# Huawei Rico Trial, Grand Conspiracy Investigation & Shadow Docket

An episode of [Bloomberg Law](https://invisiblenetwork.ai/podcast/277975394), 19 Sep 2026, 38 min.

Audio: https://podtrac.com/pts/redirect.mp3/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/7c892d84-801f-4c0b-b0e9-ae2b0012ff5f/b2bc2909-69aa-4005-8ded-b4ca016a352b/audio.mp3?utm_source=Podcast&in_playlist=91224201-26a6-429d-ac3c-ae2b0012ff6d

June Grasso talks to Chris Strohm of Bloomberg News, and Professors Eric Talley and Thomas Schmidt of Columbia Law School, about the top legal stories of the week. See omnystudio.com/listener for privacy information.

## Transcript

[0:02] Speaker 1: This is Bloomberg Law with June Grosso from Bloomberg Radio.
[0:08] Speaker 2: During his first term, President Trump raised national security concerns
[0:14] Speaker 2: about the Chinese company Huawei, the world's biggest supplier of
[0:18] Speaker 2: telecommunications network equipment.
[0:21] Speaker 1: Huawei is something that's very dangerous. You look at what
[0:24] Speaker 1: they've done from a security standpoint, from a military standpoint,
[0:27] Speaker 1: it's very dangerous.
[0:28] Speaker 2: While the U.S. government lobbied Western allies to avoid using
[0:33] Speaker 2: the Chinese company's products in their high-speed wireless networks, U.S.
[0:38] Speaker 2: prosecutors charged Huawei with stealing technology, plotting to steal trade secrets,
[0:44] Speaker 2: defrauding banks, and violating trade sanctions. Eight years after those
[0:50] Speaker 2: charges were brought, the criminal racketeering trial against Huawei is
[0:55] Speaker 2: finally kicking off in Brooklyn, New York. in the shadow
[0:59] Speaker 2: of a September 24th summit in D.C. between Trump and
[1:03] Speaker 2: China's President Xi Jinping. Joining me is business law professor
[1:07] Speaker 2: Eric Talley of Columbia Law School. Eric, the government is
[1:11] Speaker 2: really bringing a sprawling case against Huawei. Tell us about
[1:15] Speaker 2: the charges.
[1:17] Speaker 1: The government's trial against Huawei basically has three clusters of allegations.
[1:21] Speaker 1: One is sort of bankrupt. and wire fraud actions that
[1:26] Speaker 1: are related to business with sanctioned countries like Iran and
[1:31] Speaker 1: North Korea. That's one cluster. A second has to do
[1:33] Speaker 1: with trade secret theft, kind of industrial espionage. And the
[1:37] Speaker 1: third is kind of a throw-in. It's a racketeering charge
[1:40] Speaker 1: that basically is a conspiracy theory that ties all three
[1:44] Speaker 1: of these claims together.
[1:46] Speaker 2: The RICO charges are traditionally used to target organized crime conspiracies.
[1:52] Speaker 2: How does the government prove a RICO case here?
[1:56] Speaker 1: The thing that holds the same as the other two
[1:58] Speaker 1: is that RICO basically requires what's sometimes known as a
[2:03] Speaker 1: predicate offense, that there's got to be some underlying wrongdoing
[2:06] Speaker 1: that is then sort of part of an overall strategy
[2:10] Speaker 1: that is about a continuous organized pattern of criminal activity.
[2:15] Speaker 1: So the triggers for RICO are actually still going to
[2:18] Speaker 1: be the same as the first two allegations. trade secret
[2:21] Speaker 1: theft and bank and wire fraud. But in addition, the
[2:25] Speaker 1: government's going to actually have to bring evidence that these
[2:28] Speaker 1: weren't just sort of one-off events, but that they were
[2:31] Speaker 1: part of a continuous, organized, orchestrated pattern of Huawei and
[2:37] Speaker 1: not just, you know, spot, cherry-picked examples.
[2:40] Speaker 2: During the opening statements, the federal prosecutor told jurors that
[2:45] Speaker 2: crime was a business strategy for Huawei. Theft lies corruption
[2:51] Speaker 2: for 20 years. But the company's attorney countered with, it's
[2:55] Speaker 2: about competition, not conspiracy. Innovation, not theft. Ordinary business dealings,
[3:02] Speaker 2: not criminal conduct. Which argument do you think the jury
[3:06] Speaker 2: will find more convincing?
[3:08] Speaker 1: Well, one of the reasons this is going to trial
[3:10] Speaker 1: is that both of these types of arguments are actually
[3:12] Speaker 1: reasonably good. Huawei is 100% correct that this is an
[3:16] Speaker 1: incredibly competitive industry in which different manufacturers are essentially trying
[3:22] Speaker 1: to one-up one another. And if you can sort of
[3:25] Speaker 1: outflank your competition, even by a little, you can take
[3:28] Speaker 1: an awful lot of market share. That's in many ways very,
[3:31] Speaker 1: very healthy forms of competition. But because employees go back
[3:35] Speaker 1: and forth, because there are different business dealings, because there
[3:38] Speaker 1: are trade fairs, it often can give rise to claims
[3:41] Speaker 1: that you got your edge wrong. through an impermissible sort
[3:46] Speaker 1: of approach. But Huawei's overall claim is that this is
[3:49] Speaker 1: a really, really competitive industry, and it's unfair to look
[3:53] Speaker 1: at specific anecdotes as a way to lay out some
[3:56] Speaker 1: kind of a systematic pattern. They're just anecdotes. On the
[3:59] Speaker 1: other hand, the government's got some decent anecdotes. You know,
[4:02] Speaker 1: particularly on the trade secret dimension, they have got some
[4:06] Speaker 1: pretty vivid examples of unauthorized stealing of source code for
[4:10] Speaker 1: routers and user manuals and antenna technology. They even have
[4:15] Speaker 1: some evidence of one Huawei employee physically breaking off a
[4:19] Speaker 1: piece of T-Mobile's phone testing robot to take back home
[4:23] Speaker 1: and to study it. And so these are going to
[4:25] Speaker 1: be pretty vivid, particularly for a jury, but they are
[4:29] Speaker 1: also consistent with this being a very, very competitive industry.
