question at the argument. I don't remember what the
question was. I answer it, and then I say, Justice Thomas,
may I say, in nearly three decades of arguing before you,

(38:38):
I've been waiting for this case because it speaks to
your method of constitutional interpretation, the original understanding, And here
are the four things you need to know about more
versus Harper in the original understanding of the Constitution. And
I get to talk about Madison and Hamilton and Jefferson
and so on, and it totally changes the dynamic in
the courtroom, and sure enough, we win six to three.

(39:00):
This case in the Republican theory is thrown out. I
didn't win Justice Thomas's vote, but I won a bunch
of others.

Speaker 2 (39:07):
Huh, that's amazing. Let's quickly talk about the Voting Rights
Act that you successfully defend it instead of trying to
overturn it. Tell us how different is to be playing
defense or is it not? You're just arguing constitutional law
and this is the outcome that should come about.

Speaker 3 (39:28):
It is different. But I would say even back then,
I felt like I was playing defense. So this is
a case I argued in maybe twenty ten. The Voting
Rights Active and passed in nineteen sixty five. It literally
has the blood of patriots on it. It is what
Selma and the Bridge Potatos Bridge is all about. And
so you know, in the case, basically it was right

(39:50):
after President Obama had been elected and Southern States said, look,
we don't need the Voting Rights Act anymore. Look you
have an African American president, Like that's proof that we
don't need it. And I stood up in court and said, no,
we do need it. And it's like, you know, the
very fact that we've been able to have an African
American president isn't alone enough to to say there isn't

(40:12):
discrimination in voting, particularly in particular areas, you know, even
if the overall national result is one thing. And the
Supreme Court at that point accepted that argument. And four
years later, however, in a case called Shelby County, they
reversed that position and struck down that part of the
Voting Rights Act. And now there's only one part of

(40:33):
the Voting Rights Act that remains, Section two, and the
Supreme Court's agreed to hear a case to challenge that
this fall. And so we very well may have a
world in which there is no Voting Rights Act left whatsoever,
which is a very dangerous thing. And yes, I do
think the Court has become more conservative over my lifetime.

(40:54):
I mean, the Court has always been a point majority
Republican appointees since things.

Speaker 2 (40:58):
This isn't just too hard in ship. This is an
ideological tilt, not necessarily party tilts.

Speaker 3 (41:05):
Yeah, so I would say, you know that the presidents
now of both parties are sending to the Supreme Court
more sure things that you know than which the track
record is really known. You know, the Republicans had this
mantra no more suitors because David Sudor, nominated by Republican
President Bush upheld things like abortion rights and so on.

(41:26):
And the Democrats, I think, have had their own version
of this for some time as well. And so we
get we don't tend to get justices without very defined
positions anymore. Like when I started arguing, Justice Kennedy was
on the court and you could see Barry every time
you argued. He was struggling with which is the right view?

(41:48):
Which is the right view of the law. And he's
a very smart man. It wasn't that he wasn't smart.
When I say struggling, it's not that he was struggling intellectually.

Speaker 2 (41:56):
They were pretty even handed argument yeah, and he really.

Speaker 3 (41:59):
Took the arguments so seriously without caricaturing him and just
tried to make the right decision. And certainly that still
happens today. I don't mean to overclaim it, but I
would say in particularly some of the big cases, they're
coming in a bit more with their minds made up
than when I first started.

Speaker 2 (42:15):
Really interesting. Coming up, we continue our conversation with a
Pellet litigator, Neil Kadil, talking about the tariff litigation winding
its way through the courts. Today. I'm Barry Ridults. You're
listening to Masters in Business on Bloomberg Radio. I'm Barry Ridults.
You're listening to Masters in Business on Bloomberg Radio. My

(42:37):
extra special guest this week is Neil Kadial. He is
the former Solicitor General under President Obama. He is an
appellet attorney who's argued in front of the Supreme Court
pretty much more than any living or at least any
active attorney fifty two times something more.

Speaker 3 (42:57):
There are people who have more. But I'm doing okay.

