Transcription
Well, is it cheaper today because of the tariff uh decision?
Maybe cheaper tomorrow. We're going to get to that. I was in Canada for a wedding recently um, you know, a few months ago and I kept asking for um, getting some provisions for various folks and they and there was no California Cabernet and there was no Texas vodka. So, I had to leave the store. But that was all due to this um, the taraphor. So, as you can see, it deeply affected me and my family personally.
You seem to be weathering the storm. Okay, though.
I think I'm doing all right. So, we got we got folks streaming in at the end of the week. Steve, thanks for taking the time. Um, glad we have you. It's complicated for a lot of folks. Let's take it one step at a time. um, remind folks in a sentence the basis on which Donald Trump and his administration claimed that they could impose these sweeping tariffs unilaterally based on their understanding of executive power without input or objection from the Congress.
Yeah. So the the tariffs the what we might call the retaliatory tariffs although there were also some fentinylbased tariffs that were also in today's ruling pre were based on a very muscular reading of a statute specifically the international emergency economic powers act of 1977 uh which we lovingly call IPA.
And you know I mean you know from your justice department days is a very powerful tool >> for the executive branch when it comes to various forms of international econ economic regulation, transactional uh investigations, etc. It had never been used for tariffs before. And in fact, there are a series of other statutes. Um, section 232 of the trade expansion act is just one example where there's much more specific tariff authority, but those other statutes pre also have substantive and procedural constraints that IPA doesn't. So, you know, the Trump administration tried to rely upon AIPA for these tariffs. Um, and it lost in the lowest court, the Court of International Trade. It lost in the Federal Circuit. And today, in a 63 ruling that has gotten already quite a lot of media attention, it lost in the Supreme Court.
Um, you might say Donald Trump didn't have the cards. Is that is that one way to is that one way to put it?
Um, well, didn't have the cards. uh you can have you know you can there are so many metaphors you can do here but I think I'll just stick with uh lost a big one.
So the split it's it's complicated as people are making their way through the hundred hundreds of pages of opinions. This is what a lot of people call a splintered opinion um because justices give reasons for why they believe in a particular decision and parts of a decision. And there are things when we have more time in the coming weeks, we'll talk about the major questions doctrine and um how some conservatives along with other conservatives on certain parts of the ruling. But in essence, as the reporting has suggested, it's a 63 decision on the on the principal point, the three liberals um being excuse me, the three liberals being in the majority with Roberts, Gorsuch, and Barrett. Do I have that right?
Exactly right. And you know, I think the I'll just say pre when I coming out of the oral argument, I thought we were heading for 7 to2 or 6 to three.
Who was the seventh? He thought we were going to get.
So, I think the question was Kavanaaugh and and I think that, you know, he's perhaps the most interesting vote of the.
Well, he wrote the descent.
He wrote the he wrote the what Justice Thomas called the principal descent. And I know I know we'll come back to him, but yeah, I mean, I think so it's it's just for the to be a little legal nerdy for a second. Um, sometimes you have these rulings that are deeply fractured where there's no majority opinion at all. Um, this isn't that. There actually was a decent chunk of Chief Justice Robert's opinion that was joined in full by all five of the other justices. The real daylight between the six justices in the majority pre was all about the so-called major questions doctrine.
Yeah.
Um, so they all agree that AIPA doesn't authorize tariffs. They just disagree about exactly how they get there. And you know those disagreements I think pre might matter in future cases. They didn't really matter today.
So talk about how this court, the majority of this court found that President Trump, who we've talked about in this podcast and you've talked about in many places, including I'm sure in your classes, there's no executive authority or loophole through which he can argue executive authority that he doesn't seize again and again and again. And those are emergency powers that brought us Minneapolis. Those are emergency powers that brought us certain deportations. Those are um, you know, alleged emergency powers that brought us uh, you know, troops and the National Guard. This is an extraordinary power that actually exists within AIPA but simply not to the extent that the president demanded. My my my my my sort of larger question, we'll get back to the particulars of the case is um, you and I and others have railed against the uh, you know, continuing encroachment upon all the other branches of this this executive branch. Why here? Why put up the the red light or the stop sign here? Does this tell us anything about where we're going overall or not?