[4:33] Speaker 1: I think there's really going to be this sort of
[4:35] Speaker 1: question about whether these specific events that the government has
[4:40] Speaker 1: seemingly hard evidence about are are going to be enough
[4:43] Speaker 1: to convince the jury that this is really, you know,
[4:46] Speaker 1: not only significant events that themselves constitute episodes of criminal activity,
[4:51] Speaker 1: criminal trade secrets, but they're also part of this overarching,
[4:55] Speaker 1: longstanding conspiracy.
[4:57] Speaker 2: The Trump administration has moved away from criminally charging corporations.
[5:02] Speaker 2: Now it's pursuing this really ambitious prosecution against a Chinese company.
[5:09] Speaker 2: What are the political overtones here?
[5:11] Speaker 1: Well, it's an interesting political setting because this case started
[5:16] Speaker 1: under the first Trump administration. It was then inherited by
[5:19] Speaker 1: President Biden, and now it's being tried in a broader
[5:23] Speaker 1: sort of U.S.-China technology race and competition under the second
[5:27] Speaker 1: Trump administration. It's relevant to note that even the Biden
[5:31] Speaker 1: administration pushed the ball forward on this case. Huawei employee
[5:35] Speaker 1: who was living in Vancouver was, in fact, subject to
[5:39] Speaker 1: extradition orders and entered into a deferred prosecution agreement. Some
[5:43] Speaker 1: of the things that she essentially put into that settlement
[5:47] Speaker 1: have now evidently been accepted publicly. as statements of fact
[5:51] Speaker 1: by the trial court judge that are going to be
[5:54] Speaker 1: difficult for Huawei to sort of push back against because
[5:57] Speaker 1: it's from one of their own former employees. But one
[5:59] Speaker 1: of the bigger stages here is not just Huawei itself
[6:03] Speaker 1: or the Trump administration's attitude towards businesses and whether it
[6:08] Speaker 1: takes a more hands-off approach or hands-on approach. There's an
[6:11] Speaker 1: overarching U.S. versus China theme to this as well that
[6:15] Speaker 1: has played a big role in the first Trump administration.
[6:18] Speaker 1: continues to play a role in this Trump administration. And,
[6:22] Speaker 1: you know, in many ways, some of the allegations had
[6:24] Speaker 1: already been substantially served up on a platter before the
[6:28] Speaker 1: second Trump administration actually was in power.
[6:31] Speaker 2: How successful have federal prosecutors been in prosecutions of Chinese companies?
[6:39] Speaker 1: There have been some successes. This is a large company, however.
[6:42] Speaker 1: This is not sort of a fly-by-night company that is
[6:45] Speaker 1: you know, essentially pilfering trade secrets here or there. And so,
[6:49] Speaker 1: you know, in terms of the target of the size
[6:51] Speaker 1: of Huawei, this is a significant move to make. And
[6:55] Speaker 1: so one would expect also that Huawei would, in fact,
[6:59] Speaker 1: they are putting up a pretty steep defense because, you know,
[7:03] Speaker 1: the stakes are enormous. A couple of things that are
[7:06] Speaker 1: also kind of worth noting, however, is that this is
[7:10] Speaker 1: a criminal case against a company. So success by the
[7:13] Speaker 1: government is doesn't necessarily mean that someone's going to go
[7:16] Speaker 1: to prison. There aren't individuals who are basically co-defendants along
[7:20] Speaker 1: Huawei here. And Huawei is already heavily restricted in terms
[7:24] Speaker 1: of its presence in the U.S.
[7:26] Speaker 3: Market.
[7:27] Speaker 1: And typically, in addition to whatever fines that might be
[7:30] Speaker 1: levied against a defendant company in this position, usually the
[7:34] Speaker 1: most potent form of remedy would be, you know, you
[7:38] Speaker 1: basically have to leave the US market. But Huawei's presence
[7:41] Speaker 1: in the US market is already because of, you know,
[7:43] Speaker 1: US trade policy, relatively small. But the US still could
[7:47] Speaker 1: take a verdict in its favor in this case to
[7:50] Speaker 1: try to persuade allies, suppliers and others to to keep
[7:54] Speaker 1: a distance from Huawei because it has been criminally convicted
[7:58] Speaker 1: if the government ends up getting some sort of conviction
[8:01] Speaker 1: in this case.
[8:02] Speaker 2: Would it be better as far as presenting a case
[8:05] Speaker 2: that appeals to a jury if the prosecutors charged some
[8:09] Speaker 2: people along with this nameless, faceless, giant tech company?
