This is Bloomberg Law with June Brusso from Bloomberg Radio.
Vice President Kamala Harris sealed her status as the presumptive Democratic presidential nominee on Monday night, after crossing the magic number of nineteen hundred seventy six pledge delegates, more than enough to clinch the nomination, after an extraordinary two day blitz that saw Harris consolidate her party's backing to challenge Donald Trump in November.
Over the next one hundred and six days, we are going to take our case to the American people, and we are going to win.
President. Joe Biden had won ninety nine percent of the pledge delegates to August Democratic National Convention through a series of state primaries and calls earlier in the year, and his endorsement of Harris served as a rallying point for the party.
I'm hoping you'll give every bit of your heart and soul that you gave to me to come on.
The Vice president took over Biden's campaign, which was renamed Harris for President, giving her access to its war chest. Yet some Republicans, like House Speaker Mike Johnson, are raising the specter of lawsuits challenging Harris's place on the top of the ticket.
We have fifty different systems in each of the states when it comes to presidential elections and choosing electors and all the rest, And in some of the states there are impediments to just switching someone out like that. Remember that this claims to be the Party of Democracy, small d democracy right. Fourteen million people went through the process and chose this nominee, Joe Biden. Now a handful of people have gotten together and decided he's no longer suitable.
That's not how this system works, or.
As Johnson confused about how the system works. Joining me is elections law expert Richard Brefalt, professor at Columbia Law School. So she has more than enough pledged delegates to clinch the Democratic presidential nomination. So does that rule out any kind of an open convention or problems at the convention?
I think it will turn on the rules. I mean, I don't think it precludes an open convention. Nobody seems to be running against her. I mean, the way delegates work in the Democratic Party, even if Biden were running, the nature of the pledge is it's like an honor pledge or a good faith pledge, so even the pledge delegates actually could have voted for someone else. So the fact that they've kind of announced a commitment to her, they're not legally pledged to her, so people could change
their minds. I mean, I'm not saying that's going to happen, but I think the real issue is I think I saw Mary Ann Williamson might have declared. I think under the rules of the Democratic Party, anyone who wants to be nominated would need to support a three hundred delegates with no more than fifty from one state, And at this point it doesn't seem like there'll be any other candidate, so I think in that sense she has it wrapped up. None of the other prominent figures in Democratic parties have
indicated any interest in running. I think at this point they've all endorsed her, so in some sense it's technically open. But she's going to be nominated, presumably, if not by acclamation, then by some overwhelming vote.
One of the first questions is whether she can access Biden's campaign funds.
Right, so the money is sort of in three parts, and the only real issue is the money technically that went to the Biden Harris campaign. So the money that goes to the Democratic Party, of course she can use. And I think they also had a pack going, a superpack going, and of that of course they can use. The issue was the money that they went to Biden Harris specifically, and there I think it's a smaller amount, maybe like ninety million, but I'm not sure about that.
The assumption of all the campaigns and nance people I've spoken to is yet, as long as Harris continues to be on the ticket, it's money that she can use. The issue would have been more if the Democrats and not made someone else, then I think the Biden Harris committee would have had to transfer the money to the Democratic Party and the Democratic Party would have the money. But as long as she's the nominee, she is part of Biden Harris, which I think now has already been
renamed Harris. So the assumption of just about every campaign finance lawyer I know is that yes, she can use it. I think that some Republicans have made some noises about challenging that, but I think that the overwhelming assumption has been the money went to her also it was going to Biden and Harris. Harris is still running. So I think that the vast majority of campaing San's lawyers and scholars believe that it's money she can use.
And I understand that even if it's challenged that the Federal Election Commission takes so long to move that it would just be a question of paying fines later.
Not only it takes so long to move but you would need to get four votes, and there are three Democrats who sit on the commission. There's a sixth member commission, three Democrats and three Republicans, and on most major things they tend to vote on party mind, So it just seems right there's both the time that would take and likely vote, and I think given the rules of the federal election law, I think it will be very hard for Republicans to sidestep the Commission and go directly to court.