Speaker 2 (43:01):
You're doing okay. I want to talk about the Vos
Selections Trump tariff litigation that, as we're recording this right
before Labor Day, continues to perplex me how little coverage
this has gotten from media, and not just political media,

(43:22):
but financial and markets and economics media, because this case
has enormous potential to impact the broader economy. So first,
let's start with Vos Selections and other planiffs. April fourteenth,
after Liberation Day sued the President, saying you don't have

(43:45):
the authority to issue tariffs on your own without meaning Well,
these checklists which you fail to do. How did you
get involved in this case? Tell us a little bit
about what makes this case different than other challenges to
presidential authority.

Speaker 3 (44:00):
So right after President Trump took office and started talking
about this tariff position, I was reminded of the Guantanamo case.
I just described to you earlier, because it's the exact
same problem, which is, look, a president had may, motivated
by any number of good reasons, has a policy that
he wants to implement, and instead of going to Congress,

(44:23):
he just does it on his own with the stroke
of his pen. And our founders thought that a very
dangerous proposition, particularly in core areas like tariffs, because you
know every King George, of course, you know every dictator,
every leader would like the power to tariff, to tax

(44:44):
the people in any way they see fit, without limitation.
And what our founder said is no Article one, section eight.
They gave the power to tariff expressly to the president
in a similar way to they gave the gave the
power to Congress, and in the same way as they
did over matter of military justice.

Speaker 2 (45:01):
Let me ask you a question about Article one, section eight,
because it talks about Levy's duties and taxes, but it
doesn't specifically say tariffs. Does the nomenclature matter or are
they all the same things? Now?

Speaker 3 (45:13):
I mean, even the Trump administration, which just made some
bizarre legal arguments in this case, even they're not making
that argument. A duty is definitely understood as a tariff,
and the original understanding very clear on that point.

Speaker 2 (45:26):
And Article one, section eight says that authority lies exclusively
with Congress exactly. So that's the initial claim. I'm assuming
the president is saying, well, I was given authority by
Congress either through the IEPA Act, which was nineteen seventy seven,

(45:47):
or the Trade Act of nineteen seventy four. How do
you see these other legislations modifying the Constitution?

Speaker 3 (45:54):
So the government is certainly so the Trump administration is
trying to say that in nineteen seventy seven and Congress
passed this International Economic Emergency Act which gave the power
to tariff. There's only one problem with that. The law
doesn't say anything about tariffs in it in nineteen seventy seven,
and there's nothing in the you know, history of the
law to say so. No president for fifty years has

(46:17):
ever thought that it includes the power to tariff. And
then President Trump's lawyers come along and say, ah, here,
that's how we're going to announce these massive tariffs. And
I just think our Constitution demands more from the Congress
than that simple thing. I mean, Congress can certainly tomorrow
easily authorize all of President Trump's tariffs. It would you

(46:39):
know they could just do it with an up or
down vote. The fact that they haven't, the fact that
the president is scared to even ask, I think, tells
you all you need to know.

Speaker 2 (46:48):
Didn't he ask in his first term?

Speaker 3 (46:50):
In his first term, he asked and it was rejected
by the Congress.

Speaker 2 (46:53):
So it seems kind of odd to say, please give
me the authority to tariff. No, I can't. Okay, now
I'm not even going to ask. This is like a
teenage kid who sneaks out after curfew.

Speaker 3 (47:04):
Right, it's it's I mean, a different way of putting
The point is. Look, even Donald Trump didn't believe his
own AEPA argument because he went to Congress back the
first time around and lost, And so then he comes
up with his backup plan, which is, oh, I have
the power anyway. Then I have no idea what he
was doing in the first term by going and asking
Congress for this power if he had it in the
first place. And it's such a dangerous thing because you know,

(47:28):
if this president does it for tariffs because he sees
trade imbalances, another president, and this is how I started
my oral argument to the Federal Circuit. Another president to
the Court of appeals. Another president could say, you know,
climate's a real emergency, and I am going to impose
one hundred percent tariffs or one thousand percent tariffs on

(47:49):
any goods from an oil producing country. You know, that
whole thing is something that Congress really needs to be deciding,
not the president on his own.