[8:15] Speaker 1: In some cases, it would. I think sometimes when you're
[8:18] Speaker 1: dealing with these sort of corporate alleged misconduct cases, the
[8:22] Speaker 1: jury might actually push back against that sort of saying, look,
[8:26] Speaker 1: these are large, multi-person organizations. You're trying to throw one
[8:30] Speaker 1: individual under the bus when really it was the organization
[8:33] Speaker 1: that was at fault. And a jury, particularly if an
[8:36] Speaker 1: individual defendant is looking at potential for prison time, that
[8:40] Speaker 1: could actually induce them to be less anxious to vote
[8:43] Speaker 1: to convict. On the other hand, you know, I think
[8:46] Speaker 1: there is a sense in which the measure of success
[8:49] Speaker 1: for the government is, is going to be a little
[8:51] Speaker 1: bit less concrete than it would be in the context
[8:54] Speaker 1: of an individual criminal defendant who's a natural person. So
[8:58] Speaker 1: the government, you know, clearly has sort of decided for
[9:01] Speaker 1: jurisdictional and possibly strategic reasons, they want to sort of
[9:04] Speaker 1: keep this about Huawei. Hopefully, from their perspective, seize on
[9:09] Speaker 1: a sentiment amongst the jurors that Huawei is an example
[9:13] Speaker 1: of an unfair form of competition that is essentially skirting
[9:17] Speaker 1: the rules both of intellectual property and international sanctions and
[9:21] Speaker 1: visiting a penalty on the company itself is the best
[9:25] Speaker 1: way to move. You know, one thing that's going to
[9:27] Speaker 1: be pretty interesting from the jury's perspective, and this particularly
[9:30] Speaker 1: relates to the RICO charge, is how likely is it
[9:33] Speaker 1: that the jury is going to be able to take
[9:36] Speaker 1: this set of examples, some of which are quite vivid,
[9:39] Speaker 1: like the breaking off of the piece of the robot,
[9:41] Speaker 1: and say, oh, wait, no, that's part of an entire
[9:43] Speaker 1: pattern and practice, as opposed to some cherry-picked anecdotes, which,
[9:48] Speaker 1: you know, quite frankly, all prosecutors can usually find one
[9:51] Speaker 1: or two examples of something that looks a little bit
[9:54] Speaker 1: sketchy and then try to weave a story of a
[9:56] Speaker 1: longstanding criminal enterprise. And that's going to be one thing
[9:59] Speaker 1: to really watch here about whether the government is going
[10:02] Speaker 1: to be able to stitch together these anecdotes and basically say,
[10:06] Speaker 1: these aren't just anecdotes. These are a pattern. While Huawei
[10:09] Speaker 1: is basically going to say, look, you just cherry picked
[10:12] Speaker 1: some of the worst possible situations involving individual isolated employees,
[10:16] Speaker 1: former employees, contractors of Huawei. But that was never part
[10:20] Speaker 1: of our corporate strategy.
[10:21] Speaker 2: What's the government looking for if it wins? Huawei is
[10:24] Speaker 2: already on a blacklist. And would any financial penalties that
[10:28] Speaker 2: could be obtained really hurt this company?
[10:31] Speaker 1: I think the financial penalty, though, given the fact that
[10:35] Speaker 1: a lot of these assets are offshore, is going to
[10:37] Speaker 1: be a harder one to pursue, at least in some circumstances.
[10:41] Speaker 1: And as you noted, Huawei is not going to be
[10:44] Speaker 1: in a position where suddenly it's going to lose a
[10:46] Speaker 1: bunch of customers in the U.S. since it currently doesn't
[10:48] Speaker 1: have many customers in the U.S. since it's been blacklisted.
[10:50] Speaker 1: So my sense is the real grab that a successful
[10:54] Speaker 1: outcome for the Department of Justice would have is in
[10:57] Speaker 1: effectively trying to throttle back Huawei's market share outside of
[11:03] Speaker 1: the U.S., amongst trading partners who basically are told, look,
[11:08] Speaker 1: if you continue to trade with what would then be
[11:11] Speaker 1: a criminally convicted enterprise, that's going to have implications for
[11:15] Speaker 1: your own dealings. with US markets. The Trump administration has
[11:19] Speaker 1: wielded that club many times thus far with tariffs and
[11:23] Speaker 1: other contexts. So I could imagine that having a little
[11:26] Speaker 1: bit of mileage, but there really is kind of a
[11:29] Speaker 1: question given how global this market is and how several
[11:32] Speaker 1: of our historical allies seem to be getting a little
[11:36] Speaker 1: bit closer to China as the US levies tariffs on them.
[11:39] Speaker 1: There really is a question whether that's going to convince them.
[11:43] Speaker 2: This trial is expected to go into December, so we'll
[11:46] Speaker 2: talk again, Eric. Thanks so much. That's Columbia Law School
[11:49] Speaker 2: professor Eric Talley. Coming up next, the Justice Department is
[11:54] Speaker 2: ramping up an investigation into Trump's perceived enemies that goes
[11:58] Speaker 2: back a decade. I'm June Grosso, and you're listening to Bloomberg.
[12:04] Speaker 2: On the campaign trail, President Trump loved to regale audiences
[12:08] Speaker 2: with his list of grievances over what he saw as
[12:12] Speaker 2: a conspiracy to get him, whether it was the investigation
[12:16] Speaker 2: into Russian interference in the 2016 election or the investigation
[12:21] Speaker 2: into his mishandling of classified documents.
[12:25] Speaker 1: From the beginning, the Democrats spied on my campaign.
[12:29] Speaker 2: Remember that?
[12:30] Speaker 1: They attacked me. with an onslaught of fraudulent investigations. Russia, Russia, Russia. Ukraine, Ukraine, Ukraine.
[12:40] Speaker 1: Impeachment hoax number one. Impeachment hoax number two. The illegal
[12:46] Speaker 1: and unconstitutional raid on Mar-a-Lago right here.
[12:52] Speaker 2: Well, now that he's president, Trump is turning the tables
[12:56] Speaker 2: on those who investigated him, all in service of his
[13:00] Speaker 2: theory of a grand conspiracy by Democrats to sabotage him
[13:05] Speaker 2: over the course of a decade. And the Justice Department
[13:09] Speaker 2: is following in step, wrapping up a criminal investigation into
[13:13] Speaker 2: whether former government officials conspired to undermine Trump going back
[13:18] Speaker 2: 10 years. The department is adding prosecutors to the investigation,
[13:23] Speaker 2: convening a grand jury and sending out subpoenas to people
[13:27] Speaker 2: like former CIA director John Brennan. Joining me is Bloomberg
[13:32] Speaker 2: legal and national security reporter Chris Strom. Chris, tell us
[13:36] Speaker 2: about this Justice Department investigation that's been referred to as
[13:41] Speaker 2: the Grand Conspiracy Investigation.