Now somebody might try that, but I do think it's kind of a lost cause given the court system today. You never know one hundred percent. But I think, as I said, the overwhelming belief is that the money she could use and would be very unlikely the Federal Election Commission would certainly during the course of the campaign, but at any time come and say it was an improper use.
Speaker Mike Johnson says he expects they'll be litigation, saying there are fifty different systems and that in some states there are impediments to swapping candidates. Could there be losses on the basis of the switch.
It seems like a totally ridiculous argument. The party doesn't have a candidate. The party doesn't have a candidate until they make a nomination. Biden was never nominated. Democratic convention has not met. The so called virtual role call we're talking about hasn't happened. The Democratic Party gets to decide who the Democratic Party's nominee is, and they haven't made a choice yet. I don't think there'd be an issue even if it was answered the nomination, because they still
get to write their own rules. Just they make it clear Biden was never the nominee. He was the presumptive nominee, that he was never the nominee, and so there's no challenge to make. There's no substitution, no ballots had been printed, and so it's it's totally blowing smoke.
So then what about the June twenty first memo from the Heritage Foundation, the conservative think tank, where it says it views swing states Georgia, Nevada, and Wisconsin as likely arenas for pre election legal challenges because they have specific procedures for withdrawal of a presidential nominee.
The only way there would be anything is that Biden had actually been nominated, but Biden wasn't nominated. It doesn't matter that Biden won primary there because many times a candidate who's won primary and there's upstates, whose is the nomination. So the fact that Harris didn't win the primary any of the states is irrelevant. Many candidate who are then ultimate nominees lost some primaries, they still got to be on the ballots of the states where they lost the primary.
So I think they might have some argument that he'd actually been nominated and she was being put in to replace him, but he was never nominated.
Which do you see any other legal complications of her candidacy.
No, I don't, I don't. I mean, I think again, there's a potential potential challenge on the money when it goes from Biden Harris to Harris somebody else. But I do think there it's still Harris. I think that challenge is pretty weak. There's absolutely no challenge on her being on the ballot because you say, one more time, Biden was never the nominee, so there's no issue about changing nominees.
He hadn't been nominated yet, and you know it was not likely that he would have defeves of the convention. But there have been contested conventions. I mean, maybe the least truly contested one was in nineteen seventy six when Ronald Reagan was trying to unseae Gerald Ford. He came close, and if he had done that, he would have been the nominee. And the fact that had Ford with the incumbent president and had won a bunch of states and primaries would have been irrelevant.
So do you have any idea what Mike Johnson is talking about?
Then I have no idea what he's talking about. I mean, I mean, some of the noise he's making is that it's undemocratic, small d democratic. But the parties get to write their own rules about who the nominees are. Supreme Court has said that, going back to contested conventions in the nineteen seventies, this is the parties are private organizations. They get to write their own rules and to choose their own nominees. And it looks like they're going to
choose to nominate Harris. If they do nominate Harris, she's the nominee. She's the one who gets on the ballot. And if for some reason they choose to nominate somebody else because something else happened in the next three weeks, that person would be the nominee.
And what do you think about Johnson's argument that this violates democratic principles, that voters chose Biden in the primaries and now they're getting Harris.
There's a reason it's unprecedented. You don't just, you know, steamroll the rules in the process because you decide that your candidate is no longer suitable.
I mean, I think, for one thing, Biden was always running with Harris as as his teammate. So to some extent, they're still getting one of their choices. But I think in the end, remember, the winner of the primary in any one state is not guaranteed or in many states. I mean, going back to nineteen sixty eight, Hubert Humphrey didn't run any primaries and he was the nominee. Eugene McCarthy won more primaries than Hubert Humphrey, but Hubert Humphrey was the nominee.
Everyone agrees on one thing. This is unprecedented, But is there anything in presidential history that would be analogous.