So, at the risk of I think disappointing some folks, I I'm very wary about reading too much into this decision. I mean, I think it is it's a big deal on its own terms pre um, it is I mean I realize this doesn't feel that way because of all the emergency applications that have come from the Trump administration. This is actually the first merits case of the second Trump administration and you know, the fact that it was a big loss I think is a is a pretty resounding signal but it's a narrow signal and so let me let me say a bit about why. So this is not a case where the Trump administration made any arguments about the president having inherent constitutional authority. This is not a case in which the administration argued that statutes Congress had passed were somehow either not exhaustive or perhaps had even not fully occupied the field or might even be unconstitutional. They rested their whole case on what they thought was a better reading of the statute of AIPA. And with this court pit, when you have what really is what we might call a pure statutory interpretation case, um, you're going to play into at least some alignments between some of the conservatives and the three Democratic appointees about how we do and don't understand delegations of authority to the executive branch. And I think that's why I, you know, Adam Liptac in the New York Times said this was a Declaration of Independence by the Supreme Court.
You disagree. You disagree.
I I feel like it's more like the Albany plan of union.
Um, right.
Um,
What that is, Steve?
Uh, the the Alb Plan of Union, the the first effort by Ben Franklin to create a charter of of mutual cooperation among the colonies.
Um,
Right.
Um,
It's like the League of Nations. It's like the League of Nations. Is that a better.
Not the UN? Um, but let me say but but it's worth it's worth stressing why. I mean, so in the immigration context, the president is exercising powers both that he claims have been delegated by statute and in a field in which the courts have historically been more differential to the president. um, you know, the even if you think that the tariffs case is a sort of foreign affairs national security case and that's the Kavanaaugh argument in his descent pre, this is still not a topic on which the courts have historically um bent over to the executive branch and so you know, I think this is a good sign that the court is not reflexively ruling for Trump in all of these cases I don't know that we can say with any confidence that it's any kind of turning point as opposed to just you know, a case that came to the court in a very different posture and on a very different question than all those previous emergency applications.
Let me just read a sentence from the Roberts decision and you can maybe explain it to lay folks. Um, based on two words separated by 16 others in AIPA and those words are regulate and importation. The president asserts the independent power to impose tariffs on imports from any country of any product at any rate for any amount of time. Those words, Robert said, cannot bear such weight. AIPA, he points out, and this maybe is understandable to everyone, contains no reference to tariffs or duties. And until now, no president has read AIPA to confer such power. Now that last part, the fact that no president has read AIPA to confer such power um substitute a different word for AIPA and you can have many many examples of that. I don't know how much that mattered. But but what is it what did it matter that the president's team relied on those words and neither tariff nor duty appears in the statute? Isn't that sort of a slam dunk?
It should have been. I mean, I think this is why maybe you could have made the case that it should have been nine nothing. um, you know, the I think the the federal circuit the court of appeals that heard this case when it sat on Bob it divided I think it was either 7 to4 8 to4 and the denters actually I think had a decent argument which is if you read statutes the way that I think we more often associate historically with liberal uh statuto interpretation with sort of more purpos um that there actually is not a ridiculous line of causation line of logic from AIPA's broad language to the president having broad flexibility in the space. The problem for the Trump administration all along PIT is that that's not how this court reads statutes anymore and it hasn't been for the better part of 20 years. And so, you know, if you hold up today's ruling, PIT, against the 2023 decision in the student loan debt forgiveness program case, Biden versus Nebraska,
You'll find six of the justices in the same place.
Um, right. So you'll find, you know, the sort of the justices who think that the major questions doctrine denies um the president this kind of power um are the three Republican appointees in the majority. The justices who don't think the major questions doctrine should apply are the three Democratic appointees in the majority. And the only justices who are openly inconsistent on this are the dissenters, right? Kavanaaugh, Thomas, and Alto. So that's that's the argument for why there should have been an easy case.
In the real world. we're in the real world even though we're talking about law. Um, there's that distinction that you have to make with students and sometimes in in legal writing. Had it been the case that the tariffs were uniformly viewed by economists and experts as a good thing and proper and helpful as opposed to universally panned as being idiotic and stupid and the product of tantrum. Um, the legal arguments don't change. The words of the statute don't change. Jurist prudence doesn't change. The the state of play, the major questions doctrine doesn't change. Does the decision change?
Maybe. I mean, maybe. I mean, yeah. The I mean,
Wait, wait a minute. Wait a minute. You're a professor of law. You're saying that the law sometimes doesn't matter as much as other stuff.
I think that the I think that the reality is that the justices live in the world like the rest of us. And whether you take that as the cynical view, which is that the justices are worried about their own 401ks, or whether you take that as the more ide.
Yeah.