[13:43] Speaker 3: Well, the investigation is an extremely broad probe into multiple
[13:50] Speaker 3: actions that were taken at the end of the Obama
[13:53] Speaker 3: administration and during the Biden administration, ranging from the investigation
[13:59] Speaker 3: into Russia's interference in the 2016 election, and whether the
[14:04] Speaker 3: Trump campaign had any involvement in that, ranging all the
[14:08] Speaker 3: way through to the investigation that was done under the
[14:11] Speaker 3: Biden administration into Trump's activities, including his efforts to overturn
[14:17] Speaker 3: the 2020 election and his taking of classified documents down
[14:22] Speaker 3: to Mar-a-Lago after he left office.
[14:25] Speaker 2: I mean, it sounds like, especially the allegations involving Russia...
[14:30] Speaker 2: have been investigated over and over again, including by John Durham,
[14:35] Speaker 2: who was appointed by Trump, right?
[14:38] Speaker 3: One of the things that's so bizarre about what the
[14:40] Speaker 3: Justice Department is doing is that they're retreading ground that
[14:44] Speaker 3: has already been well plowed by other investigations. There's been
[14:47] Speaker 3: multiple investigations into what happened in 2016 with regard to
[14:52] Speaker 3: the Trump-Russia investigation. There was an Inspector General investigation yesterday
[14:58] Speaker 3: into all of the activity that took place. And then
[15:01] Speaker 3: there was a special counsel appointed during the first Trump administration,
[15:05] Speaker 3: John Durham, and he took a deep dive look into
[15:09] Speaker 3: whether there were any crimes committed during the Trump-Russia investigation.
[15:13] Speaker 3: And he was only able to find one low-level FBI
[15:17] Speaker 3: lawyer who lied on a document that And that individual
[15:22] Speaker 3: pled guilty. No other individuals were ever charged with any
[15:27] Speaker 3: crimes based on the previous investigations. And so a lot
[15:31] Speaker 3: of people are questioning now what the Justice Department is
[15:34] Speaker 3: currently doing by going back 10 years and looking at
[15:38] Speaker 3: activity that has already been well investigated without any findings
[15:42] Speaker 3: of wrongdoing.
[15:43] Speaker 2: And they're seriously pursuing a theory that Democrats... were involved
[15:47] Speaker 2: in a conspiracy to sabotage Trump over the years.
[15:51] Speaker 3: Part of the theory of the case that prosecutors are
[15:54] Speaker 3: pursuing is that there was a conspiracy against Trump ranging
[15:58] Speaker 3: over the last 10 years from the Trump-Russia investigation that
[16:03] Speaker 3: was done in 2016 to the Mar-a-Lago classified documents investigation
[16:08] Speaker 3: that was done in 2023. And prosecutors are trying to
[16:11] Speaker 3: stitch together kind of a Frankenstein of a case that
[16:15] Speaker 3: says that there is a grand conspiracy against Trump ranging
[16:19] Speaker 3: over 10 years.
[16:20] Speaker 2: I mean, there were pictures of boxes and boxes of
[16:23] Speaker 2: classified documents piled up at Mar-a-Lago, so I'm not sure
[16:28] Speaker 2: where the conspiracy would be there. And investigations go awry
[16:34] Speaker 2: all the time. What kind of charges could they bring
[16:37] Speaker 2: against these former officials for pursuing investigations?
[16:42] Speaker 3: What's happening here is that Trump has demanded that the
[16:45] Speaker 3: Justice Department investigate and potentially prosecute his perceived political enemies.
[16:51] Speaker 3: And some of the major figures that Trump wants to
[16:54] Speaker 3: be investigated were people who were involved in in the
[16:58] Speaker 3: Trump-Russia investigation of 2016 and putting together an intelligence assessment
[17:04] Speaker 3: during that time, as well as government officials who were
[17:08] Speaker 3: involved in the investigation into Trump's retention of classified documents.
[17:13] Speaker 3: And so the Justice Department, during the second Trump administration,
[17:17] Speaker 3: has set out to conduct a sweeping investigation to look
[17:22] Speaker 3: for any potential wrongdoing or criminal activity that was done
[17:28] Speaker 3: over the last 10 years that they can find any
[17:32] Speaker 3: potential crime where they could bring a charge. There's a
[17:36] Speaker 3: lot of skepticism that the Justice Department is going to
[17:40] Speaker 3: be able to find anything new given that a lot
[17:44] Speaker 3: is already known about these investigations. But they've convened a
[17:48] Speaker 3: grand jury and they've sent a bunch of prosecutors down
[17:52] Speaker 3: to Florida and they're looking under as many rocks as
[17:56] Speaker 3: they possibly can and bringing people in before the grand
[18:00] Speaker 3: jury to testify with the hopes of finding something that
[18:07] Speaker 3: they can pin to somebody who Trump once investigated. And
[18:13] Speaker 3: as of now, there's no indication that they found any
[18:16] Speaker 3: criminal wrongdoing or have any justification to bring charges against anybody.
[18:23] Speaker 3: But the investigation is ongoing. They do have an active
[18:27] Speaker 3: grand jury. They are taking testimony. They have been receiving
[18:31] Speaker 3: documents and they've put a bunch of people under investigation
[18:35] Speaker 3: and they are moving forward with an undefined scope of
[18:41] Speaker 3: investigation that doesn't have any clear ending in sight.
[18:45] Speaker 2: Trump has a long enemies list. Are they targeting anyone
[18:49] Speaker 2: in particular?