It's hard to make an analogy where there was somebody who was so clearly the presumptive nominee and then who
pulls out at the last minute. There have been a couple of a life where a candidate dies but that person's already been nominated, and then there's a scrambled to place the candidate that has happened, But I can't recall anything like this where there was somebody who had won all the primaries, was the presumptive nominee and then decides no, I'm not going to run, and the party quickly rallies around another person. But again, this is the person who
was his number two. It's not a challenger who is going to be chosen. So it is unprecedented, but it's utterly, entirely consistent with the rules. Maybe just leave it at that. Is that again, just to make it clear, he was never the nominee, so they're not replacing a nominee. They're just picking a nominee. And when people were donating money, they were donating money to Biden Harris. It looks like they're still going to get Harris.
Thanks Rich for helping us clear up the confusion with facts and legal analysis. That's Professor Richard Ruflt. Of Columbia Law School coming up next on the Bloomberg Lall Show. Remember back in late May, when the Justice Department in more than two dozen states filed a major anti trust lawsuit seeking to break up Ticketmaster's owner Live Nation. Well, Live Nation has filed its first answer to that suit, and we'll tell you about it. I'm June Grosso and this is Bloomberg.
Ticketmaster can impose a seemingly endless list of fees on fans. Those include ticketing fees, service fees, convenience fees, platinum fees, price master fees, per order fees, handling fees, and payment processing fees, among others.
Anyone who's bought concert tickets from Ticketmaster can probably relate to Attorney General Merrick Garland's description of the seemingly endless fees to purchase tickets. Garland said it was time for fans and artists to stop paying the price for Live Nations when monopoly. When the Justice Department in more than two dozen states filed a major anti trust lawsuit in late May, seeking the breakup of Ticketmaster's owner, Live Nation Entertainment.
Live Nation suffocates its competition using a variety of tactics, from acquisitions of smaller regional promoters and venues to threats and retaliation to agreements with rivals designed to neutralize them. This has included acquiring or co opting key independent promoters.
Live Nation has denied its monopoly, blaming rising ticket prices on things like increasing production costs, artists popularity, and twenty four to seven online ticket scalping. But now Live Nation has offered its first official response to the anti trust claims in a letter to the federal judge overseeing the litigation, joining me to discuss the strength of the case. And that response is antitrust ECXI, spurred Harry First, a professor
at NYU Law School. Harry start by telling us about the Department of Justice's lawsuit against Live Nation.
Okay, so this is in some ways basically a suit to correct a bad mistake the Justice Department made in twenty ten. So it's taken them a while, but eventually anti trust enforcers are trying to get it right. So what happened was in two thousand and nine, Ticketmaster and Live Nation decided to merge, and the Justice Department looked at it. Ticketmaster, of course, sells ticketing services to major venues around the country what's now called primary ticketing services.
You know, the secondary markets weren't so developed then, I don't think, you know, reselling, and Live Nation was the biggest promoter at the time and was about to sort of entered the ticketing market. But basically this was what's referred to as a vertical merger, not really competitors or not much competitor yet, but at the time, the Justice
Department understood what was going on. So Live Nation, which was a big promoter and booker of venues, wanted to put its shows into venues that would use Ticketmaster ticketing. So the venues knew that if they wanted to get you know, a really good show, the best way to do it was to use Ticketmaster because they really needed Live Nations talent. So Live Nation, as a promoter of you know, major tours, thought that this tie up would
sort of help both businesses, as did Ticketmaster. It would give Ticketmaster and edge you know, over competitors in the ticketing business, and it would increase Live Nations revenues because now they owned a ticketing company. So control the talent, control entry or choice of the venues, and you control ticketing. So at the time, the Justice Department knew this, there was testimony about this, and also Ticketmaster had, you know, in major venues, a major share of the market, maybe
seventy or so percent. You can argue over what exactly it was. So they had a dominant or monopoly position at the time. But instead of saying you can't merge, they said, hey, go ahead and merge. Okay, we've got some conditions for you. First, help a company is trying to get into the ticketing business, get into it through
some software. Okay, that was one idea. The second thing is we'll tell Live Nations that they can't condition their talents, you know, with venues on using Ticketmaster, they can't make that a condition, and they can't retaliate against the venue if that venue subsequently decides to use a ticketing company. So no conditioning, no retaliation. Fine. We think this is wonderful.