Speaker 2 (47:59):
So before we get the appellate litigation, let's start with
the trial litigation. You're representing a group of small businesses
that are all saying tariffs are going to hurt their business.
Tell us what the this was the Court of Trade,
the International Court of Trade in DC. Tell us a
little bit about that litigation. How did that proceed?

Speaker 3 (48:19):
Yeah, and just to be clear, I wasn't involved at
that stage. I mean, this happens a lot with me.
Is someone brings the case in the trial court, they
win or lose, and then they want a firepower for
the appeal stage and the Supreme Court. So that's what
happened to you.

Speaker 2 (48:33):
Sure, So they won at the trial level, and then
there was a stay on the enforcement at the trial
level pending appeal. Right, So that's where you get involved
in the case. How did this go up to the
DC Court of Appeal? So rapidly, and why was it
a full on bank all eleven justices hearing the case

(48:53):
at once.

Speaker 3 (48:54):
Yeah, So what you have is you have a trial
court decision from the Court of International Trade that says
President tree Trump's tariffs are illegal. The court then pauses
that ruling so that it could be decided by the
appeals Court and perhaps the US Supreme Court. And at
that point I get involved. The Federal Court of Appeals says,

(49:14):
on their own, this case is so important that we're
going to have all eleven of our judges here the case,
not just three judges, which is normally the rule.

Speaker 2 (49:22):
How often do you get a full on bank hearing
like that?

Speaker 3 (49:25):
Very rarely, I mean the Federal Circuit, which is this
Court of Appeals, maybe once a year, maybe once every
couple of years. So it's a very rare thing, and
I think it does demonstrate the gravity of this. And
to circle back to something at the start that you
talked about about the kind of degree of attention around
this case, I guess I want to push back a
little because I do think there's been a lot of
media attention around the case, a lot of jurisprudential attention

(49:48):
around the case, but perhaps the most important a lot
of business community interest. I mean, I think every major
hedge fund called me while this case was pending in
the trial court to ask for my views, and they
wanted to make financial decisions on the basis of it.
I obviously can't answer those questions in quite the same
way now that I'm involved in the case. But I

(50:08):
do think that for the markets, this is a case
of enormous, enormous significance, and what happens at the Court
of Appeals and what perhaps happens should the case go
to the Supreme Court is something that a lot of
people are thinking about.

Speaker 2 (50:23):
So let's walk before we run. So you argue the
case on bank in front of the entire all lemonjustices
of the DC Court of Appeals. Tell us what that
hearing was, like, how did it go?

Speaker 3 (50:37):
Yeah, So, I mean, I'm obviously constrained. It's a pending case,
so I want to just stick to the public record.
I'm not going to try and litigate the case on
your podcast or anything. I love your podcast, but I
have to be very mindful of those kinds of things.
But you know, in a big case like this, I
think you're always looking I'm always looking to try and

(50:59):
make sure the judges understand the implications of the government's argument,
because anything can look reasonable when a president does it
in the you know, for the immediate situation. But the
question and constitutional law is, if the president has this
power here, what's to stop him from doing the next.

Speaker 2 (51:18):
Thing and the next thing in the next slope.

Speaker 3 (51:20):
Yeah, exactly, And that's something our founders the whole architecture
of our government, and Madison really talks about this in
Federalists ten fifty one. The whole architecture of our government
is to try and prevent that slippery slope through all
sorts of different breaks. And the obviously the most important
break to our founders was the role of the Congress.
That the Congress has to affirmatively authorize things before a

(51:43):
president can do them.

Speaker 2 (51:44):
So if the president can levy tariff's taxes duties on
his own without congress, what can he do exactly?

Speaker 3 (51:54):
And so, you know, you asked me, how did the
argument go? I felt like the judges were circling in
on that precise question, the one you just asked me.
And you know it's available for anyone to listen to exactly,
So you know, listeners can decide for themselves. But I
do think the government, you know, was was on the

(52:16):
defense in response to those questions. And you know, I,
you know, I have some sympathy for that. I was
the top lawyer for the federal government for a while,
and you know, sometimes governments, you know, have positions that
are tough to defend. This one I felt was particularly
tough to defend.

Speaker 2 (52:33):
So what given what we've talked about with Article one,
Section eight and NIPA, what on earth was the government's
case defending the Tara faction.