[18:51] Speaker 3: Individuals that we know who are under investigation include John Brennan,
[18:55] Speaker 3: the former CIA director, James Clapper, the former director of
[19:00] Speaker 3: national intelligence, and other senior officials who were either in
[19:05] Speaker 3: the Obama administration or the Biden administration and worked for
[19:09] Speaker 3: either the FBI or intelligence agencies. It's pretty clear that
[19:13] Speaker 3: Trump wants certain individuals who are well-known, such as John Brennan,
[19:19] Speaker 3: James Clapper, and James Comey, to be under investigation and ideally,
[19:25] Speaker 3: from Trump's point of view, face criminal charges. But at
[19:29] Speaker 3: this point, there's not been any indication that evidence exists
[19:33] Speaker 3: to actually bring charges against any of these individuals. So
[19:36] Speaker 3: what might happen is that prosecutors will eventually write up
[19:40] Speaker 3: a report and talk about activity that they believe was
[19:45] Speaker 3: not justified and was done in the spirit of trying
[19:49] Speaker 3: to make Trump look bad. But in the end, they
[19:52] Speaker 3: just issue a report without any criminal charges.
[19:55] Speaker 2: I mean, sometimes it seems like the point is the
[19:58] Speaker 2: investigation itself, the news about the investigation and just bringing
[20:04] Speaker 2: charges like the Comey charges over the seashells on the beach.
[20:08] Speaker 3: Yeah, part of what the Justice Department seems to be
[20:10] Speaker 3: doing at this point is making the prosecution the punishment.
[20:15] Speaker 3: That by prosecuting individuals and putting them under investigation, they
[20:19] Speaker 3: have to spend a lot of money and they have
[20:21] Speaker 3: to spend a lot of time. They have to hire lawyers.
[20:24] Speaker 3: They have to go into court. They have to file documentation.
[20:29] Speaker 3: And so part of what the Justice Department appears to
[20:31] Speaker 3: be doing right now is putting people under investigation just
[20:35] Speaker 3: for the sake of putting them under investigation as a punishment.
[20:38] Speaker 2: Has the investigation ramped up since Todd Blanche became Attorney General?
[20:43] Speaker 3: Yes. By all accounts, the investigation has entered a new phase. Previously,
[20:49] Speaker 3: the investigation has been going in fits and starts. When
[20:52] Speaker 3: the Trump administration first began, it was being done under
[20:56] Speaker 3: former Attorney General Pam Bondi. It is based in the
[21:00] Speaker 3: Southern District of Florida. And the Investigators were spending a
[21:04] Speaker 3: lot of time cooking up the theories of the case
[21:08] Speaker 3: and then started sending out subpoenas for documentation. And then
[21:12] Speaker 3: the investigative pace seemed to stall. And of course, Bondi
[21:16] Speaker 3: was removed in April and Todd Blanche was confirmed as
[21:20] Speaker 3: attorney general in August 2017. And since then, we've seen
[21:24] Speaker 3: an uptick in the activity. And the most significant thing
[21:28] Speaker 3: is that prosecutors in Florida are now sending out subpoenas
[21:32] Speaker 3: for individuals to come in and testify in person before
[21:36] Speaker 3: the grand jury. And so this marks kind of a
[21:38] Speaker 3: new and aggressive phase for the investigation.
[21:41] Speaker 2: And why is this huge investigation based in Florida?
[21:45] Speaker 3: The reason why the Justice Department based the investigation in
[21:48] Speaker 3: Florida has always been a mystery. There is plenty of
[21:51] Speaker 3: activity that is under investigation that doesn't seem to have
[21:54] Speaker 3: any connection to Florida. Obviously, the Mar-a-Lago documents case has
[21:59] Speaker 3: a connection to Florida. And so prosecutors are making the
[22:03] Speaker 3: case that they are able to base their investigation in
[22:07] Speaker 3: Florida because they have activity that occurred in Florida that
[22:11] Speaker 3: is connected to a 10-year grand conspiracy against Trump. But
[22:16] Speaker 3: what really appears to be going on is that the
[22:18] Speaker 3: Justice Department did not want to bring any of the
[22:21] Speaker 3: case in any other jurisdiction where they might not have
[22:25] Speaker 3: a favorable jury or they might not have a in
[22:32] Speaker 3: Fort Pierce. Fort Pierce just happens to be where Judge
[22:36] Speaker 3: Eileen Cannon is located. And Judge Eileen Cannon oversaw the
[22:41] Speaker 3: classified documents case against Trump. And she made a lot
[22:45] Speaker 3: of rulings that were favorable to Trump and ultimately dismissed
[22:49] Speaker 3: the case against Trump. And so it appears what the
[22:52] Speaker 3: Justice Department is now trying to do is engineer a
[22:56] Speaker 3: way to get any kind of charges that they bring
[22:59] Speaker 3: in front of Judge Cannon.
[23:01] Speaker 2: And Judge Cannon was reversed twice by the 11th Circuit
[23:04] Speaker 2: during that case. Now, in April, conservative lawyer and Trump
[23:09] Speaker 2: ally Joe DiGenova was brought in to lead the investigation.
[23:14] Speaker 2: Why did he resign suddenly?
[23:16] Speaker 3: Joe DiGenova previously served in the Justice Department as the U.S.
[23:20] Speaker 3: attorney for the District of Columbia back in the 1980s.
[23:24] Speaker 3: And he's had kind of a storied reputation as being
[23:27] Speaker 3: an experienced professional prosecutor and went into private practice. But
[23:33] Speaker 3: in April, the Justice Department reached out to have him
[23:37] Speaker 3: come in and lead the investigation based in Florida. And
[23:41] Speaker 3: he had been working on it. But last week, he
[23:45] Speaker 3: abruptly resigned. And there's a lot of questions over what
[23:48] Speaker 3: actually took place behind the scenes. What we've been able
[23:51] Speaker 3: to report is that he was very frustrated and mad
[23:56] Speaker 3: at the heavy-handed approach that was coming out of Washington
[24:01] Speaker 3: and the Justice Department leadership to dictate what the pace
[24:05] Speaker 3: and scope of the investigation should be. And he was
[24:08] Speaker 3: pushing back on how fast the Justice Department wanted to
[24:13] Speaker 3: do grand jury activity and potentially bring charges against individuals
[24:18] Speaker 3: like John Brennan, and eventually reached a boiling point where
[24:22] Speaker 3: he could not continue doing the investigation the way that
[24:26] Speaker 3: he believed it should be done. And so he ended
[24:28] Speaker 3: up resigning.