Or whether you take it as the more idealistic view, which is that the court is not supposed to be completely immune from and oblivious to public opinion. Um, I think the reality is you end up in the same place, which is that the best chances the president's going to have for a, you know, sort of deeply stretched aggressive interpretation of a statute are going to be in cases in which that interpretation is broadly popular. Um, and you know, we can talk about whether that ought to be how this works, but I think there's no denying that that has been how this works. Um, and so whether you view this as cynicism or just realism, yeah,
You end up in much the same place. Do you have are you able to answer the question that some people might have which is well you know Biden imposed tariffs maybe not in the same manner in the same degree and on the same products how come that was okay and this is not.
Yeah. So, you know, presidents going back decades uh have imposed tariffs. But the difference pit is that there are a handful of far more specific statutory authorities. Um, and just to pick out one some something called section 232 of the trade expansion act of 1962 that presidents of both parties including we should say President Trump during his first term relied upon to impose tariffs pre that were more subject matter specific. So, for example, the Canadian steel tariffs Yeah. during President Trump's first term um that were more procedurally constrained. And I think the difference here is that President Trump couldn't use those more specific authorities to impose these broad general sweeping reciprocal tariffs. And you know, that doesn't mean that he won't come back tomorrow pre with a new executive order imposing some subset of some of these tariffs under these other authorities.
Yeah. Yeah.
But that distinction matters.
He certainly will, will he not? I mean, you know, you are not the only observer of the oral argument who must have foresaw that it could go this way. Do you have an understanding of how the president has been planning for this? I think even as we speak, I haven't caught the last couple of hours, but he's made some pronouncements on what he's going to do. How is that going to fair?
And he said some very nice things about the the the justices in the majority. Um, so you know, it it's hard to generalize pre because I don't think there is any denying that some of these statutes other than the one President Trump used for the reciprocal tariffs do in fact provide tariff authority like no no one is seriously saying it doesn't. And you know, in so far as there is any argument about what's called the non-delegation doctrine that Congress couldn't delegate this kind of power to the president really I think only Justice Gorsuch is is attracted to that argument. Um, the hard question will be what are the specific tariffs President Trump tries to impose in response and are those based on you know, valid plausible readings of the relevant statutes and pre, it's hard to generalize because we don't know what he'll do.
Um,
Yeah.
My best my best guess and this is really not this this is worth what everyone's paying for it um is that the president will do like something small and we'll claim it is much bigger than it is and will claim that it is some massive repudiation of the Supreme Court when maybe it's using sort of a very narrow tariff authority to put back some very small subset of what was already on the books. Now, a question that lots of people are asking, and this court seemed to avoid answering in any way, shape, or form, you're nodding your head. What about the tariffs that were paid, Steve?
Yep. Yep.
What happens to those?
Um, do they get paid back? How does that work?
So, let me start with we don't know. Um, let me let me and let me sort of go from there. the the folks who are surprised that the Supreme Court did not address this I think um should not have been surprised um that this is a incredibly messy question. It's a question that no one in the lower courts had talked about at all and I think that the justices are perfectly happy
To let the lower courts in this case the court of international trade um go first. Um, but there's a larger point here preit which is this is not the first time in the Supreme Court's history that we've had a massive ruling that had immediate significant economic effects and in prior instances where this has happened the court has operated sometimes informally and pre sometimes formally Yeah.
With an expectation that this other branch of government we used to call it Congress um right would actually step in and fill the gap.
Yeah. And you know, so a good example of this is in um 1982 when the court invalidated the entire bankruptcy court system, right?
Um, the justices paused their ruling for long enough for Congress to fix it. Um, if you go back a little further to the end of World War II, there were a series of rulings where the justices reinterpreted uh the Fair Labor Standards Act to impose a ton of retroactive liability on employers from World War II. and Congress responded by sort of aortioning out what would be and what would not be allowed to be collected. So in a system in which we had a function of separation of powers pre, this would actually be a policy question for Congress.
I I think neither you nor I are going to hold our breath that Congress is going to do anything here. And so I think it's going to go back to the lower courts where you know, it will be a mess but I think that's a mess that was inevitable. And you know, I I'll just say I would be surprised if at the end of the day the result is everyone gets their money back. That seems to me to be the least likely outcome.
Just so I understand, reasonable and lawful and appropriate for the judges the justices to punt on this question uh or not. And then related to that, um, depending on your answer, given what we said earlier about how the justices live in the real world, was punting on this, um, evidence to the contrary that they don't live in the real world?