Speaker 3 (52:44):
Most of the government's case was like a fate of
complete which was, Oh, it's already done, the President's done it,
it's had all these successes. If you undo it, it's
going in declared illegal. Then it's going to wreck the economy.

Speaker 2 (52:57):
I am not aware of many having gone to law
school and passed the bar. I don't recall a lot
of constitutional cases where the judges shrugged and said, well,
if you did it already, who are we to undo that?

Speaker 3 (53:11):
Exactly?

Speaker 2 (53:12):
It seems like a kind of bizarre argument to make.

Speaker 3 (53:15):
It is, but it is one that the governments have made.
Prior governments have made it. President Truman made it when
he sees the steel mills in nineteen fifty two, and
that went up to the Supreme Court. Solicitor General made
a version of this argument, and of course there we
were in a war and we needed the steal. And
so the Solicitor General said to the Supreme Court, look,
you will d it gravely undermine our war fighting powers

(53:37):
in the midst of a war if you reverse the
president's decision to seize the steel mills. Supreme Court said,
that's not a good enough reason. In our constitutional system,
they say, it's Congress that makes the laws. And again,
similar architecture to the guantanam argument. Similar architecture here in
the tariff's case.

Speaker 2 (53:56):
Huh, that's really fascinating. So the government's substance equently did
a filing pretty quickly after the hearing, asking for a
stay if they lose, pending Supreme Court review. That seems
kind of unusual. It's almost as if, hey, we didn't
do a great job and we think we're going to lose,

(54:16):
but we don't want you to overturn this. How often
does that happen this quickly after an appeal is argued.

Speaker 3 (54:25):
I mean, it was an extraordinary letter. I don't really
want to say more than that people can listen to
people can read the letter for themselves. It was filed
in the court. It's a two page letter, and then
we filed a quick response to it. But it is
it is an extraordinary.

Speaker 2 (54:39):
Letter, so typically get a this was argued in July
twenty twenty five. It could take six months before we
get a decision. Typically, my assumption is a full on
bank hearing. Recognizing this is a really important case, you
tend to get a decision faster than you would otherwise.
I'm assuming that this can drop sometime in September October.

(55:03):
But this isn't a February twenty twenty six.

Speaker 3 (55:06):
I think nobody wants it to be something that's going
to go long, and courts of appeals generally do take
a while for decisions. The average time is about six
months in the federal system. Here, I think the judges
do want to try and decide this quickly. That was
indicated to us by the fact that they gave us
very little time to write our briefs. You know, they

(55:27):
wanted us to go straight to argument.

Speaker 2 (55:29):
And really, what's that timeline? Normally they like to prep.

Speaker 3 (55:32):
It was truncated by about half the time, and then
oral arguments set for right away, right after the briefs
came in.

Speaker 2 (55:40):
So no falling around. We're fast tracking this exactly. This
isn't a Christmas decision. We're gonna we're gonna get this
out exactly left Lay.

Speaker 3 (55:48):
I think the court did exactly the right and responsible
thing there, which is us as lawyers. We can get
the briefs done, we can get prepared for argument, so
you know, so do it more quickly because there are
eleven judges and they do have to reach some sort
of majority view. It is going to take some time,
in which you know, eleven people to decide. Anything takes time,
particularly something with this gravity and.

Speaker 2 (56:09):
Wait, quite fascinating. Coming up, we continue our conversation with
Neil Kadial, who is the planeff's attorney on the appeal
for the Vos selections versus Trump, which is seeking to
overturn all of the tariffs, discussing where the case can
go from here. I'm Barry Ridolts. You're listening to Masters

(56:29):
in Business on Bloomberg Radio. I'm Barry Redults. You're listening
to Masters in Business on Bloomberg Radio. My Extra Special
guest today is litigation Appellet attorney Neil Kadial. He has
a tremendous CV former Solicitor General, dozens and dozens of
cases argued in front of the Supreme Court, and the

(56:51):
most recent argument he did was the Vos Selections versus Trump,
arguing that all of these tariffs are illegal. So let's
pick up where we left off. The DC Court of
Appeals agrees to hear the case. They expedite this. You
don't have a lot of time to prep for the
moving papers, You don't have a lot of time to

(57:13):
prep for the oral argument. What is that argument like
when you're in front of the court. How long does
it go for? I know you've done this a million times.
You still get those butterflies in your stomach before you
get up there.