Parties merge. The new entrant turns out never does well and almost from the beginning they violate the decree, and in fact, they don't have to actually violate it because every promoter, every venue owner knows what the deal is. You know, give Live Nation the ticketing revenue, you're more likely you're going to get the good tours into your venue. And there's a lot of competition for that. So this decree never worked. It didn't work because the parties violated.
There were later proceedings because it looked like they were violating it, and then kame Taylor Swift.
Referring of course to the website crashing, et cetera, et cetera, et cetera.
Oh, that was the push and hearings in the Senate, Amy Klobashar and so forth. That was the push that finally pushed the Justice Department. And this has been a pretty aggressive Justice Department on any trust to say, you know, just really, almost fifteen years, it just didn't work and
it's time to do something about it. So the lawsuit we see now is the Justice Department saying, you know, Ticketmaster has a monopoly position in primary ticketing services, and it's solidified by this, you know, being owned by Live Nation. We've got to stop it, declare them monopoly, and.
Then break them up is tying an anti trust term? Will you explain what it means? In this context?
Tying is an anti trust term. And so there is in the Justice Department's complaint, which is joined by a lot of states. By the way, there is in this complaint not just a complaint about the monopolization of the ticketing markets and large venues. There's a complaint about a tying arrangement in here that involves the talent itself. So a tying arrangement is basically, you have two products. A seller says, if you want my A product, guess what you've got to take B So you know, I don't know.
If you want my car, you got to take my tires. There's always a question of what two products are. But that's the basic of a tying arrangement, and the Justice Department alleges that talent knows. There's this talent promoting services market that Live Nation also is involved in. So if you want those promotion services, you've got to be sure to be booked into the proper venues that, of course
are using Ticketmaster. This is part of the complaint, and it's a part that the defendant Ticketmaster a lot of nation says it might move to dismiss, but frankly, it seems like a rather minor part of the complaint. The big part is their monopolization claim, and the big relief is to break up the company. So tying can be a problem, and it's historically a problem, but it's not the central problem of this piece of litigation.
And what you're referring to there is that they're at the motion to dismiss stage, and the judge asked Live Nation to identify issues that it might contemplate a motion to dismiss on. Live Nation's letter in response was pretty narrow. What did you think of the response?
Not much? I mean, okay, it involves a little more factual analysis of who's force to do. Was basically a compelled arrangement, and in fact, it came out of cases where a company had a machine that deposited salt tablets into canned products, and they said, well, if you want this machine, we have a patent on so you've got to have a machine. You've got to buy salt from.
Salt was the tied product, and the machine, which they had some monopoly power over, was the tieing product, and that's where the idea came that this was anti competitive because it's stopped competition in the B market, the tide product market salt. So, you know, is this a problem here? Maybe this is going to depend on the facts, but not the critical problem. So I was a little They haven't made their motion yet and it's a little I
don't know what they're doing with this particular part. They are trying to move the case to a different court, so maybe they don't want to, you know, reveal their entire legal strategy at the moment. I really don't know, but they're trying to change where the case is going to be tried from New York to DC.
Yeah, why do they want to change? I mean, do they think they'll have more luck in DC than in New York?
I knew you were going to ask me that. And I'm not really sure why they want to change. It's going to change the venue, as you know, I'm not really sure why they want to do that flow things down. Maybe they're dissatisfied with this particular judge. They know who they've got here. Maybe the docket is slower in DC. They've got a lot of cases there. Part of it may be related to their effort to dismiss the state claims. So the states are asking for damages, not clear which states,
but under their state law. And there's now precedent in the DC Circuit which takes a somewhat dim view of these kinds of state claims in any trust cases case that involves the Facebook litigation in the District of Columbia, So maybe they feel they have a better chance of getting those state claims dismissed there. And the state claims also come with a request for a jury trial. So hard for me to know exactly, you know, what all
is going on. And I mean, obviously people don't ask for change of venue unless they think they'll be better off someplace else. But I'm not quite sure why they think that.