[24:29] Speaker 2: It says a lot when you have an experienced lawyer
[24:32] Speaker 2: leaving an investigation after five months. And of course, the
[24:35] Speaker 2: Justice Department so far has not fared well in its
[24:39] Speaker 2: attempts to prosecute Trump's enemies. Thanks, Chris. That's Bloomberg's Chris Strom.
[24:45] Speaker 2: Coming up next, how to fix the Supreme Court's shadow docket.
[24:49] Speaker 2: I'm June Grosso, and you're listening to Bloomberg. The Supreme
[24:55] Speaker 2: Court's emergency or shadow docket has grown exponentially in size
[25:00] Speaker 2: and importance, with rulings in consequential cases often issued without explanation,
[25:07] Speaker 2: leaving lower courts to puzzle over their meaning. Justice Katonji
[25:11] Speaker 2: Brown-Jackson is just one of the justices who've criticized the
[25:16] Speaker 2: shadow docket for its lack of transparency and accountability.
[25:21] Speaker 4: So the court has left confusion. in its wake. And
[25:25] Speaker 4: it offers little guidance because it ordinarily does not spell
[25:28] Speaker 4: out the circumstances, giving rise to its own equities evaluation,
[25:33] Speaker 4: making it incredibly difficult for lower courts to understand which
[25:38] Speaker 4: facts were important to the state determination and thus identify
[25:43] Speaker 4: like cases.
[25:44] Speaker 2: Joining me is Columbia Law School professor Thomas Schmidt, who's
[25:48] Speaker 2: written a paper along with his colleague, Professor Kellen Funk,
[25:52] Speaker 2: suggesting some fixes for the emergency docket. Before we get
[25:56] Speaker 2: to the fixes, can you explain why the shadow docket
[26:00] Speaker 2: has ballooned, both in size and significance?
[26:05] Speaker 5: Well, it's a difficult question. And let me just begin
[26:07] Speaker 5: with some numbers, June, just to remind everybody how important Dramatically,
[26:12] Speaker 5: this has grown in the last decade or so. So
[26:14] Speaker 5: during the eight years of the Obama administration, plus the
[26:18] Speaker 5: eight years of the Bush administration, the court got six
[26:21] Speaker 5: or eight applications from the government to intervene and lift
[26:26] Speaker 5: the lower court's injunction with respect to a federal policy.
[26:29] Speaker 5: That has exploded in recent years. So the latest number
[26:32] Speaker 5: that I saw was about 37 applications from the second
[26:35] Speaker 5: Trump administration to in the first year and a half,
[26:39] Speaker 5: almost two years of the administration. So there's just been
[26:41] Speaker 5: a dramatic increase. And I think that's due to a
[26:45] Speaker 5: number of different reasons. I think one is that the
[26:48] Speaker 5: executive branch and the president in particular has gotten a
[26:51] Speaker 5: little bit more aggressive over time in invoking legal authorities
[26:55] Speaker 5: to implement its preferred policies without Congress. And that's led
[27:00] Speaker 5: to some litigation that has created a series of injunctions
[27:03] Speaker 5: in lower courts, and the Supreme Court itself has felt
[27:06] Speaker 5: pressure to intervene and has intervened in a lot of cases.
[27:09] Speaker 5: So that's one piece of the story. But I think
[27:12] Speaker 5: another piece of the story, unquestionably, is that the court
[27:14] Speaker 5: has been more open to these sorts of applications, and
[27:18] Speaker 5: it's applied its own stay and injunction standards in a
[27:21] Speaker 5: way that invite these applications. So to a certain extent,
[27:24] Speaker 5: litigants are pushing on an open door, and that's another
[27:27] Speaker 5: reason that there's been so much of a growth in
[27:30] Speaker 5: this side of the court's business.
[27:31] Speaker 2: There's a four-part test for equitable intervention that courts use.
[27:36] Speaker 2: Does the Supreme Court take into account and decide on
[27:40] Speaker 2: each of those four factors?
[27:42] Speaker 5: So the four-factor test that the court has given is
[27:46] Speaker 5: irreparable harm, the likelihood of success on the merits, the
[27:49] Speaker 5: balance of the equities, and the public interest. Now, it's
[27:53] Speaker 5: a little bit difficult to answer your question for a
[27:55] Speaker 5: couple reasons, right? So first of all, so often these
[27:59] Speaker 5: rulings on what we call the equity docket are unexplained.
[28:03] Speaker 5: So when a ruling is unexplained, there's just no way
[28:05] Speaker 5: to assess which of the factors the court considered. Second,
[28:09] Speaker 5: sometimes when they are explained, they only focus in on
[28:11] Speaker 5: one factor and don't really address the other factor. So again,
[28:14] Speaker 5: it's not really clear in that circumstance what was an
[28:16] Speaker 5: ingredient in the court's decision making. And then in other cases,
[28:20] Speaker 5: the court kind of recites the factors in a rote
[28:22] Speaker 5: sort of way, but doesn't really address all of them.
[28:24] Speaker 5: So one thing that Kellen, Professor Funk, and I argue
[28:28] Speaker 5: for in this paper is a little bit more transparency
[28:31] Speaker 5: in the rationale for rulings and just a little bit
[28:33] Speaker 5: more attention to the traditional balance of the equities of.
[28:38] Speaker 2: Is that why you think a better name for the
[28:40] Speaker 2: emergency docket would be the equity docket?