Speaker 3 (57:25):
Always get the butterflies, And you know it helps me
be a better lawyer. In the minute that I don't
have those butterflies, I'm going to go do something else.
John Roberts told me that I used to run his
practice at his law firm practice, and he said, you know,
every time I go up there, I got nervous. And
he was an extraordinary advocate. And so I've come to

(57:47):
actually appreciate the butterflies as opposed to trying to just
push them away. My practice schedule is the same for
any kind of big case, which is, I take notes
on the briefs that have been filed, and then I relentlessly,
relentlessly practice the argument in front of people both new
to the case like the judges will be, and people

(58:09):
are experts on the case, and they are throwing questions
at me one after another for hours. And I do
this sometimes, you know, as many as six, eight, ten times.
In the tirest case, I did it eight times, practicing
the argument in front of all these people. And I
then go and I listen to the arguments these practice

(58:30):
sessions on MP three, I put it on you know,
something that I can put on my iPhone and then
I'll run to it or something like that. And so
I'm just thinking to myself, A. Can I answer the
question better? B? Can I answer it more quickly? C?
Can I answer the question in a way that doesn't

(58:52):
invite a follow up question that I really don't want
to ask? And then D the most dark arts part
of it. Can I answer the quest question in a
way that leads them to ask the next question, which
is one I do want.

Speaker 2 (59:05):
So there's a lot of tactical thinking and strategy beyond
just legal knowledge and rehearsal.

Speaker 3 (59:12):
One hundred percent. Like I mean, you know, in a
big case, yes, you got to know the law, you
got to know the history, you got to have all
of the you know, finer points, you.

Speaker 2 (59:22):
Know, memorized table mistakes though, but at the end.

Speaker 3 (59:25):
Of it, in the big cases, what really matters is
can you pivot the conversation in the way you want?
Can you show maximum credibility with the court? Can you
really be a true listener to the questions and not
answer the question that you want asked, because they may
be asking you a different one and you've got to
answer that one. And so, uh, it is a really

(59:49):
specialized skill, which is why you know, I tend to
be brought in for these cases which, like you know,
I don't know how to do a trial. In fact,
I was special prosecutor in the George Floyd murder, and
but I handled all the appeal stuff because I mean,
you know, I have no idea how to cross examine
a witness or something, and so you know, I do
one thing, hopefully I do it kind of well, and

(01:00:12):
but the practice sessions are really I think the secret sauce.

Speaker 2 (01:00:15):
Kind of well, kind of well, how long did the
oral arguments last? How?

Speaker 3 (01:00:20):
I think there are a couple hours long.

Speaker 2 (01:00:22):
That's what it looked like when I saw it on YouTube.
And I'm like, I don't know how much of this
because I listened to a good chunk of it and
kept starting and stopping, and I'm like, this feels like
typical appellate arguments are not hours long, right.

Speaker 3 (01:00:37):
You know, set for twenty minutes, except for twenty three
minutes I think for me, and I'm pretty sure I
probably went for an hour or something like that.

Speaker 2 (01:00:44):
Yeah, And how did opposing counsel? How much time did
they use it?

Speaker 3 (01:00:48):
And I think they used a fair amount of time
as well. I think the court really did want to
try and ask a lot of the hard questions to
both sides, and so yeah, so I think it did
go long.

Speaker 2 (01:00:59):
So the DC Court of Appeals recognizes how significant this
case is, they expedite it. It's a full on bank.
All eleven justices hear it. Where does it go from here?
I was trying to figure out what options So I'm
going to assume for argument's sake that the plaintiff is

(01:01:19):
successful in this case, and they affirm the lower court's
ruling against the president. Tariffs are Congress's venue, not the
president's their responsibility. What happens from here? What can the
Supreme Court do? They could say that's fine, let it
stands as far as I know. They could remand the

(01:01:42):
case for further fact finding to the trial judge and
say we want to see more specific things, or they
can take it up on a full hearing. What am
I missing? What am I forgetting from law school?