Um, I so let me take the second question first. I don't think so because, you know, I mean, look, it already took them, you know, three and a half months to write to get out these 160 pages. Um, and it's hard to imagine that they would have been in any hurry to figure out the remedy question in a way that was going to slow down getting this ruling out and onto the books. Um, you know, maybe pre they could have ordered reargument on the remedy question. That that is something that in history we've seen the court do, but again, this is not something that the lower courts have touched on at all. Um, and you know, it's not just in these cases pre, but we have all these other lawsuits brought by companies like Costco um
Right.
That I think are probably better vehicles for trying to figure that out. There's there pre there's an administrative process through um, I think it's CBP customs and border protection >> right for folks to actually try to reclaim the funds. And so I I think it would have been a very aggressive move by this court to try to sus out all those questions when they hadn't been briefed and argued um in the in the merits part of this case.
Now a lot of business people, you know, I have clients who my law firm has lots of business clients who want some repose, some closure, some predictability. They're just not going to get it. Ain't happening right. I I would think uh we are not getting immediate closure in any way, shape or form. Um, you know, what happens in the lower courts I think is um an open question. I think there are different ways that the remedies issue can go. I think there will be pre some jostling for which court or courts will decide this question. Right. So you know, the case the Supreme Court decided today came out of the court of international trade. Um, it's possible that some of these other lawsuits will be brought in the court of federal claims. Yeah.
And so, you know, the short answer is yes. This is going to be a litigation program in the short term for, you know, your firm and lots of other law firms. Um, I think we should though not lose sight of two broader points. The first is again, um, this is a this is exactly the type of mess that historically we actually would have looked to Congress to try to fix. and the fact that we're going to be stuck with the lower courts is yet another I think in indictment of of Congress's specklessness. But the second, you know, from the court's perspective, I don't think that if you're John Roberts and you're thinking about the institutional relationship between the Supreme Court and the other branches, the question of whether individual businesses will be made whole is one that you're losing sleep over, even if you and I might think it should be.
Yeah. as as you alluded to the the artist formerly known as Congress, but but on the question of of certainty and and and what is to come in the future, is it the case that notwithstanding these other authorities the president may have, some of which are temporary, um, tariffs can be put in place for a limited period of days, I think one of them is 150 days, that if you're if you are a manufacturing concern in another country, you can be pretty sure that You will not have a whackadoodle 50 80 100% tariff placed upon your products going forward in any way shape or form.
Correct. Um, I guess what I would say is I have a very hard time if I were giving advice right now um telling anyone to be confident about the predictability of what this administration will or will not do.
Um, and so
Well wait I'm sorry what what's the basis on which I don't know enough about trade law. What's the basis on which Trump could reinstate in to the same extent and on the same scale the tariffs that he has in place now.
So I don't think he can but I also don't think that we can be confident that he won't try to stretch the other statute.
Yeah. The 14th amendment perhaps. No, I mean, but but realistically, I mean, like I you know, this administration Yeah.
So, you know, President
Will have to be litigated itself again.
And and and and you know, and let me just say, I mean, President Biden got a lot of grief from the right, right, for trying to do student loan debt forgiveness through a a different statutory pathway. Yeah. Once the Supreme Court closed off the first one.
Yeah.
I don't, you know, as long as it's a viable application of the statute, I don't think it's necessarily lawless. But I think the real point here is that this administration is not, I think, predictable in ways that its predecessors were sufficient for small businesses pre whether inside or outside the United States to actually rely heavily on what they think is going to happen next. Is there anything about this decision in the 63 that um, that would call that would cause you to call this as we sometimes say um, a case of strange bedfellows or is it does it make logical sense given where those justices are and it was a matter of statuto interpretation as opposed to constitutional interpretation.
Um, I to me it is I am more surprised pre that Kavanagh is in the descent than I am that Gorsuch is in the majority. Um, you know, Justice Gorsuch, I think, has been very aggressive um in ruling with for the Trump administration on a bunch of these emergency applications. So, he's, you know, on we've seen him with Gorsuch, uh, sorry, with with Thomas Nolo in, you know, a lot of those cases, but this is just a pure statutory interpretation case that checks all of his boxes. And, you know, I guess to me the it is much much more I walked out of the oral argument in November thinking it would be 7 to2. And you know, I was wrong about Kavanaaugh, not Gorsuch. And I suspect that there are other folks who probably feel the same way. The the only the strange bet bellow here is that it's Kavanaaugh with Thomas and Alo, not Gorsuch. So on and Thomas and Alto, did they rule predictably the way they did in favor of presidential power because they they they love them some presidential power. And it just so happens that their interpretation of the statutes jive with their endearing um feelings towards uh executive power or is it something different?