[28:43] Speaker 5: I think it's better because that fundamentally describes what the
[28:46] Speaker 5: court is doing, right? I mean, what litigants are doing
[28:49] Speaker 5: when they come to the court in this posture is
[28:51] Speaker 5: asking the court to set the status of a legal
[28:54] Speaker 5: policy or to set the status between the parties while
[28:57] Speaker 5: a lawsuit is pending. And traditionally, historically, that was one
[29:02] Speaker 5: of the core functions of courts of equity.
[29:04] Speaker 2: As you mentioned, the Trump administration's emergency applications to the
[29:09] Speaker 2: Supreme Court have dwarfed that of any prior administration. And
[29:14] Speaker 2: their claims of an emergency cover everything from firing someone
[29:18] Speaker 2: to changing birthright citizenship. So should the court draw a
[29:22] Speaker 2: line in the sand somewhere and say, this isn't a
[29:25] Speaker 2: real emergency?
[29:27] Speaker 5: Yeah, I think there's a lot to that, June. And
[29:29] Speaker 5: I would think about it in a couple different ways.
[29:31] Speaker 5: First of all, One of the most important requirements for
[29:35] Speaker 5: getting on the equity docket and historically to get into
[29:37] Speaker 5: a court of equity was that you had to show
[29:39] Speaker 5: irreparable harm. And the reason you had to show irreparable
[29:42] Speaker 5: harm is that the courts of law, in the case
[29:44] Speaker 5: of the Supreme Court, right, the merits docket, are open
[29:47] Speaker 5: for adjudication of the case in this non-expedited posture, right?
[29:51] Speaker 5: So One way that the court could respond to this
[29:54] Speaker 5: circumstance is to just insist on government showing of irreparable
[29:59] Speaker 5: harm in every case when they come to the court.
[30:01] Speaker 5: And I think the pattern so far is that the
[30:04] Speaker 5: court has been taking the administration at its word when
[30:07] Speaker 5: it claims harm. And the result has been that the
[30:10] Speaker 5: door to the equity docket has swung open. So I
[30:12] Speaker 5: think one way to deal with this problem is for
[30:15] Speaker 5: the court to insist in a more granular factual sense
[30:18] Speaker 5: on what exactly the emergency is and why the government
[30:21] Speaker 5: is going to suffer irreparable harm. But the second part
[30:25] Speaker 5: of my answer to your question, June, is that you're right,
[30:27] Speaker 5: that not all of these cases present genuine emergencies. A
[30:31] Speaker 5: petition from non-citizens hours before deportation would be an obvious case, right?
[30:36] Speaker 5: If you think about the AARP case, for example, that's
[30:39] Speaker 5: an emergency. Other cases, it's much less clear that these
[30:42] Speaker 5: are emergencies, right? If you think about the Lisa Cook case,
[30:45] Speaker 5: that was technically resolved on the equity docket, right? The
[30:48] Speaker 5: court never granted certiorari in the case, but it was
[30:51] Speaker 5: pending for several months. It was pending at least as
[30:54] Speaker 5: long as the typical merits case, right? So in that circumstance,
[30:58] Speaker 5: we think there's no danger in slowing down a little bit,
[31:01] Speaker 5: and issuing an opinion that explains kind of point by
[31:04] Speaker 5: point why the equitable standard is met.
[31:07] Speaker 2: Another favorite Trump administration argument that I've noticed on the
[31:12] Speaker 2: shadow docket is an invocation of national security as a
[31:16] Speaker 2: justification for its actions. Does the Supreme Court almost always
[31:20] Speaker 2: bow to the administration when it says national security?
[31:25] Speaker 5: There's no question that historically courts have been reluctant to
[31:30] Speaker 5: involve themselves in cases where the executive branch is making
[31:34] Speaker 5: strong claims of national security. On the other hand, the
[31:37] Speaker 5: court has said again and again that the invocation of
[31:39] Speaker 5: national security is not a talisman, right? It doesn't ward
[31:43] Speaker 5: off judicial review sort of automatically. And I think the
[31:45] Speaker 5: broader pattern of litigation in the Trump administration, not just
[31:49] Speaker 5: in the Supreme Court, but in the lower courts, is
[31:51] Speaker 5: a certain amount of skepticism to claims that the Justice
[31:56] Speaker 5: Department is making, right? This is sometimes couched in terms
[31:59] Speaker 5: of the erosion of the presumption of regularity. The idea
[32:02] Speaker 5: being we can't necessarily take the Justice Department at its
[32:06] Speaker 5: word and all of the claims that it makes in
[32:08] Speaker 5: its various briefs. So I think the Trump administration is
[32:11] Speaker 5: trying to tap into a history or a tradition of
[32:15] Speaker 5: judicial reticence, but I'm not sure that it's always working.
[32:19] Speaker 2: Justice Jackson talked about the difficulty for lower courts— to
[32:24] Speaker 2: follow the Supreme Court's orders on the emergency docket. And
[32:28] Speaker 2: there was that case last year where Justice Gorsuch took
[32:32] Speaker 2: a federal judge to task for not following Supreme Court precedent.
[32:37] Speaker 2: Is there any wiggle room for lower courts?
[32:41] Speaker 5: So last year, in a case called Boyle, the Supreme
[32:44] Speaker 5: Court made clear that when it rules on the emergency docket,
[32:48] Speaker 5: the lower court should follow it in like cases. That
[32:51] Speaker 5: is to say, by ruling on the emergency docket or
[32:53] Speaker 5: the equity docket, the court has shown how it regards
[32:57] Speaker 5: the equities in the case to balance out and lower
[33:00] Speaker 5: court should follow that lead. Now, having said that, following
[33:04] Speaker 5: the Supreme Court is perhaps easier said than done, right?
[33:07] Speaker 5: To the extent many of these orders are unreasoned, it's
[33:10] Speaker 5: not clear what the basis was and therefore not clear
[33:12] Speaker 5: exactly what it is that a lower court has to follow.