Speaker 3 (01:01:54):
That's exactly right. So if we win, you know, the
government will try and take the case to the Supreme Court.
They've already said they would do that, and we hope
the Supreme Court at that point wouldn't hear the case.
I mean, I'm privileged to represent these plaintefs. They're small businesses.
Bos Selections is a small wine company. It's been around
for a while. And if they're saying, and they filed

(01:02:15):
briefs in the Supreme Court, in the Court of Appeals,
it's say, if we lose this case, our business may
go under, and other businesses like ours may go under.
And so you know, we think from the perspective of
small businesses in particular, it's really important that this is
you get settled and settled quickly. And if the Court
of Appeals says, I hope they will that President Trump's

(01:02:38):
tariffs are unconstitutional, we hope that's the end of it.
It might not be. Of course, Supreme Court may decide
to hear the case. Conversely, if the government wins in
the Court of Appeals and says these tariffs are okay,
then we would presumably go to the Supreme Court and
say no, they're not, and then ask the Supreme Court
to hear it. And then there is, as you say,

(01:02:58):
a third option, which the Court of Appeals might say, hey,
you know, we think that this needs to go back
to the trial court for further fact finding on something
or the other. You know, I think that's in many
ways the worst of every world because everyone needs certainty
around this, particularly the business community, and so you know,

(01:03:20):
you know, there's definitely been floated as a possibility, but
it's one that I think wouldn't be attractive to the government.

Speaker 2 (01:03:27):
And the facts in question are pretty clear. Here's what
the president did, he is what the litigation has showed,
and here's the legislation and the constitution. The specific facts
don't seem to matter that much other than what is
pretty widely understood.

Speaker 3 (01:03:43):
Yeah, so that's correct, That's exactly our argument.

Speaker 2 (01:03:46):
So let's talk about remedies. Hypothetically, you win at the
appellate level. There's been a stay for the prior victory
at the district court level, at the International Court of Trade.
What sort of remedies do small businesses get? Can the

(01:04:06):
tariffs be thrown out? Can companies that have paid tariffs?
Can they get refunds? How does this work? Right?

Speaker 3 (01:04:13):
So, I think right now, all we have asked for
in our case is is for the tariffs to be
declared unconstitutional, illegal and void. There is a question, as
you say about about companies individuals that have paid tariffs,
can they get a refund on that from the government.
That's not something that's been briefed yet or argued. I

(01:04:33):
think it is kicking around as an issue. When President
Trump issued some tariffs that were declared illegal before, there
were refund actions that were filed, and I think those
refund actions are still pending years later in the courts. Yes,
so you know, it's a long process, that refund process
to the extent it's available. We have just not gotten

(01:04:55):
into that at the time.

Speaker 2 (01:04:56):
And I look at tariffs as of that tax on consumers.
I'm going to assume consumers are just that money's gone.
They'll never be able to see that back.

Speaker 3 (01:05:05):
Yeah, I don't know if that, you know, I think
that may be the case. I think you're right to
characterize tariffs as a tax. I think you're one hundred
percent right. That's what we're talking about. We're talking about
the price because of President Trump's tariffs, the price of
everything you're hurting on Amazon or at the grocery store, whatever,
you know, increasing the cost to you, the American consumer. Indeed,

(01:05:26):
the Tax Foundation, which is a nonpartisan group, has said
that this is the largest tax increase on American consumers
since Bill Clinton in nineteen ninety three.

Speaker 2 (01:05:36):
That's a big tax increase, isn't it. Yeah, So let's
talk about I know you don't want to speculate about
the Supreme Court. This court seems to have been increasingly
allowing presidential authority to expand. At what point is it
a bridge too far? This is essentially we're going to

(01:06:00):
give the president the authority to tax, which is Congress's responsibility.
How do you think about how the Supreme Court is
going to contextualize this. Is there a narrow keyhole that
they can sort of, you know, thread the needle and
avoid the constitutional argument. I'm trying not to put words

(01:06:21):
in your mouth and think about what are the possible
scenarios we could go down.