I I would love to be able to say that they've been consistent about executive power in this space, but just to go back to the student loan case one more time, it is really hard to put their votes in that case next to their votes in this case. And and the same is true frankly pri of Justice Kavanaaugh. And you know, Kavanaaugh's descent, his 63page descent, makes much out of this being a foreign affairs/n security case.
Um,
But you know, folks might not remember that in the student loan case, the statute on which the secretary of education was relying was a post 911 emergency statute. Um, right, it was power that Congress delegated in a national emergency. And indeed, that the student loan debt forgiveness program was specifically about the COVID emergency. Um, and so you might think those are factually distinguishable. It's really hard to see how you have one theory of statutory delegation in that case and a different one in this case.
Yeah. Um, we got to get going. People have happy hours to attend. See, but I have a final question. I have heard some rumors and some speculation that one of the justices about whom we've been speaking and you have a lot of sources everywhere in the world. I I've I've I've come to learn. Is Sam Alto going to retire in June?
Um, so let me say I have absolutely no inside information to answer that question. Um, but
You guys don't have dinner. You guys don't have dinner from time to time.
You know, he's a Phillies fan. I'm a Mets fan. It's just it's it was never going to work out.
Um,
So, but what do you think?
I I think that the if you're looking for clues, the clues are leaning toward and and I see three in particular, Pit. So the first is um, he has a book coming out in October. Um, and you know, the justices have I mean seven of the justices have now written books that's not new but releasing a book in October is a very interesting move since that's usually the busiest right
Or at least the second busiest time of the Supreme Court's term. Um, very hard pre to do a book tour when you're sitting on the bench. Um, so that's clue number one.
That's a good clue. That's a good clue. Um, clue number two is there's a very hagioraphic biography of him coming out from Molly Hemingway, which I think is also a sort of um, a a DU Ma type piece, if you will.
Swan song. Yeah.
Exactly. So, um, and I think clue number three is frankly the shifting political ties. Um, you know, I think four, five, six months ago, um, you and I probably both would have said the chances of the Democrats retaking the Senate in November, um, were still quite low. And I think that math has changed. Um, not to the point where anyone can be confident, but that probably includes Alo. And so, you know, I don't think there's a universe in which he would ever consider retiring um, in the face of a Democratic Senate.
Those are very good clues, Steve. Um, you know, this point of personal history, um, when I worked on the Senate Judiciary Committee, I worked on the confirmation hearing, um, of of Sam Lato for whom, um, that took place in January of 200, I think January 2006, and I started working in '05.
And now we're talking about his retirement. So, the reaction I have um, most personally is that, wow, I'm old and time flies. and we'll see what it means for the Senate um for the president of the nation.
Pretty that was my first year teaching um 506 and so imagine
You must have talked back then because I was talking to a lot of constitutional law professors to understand what the important issues were for the hearings and um, so he's been on the court a long time.
But imagine you're a baby law professor and your first couple months on the job, Chief Justice Renquist dies. Um, right, Justice Roberts is confirmed to his seat. Okconor resigns. Harriet Meers's nomination is killed.
Yeah. Two and a half nominations I was saying.
Yep. Yep.
Your students probably don't remember who Harriet Meers is.
Nope. But it's a remarkable marker pre of how much the court has changed in really what you know historical terms is a very short period of time. The you might remember Justice Brier in 2007 in his oral descent from the bench in the parents involved case says uh seldom in the law have so few changed so much so quickly. And I feel like, you know, that was he didn't, you know, he that that was nothing compared to what happened since.
Um, you query how how Antinine Scalia would do at a confirmation hearing today. And relatedly, as I've heard some people mention recently, imagine this that Ronald Reagan would have a very difficult time a very difficult time winning the the Republican primary. That's how far we've come. All right, folks. Drink them if you got them. Uh, have a great weekend, Steve. I really I have a Diet Coke. I gota I gota upgrade.
No, mine just mine just been drift. So, I'm I'm
Oh, I didn't see that. Okay.
Yeah.
All right. I thought it I thought it was just um
I wish
Turpentine or something.
Um, All All right, Steve.
Thanks everybody for joining us for joining us on a Friday evening. Very important stuff. Thanks so much. Bye.
Great to see you.