And so in this letter to the judge they try to knock out the state claims in different ways. Are they trying to avoid a jury trial in a case like this where I mean, who hasn't been aggrieved by ticket Master?
You mean you think the jury might not be too sympathetic, That's what I'm thinking. But that's what I'm thinking.
Whether you're a fan of Taylor Swift, Bruce Bringsteen all.
The way back, right, Yeah, that's a good instinct. I think on this they really would not want to have to present this case to a jury. And the claim for damages seems it's a little vague, which the defendant does say, and I think correctly, you know, not that they can't be made less vague. But if there's not a claim for damages, then the case gets tried before a judge, and you just hope, I guess that the judges never bought a ticket that's a stress to an event,
So you know that's part of it. Now. If it doesn't get moved them, they're gonna make the same claims in New York. And you know they've already cited the DC circuit case. But you know it's stronger if it's in a circuit in which you're litigating, not in a sister circuit.
Stay with me. Harry, coming up next on the Bloomberg Law Show, Live Nation says the lawsuit won't solve the issues fans care about and how antitrust enforcement will change with a different administration. In January, we're discussing the Justice Department's anti trust suit against ticket Master and its parent company, Live Nation, accusing them of running an illegal monopoly over Live concerts. I've been talking to anti trust expert Harry First,
a professor at n YU Law School. The Nation's legal team was saying that the government has no right to force it to do business with competing promoters in buildings that it owns.
I guess, you know, you can say it. They can't force them to do business, but they're forcing others to do business. They're forcing their customers, they're forcing the artists to do business. Now they claim that the artists don't have a say on which venue is used. I don't know enough of the facts on that particular wrinkle of the case. My guess is that in practice it's a
lot more complicated. But I think the tying part is whatever the merits of their claim, which is overdrawn as a bit, But whatever those merits, it doesn't really go to the heart of what the competition problem is here and what the government is asking for, which does go to, you know, to what for them a very successful business model, even if it's not a great business model from the point of view of consumers or venues which you know,
are forced to use ticket masters not so great ticketing services.
Live Nation claims that this lawsuit won't solve what fans care about most, relating to ticket prices, service fees, and access to in demand shows. They say that factors from increasing production costs to artist's popularity to twenty four to seven online ticket scalping are responsible for higher ticket prices.
Well, you know, I mean, it won't cure cancer either, but I mean that's sort of in some ways it's a ridiculous statement. Of course, it doesn't cure those other things. But if a ticketmaster is able to charge monopoly prices for ticketing services, they're charging higher prices and this is all folded into what consumers pay, so you know, they don't charge highers prices. That's the argument for you know,
what a monopolist does and consumers pay it. So the idea that it won't completely solve high prices, of course, that's true. There are a lot of other factors that go into you know, what it costs you to go to one of these events, and you know ticketing is one of them, but it is one of them. So that seems to me a sort of argument that is more made for newspapers than really for a serious legal argument court.
You mentioned DOJ wants a breakup of the company, and that's a drastic remedy. But I've heard it said, well, it's drastic, but if it works anywhere, it should be here.
Yeah, I mean, in many ways this is I mean, I don't know for sure because they don't know the inner workings of how integrated the firms are. But this should be a case where it's relatively easy, relatively being the keyword to break the company up because they do operate as at least public Facing has two separate companies. They do two separate things. They're in separate market that are linked, but they used to operate separately before and
presumably could operate separately again. So I think you're right. This is a case where, you know, restructuring of the company sounds like it is doable. The question is whether that's going to change Ticketmaster's monopoly position or not. And that's sort of the next step. So you could break them up, but you know, how much will that increase competition in itself?
Can live Nation use the fact that the DOJ allowed the merger to proceed in the first place, and then agreed to extend the initial consent decree as recently as twenty nineteen, even after it found that live nation repeatedly violated the decree.