Speaker 3 (01:06:27):
Yeah, so I think, you know, the Supreme Court has
probably the same three options that we talked about earlier
for the Court of Appeals, declare the tariffs illegal and unconstitutional?
Declare the tariffs constitutional and legal, or send it back
to the trial court for some fact finding. I do
think that there's a deep concern that this president is

(01:06:51):
asserting powers in very, very muscular ways, and some of
those are legitimate and others are not. This is one
that I think is pretty easy to characterizes, falling on
the latter side of that line. Others are more difficult,
and you know, and so I think there's a conversation
at the court about that question. But I think they're

(01:07:11):
going to approach this case as they do any on
its own individual facts, and the facts are I think
here that the president hasn't done what the Constitution requires,
which is to have him go to Congress and get
the authority for the things that he says he claims
he needs so desperately.

Speaker 2 (01:07:29):
So the middle e in AIPA is emergency. Is there
an argument to be had that, hey, we're in the
middle of an emergency, although you know some of the
things that kind of surprise me about the tariffs he
negos to the president negotiated the North American Trade Group

(01:07:50):
of trade laws and now threw that out in tariff
and we have a free trade agreement with South Korea
and suddenly with tariffing them. How is it an emergency
if you're tariffing every country in the world, including those
that do not have tariffs on our goods.

Speaker 3 (01:08:08):
It's one hundred percent right. And I would point out
that the language of this nineteen seventy seven law that
President Trump is is relying on AIPA. It doesn't just
say emergency. It says it must also be an unusual
and extraordinary threat. And yet the president's executive order imposing
these tariffs has said trade deficits have been a persistent

(01:08:28):
feature of the American economy for the last fifty years.
And so he basically pled himself out of court because
his own executive order says these trade deficits are not
unusual and extraordinary, They're commonplace and de raguer in the
American economy. So that was I think a big portion
of my oral argument before the court. And you know,

(01:08:51):
I suspect that we'll, you know, get a bunch of
attention in whatever decision the Court of Appeals will make.
So I think, look, you want a circumstance, and Founders
wanted a wanted a constitutional structure in which, if there
is a true emergency, presidents get leeway.

Speaker 2 (01:09:08):
You're anticipating my next question, which is the Supreme Court
doesn't want to tie the president's hand in cases of
true emergencies. I'm hearing your argument. This should have nothing
to do with that there's no emergency.

Speaker 3 (01:09:25):
Exactly. You've got time to go to Congress. Think back
to President Lincoln in the Civil War. He orders the
blockade of the South, he suspends the rid of habeas corpus,
and and yet he says, I'm going to call a
special session of Congress on July fourth to get people
back to vote and say did I do Do you

(01:09:46):
ratify what I did? I had to do it in
an emergency, And of course then you didn't have middle
of Civil War, middle of Civil War, no telecoms, no
instant email or anything like that. You know, so he
had to take certain actions in order to protect the
American Republic. And you you know, certainly I and the
small businesses and privilege to represent. We're not saying in
some true emergency in which Congress can't act, the president

(01:10:07):
can't fill the void. Of course he can. This is
the opposite of that. This is one in which Congress
is operating normally. The trade deficits have been going on
for fifty years. No president has ever sought this kind
of sweeping power. And yet he comes along and says, I,
Donald Trump get this power. That's a very dangerous thing,
not just because for some people who are concerned about

(01:10:28):
President Trump, but if you're concerned about President Mamdani or
whomever in the future. You don't want presidents to have
that kind of sweeping power on their own.

Speaker 2 (01:10:37):
What a perfect place to leave it. Thank you, Neil
for being so generous with your time. We have been
speaking with Neil Kadial. He is the appellate litigator for
VOS Selections Versus Trump, which seeks to declare the president's
tariffs not only null and void, but unconstitutional. If you
enjoy this conversation, well, check out any of the other

(01:10:59):
five home we've done over the past twelve years. You
can find those at iTunes, Spotify, Bloomberg YouTube, wherever you
find your favorite podcasts. I would be remiss if I
did not thank the craft team that helps us put
these conversations together each week. Alexis Norieger is my producer.
Sage Bauman is the head of podcasts at Bloomberg. Sean

(01:11:21):
Russo is my researcher. I'm Barry Ritolts. You've been listening
to Masters in Business on Bloomberg Radio.