[33:15] Speaker 5: The second thing is that Often the court's rulings on
[33:19] Speaker 5: the equity docket are foreshadowing changes in the law that
[33:23] Speaker 5: make it very difficult for a lower court to understand
[33:27] Speaker 5: what the law is right now. So one thing is
[33:29] Speaker 5: the old equitable maxim that equity follows the law. And
[33:33] Speaker 5: when the court takes a case on the equity docket,
[33:36] Speaker 5: it should be applying existing law, not anticipating a change
[33:39] Speaker 5: in law that might happen down the road. To make
[33:42] Speaker 5: this a little less abstract, maybe I'll mention the Slaughter
[33:45] Speaker 5: case in which the Supreme Court overturned Humphrey's executor and
[33:49] Speaker 5: the principle of independent agencies that have been embodied in
[33:52] Speaker 5: that case. Now, if you're a lower court judge before Slaughter,
[33:56] Speaker 5: on the one hand, you're looking at a unanimous majority
[33:59] Speaker 5: opinion in Humphrey's executor upholding the FTC. On the other hand,
[34:03] Speaker 5: you're looking at a mostly unreasoned order by the Supreme
[34:07] Speaker 5: Court just relying on harm to the executive branch while
[34:10] Speaker 5: purporting not to disturb Humphrey's executor that allowed the Trump
[34:14] Speaker 5: administration to move forward with firing a commissioner of the FTC.
[34:18] Speaker 5: It's not clear to me that looking at that, it's
[34:20] Speaker 5: plain what the duty of a lower court judge is.
[34:22] Speaker 2: Do you think some of the justices may be reluctant
[34:25] Speaker 2: at times to write full decisions because it slows down
[34:29] Speaker 2: the process? They have to exchange decisions and perhaps there'll
[34:34] Speaker 2: be concurrences and dissents to write?
[34:37] Speaker 5: I think that's quite possible. And whether to write an
[34:39] Speaker 5: opinion and how long an opinion to issue, those are
[34:43] Speaker 5: inevitably sort of prudential judgments that are going to be
[34:46] Speaker 5: happening within the court. But I don't necessarily think that
[34:49] Speaker 5: issuing opinions slows things down. And the most important reason
[34:53] Speaker 5: is that the court does not necessarily have to issue
[34:56] Speaker 5: a full-fledged opinion at the moment that it rules, right? So,
[34:59] Speaker 5: for example, an individual justice alone can issue an administrative
[35:04] Speaker 5: stay while an opinion is being worked out.
[35:07] Speaker 3: Right?
[35:07] Speaker 5: So that would preserve the status quo or allow the
[35:09] Speaker 5: court at least to set the status quo while it's
[35:12] Speaker 5: issuing an opinion. It can also issue an order as
[35:14] Speaker 5: a majority and then issue an opinion afterwards. I mentioned
[35:17] Speaker 5: the AARP case a moment ago. That's exactly what happened there.
[35:21] Speaker 5: A very brief order on the night that the non-citizens
[35:24] Speaker 5: first approached the court about their imminent deportation and then
[35:28] Speaker 5: a much longer opinion a few days later.
[35:30] Speaker 2: Speaking about preserving the status quo or rather not preserving
[35:34] Speaker 2: the status quo, Let's turn to the White House ballroom,
[35:37] Speaker 2: where the majority went off on standing and twisted itself
[35:42] Speaker 2: in knots to come to the conclusion that the National
[35:46] Speaker 2: Trust for Historic Preservation didn't have standing. So they allowed
[35:52] Speaker 2: President Trump to go forward to complete the project that
[35:56] Speaker 2: lower courts concluded was likely illegal. What happened to preserving
[36:01] Speaker 2: the status quo while litigation proceeds?
[36:04] Speaker 5: I agree with you, June. And I think the equity
[36:06] Speaker 5: docket idea is a helpful way to think this through, right?
[36:10] Speaker 5: So one thing that courts of equity would do is
[36:13] Speaker 5: to preserve the status quo while litigation is pending to
[36:16] Speaker 5: enable a court to rule on the merits of a case.
[36:19] Speaker 5: And as you point out here, it is very possible
[36:22] Speaker 5: that by the time a plaintiff withstanding under the court's
[36:25] Speaker 5: new opinion comes along and is able to sue, the
[36:28] Speaker 5: ballroom will be built and there will in fact be
[36:30] Speaker 5: no way to adjudicate the merits of the case because
[36:32] Speaker 5: it will be too late. So one way to think
[36:35] Speaker 5: about this in equitable terms is just to say, this
[36:39] Speaker 5: looks illegal under the relevant authorities for the reasons that
[36:43] Speaker 5: Chief Justice Robert gave in his dissent. I have not
[36:46] Speaker 5: seen a plausible legal justification for moving ahead with this
[36:50] Speaker 5: without other kinds of approvals. And essentially, what the administration
[36:54] Speaker 5: was doing in coming to the Supreme Court was asking
[36:57] Speaker 5: for its equitable intervention to allow it to get away
[37:01] Speaker 5: with in a legal project. And that's a fundamentally inequitable
[37:05] Speaker 5: use of a court of equity. The way you could
[37:07] Speaker 5: put that in more legal or litigation terms would be
[37:10] Speaker 5: to say the administration came to the court with unclean hands,
[37:14] Speaker 5: or you might say that he who seeks equity must
[37:16] Speaker 5: do equity. And essentially, enlisting the Supreme Court in this circumstance,
[37:20] Speaker 5: I think, violated those equitable maxims.
[37:23] Speaker 2: I always feel that the doctrine of unclean hands presents
[37:26] Speaker 2: a vivid image of Thanks for sharing your insights with us.
[37:32] Speaker 2: That's Columbia Law School Professor Thomas Schmidt.

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