Can they use that as an argument? They are doing that, I think, and they will make that argument. Is it a good legal argument? I really don't think so. There is not what's called in the stoppel against the government. The government is able to and free to change its policy as it sees how it works. There are older cases in which you know, the government accepted this particular remedy, the remedy didn't work out. The district court judge in fact in that older case said, see, I can't change
this decree. You entered it, and the Supreme Court said, no, you can. It didn't work. Ten years you had a chance for this to work and it didn't bring competition. Ten years is long enough. So I don't think in the end that's really a good argument. And I do disagree with the idea that the Justice Department approved the merger.
Justice Department never approves mergers. It decides what it will do in terms of bringing a lawsuit, and it may decide not to sue, or it may decide to settle a claim in a particular way, but it doesn't approve it. Everybody knows it, and you know, things change and don't work out, and they don't bind successive governments forever.
So it sounds like you think that the Justice Department has the better case here.
I do. I do so, of course, as they say, we'll see what happens. But you know, you never know in litigation. You know, they're still going to have to prove exactly what the market is and what Ticketmaster's market share is, and you know, they've got to distinguish between the primary market and resale market and what Live Nation's position is, and you know, whether there's a large arena market. There are a lot of technical things that you know, still have to be worked out in the context of
the litigation. But on the surface, at least on of course, there's only one side. We have the you know, the complaint filed by the Justice Department and a large number of states, so we have one view of the allegations. But the defendants certainly have defended this position, and you know, their position in this industry for a long time. They've faced these allegations. So we'll see.
Do you see a star studded cast at the trial.
I don't know. It's a great question. I hadn't really thought about that. I think even judges can be starstruck by Taylor Swift, so I don't know. The Attorney General is apparently a big swiftye.
So really I go more for Springsteen. But still, I mean, how long could this take?
Years?
So look, looking at it from the defendant's point of view, the longer the better. So they're making money off of this deal, and you know, if the Justice Department's right, they shouldn't be in any hurry to get through it because while it's going on, they're still in a great market position and still getting those high prices you know, in ticketing services. So you know, I don't expect them to be asking for quick resolution, and they're not. They're
trying to move the trial. They're filing letters rather than motions to the smith. So it will be a while. Anti trust litigation tends to take a while, and you know, it could be years or at least a year. There's a lot to do and a lot to go through their economy, know, all sorts of things, and there's an election.
So that brings me to my big picture question. You know, you mentioned the Biden administration has been i'll say incredibly aggressive in the anti trust area, bringing lawsuits. If there's a Trump administration, will it be very different?
My first answer is, whichever administration takes over in January of twenty twenty five, things will be different. Things always are different. There'll be different leadership, it will stagger is sort to be feathered in in a way at the Federal Trade Commission as terms run out or maybe commissioners resign, they'll be I assume a new head of the Anti Trust Division, There'll be a new attorney general. It's going to be a new administration. And will they do things
exactly as things are done now? Presumably not. They'll put their own stamp on it. What a Trump administration stamp might be, I really don't know, because there are contradictory policy themes running around within that thing that we call MAGA or whatever we want to call it. So in some ways anti trust under Trump did some heavy enforcement things, and in some ways they didn't. So it's hard to know where that trend is going to go and how it might show up. But of course you would predict
things will likely be different. Would they be different with this case? Would this case settle more easily with the new administration? So that too is that's hard to know. I think it's a good, solid anti trust case. Is not a crazy any trust case. Not crazy in the sense that it's not trying something that's unusual for anti trust. It's pretty much in you might say, the wheelhouse of any trust and what it should be. So you know,
we'll see. But remember the original deal was in the Obama administration, so it's hard to pin labels on these, but we do. But we do, I know, because it makes it fun.
Well, it's always fun to talk to you and always enlightening. Thanks so much. That's Professor Harry First of NYU Law School. And that's it for this edition of the Bloomberg Law Podcast. Remember you can always get the latest legal news by subscribing and listening to the show on Apple Podcasts, Spotify, and at Bloomberg dot com, slash podcast, Slash Law. I'm June Grosso and this is Bloomberg